Business and commercial law in Zambia: an orientation

Choosing a vehicle

The main options are operating as a sole proprietor with a registered business name, forming a partnership, or incorporating a company. The decisive difference is legal personality: an incorporated company is a separate legal person that can own property, contract and sue in its own name, and whose members' liability is ordinarily limited. A business name is not a separate person; the proprietor bears the liabilities personally.

Registration

Companies and business names are registered with the Patents and Companies Registration Agency (PACRA) under the governing companies and registration legislation. Registration involves reserving a name, filing the prescribed incorporation documents and details of directors and shareholders, and paying the prescribed fees. Registration is the beginning of the compliance obligations, not the end of them.

The regulators you will meet

Beyond PACRA, most businesses deal with the Zambia Revenue Authority for tax registration and returns, with the National Pension Scheme Authority and the health-insurance scheme in respect of employees, and with sector regulators or licensing authorities depending on the activity. Local authorities also license many trading activities.

• PACRA — company and business-name registration, annual returns
• Zambia Revenue Authority — tax registration, returns and payments
• NAPSA and the statutory health-insurance scheme — employee contributions
• Sector regulators and local authorities — activity-specific licensing

Governance after incorporation

Directors owe duties to the company, including duties to act in good faith and in the company's best interests, to exercise reasonable care and skill, and to avoid conflicts of interest. Companies must maintain statutory registers and accounting records and file annual returns. Failure to do so exposes both the company and its officers to penalties and, in some circumstances, to personal liability.

Verifying the detail

Fees, forms, filing deadlines and thresholds are set by statutory instrument and change. Always confirm the current requirements from the responsible authority and the current legislation rather than from a general guide such as this one.