Friday, March 07, 2014

As more and more companies worldwide consider ways to grow their businesses, a number are exploring how best to exploit the untapped markets found in Africa. Often they will consider setting up a new company or joint venture as a vehicle to establish a legal presence and to do business in a particular jurisdiction. This, however, can be fairly daunting without the help of experienced experts particularly when considering a somewhat unknown continent such as Africa.

Legal status of companies

In South Africa, Zambia, Tanzania, Kenya and Uganda, from the date and time that the incorporation of a company is registered the company is a juristic person which exists continuously until its name is removed from the companies register. In South Africa and Zambia, once registered, the company has all the legal powers and capacity of an individual, except to the extent it is incapable of exercising any such power or having such capacity or the company’s Memorandum of Incorporation provides otherwise. A Zambian company is proscribed from carrying on any business or exercising any power that it is restricted by its articles to do.

In Kenya, Tanzania and Uganda once a company is registered, it becomes a body corporate with perpetual succession with legal powers and the capacity to do all it requires to achieve its objects. The objects and constitution of the company are set out in its memorandum and articles of association. In Tanzania, however, any act done outside the scope of the memorandum remains binding on the company. In Uganda, any activities not expressly or impliedly authorised by the articles or the memorandum are ultra vires or beyond the powers of the company.

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