The Zambian Cabinet has approved a bill that will strengthen corporate governance and improve the cost of doing business in order to enhance foreign direct investment, a presidential spokesperson said on Tuesday.
The Zambian Cabinet approved a bill to repeal the Companies Act in order to strengthen corporate governance, align corporate law with relevant laws and national development aspirations including the promotion of foreign direct investment, presidential spokesperson Amos Chanda said.
The cabinet approved the bill during a meeting held on Monday, he added.
“The new Companies Act is designed to enhance government policy on economic empowerment of citizens and the development of micro, small and medium enterprises. The rationale for the amendment is to simplify the registration procedures and reducing the cost of forming a company,” he said.
According to the statement, the 1994 Companies Act is no longer in tune with international best practices following the evolution of corporate lawn which has placed a lot of emphasis on good corporate governance, adding that several government studies have revealed a need for reform of the business licensing regime in the country.
The new bill, which will be presented to the next sitting of parliament, promotes transparency and high standards of corporate governance by clearly articulating the role of directors as well as providing a legal framework for the modernization of the company registry.
The Zambian Cabinet has also approved the introduction of an Insolvency Bill to provide for personal bankruptcy, insolvency and receivership in order to strengthen the obligations and duties of insolvency practitioners.
The new bill consolidates individual and corporate insolvency into one statue as well as introduces measures for business rescue. Enditem