Q & A Business Legal Corner

Q & A Business Legal Corner

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By Beatrice Moyo

What are the daily tasks of a corporate secretary, who is an attorney hired full time in a business?

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The role and task of a corporate secretary in any business entity is detailed in the Companies and Other Business Entities Act [Chapter 24:03] in section 198. Overall the corporate secretary acts as:

  1. secretary and transcriber – setting the agenda, writing meeting minutes and getting them approved, as well as engaging in pre-meeting planning;
  2. compliance officer – ensuring that the entity is compliant with relevant legislation and regulatory authorities; and
  3. advisor to the board on issues like conflict of interest, conducting meetings etc. 

In brief these include, but are not limited to:

(a) acting as custodian of the company’s records including shareholder records;

(b) ensuring that notices of all shareholder meetings, board meetings and board committee meetings are given in accordance with the Act;

(c) ensuring that minutes of all such meetings are recorded in accordance with the Act;

(d) advising the directors as to their duties and powers under the Act;

(e) making the directors aware of other laws relevant to or affecting the company; and

(f) certifying in the company’s annual financial statements whether the company has filed required returns and notices in terms of the Act.

In addition to the Act, the corporate secretary must perform the tasks highlighted in the Zimbabwe National Code on Corporate Governance (ZimCode). In terms of ZimCode, the corporate secretary is the gate-keeper of good corporate governance and for this reason the Board should appoint a suitably qualified, competent and experienced company secretary capable of maintaining a cordial but arm’s length relationship with the members of the Board at the personal level. The ZimCode also outlines the duties that a company secretary must do the following:

(a) assist the nomination committee by ensuring that the procedure for the appointment of directors is complied with;

(b) assist in the proper induction, orientation, ongoing training and education of directors and assessing their individual training needs and those of executive managers in their fiduciary and other governance responsibilities;

(c) assist and guide directors in appreciating their role, responsibilities and duties, and discharging them in the best interests of the company;

(d) provide a central source of advice to the Board and within the company on matters of good corporate governance, law and any developments or changes thereto;

(e) have a direct channel of communication with the chairperson and being available to provide comprehensive practical support and advice to chairpersons of the Board and Board committees;

(f) ensure that the charter of the company and the terms of reference of the Board and its committees are kept up to date;

(g) sittings of the Board and Board committees are properly recorded and that minutes are circulated with the approval of the relevant chairperson;

(h) ensuring board resolutions are implemented timeously and effectively;

(i) ensuring that board members are collectively and individually evaluated annually;

(j) be responsible for the proper compilation and timely circulation of Board packs;

(k) assist the chairpersons of the Board and Board committees in drafting yearly work plans;

(l) obtain appropriate responses to or feedback on specific agenda items and matters arising from meetings of the Board committees; and

(m) raise any matters that may warrant the attention of the Board.

As an Agent or middle man for selling stands how best can you do it legally. These stands are not mine am just an Agent so I want to know how can one do it legally?

There are two options for you – the first is registering an estate agency and conducting the business of selling the stands formally in this manner. In order to legally operate as an estate agent in Zimbabwe one has to be registered as an estate agent with the Estate Agency Council by submitting an application to the Registrar of the Estate Agency Council, accompanied by documents and information satisfying certain requirements. If you hold the relevant qualifications, the Estate Agency Council will then grant your application and direct the Registrar of the Council to enter the name of the successful in the register and register him / her as an estate agent.

The second option is to ensure that in every transaction you enter into written exclusive contracts with both the buyer and the seller. This contract should ensure that you receive a fee or commission on the sale and purchase of the property, depending on whose behalf you are acting for. It is suggested that you enter into a mandate agreement or any related contract to protect your interests. It would also be wise to work closely with real estate agents or lawyers to ensure that the property and the paperwork thereto are genuine.

Is Real Estate Investment viable in Zimbabwe, how can one be involved and participate?

Real estate is generally a great investment option. It can generate ongoing passive income and can be a good long-term investment if the value increases over time. You may even use it as a part of your overall strategy to begin building wealth. Zimbabwe has a lot of land and with investment ventures on the rise, this has propelled demand for immovable property. One of the most lucrative businesses in Zimbabwe is investing in real estate for residential and business purposes. Most Zimbabweans have taken this up as a way of generating income. Although real estate may require a lot of capital it can be quite lucrative if wisely explored. To participate in the market, it is suggested that the investor scouts for immovable properties, depending on the budget, online or through reputable estate agents. It is also advisable that the investor engage a legal practitioner to conduct the due diligence before investing in real estate to ensure that everything is above board. With the real estate industry being a lucrative one, the instances of property fraud have also been on the rise.

What types of Income generating Assets can one have in Zimbabwe?

  • Immovable property (land may be used for leasing to farmers, housing leased as residential property and for commercial use, or sold at a profit)
  • Earth moving machinery/ equipment (used for hire)
  • Agricultural Land (for farming, leasing, joint ventures, cattle ranching, piggery etc.)
  • Moving trucks / transportation (for hire)
  • Shares (through for example the ZSE)

Does Escrow Work in Zimbabwe

Escrow accounts are accounts opened for purposes of ring fencing money, and the money is transferred out of the account upon the taking place of certain specified events. The account is managed by an escrow manager who will be responsible for making transfers out of the account once the specified events occur. These accounts are in fact operational in Zimbabwe. Buyers and sellers may elect to use escrow in their transactions to ensure satisfactory and timeous delivery of products and payment thereof. Common escrow managers include any one of good standing who is able to be trusted e.g. registered banks and lawyers, and ensures that conditions are met and payments made when due. Escrow is more popular in cross border transactions but is also popular in domestic transactions for the protection of both parties. The arrangement is established through an agreement between the buyer and the seller and will be regulated in line with the terms therein. There are a number of escrow agents in Zimbabwe, one of which is the SMEAZ Escrow Service.

We are a group of twenty pensioners. We want to embark on income projects to sustain our lives and families. What grouping should we form ourselves into?

 As pensioners, we would recommend that you venture into agriculture as it is one of the most income generating projects. You may also consider looking into piggery, chicken rearing as well as cultivating cash crops such as tomatoes cabbage, onion, maize and wheat. If you have immovable property, it would also be wise to consider leasing such property for residential or business use. If the group has access to funding, it may be advisable for the pensioners to pull their funds together and purchase real estate to generate passive income in the form of rentals. It is strongly advised that the group ensure that there is a legal structure created to regulate the affairs, for example the group could register a trust or an association and prepare a constitution to regulate all aspects for example returns, what happens in the event of death of one of the pensioners, and investing procedures.

Disclaimer:

The information and opinions expressed above are for general information only. They are not intended to constitute legal or other professional advice. For clarification, assistance, or if you have questions, contact Beatrice Moyo on beatricejoycemoyo@gmail.com.

Beatrice is a lawyer practicing in Zimbabwe and co-author of the Directors Handbook in Zimbabwe, a comprehensive guide on the company law provisions every director must know.

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