Companies (Amendment) Act, 2025: What Companies Need to Know

In December 2025, Zambia enacted the Companies (Amendment) Act, 2025, introducing far-reaching reforms to the country’s corporate regulatory framework. The amendments significantly strengthen transparency, expand the enforcement powers of the Registrar of Companies, and introduce stricter governance and compliance obligations for all registered entities.

These changes have immediate implications for companies, directors, shareholders, and beneficial owners. Non-compliance now carries heightened financial, administrative, and personal liability risks.

Key Regulatory Changes

Beneficial Ownership: Expanded Scope and Severe Penalties

The definition of a beneficial owner has been broadened to include any natural person who:

• Holds 5% or more shareholding
• Exercises ultimate effective control
• Receives significant economic benefit from a company

Company obligations:

• Maintain accurate and up-to-date beneficial ownership registers
• Report any changes immediately
• Notify banks and other regulated entities within 14 days

Penalties for non-compliance include:

• Fines of up to 5 million penalty units for companies
• Administrative penalties of up to 10% of annual turnover
• For individuals, fines of up to 500,000 penalty units or imprisonment for up to five years

Expanded Powers of the Registrar

The Registrar of Companies may now:

• Actively verify company records
• Direct companies to update information within 30 days
• Impose administrative penalties
• Publicly designate companies as non-compliant

Persistent non-compliance may result in compulsory deregistration.

Increased Transparency in Shareholding

• Companies must disclose nominee shareholding arrangements
• The identity of the person who instructed the nominee shareholder must be recorded
• This effectively removes anonymity from ownership structures

Directors and Share Capital Requirements

Failure to maintain the prescribed minimum number of directors or minimum share capital now attracts:

• Administrative penalties after 90 days
• Mandatory deregistration after prolonged non-compliance

Mandatory Auditor Rotation (Public Interest Entities)

For public interest entities, the Act introduces mandatory rotation requirements applicable to:

• Key audit partners
• Senior engagement members

Maximum tenure limits and mandatory cooling-off periods now apply.
Failure to comply may compromise audit independence and regulatory compliance.

Abolition of Bearer Shares

• The issuance of bearer shares is prohibited
• Existing bearer shares must be reported and converted into ordinary registered shares by 30 June 2026
• Any unconverted bearer shares will become void

Enhanced Incorporation and Annual Filing Obligations

Incorporation applications must now include:

• NRCs or passports for all members, directors, secretaries, and beneficial owners
• Detailed beneficial ownership statements
• Expected employee numbers

Annual returns must now include:

• Updated beneficial ownership information
• Total employee numbers
• Financial statements for private companies

Applications involving sanctioned persons will be rejected, and companies with sanctioned stakeholders may be deregistered.

Expanded Grounds for Deregistration

The Registrar’s power to deregister companies has been significantly expanded. New grounds include:

• Failure to file annual returns for two consecutive years
• Dormancy
• Failure to maintain minimum directors, members, or share capital
• Failure to maintain a beneficial ownership register for one year
• Having a shareholder, director, or beneficial owner who is a sanctioned person

Risks of Non-Compliance

Failure to comply exposes companies and leadership to:

• Significant financial penalties
• Personal liability for directors and officers
• Public non-compliance listings
• Increased regulatory scrutiny
• Deregistration of the company

Recommended Compliance Actions

To mitigate regulatory risk, companies should:

• Review and update beneficial ownership registers
• Identify and disclose nominee shareholder arrangements
• Confirm compliance with director and share capital requirements
• Convert any existing bearer shares
• Prepare company records for potential Registrar verification
• Update annual return processes to reflect expanded disclosure requirements

Conclusion

The Companies (Amendment) Act, 2025 marks a decisive shift toward proactive enforcement and enhanced corporate accountability in Zambia.

Companies are strongly advised to take immediate steps to assess their compliance position and address any gaps. Early action reduces exposure to penalties, protects directors from personal liability, and ensures continued good standing with regulators.

Our team can help with compliance reviews, beneficial ownership updates, statutory filings, and ongoing advisory support.