1. Automation of the Company Registry and Associated Legal Reforms in Lesotho The Ministry of Law and Constitutional Affairs in collaboration withthe Ministry of Trade and Industry, Cooperatives and Marketing

2. Background “.. 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

3. Background In 2007, the Government of Lesotho launched a 5 year World Bank funded Private Sector Competitiveness and Economic Diversification Project (PSC Project). The objective of the PSC Project is to facilitate increased private sector investment by improving business environment and diversifying sources of growth.

5. Immigration and Passport Service Reform.

7. Computerization of the Company Registry

8. Activities Design and installation of an integrated and computerized system for notification and company registration Purchase of computer equipment and associated software Design and conduct of training programs for the staff of the Registrar General’s Office Operation and maintenance of the installed IT systems; Transfer of the CR from Law Office to OSS at the Ministry of Trade. Expected Results A modern and efficient Company Registry established and consolidates all business registration processes; The time required for registration significantly reduced.

9. MAIN SCREEN

10. Main Additions & Enhancements Name Reservations Company Status Tracking Improved Information about shareholders Miscellaneous Management Reports

11. Key Deliverables Fully Functional Database System Data Storage Server Local Area Network Antivirus protection End-User and Management Training Support contract (on-going)

12. Project Achievements Computerization of records and operations Trained Staff and Management Improved Infrastructure Potentially enhanced operational efficiency

13. Challenges Data Capture not yet completed. The System not yet used optimally in the operations. Full system usage on a daily basis. More management commitment required. Regular review of system and project progress needed.

14. GATEWAY FOR KEY SYSTEM MODULES

15. SECURE RECORDS MODIFICATION

16. NAME RESERVATION

17. COMPANY REGISTRATION

19. MEMBERS OF AN ASSOCIATION

20. CERTIFICATE OF INCORPORATION

21. A sample of a report of registered companies

22. SAMPLE COMPANIES LIST

23. SEARCH FACILITY

24. Progress on Companies Bill

25. Companies Bill: The Process The process has taken more than a decade. The latest effort to finalize the Bill started through World Bank’s assistance in 2006. The draft Bill was presented to Cabinet in March, 2010. The Bill to be presented to Parliament by May, 2010. Enactment by September, 2010.

26. Features of the Companies Bill The Bill is more elaborate as it clearly defines the relationship between shareholders and directors; It brings out the aspect of protection clearly; It addresses responsible and efficient management; It removes the controlling aspect of the company/directors and introduces fair dealings between the shareholders and directors.

27. Features of the Companies Bill Cont. Legal assistance is not required to register a company as the procedures are now easier and simpler. Less paper work. The structure of the Bill allows for easy navigation.

28. Features of the Companies Bill Cont. Removes cumbersome requirements in the Memorandum and Articles of Association. Only one document is required, namely, Articles of Incorporation.

29. Features of the Companies Bill Cont. A Woman is entitled to act as a promoter or to be a director of a company without her spouse’s consent.

30. Features of the Companies Bill Cont. Companies are entitled under the new law to file electronically. This expedites the application process.

31. Features of the Companies Bill Cont. Dealing between company and other persons – The Bill does away with the principle of constructive notice or knowledge and relaxes the ultra vires doctrine. The principle of ultra vires restricts companies to engage in those business activities contained in their Memorandum and only those related to such activities.

32. Next Steps Support and Maintenance of the Company Registry. Refresher Training for Company Registry Staff. Enactment of the new Companies Law. IT/Business Process Alignment (i.e., tailoring the database to the upcoming new Companies act) and integration with the OSS.