Introduction
The Companies and Other Business Entities Act [Chapter 24:31]—commonly referred to as the COBE Act—marks a transformative shift in Zimbabwe’s corporate legal landscape. Enacted on 13 February 2020 and fully operational by 14 May 2020, the COBE Act consolidates company law, enhances transparency, and introduces modern governance protocols. Whether you are a director, company secretary, investor, or legal advisor, understanding the Act is crucial for ensuring compliance, avoiding penalties, and positioning your business for growth.
In this 2,000-word guide, we unpack the COBE Act’s background, scope, transitional requirements, beneficial ownership framework, governance obligations, filing procedures, technological integration via the e-Registry, and practical best practices. We also answer frequently asked questions and provide authoritative external links to help you navigate every aspect of this landmark legislation.
Section 1: Background and Objectives of the COBE Act
1.1 Why the COBE Act Was Needed
Before 2020, Zimbabwe’s principal company law dated back to the colonial-era Companies Act [Chapter 24:03], supplemented by the Private Business Corporations Act [Chapter 24:11]. Over time, these statutes proved inadequate for addressing modern challenges such as cross-border investment, digital reporting, and transparency standards. Key drivers for reform included:
- Global Transparency Trends: Aligning with Financial Action Task Force (FATF) recommendations on beneficial ownership disclosure.
- Corporate Governance Best Practices: Incorporating elements from the UK Companies Act 2006 and South Africa’s King IV Report.
- Administrative Efficiency: Streamlining registrations and filings through digital platforms.
- Investor Confidence: Demonstrating Zimbabwe’s commitment to clear, up-to-date corporate regulations.
1.2 Core Objectives
The COBE Act aims to:
- Consolidate Law: Merge all company-related legislation into a single, modern statute.
- Enhance Transparency: Mandate beneficial ownership registers and periodic disclosures.
- Streamline Administration: Remove defunct entities via mandatory re-registration and enable online filings.
- Strengthen Governance: Codify director duties, require company secretaries, and standardize annual reporting.
By meeting these objectives, Zimbabwe strengthens its business environment and improves its attractiveness to both domestic and foreign investors.
Section 2: Scope and Key Definitions
2.1 What Is a “Company” under the COBE Act?
Under Section 2, the COBE Act defines a “company” to include entities formed or registered under the Act, such as:
- Private limited companies
- Public limited companies
- Companies limited by guarantee
- Co-operative companies
- Private business corporations (PBCs)
- Foreign companies
2.2 Excluded Entities
Certain financial and membership bodies fall outside the COBE Act’s remit and remain governed by sector-specific legislation, including:
- Banks and building societies
- Insurance companies and micro-finance institutions
- Trade unions and cooperative societies
2.3 Registrable Business Entities
Beyond companies, Section 278 allows voluntary registration of:
- Partnerships
- Joint ventures
- Syndicates
- Associations of persons
These registrable entities gain corporate personality and limited liability, subject to tailored compliance requirements.
Section 3: Transitional Provisions & Mandatory Re-registration
3.1 Who Must Re-register?
All entities incorporated under the repealed Companies Act [Ch. 24:03] and Private Business Corporations Act [Ch. 24:11] were required to re-register under the COBE Act within 12 months of its commencement—by 13 February 2021.
3.2 Why Re-register?
- Prune Inactive Entities: Eliminate “zombie” companies that no longer trade or file returns.
- Update Records: Ensure the Registrar’s database reflects current directors, secretaries, and registered offices.
- Maintain Limited Liability: Failure to re-register results in removal from the register and potential exposure of directors to personal liability.
3.3 Re-registration Process
- Complete Constitutive Documents: Provide memoranda and articles of association.
- Pay Prescribed Fee: Confirm current rates on the Registry’s website
- Receive Confirmation: Digital acknowledgment or stamped certificate upon successful registration.
Section 4: Beneficial Ownership Transparency
4.1 Defining Beneficial Owners
Under Section 36, a “beneficial owner” is any individual who:
- Holds more than 20% of voting rights or shares, directly or indirectly.
- Exercises significant influence or control, including through nominee arrangements.
4.2 Internal and Public Registers
- Internal Register: All companies must maintain a register of beneficial owners at their registered office.
- Registrar’s Copy: A certified extract must be filed with the Companies Registry upon re-registration and updated within 30 days of any change.
4.3 Penalties for Non-Disclosure
Failure to maintain or file accurate beneficial ownership information constitutes an offence, punishable by fines or imprisonment under Sections 32–34.
Learn more: ZimLII COBE Act Full Text
Section 5: Corporate Governance Enhancements
5.1 Director Duties
The COBE Act codifies fiduciary duties for directors, including:
- Duty of Loyalty: Avoid conflicts of interest and self-dealing.
- Duty of Care: Act with the skill and diligence a reasonably prudent person would exercise.
- Duty to Act in Good Faith: Pursue the best interests of the company.
5.2 Company Secretary Requirements
Every company must appoint a qualified company secretary responsible for:
- Maintaining statutory registers and minutes.
- Ensuring timely filings with the Registrar.
- Advising the board on compliance matters.
5.3 Annual Returns and Enhanced Disclosure
Annual returns now require expanded information, such as:
- Share capital breakdown and issued shares.
- Auditor details (name, registration number, and address).
- Registered office and members’ register location.
Detailed obligations can be found in the Fourth Schedule of the Act.
Section 6: Compliance Obligations & Filing Deadlines
6.1 Annual Returns
- Deadline: Within 21 days of the anniversary of incorporation or re-registration.
- Form: Fourth Schedule (COBE-4).
- Fee: ZWL 20 for up to 100 members, plus ZWL 0.20 per additional member.
- Late Penalty: Category 3 civil penalty—typically ZWL 10,000 per month in default.
6.2 Change of Particulars
- Notifiable Changes: Director appointments/removals, office relocations, share allotments.
- Deadline: Within 14 days of the change.
- Form: COBE-2 or COBE-3 as applicable.
6.3 Audited Financial Statements
- Deadline: Within six months of financial year-end.
- Requirement: File with the Registrar and circulate to members at least 21 days before the annual general meeting.
Section 7: Technological Integration—The e-Registry Portal
7.1 Overview of e-Registry
To modernize filings, the Judiciary launched an e-Registry portal allowing fully digital submissions of:
- Re-registration forms (COBE-1)
- Annual returns (COBE-4)
- Changes of particulars (COBE-2/3)
- Beneficial ownership extracts
Access the portal at https://eregistry.judiciary.org.zw.
7.2 Benefits of Electronic Filing
- Speed: Process times reduced from weeks to days.
- Accuracy: Built-in validation checks minimize errors.
- Convenience: 24/7 access from any internet-enabled device.
- Secure Payments: Integrated mobile money and EFT options.
For step-by-step guidance, download the e-Registry User Manual.
Section 8: Best Practices for Seamless Compliance
- Maintain a Digital Compliance Calendar
- Automate reminders for all statutory deadlines.
- Regularly Audit Internal Records
- Quarterly reviews of director, shareholder, and beneficial ownership registers.
- Educate Key Personnel
- Train directors and secretaries on fiduciary duties and filing procedures.
- Leverage Governance Software
- Use platforms that auto-generate COBE schedules and integrate with your accounting system.
By embedding these practices into your governance framework, annual filings become routine and risk of non-compliance is minimized.
Section 9: Frequently Asked Questions (FAQs)
- When did the COBE Act become law?
– 13 February 2020, with full commencement 90 days later. - Who must re-register under the COBE Act?
– All companies and registrable business entities incorporated under the repealed Acts. - What is a beneficial owner?
– An individual with >20% shareholding or control, directly or indirectly. - How do I file annual returns electronically?
– Register on the e-Registry portal, complete COBE-4 online, pay the fee, and download your acknowledgment. - What penalties apply for late filings?
– Category 3 civil penalties up to ZWL 10,000 per month in default, plus potential removal from the register.
Conclusion
Zimbabwe’s Companies and Other Business Entities Act [Chapter 24:31] ushers in a new era of corporate regulation, emphasizing transparency, accountability, and digital efficiency. From mandatory re-registration and beneficial ownership registers to codified director duties and the e-Registry portal, the COBE Act aligns local practice with international standards.
