Hostname: page-component-78c5997874-m6dg7 Total loading time: 0 Render date: 2024-11-05T22:25:25.131Z Has data issue: false hasContentIssue false
  • English
  • Français

New Company Law for Malawi

Published online by Cambridge University Press:  28 July 2009

Matembo Nzunda
Get access Rights & Permissions [Opens in a new window]

Extract

Company law needs to be reformed so as to promote and maintain the protection of the interests of shareholders, creditors and the community. These are the three “social and economic needs to which a system of company law should respond”. These three purposes of company law are not mutually exclusive. However, the weighting of them depends on the space factor and time factor of law reform. Space factor refers to the differences in economic, social, political and other conditions and needs between one country and another at a given time. So, “Whereas in Britain one of the main purposes of company legislation is to protect the interests of shareholders, in a developing country like Malawi its main function should be to protect the interests of the national economy since most of the effective shareholders will in fact be non-resident in the country.” Time factor refers to the differences in economic, social, political and other conditions and needs of a country between one time and another. For example, the increasing internationalisation of the Malawian political economy, through branches and subsidiaries of multinational companies and joint-ventures, may demand that companies’ legislation in Malawi respond to the conditions and needs of such an economy. Of course, the two factors constantly act on each other.

Type
Articles
Information
Journal of African Law , Volume 33 , Issue 1 , Spring 1989 , pp. 1 - 18
Copyright
Copyright © School of Oriental and African Studies 1989

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Kahn-Freund, O. (1944) 7 M.L.R. 54Google Scholar.

2 Nzunda, M. S. The Company Law of Malawi (Cambridge, Ph.D., 1987) pp. 3–22Google Scholar. Much of this paper is extracted from this work.

3 File No. 106/06/01, Ministry of Trade, Industry and Tourism, Lilongwe, Malawi.

4 Gower, L. C. B.Principles of Modem Company Law, 4th Ed. (London, 1979), Chap. 7Google Scholar.

5 [1970] A.C. 1099, H.L.Google Scholar

6 Ibid, at 1109 per Lord Upjohn.

7 Final Report on the Commission of Equity into the Working and Administration of the present Company Law of Ghana (Accra, Ghana: Government Printing Department, 1961) (Gower Report), p. 144Google Scholar.

8 Report of the Company Law Committee (Cmnd 1749, 1962) (Jenkins Report), para. 120Google Scholar.

9 Gower Report, pp. 553–554Google Scholar.

10 This is proposed for England: Reform of Ultra Vires, Part II of a Consultative Document of the Department of Trade and Industry, 1986 (Prentice Report), Chap. VGoogle Scholar.

11 Cf. Jenkins Report, para. 39(vi)Google Scholar.

12 (1875) L.R. 7 H.L. 653 at 670per Lord Cairns, L.C.Google Scholar

13 [1900] 1 Ch. 656, C.AGoogle Scholar.

14 Brown v. British Abrasive Wheel Co. [1919] 1 Ch. 290Google Scholar; Dafen Tinplate Co. v. Llanelly Steel Co. [1920] 2 Ch. 124Google Scholar.

15 Sidebottom v. Kershaw Leese Co. [1920] 1 Ch. 154Google Scholar; Shuttleworth v. Cox Brothers & Co. [1927] 2 K.B. 9Google Scholar which was a non-expropriation case.

16 Jenkins Report, para. 199–212Google Scholar, esp. paras. 204, 212.

17 Cf. Companies Act 1948 (UK), s. 210Google Scholar; Gower, L.C.B.Principles of Modern Company Law, 3rd Ed. (London: 1969), pp. 598–604Google Scholar.

18 Cf. Companies Code 1981 (Aust), s. 320(1)(a)(2)Google Scholar: Ford, H. A.J.Principles of Company Law, 3rd Ed. with Supplement (Sydney: Butterworths, 1982), Supp., pp. 47–53Google Scholar.

19 By the General Interpretation Act 1966 (Cap. 1:01), s. 2(1)Google Scholar, this includes an omission and extends to a series of acts or omissions.

20 Cf. Companies Act 1985 (UK), s. 459(1)Google Scholar; Ford, op. cit., Supp., pp. 47–53Google Scholar; Boyle, A.J. (1987) C.L.P. 25Google Scholar.

21 Nzunda, , op. cit., pp. 165–168Google Scholar.

22 Wallersteiner v. Moir (No. 2) / [1975] 1 Q.B. 373, C.A.Google Scholar

23 See Smith v. Croft [1986] 1 W.L.R. 580Google Scholar.

24 Re Australian Estate & Mortgage Co. Ltd. [1910] 1 Ch. 414Google Scholar.

25 Nzunda, , op. cit., pp. 171–173Google Scholar.

26 [1946] 1 All E.R. 512Google Scholar.

27 Cumbrian Newspapers Ltd. v. Cumberland Co. [1986] 3 W.L.R. 26Google Scholar.

28 Kahn-Freund, , op. cit., pp. 54–59Google Scholar.

29 Ibid, pp. 59–66.

30 Schmitthoff, C. M. “Group Liability of Multinationals” in Simmonds, K. R. (Ed) Legal Problems of Multinational Corporations (London, 1977), pp. 71–73Google Scholar.

31 Lonrho Ltd. v. Shell Petroleum Co. Ltd. [1980] 2 W.L.R. 367Google ScholarC.A.; [1980] 1 W.L.R. 627, H.LGoogle Scholar.

32 Multinational Gas & Petrochemical Company Ltd. v. Multinational Gas & Petrochemical Services Ltd [1983] Ch. 258, C.AGoogle Scholar.

33 Schmitthoff, op. cit., p. 74Google Scholar.

34 Ibid, p. 75. Re Southard [1979] W.L.R. 1198 at 1208Google Scholar; Multinational Gas, fn. 32Google Scholar.

35 See, for example, Orhnial, T. (Ed) Limited Liability and the Corporation (London & Canberra, 1982)Google Scholar; Paish, F. W. and Briston, R. J.Business Finance, 6th Ed. (London, 1982), pp. 18–21Google Scholar.

36 Nzunda, , op. cit., Chaps VI and VIIGoogle Scholar.

37 See, e.g. Indefund Ltd. v. Manguluti & Manguluti, Civil Cause No. 232 of 1985 (H.C.) (Mtegha, J.) (Unreported)Google Scholar.

38 Under C.A. 1908, s. 212, it was three months.

39 Kahn-Freund, op. cit., p. 59Google Scholar.

40 U.K.C.A. 1980, s. 4.

41 TomHadden, Hadden,, Company Law and Capitalism, 2nd Ed. (London, 1977), p. 225Google Scholar.

42 Hadden, ; op. cit., p. 225Google Scholar.

43 See Rep. v. Laycock & Another, Crim Case No. 6 of 1980 (H.C.) (Skinner, C. J.) (Unreported)Google Scholar.

44 See File Nos. 106/06/01 and 106/06/02, Ministry of Trade, Industry and Tourism Headquarters, Lilongwe, Malawi.

45 Ooregum Gold Mining Co. of India v. Roper [1892] A.C. 125, H.LGoogle Scholar.

46 Because of Re Wragg [1897] 1 Ch. 796Google Scholar: see Kahn-Freund, , op. cit., pp. 63–64Google Scholar for criticism.

47 See, in general, Nzunda, , op. cit., pp. 177–178Google Scholar.

48 See Nzunda, , p. 179Google Scholar.

49 s. 181; 2nd Sch. para. 10.

50 Under C.A. 1908, s. 89(1)Google Scholar, the amount or rate was limited to any set in the articles of association

51 Trevor v. Whitworth (1887) 12 App. Gas. 409, H.LGoogle Scholar.

52 Kirby v. Wilkins [1929] 2 Ch. 444Google Scholar: Re Castiglione's Will Trusts [1958] Ch. 549Google Scholar.

53 For the practice before the 1984 Act came into force see Nzunda, , op. cit., pp. 182–184Google Scholar.

54 Re Exchange Banking Co. Flitcroft's Case (1882) 21 Ch. D 519, C.A.; cf. C.A. 1908, ss. 40, 91Google Scholar.

55 Lubbock v. British Bank of South America [1892] 2 Ch. 198Google Scholar;

56 Dimbula Valley (Ceylon) Tea Co. Ltd v. Laurie [1961] Ch. 353Google Scholar; Re New Zealand Flock & Textile Co. [1976] 1 N.Z.L.R. 192Google Scholar.

57 [1954] 1 Q.B. 45, C.AGoogle Scholar.

58 For a fuller treatment see Nzunda, , op. cit., pp. 128–133Google Scholar.

59 (1866) L.R. 2C.P. 174Google Scholar.

60 (1965–1966) 117 C.L.R. 52Google Scholar.

61 [1904] A.C. 120, P.C.Google Scholar

62 See Goodhart, A. L. (1941) 57 L.Q.R. 228Google Scholar: J., Slade C. (1954) 70 L.Q.R. 385Google Scholar; Hall, J. C. [1961] C.LJ. 86Google Scholar; and Turpin, C. G. [1972] C.L.J. 19Google Scholar.

63 Prentice Report., Chap II. 64

64 Ibid, pp. 24–31.

65 Ibid, pp. 21–24, 31–35.

66 Ibid, p. 20.

67 ss. 22(2)(4), 203, 290,299.

68 Prentice Report, p. 20Google Scholar.

69 But see A.C.C. 1981, s. 67(2)Google Scholar.

70 For a fuller treatment see Prentice Report, pp. 21–24, 31–35Google Scholar.

71 Ibid, p. 22.

72 E.g. ss. 36, 72(3)(b), 82(2), 140(4), 141(4), 142(6), 149(3)(4).

73 Belmont Finance Corp. v. Williams Furniture Ltd [1979] Ch. 250, at 267Google Scholar.

74 On the distinction between knowledge and notice and the types of each see In re Montagu's Settlement Trusts [1987] Ch. 264Google Scholar.

75 Wedderburn, (1984) 47 M.L.R. 345Google Scholar. See also Prentice Report, pp. 34–35Google Scholar.

76 [1964] 2 Q.B. 480Google Scholar.

77 ss. 21(1); 22(1), proviso.

78 ss. 343, 22(1), proviso.

79 For a fuller treatment see Nzunda, , op. cit., pp. 288–292Google Scholar.

80 See Address by the Minister of Trade, Industry and Tourism to the Annual General Meeting of the Chamber of Commerce and Industry of Malawi reproduced in the Chamber's Quarterly Newsletter (Blantyre, Malawi, 1975), p. 5Google ScholarPubMed.

81 Price Waterhouse & M.D.C., Investing in Malawi (Blantyre, Malawi: P.W. & M.D.C., 1985), p. 13Google ScholarPubMed.

82 First passed as Companies (Amendment) Act 1971 (Act. No. 31 of 1971).

83 Gower, , 4th ed., op. cit., pp. 61–62Google Scholar.

84 Chimango, L.J. (1973) L.J., Rhodesian 123 at 135–135Google Scholar paraphrasing the view expressed in a Treasury circular. For the text of the circular see Chamber of Commerce and Industry of Malawi, , Quarterly Newsletter (Blantyre, Malawi, 31 07, 1972), p. 1Google Scholar.

85 Cap. 55:02 Laws of Malawi, 1968 RevisionGoogle Scholar.

86 See ss. 5(3)(b), 58(3) and 72(1), provisos (b)(c).

87 Re Bulawayo Market & Offices Ltd. [1907] Ch. 458Google Scholar.

88 See Re City Equitable Fire Insurance Co. [1925] Ch. 407Google Scholar.

89 C.A. 1908, ss. 205, 210, 211, 212, 215, 217.

90 ss. 218, 288, 219, 289, 299 and 300 correspondingly.

91 Cf. Darnels v. Daniels [1978] Ch. 406Google Scholar.

92 U.K.C.A. 1985, s. 630: Gower, , 4th ed., op. tit., pp. 114–116Google Scholar.

93 See Nzunda, , op. cit., pp. 110–116Google Scholar.

94 R. v. Registrar of Companies, exp. Bowen [1914] 3 K..B. 1161Google Scholar; Lasisi v. Registrar of Companies [1976] 1 A.L.R. Comm. 7Google Scholar.

95 Cap. 5:01, Laws of Malawi, 1968 RevisionGoogle Scholar.

96 Sealy, L. S. (1981) 2 Co. Law 51Google Scholar, and Company Law and Commercial Reality (London, 1984) pp. 22–34Google Scholar.

97 ss. 14, 307.

98 ss. 158, 314.

99 ss. 186, 187, 317.

100 ss. 181, 196, 197, 308.

101 Jenkins Report, op. cit., para 57Google Scholar.

102 For a full treatment see Nzunda, op. cit., pp. 85–98Google Scholar.

103 s. 181; 2nd Sch., para. 9.

104 For a full treatment of the 1984 Act on multinational companies in Malawi see Nzunda, , op. cit., Chap. 8Google Scholar.

105 See Nzunda, , op. cit., Chap. 9Google Scholar.