Decree-Law No. 1/2022 of May 25 Approving the Commercial Code

SUMÁRIO NOTICE The matter to be published in the "Boletim da República" must be submitted as a duly authenticated copy, one for each subject matter, containing the following endorsement, signed and authenticated: For publication in the "Boletim da República". NATIONAL PRESS OF MOZAMBIQUE, E. P. Council of Ministers: Decree-Law No. 1/2022: Approves the Commercial Code. Wednesday, May 25, 2022 I SERIES — Number 99

COUNCIL OF MINISTERS Decree-Law No. 1/2022 of May 25

Since it is necessary to revise the Commercial Code, approved by Decree-Law No. 2/2005 of December 27, with amendments introduced by Decree-Law No. 2/2009 of April 24, and Decree-Law No. 1/2018 of May 4, and other related legislation, taking into account the development of the private sector and socio-economic dynamism that have occurred in recent years, it is imperative to adapt the Commercial Code to modern trends in international commerce, as well as to meet the requirements dictated by integration into the regional and continental markets, under Article 1 of Law No. 1/2021 of April 15, Legislative Authorization Law, and Law No. 5/2021 of December 30, Extension Law, the Council of Ministers decrees:

ARTICLE 1 (Approval of the Commercial Code) The Commercial Code, attached to and forming an integral part of this Decree-Law, is hereby approved.

ARTICLE 2 (Registration and publication of corporate acts) The publication of corporate acts subject to registration and publication, as referred to in the Commercial Code, falls to the competent entity for registration.

ARTICLE 3 (Amendment to the Civil Procedure Code) Paragraph d) of Article 1072 of Decree-Law No. 44,129 of December 28, 1961 (which approves the Civil Procedure Code), extended to (then) Overseas by Ordinance No. 19,305 of July 30 and amended by Decree-Law No. 1/2005 of December 27, and Decree-Law No. 1/2009 of April 24, shall henceforth read as follows: “ARTICLE 1072 (Rules applicable to the reform of lost or missing titles) a) …. b) … c) … d) the provisions set forth in this Section do not apply to shares and bonds issued by business companies whose reform must follow the form indicated in the Commercial Code.”

ARTICLE 4 (Amendment to the Securities Market Code) Articles 8 and 52 of the Securities Market Code, approved by Decree-Law No. 4/2009 of July 24, shall henceforth read as follows: “ARTICLE 8 (Nominal securities)

1. Securities are nominal, and the issuance of bearer securities is not permitted.
2. The transfer in an organized secondary market of titled or book-entry securities follows specific rules and operational procedures, provided for in this Code and complementary regulation. ARTICLE 52 (Over-the-counter market)
3. The over-the-counter market consists of the purchase and sale operations of securities not admitted to stock exchange quotation, which shall be carried out by the issuer, attorney, stockbrokers or any other financial intermediaries legally and statutorily authorized.
4. In the case of book-entry securities, purchase and sale operations of securities not admitted to stock exchange quotation must necessarily be carried out with the participation of stockbrokers or any other financial intermediaries legally and statutorily authorized to carry out this type of transaction, whether such operations are carried out on behalf of these intermediaries themselves or on behalf of others.”

ARTICLE 5 (Mandatory conversion of bearer securities into nominal securities) Issuers of bearer securities must convert them into nominal securities within a maximum period of six months from the entry into force of this Decree-Law, under the following terms: a) amendments to the articles of association and other documents relating to the conditions for the issuance of securities necessary for the conversion of bearer securities into nominal securities may be deliberated by the administrative body of the issuers, without the need for approval in a general meeting; b) issuers of bearer securities publish, during the transitional period, an announcement informing their holders about the conversion process of these into nominal securities; c) the aforementioned announcement must explicitly state, namely: (i) the identification of the securities in question; (ii) the legal basis for the decision; (iii) the date of deliberation of amendments to the articles of association and other documents relating to the conversion of bearer securities into nominal securities and indication of the deliberative body; (iv) the expected date for submitting the application for registration of amendments to the articles of association and other acts subject to registration in the commercial register; d) the announcement referred to in paragraph c) is subject to mandatory publication on the issuer's website, if it exists, and in 2 newspapers with the highest circulation at the location of the issuer's headquarters and, in the case of issuers of securities admitted to trading in a regulated market, in the official stock exchange bulletin; e) conversion, at the issuer's expense, takes effect: (i) through an annotation in the register of title accounts of their holders; (ii) by substitution of titles or by amendment of the entries relating to them, carried out by the issuer; f) whenever conversion takes effect by substitution of titles, the issuer promotes the invalidation or destruction of old titles; g) issuers must request commercial registration, namely of amendments to the articles of association and other documents subject to commercial registration necessary for compliance with this article.

ARTICLE 6 (Transitional form of publication of corporate acts) Until the electronic site for the publication of corporate acts, provided for in Article 251, is implemented, it shall be carried out under the following paragraphs: a) publications must be made at the expense of the company in the Boletim da República; b) in companies, notices, announcements and summonses directed to partners, shareholders or creditors, when the law or articles of association require them to be published, must be published in one of the newspapers with the highest circulation at the location of the company's headquarters; and c) the content of the publication of the establishment of a business company, and its respective developments, is made by simplified extract, and any interested party may obtain a copy of the articles of association from the competent entity or the company.

ARTICLE 7 (Repeal Clause)

1. Articles 1 to 476 of the Commercial Code approved by Decree-Law No. 2/2005 of December 27, with amendments introduced by Decree-Law No. 2/2009 of April 24, and Decree-Law No. 1/2018 of May 4, are hereby repealed.
2. The following legal provisions are also repealed: a) Articles 1487, 1488, 1489 of Decree-Law No. 44,129 of December 28, 1961, extended to (then) Overseas by Ordinance No. 19,305 of July 30 and amended by Decree-Law No. 1/2005 of December 27, and Decree-Law No. 1/2009 of April 24; b) paragraphs 7 and 8 of Article 52 of the Notaries Code, approved by Decree-Law No. 4/2006 of August 23; c) paragraphs 1, 2, 3, 4, 5 and 6 of Article 3 of the General Statute for Micro, Small and Medium Enterprises, approved by Decree No. 44/2011 of September 21; d) Article 4 of the Regulation for Licensing Industrial Activity, approved by Decree No. 22/2014 of May 16; and e) Annex A-Glossary-, ii), ll), mm), nn), of the Regulation for Public Works Contracting, Supply of Goods and Provision of Services to the State, approved by Decree No. 5/2016 of March 8.
3. All legislation contrary to this Decree-Law is also repealed.

ARTICLE 8 (Entry into force) This Decree-Law enters into force 120 days after its publication. Approved by the Council of Ministers, on March 29, 2022. Publish. The President of the Republic, Filipe Jacinto Nyusi.

Commercial Code Book One Business Activity TITLE I General Provisions

ARTICLE 1 (Object) This Code regulates: a) business activity and the subjects that exercise it; b) the legal relationship arising from the exercise of business activity for only one of the subjects.

ARTICLE 2 (Business activity)

1. Business activity consists of the economic activity organized for the production and/or circulation of goods or provision of services, destined for the market, with a profit-making purpose.
2. The exercise of an economic activity that is not autonomous from the subject exercising it is not considered business activity.

ARTICLE 3 (Entrepreneur)

1. An entrepreneur is considered to be anyone who professionally and habitually exercises business activity.
2. Entrepreneurs are: a) the individual entrepreneur; and b) the business company.

ARTICLE 4 (Concept of enterprise) An enterprise is considered the organization of production factors promoted by an individual entrepreneur or a business company, oriented towards the production or distribution of goods and services, destined for the market and exploited with a profit-making purpose.

ARTICLE 5 (Classification of enterprise: General rule)

1. Enterprises are classified according to the number of employees and business volume as follows: a) micro enterprise - one that employs up to ten workers and whose annual business volume does not exceed 3,000,000.00 meticais; b) small enterprise - one that employs between eleven and thirty workers and has an annual business volume exceeding 3,000,000.00 up to 30,000,000.00 meticais; c) medium enterprise - one that employs between thirty-one and one hundred workers and has an annual business volume exceeding 30,000,000.00 up to 160,000,000.00 meticais; and d) large enterprise - one that employs more than one hundred workers and has an annual business volume exceeding 160,000,000.00 meticais.
2. The number of employees referred to in this article corresponds to the average existing in the preceding civil year.
3. The data considered for determining business volume are calculated on an annual basis between the dates of account closing.
4. Whenever in two consecutive financial years an enterprise exceeds or falls below the limits indicated in paragraph 1, it is obliged to change to the corresponding classification.
5. A micro, small or medium enterprise is not considered such if, despite falling into the categories provided for in paragraph 1, it holds more than twenty-five percent of participation by a large enterprise or the State.

ARTICLE 6 (Classification of enterprise for contracting public works, supply of goods and provision of services to the State) For the purposes of contracting public works, supply of goods, and provision of services to the State, in addition to the number of employees and business volume referred to in the previous article, for an enterprise to be classified in a certain category, it must also not hold, in each category, more than twenty-five percent of participation by a large enterprise or the State.

ARTICLE 7 (Classification of enterprise in industrial activity) For the purposes of exercising industrial activity, enterprise classification follows these criteria: a) micro enterprise – whose initial investment is less than 1,500,000.00 Meticais, installed or to be installed power is less than 10 KvA and which employs a maximum of ten workers; b) small enterprise – whose initial investment is greater than 1,500,000 Meticais, installed or to be installed power is equal to or greater than 10 KvA and which employs between eleven and thirty workers; c) medium enterprise – whose initial investment is equal to or greater than 150,000,000.00 meticais, installed or to be installed power is equal to or greater than 500 KvA and which employs between thirty-one and one hundred workers; and d) large enterprise – whose initial investment is equal to or greater than 600,000,000.00 Meticais, installed or to be installed power is equal to or greater than 1,000 KvA and which employs more than one hundred workers.

ARTICLE 8 (Classification of enterprise for the purposes of hiring foreign workers) For the purposes of hiring foreign workers, classification takes into account only the number of employees.

ARTICLE 9 (Prevalence of criteria)

1. For the purposes of Article 5, enterprise classification presenting a combination of parameters for number of employees and business volume different from those indicated, the business volume prevails.
2. For the purposes of Article 7, for an industrial enterprise to be classified in a certain category it must meet at least two of the criteria.
3. The classification of an industrial enterprise whose parameters are situated in three different or intercalated levels is considered the intermediate level.

ARTICLE 10 (Update of enterprise classification criteria) The Council of Ministers is responsible for updating the classification criteria for micro, small, medium and large enterprises provided for in Articles 5, 6 and 7 of this Code.

ARTICLE 11 (Conflict rule)

1. Acts arising from business activity are regulated as follows: a) regarding the substance and effects of obligations by the law of the place where they are practiced, unless otherwise agreed; b) regarding the manner of their fulfillment, by the law of the place where it takes place; and c) regarding external form by the law of the place where they are concluded, except in cases where the law expressly orders otherwise.
2. The provisions of paragraph a) of the preceding paragraph do not apply when their execution results in infringement of Mozambican public law or principles of public order.
3. All provisions of this Code apply to business relations with foreigners, except in cases where the law expressly determines otherwise, or if there is a Treaty or Special Convention that otherwise determines and regulates them.
4. The business capacity of Mozambicans who incur commercial obligations in a foreign country, and that of foreigners who incur them in Mozambican territory, is regulated by the law of each country.
5. The provisions of the preceding paragraph do not apply when their execution results in infringement of Mozambican public law or public order.

ARTICLE 12 (Subsidiary law) Cases not provided for in this Code are regulated according to the applicable provisions of this law for analogous cases and, failing that, by Civil Law provisions that are not contrary to the principles of Commercial Law.

TITLE II Business Capacity, Entrepreneur and its Obligations CHAPTER I Business Capacity

ARTICLE 13 (Capacity to exercise business activity) All natural persons who have completed 18 years of age, resident or non-resident in the country, or business companies, with statutory headquarters in the country or not, have legal capacity to exercise business activity, without prejudice to special legislation.

ARTICLE 14 (Exercise of business activity by the spouse)

1. Any spouse, independent of authorization from the other, may exercise business activity.
2. A spouse who feels prejudiced by an act that may compromise the couple's assets may express their opposition in accordance with the law.

ARTICLE 15 (Liability for the spouse's obligation)

1. Dotal assets are liable for obligations incurred by the spouse.
2. When the spouse is separated in person and property, or simply in property, only personal assets are liable.

ARTICLE 16 (Partnership between spouses) A business partnership may be legally established between spouses, regardless of the marital property regime.

ARTICLE 17 (Participation of a minor as partner or shareholder)

1. A minor who has not completed eighteen years of age may be a partner or shareholder with limited liability, provided that the social capital is fully paid up and remains so while business incapacity persists.
2. The minor's participation in the company's bodies, while their business incapacity lasts, is carried out through their legal representative.

ARTICLE 18 (Exercise of business activity by non-entrepreneurs)

1. A public law legal entity, when exercising business activity, does not acquire the status of entrepreneur but remains subject to the provisions of this Code regarding the exercise thereof.
2. The preceding paragraph applies to civil societies as well as to subjects that do not have a profit-making purpose.

CHAPTER II Obligations of Entrepreneur SECTION I General Provision

ARTICLE 19 (Special obligations of entrepreneur) Without prejudice to the special regime for individual entrepreneurs provided in this Code, special obligations of an entrepreneur include: a) adopting a trade name; b) keeping uniform records of operations related to the exercise of their enterprise; c) registering acts subject to commercial registration with the competent entity; and d) rendering accounts.

SECTION II Trade Name

ARTICLE 20 (Obligation of trade name)

1. The entrepreneur is designated, in the exercise of their activity, by a business name, which constitutes their trade name, and with it must sign the documents pertaining thereto.
2. The trade name must not be offensive to public morality or good customs.
3. The trade name must not use an expression that corresponds to quality or excellence to the detriment of others.

ARTICLE 21 (Composition of trade name) The entrepreneur's trade name may be composed: a) by their full or abbreviated civil name, as necessary for perfect identification of the person, possibly adding a nickname; b) by the name or trade name of one, some or all partners; c) by a trade designation; d) by an expression referring to the business activity developed or to be developed; and e) by the combination of the elements referred to in the preceding paragraphs.

ARTICLE 22 (Principle of truth)

1. The elements used in the composition of the trade name must be true and not misleading regarding identification, nature, size or activities of its holder.
2. The following cannot be used in the composition of the trade name: a) characteristic elements, even if constituted by trade designations, acronyms or compositions, that suggest activities different from those exercised or proposed to be exercised by the holder; and b) an expression that may mislead regarding the legal characterization of the entrepreneur, namely the use by a natural person of a designation suggesting the existence of a legal entity, or by a business company of an expression commonly used to designate a public body or non-profit legal entity.

ARTICLE 23 (Principle of novelty)

1. The trade name must be distinct and not susceptible to confusion or error with any other already registered.
2. In assessing distinction and insusceptibility to confusion or error, the type of entrepreneur, their domicile or headquarters, as well as the affinity or proximity of activities exercised or to be exercised, must be considered.
3. Commonly used words and place names, as well as any indication of geographical origin, are not considered exclusive.
4. The incorporation in the trade name of registered distinctive signs is subject to proof of legitimate use.
5. In the assessment referred to in paragraph 2, the existence of names of establishments, insignias or marks so similar that they may mislead regarding the ownership of these distinctive signs must also be considered.

ARTICLE 24 (Obligation to use the official or national language)

1. The trade name must be correctly drafted in the official language or any other national language.
2. The preceding paragraph does not apply to the use of a word that does not belong to the official or national language when: a) it enters into the composition of an already registered trade name; b) it corresponds to a common word without adequate translation in the official or widely used language; c) it corresponds totally or partially to the name or trade name of partners; d) they constitute a trademark whose use is legitimate, under the respective legal provisions; e) they result from the fusion of words or part of words that belong to the official language under this article, directly related to the activity exercised or to be exercised, or still taken from the remaining elements of the trade name or partners' names; and f) they aim for greater ease of market penetration to which the activity exercised or to be exercised is directed.
3. With the exception of the stipulated in the preceding paragraph, the adoption of a foreign language trade name is only admitted upon attachment of an official translation.

ARTICLE 25 (Trade name registered abroad) The admissibility of a trade name registered abroad is subject to proof of such registration at the place of origin and insusceptibility to confusion with a trade name already registered in Mozambique.

ARTICLE 26 (Exclusive use of trade name)

1. The right to exclusive use of a trade name is only constituted after registration by the respective holder with the competent entity.
2. The preceding paragraph does not prejudice the possibility of declaration of nullity, annulment or expiration of a trade name, under this Code.

ARTICLE 27 (Illegal use of trade name) The illegal use of a trade name confers on the interested party the right to demand its prohibition, as well as compensation for resulting damages, without prejudice to the corresponding criminal action, if applicable.

ARTICLE 28 (Transmission of trade name)

1. The acquirer, whether inter vivos or mortis causa, of a business company may continue to manage it under the same trade name, when authorized to do so, possibly adding a declaration of succession.
2. The authorization referred to in the preceding paragraph belongs to the transferor; in the case of transmission by death, and if the deceased has not disposed of it in writing, the authorization is given by the majority of heirs, regardless of whether it is transmission to a third party or an heir.
3. If the entrepreneur's trade name includes a business company, partner or shareholder name or trade name, their consent is not required for the transmission of the trade name, unless otherwise agreed in the constitutive act.
4. In the case provided for in the preceding paragraph, the partner or shareholder ceases to be liable for obligations incurred in the operation of the transmitted enterprise from the registration and publication of the transmission act.
5. Whoever acquires the right to temporarily operate another's commercial enterprise may use the owner's trade name without authorization.
6. The transmission of a trade name is only possible together with the enterprise.

ARTICLE 29 (Exit or death of partner or shareholder)

1. The exit or death of a partner or shareholder whose name or trade name appears in the entrepreneur's business company trade name does not determine the need to alter it, unless otherwise agreed in the constitutive act.
2. The situation provided for in the preceding paragraph applies the provisions of paragraph 4 of the previous article.

ARTICLE 30 (Annulment of trade name)