MASERU — Trade and Industry Minister Dr Leketekete Ketso will today launch the New Companies Act that is meant to ease the doing of business in Lesotho.
The New Companies Act will replace the Companies Act of 1967 which the government says is no longer responsive to the needs of the modern business community.
In a statement released on Tuesday, the ministry said the overhauling of the legislation was meant to improve direct foreign investment.
“The New (Companies) Act will be user-friendly and have positive impact on small and large business. The regulations were developed to set out procedures, guidelines and prescribed fees for the public and Registrar when incorporating
the company,” the statement said.
“Furthermore the new Act has introduced the one-man company with limited liability which will encourage individuals to participate in the economy without necessarily having to form a partnership.”
The ministry said the new law has been improved with companies being allowed “to engage in any business of its choice not restricted under its articles of associations”.
The shareholders responsibilities in the company have also been increased to monitor transactions by company directors and participate in making key decisions for the companies.
The ministry said with effect from next Monday the companies’ registry, which was previously located in the office of the Registrar General in the Ministry of Law and Constitutional Affairs, will now be located at the Ministry of Trade and
Industry, Co-operatives and Marketing.
There have been concerns from the business sector that Lesotho needed to undertake major reforms to make it easier for investors to conduct business in the country.
Lesotho slumped to a lowly 138th position out of 183 countries in the Doing Business index according to the 2011 Doing Business report released by the World Bank earlier this year.
Last year, the country was ranked at position 130.
The index is used by investors to gauge the economic competiveness of a country.
The report said Lesotho had failed to improve the business climate and noted that the lack of business growth had contributed to Lesotho’s low GDP.
Lesotho has the second lowest GDP in the southern African region after Zimbabwe, according to the World Bank.