Automation of the Company Registry and Associated Legal Reforms in Lesotho <br />The Ministry of Law and Constitutional Affairs in collaboration withthe Ministry of Trade and Industry, Cooperatives and Marketing<br />
Background<br />“.. to harness new growth opportunities and attract FDI, Lesotho needs to become competitive, particularly within SACU, where Lesotho performs the worst in terms of Doing Business Indicators ( position 130th in 2009). Lesotho can address this problem by removing such barriers to economic activity as a weak business environment…” Draft WB CAS, 2010<br />
Background<br />In 2007, the Government of Lesotho launched a 5 year World Bank funded Private Sector Competitiveness and Economic Diversification Project (PSC Project). <br />The objective of the PSC Project is to facilitate increased private sector investment by improving business environment and diversifying sources of growth. <br />
How Do We Improve Business Environment?<br /><ul><li>Company Registration and Business Licensing Reform.
Improving Access to Finance.</li></li></ul><li>Company Registration and Licensing Reform<br />Consolidation of business registration process which will enable Company Registry to improve its effectiveness to provide information to the public and private sectors. <br />Review of the Companies Act of 1967.<br />Streamlining of industrial and trading licensing regimes to reduce time and cost of doing business and to restrict the process to necessary regulatory requirements. <br />Review business licensing laws and associated regulations.<br />
Activities<br />Design and installation of an integrated and computerized system for notification and company registration<br />Purchase of computer equipment and associated software <br />Design and conduct of training programs for the staff of the Registrar General’s Office<br />Operation and maintenance of the installed IT systems; <br />Transfer of the CR from Law Office to OSS at the Ministry of Trade.<br />Expected Results<br />A modern and efficient Company Registry established and consolidates all business registration processes;<br />The time required for registration significantly reduced.<br />
Project Achievements<br />Computerization of records and operations<br />Trained Staff and Management<br />Improved Infrastructure<br />Potentially enhanced operational efficiency<br />
Challenges <br />Data Capture not yet completed.<br />The System not yet used optimally in the operations.<br />Full system usage on a daily basis.<br />More management commitment required.<br />Regular review of system and project progress needed.<br />
Companies Bill: The Process <br />The process has taken more than a decade.<br />The latest effort to finalize the Bill started through World Bank’s assistance in 2006.<br />The draft Bill was presented to Cabinet in March, 2010.<br />The Bill to be presented to Parliament by May, 2010.<br />Enactment by September, 2010.<br />
Features of the Companies Bill<br />The Bill is more elaborate as it clearly defines the relationship between shareholders and directors; <br />It brings out the aspect of protection clearly; <br />It addresses responsible and efficient management; <br />It removes the controlling aspect of the company/directors and introduces fair dealings between the shareholders and directors.<br />
Features of the Companies Bill Cont.<br />Legal assistance is not required to register a company as the procedures are now easier and simpler.<br />Less paper work. <br />The structure of the Bill allows for easy navigation. <br />
Features of the Companies Bill Cont.<br />Removes cumbersome requirements in the Memorandum and Articles of Association. Only one document is required, namely, Articles of Incorporation.<br />
Features of the Companies Bill Cont.<br />A Woman is entitled to act as a promoter or to be a director of a company without her spouse’s consent.<br />
Features of the Companies Bill Cont.<br />Companies are entitled under the new law to file electronically. This expedites the application process.<br />
Features of the Companies Bill Cont.<br />Dealing between company and other persons – The Bill does away with the principle of constructive notice or knowledge and relaxes the ultra vires doctrine. <br />The principle of ultra vires restricts companies to engage in those business activities contained in their Memorandum and only those related to such activities.<br />
Next Steps<br />Support and Maintenance of the Company Registry.<br />Refresher Training for Company Registry Staff.<br />Enactment of the new Companies Law.<br />IT/Business Process Alignment (i.e., tailoring the database to the upcoming new Companies act) and integration with the OSS.<br />
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