Corporate Law at Lesotho
Here’s a focused overview of Corporate Law in Lesotho:
Corporate Law in Lesotho
1. Legal Framework
Corporate law in Lesotho is primarily governed by the Companies Act, 2011 (Act No. 28 of 2011).
Supplemented by:
The Lesotho Business Licensing Act
The Financial Institutions Act
Other relevant regulations and the Lesotho Revenue Authority rules.
Lesotho’s laws are influenced by common law traditions.
2. Types of Companies
| Company Type | Key Features |
|---|---|
| Private Company | Most common; limited liability; restrictions on share transfer and number of shareholders (max 50) |
| Public Company | Can offer shares to the public; must comply with stricter governance and disclosure |
| External Company | Foreign company registered to do business in Lesotho |
| Non-Profit Company | Incorporated for charitable or non-profit objectives |
3. Company Formation
Registration is done through the Registrar of Companies under the Ministry of Trade.
Required documents include:
Memorandum and Articles of Association
Details of directors and shareholders
Registered office address
No minimum capital requirement, but must state authorized and issued share capital.
Typically completed within a few days if documentation is in order.
4. Corporate Governance
Companies must have at least one director.
Private companies often managed by directors appointed by shareholders.
Public companies must have a board of directors and adhere to stricter governance codes.
Annual general meetings and financial reporting are mandatory.
5. Accounting and Taxation
Corporate tax rate is 25%.
Companies must maintain proper accounting records and submit annual financial statements.
Auditing requirements depend on company size and type.
VAT is imposed at 15%.
6. Foreign Investment
Lesotho encourages foreign investment and offers incentives through the Lesotho Investment Promotion Act.
Foreign companies must register as external companies.
No general restrictions on foreign ownership in most sectors.
7. Winding Up and Insolvency
Companies can be wound up voluntarily or by court order.
Insolvency governed by the Companies Act and common law principles.
Creditors have priority in liquidation.
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