Selling a property owned by a company

Godknows Hofisi Business & Law

It is common to find an immovable property such as a residential, commercial, or industrial property registered in the name of a company.

There are different ways through which such a property can be sold to a purchaser. The two common ones are the following:

The company sells the property to the purchaser.

If the property is the only one owned by the company and the company has no liabilities or other assets the shareholders may sell their shares in the property holding company to the purchaser thereby effectively selling the property indirectly.

Company sells the property

In this case the directors of the company resolve to sell the property to the purchaser, the company will be the seller and the purchaser will purchase the immovable property from the company.

The agreement of sale will be between the company represented by its director or directors or any person appointed by them through a resolution, and the purchaser.

The purchase price will be paid by the purchaser to the company. The funds will go into the company’s coffers for use by the company. It will not be for the shareholders.

Even for capital gains tax purposes, it is the company that will be assessed by Zimra as the taxpayer, not the shareholders. If there is any capital gains tax payable the company will pay Zimra.

When a conveyancer eventually attends to the transfer of the property such transfer will be from the company to the purchaser. The property will come off the company’s asset register or books. There will be no change in the company’s shareholding.

Shareholders sell their shares in the property holding company

This arrangement or type of transaction is quite common. An investor can form a company, buy a single property and have it registered in the name of the company. The company is usually dormant. It is simply a property holding company with no other transactions.

When the shareholders or investors want to sell the property owned by the company, instead of selling the property off the company, they in fact sell their 100 percent shareholding in the company. In other words, the shareholders sell all their shares in the company and thereby effectively transfer ownership of the shares and indirect ownership or control of the property to the purchaser.

In this case, the property will remain that of the company but it is the shares in the company that will have changed hands.

The agreement of sale will be for shares in the company and will be between the current or existing shareholders personally and the purchaser of the shares who intends to have indirect ownership or control of the asset.

The purchase price for the shares will be paid by the purchaser to the shareholders and not the company. The funds will be for the shareholders to use as they please.

For capital gains tax purposes the selling shareholders are assessed by Zimra and pay if any amount is payable to Zimra. The funds to pay Zimra come from the shareholders personally, not the company.

There is no conveyancing involved. Instead, company secretarial work is involved. As required by the Companies and Other Business Entities Act (Chapter 24:31) which repealed and replaced the Companies Act (Chapter 24:03) share transfer forms have to be completed to transfer the shares from the current shareholders to the purchasing shareholders.

Further, existing share certificates have to be cancelled and new ones issued to the purchaser. Directors of the company have to be changed by removing the existing ones from the CR6 form (formerly CR14) and adding or appointing new ones as decided by the purchaser.

A common mistake made is simply to change directors on the CR6 and nothing is done to change the shareholders yet it is shareholding that is more important. Out of abundance of caution, some prudent purchasers change shareholding as explained above but they go the extra mile and issue new shares to the purchaser through the CR11 form.


When selling an immovable property registered in the name of a company, be clear of the structure and prepare the agreement of sale accordingly. Assess what is more convenient in the circumstances.


This simplified article is for general information purposes only and does not constitute the writer’s professional advice.

 Godknows (GK) Hofisi, LLB(UNISA), B.Acc(UZ), Hons B.Compt (UNISA), CA(Z), MBA(EBS, Heriot- Watt, UK) is the Managing Partner of Hofisi & Partners Commercial Attorneys, chartered accountant, insolvency practitioner, registered tax accountant and advises on deal and transactions.

He has extensive experience from industry and commerce and is a former World Bank staffer in the Resource Management Unit. He writes in his personal capacity. He can be contacted on +263 772 246 900 or [email protected]

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