Reckless trading is not expressly defined in Botswana’s Companies Act (the “Act”) or in any other legislation.
However, in broad terms, it may be described as carrying on business, or incurring further obligations, in circumstances where there is no reasonable basis for believing that the company will be able to meet those obligations as they fall due. It is not limited to fraud or deliberate misconduct, and may also arise from negligent conduct, willful blindness, or a serious disregard of the company’s financial position and the risk of prejudice to creditors.
In today’s economic climate, many companies face increasing financial strain. Cash flow tightens, creditors apply pressure, and directors are required to make difficult commercial decisions. In such circumstances, it is often tempting to continue trading in the hope that the company’s position will improve. However, once a company is no longer able to meet its obligations, or is clearly heading towards insolvency, the legal position changes fundamentally.
In terms of the Act, directors occupy a fiduciary position and are subject to strict legal duties. Section 130 requires directors to act in good faith and in the best interests of the company, while section 158 requires them to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. These duties require active oversight of the company’s financial position and informed decision making at all times.
A company is not solvent simply because it continues to operate. It must be able to pay its debts as they fall due, and its assets must exceed its liabilities. Once this is no longer the case, the focus of directors shifts away from shareholder value and towards the protection of creditors.
The Act creates clear mechanisms through which directors and officers may be held personally liable where that shift is ignored. Section 160 of the Act provides that a director who is knowingly party to the company incurring a debt without a reasonable or probable expectation that it will be paid may be required to compensate for the resulting loss. In addition, section 158 exposes directors to civil liability where they fail to act with the required level of care, diligence and skill.
The position becomes even more acute once a company is placed under liquidation or judicial management, as its affairs then come under greater scrutiny.
Once appointed, a liquidator or judicial manager will investigate the affairs of the company for the purpose of recovering value for the benefit of creditors, including by pursuing individuals involved in the conduct of its business.
Section 481 of the Act empowers the court, on the application of a liquidator, judicial manager, or any interested person such as a creditor, to hold any person who knowingly participated in reckless or fraudulent trading personally liable, without limit, for all or part of the company’s debts.
This exposure is not confined to directors. It extends to any person who was knowingly party to the conduct of the business, including company officers and others involved in its management or affairs, and it does not require the company to be in liquidation or judicial management for the provision to apply.
The consequences are not only financial. In addition to personal liability, the High Court may, under section 501 of the Act, disqualify a person from acting as a director where that person’s conduct falls below the standard required of those entrusted with the management of a company.
This may arise where a director has, inter alia, persistently failed to comply with the Act or the Botswana Stock Exchange Act, breached duties owed to the company or its stakeholders, engaged in fraudulent conduct, acted in a reckless or incompetent manner, or was responsible for a company being forced into insolvency, restructuring, or winding up due to its inability to meet its obligations.
Such an order under section 501 may prohibit that person, without leave of the court, from acting as a director or promoter of, or being involved, directly or indirectly, in the management of a company for a period not exceeding five years, with significant implications for future directorships and professional standing.
In practice, the risk of personal liability rarely arises from a single decision. Rather, it develops over time. It often begins with mounting pressure on cash flow and an increasing inability to meet obligations as they fall due. This is frequently followed by a reliance on new credit to sustain operations, decisions taken on the basis of uncertain or informal funding arrangements, and a gradual erosion of financial discipline.
Certain patterns also tend to emerge. These include a failure to maintain proper accounting records, the absence of reliable financial information, the use of company funds for purposes outside the ordinary course of business, and the continued incurring of obligations in circumstances where there is no clear basis for repayment.
The Act does not seek to penalise honest commercial judgment. It does, however, require directors to act in good faith, exercise reasonable care, diligence and skill, and ensure that decisions are properly informed and documented. In practical terms, this requires directors to maintain sufficient oversight of the company’s financial position, to interrogate the basis upon which obligations are incurred, and to act decisively where financial distress becomes apparent. This may include obtaining appropriate legal, financial, or restructuring advice at an early stage.
Reckless trading is not simply about business failure. It arises where financial reality is ignored and creditors are exposed to risk without a reasonable basis. Once insolvency sets in, the risk no longer rests with the company alone. It may shift to the individuals behind it.
On the 1st December 2025, the Employment and Labour Relations Act, 2025 was published in the Botswana Government Gazette.
Key dates to note:
Date of Assent:27th November 2025
Date of Commencement:On Notice
The publication of this Act marks a significant milestone in the ongoing reform of employment and labour relations law in Botswana. Once brought into force, this Act will have wide-ranging implications for employers, employees, trade unions, and practitioners across the labour and employment landscape.
The changes are significant and will materially change the employment and labour law landscape of Botswana.
Stakeholders are advised to ensure full compliance with the new legislative framework in anticipation of the commencement notice which may be issued any day.
Get in touch with our Employment and Labour Law Team to get up-to date with the changes in Botswana’s labour law space and to understand how these changes will impact your business:
Introduction
When demand letters and follow-ups fail, many creditors turn to the courts. But as many discover, a judgment is only as good as its enforcement. Whether you’re a company, landlord, bank or individual, recovery doesn’t end with a court order, it begins with it. That final step, the one that turns your court victory into actual payment, is where Deputy Sheriffs come in.
With the new Deputy Sheriff’s Act, 2024 and its Regulations, Botswana has transformed the legal framework for enforcing court orders. These changes bring greater oversight, transparency and professionalism, offering creditors a more reliable path to getting paid.
Key Changes Creditors Should Know
1. Structured Oversight and Regulation
Previously, Deputy Sheriffs were appointed under Section 18 of the High Court Act (CAP 04:02) by the Registrar of the High Court. The Registrar also served as Sheriff and was responsible for their supervision. This was an arrangement with no clear statutory framework. There were no qualification requirements, no formal register of Deputy Sheriffs and no built-in accountability mechanisms.
Now, under Part II of the new Act (sections 3 – 4), the Sheriff is a standalone public official appointed by the President to oversee the profession. The Sheriff’s functions include maintaining the register of Deputy Sheriffs, issuing and renewing practising certificates, resolving public complaints against Deputy Sheriffs, inspecting and approving storage facilities for attached property and assessing reports from Deputy Sheriffs.
Working alongside the Sheriff is the Board of Deputy Sheriffs, established under Part VIII (sections 19 – 30). The Board recommends suitable candidates for appointment as Deputy Sheriffs, issues Fidelity Fund certificates, manages the Fidelity Fund, inspects compliance with the Code of Conduct and professional standards. It can also investigate complaints and establish specialist committees to assist in oversight.
Together, the Sheriff and Board of Deputy Sheriffs replace a fragmented structure with a clear, institutionally governed framework, ultimately giving creditors more confidence in who they are instructing.
2. Financial Safeguards and the Fidelity Fund
One of the most important reforms is the introduction of statutory financial safeguards.
Under section 18 of the new Act, Deputy Sheriffs must operate a separate trust account for client monies. These accounts must be audited annually, and interest that accrues to the trust account must be paid into the Fidelity Fund. The money in these accounts is protected by law and cannot be treated as the Deputy Sheriff’s personal or business assets, even in the event of that Deputy Sheriff’s death or insolvency.
In addition, Part XI (sections 41 – 47) establishes the Fidelity Fund for Deputy Sheriffs. No Deputy Sheriff may lawfully practise without holding a valid Fidelity Fund certificate, which is issued and renewed annually (section 49). The certificate is issued by the Board of Deputy Sheriffs upon application and payment of a prescribed fee (sections 42, 48 and 50). The Fund is financed through prescribed levies, application fees, interest from trust accounts and income from investments (section 43). It may be used to compensate persons who suffer loss or hardship due to dishonesty or misconduct by a Deputy Sheriff or their employee (section 45).
If funds are misused or delayed, creditors now have a clear statutory route to claim compensation under section 45, instead of attempting to claim same through a long civil suit. This combination of trust accounts and a Fidelity Fund provides both preventive and remedial protection.
3. Qualifications, Licensing and Removal
Under sections 5 – 8, only applicants who hold a certificate in law, commerce, accounts, tracing, auctioneering or a related field may be appointed as Deputy Sheriffs (section 7). These requirements ensure that Deputy Sheriffs have a baseline understanding of the legal, commercial or financial principles necessary for executing judicial mandates responsibly. Disqualifying factors include prior convictions for dishonesty, insolvency, dismissal from a position of trust or past misconduct (section 8).
Under sections 14 – 17, Deputy Sheriffs must also hold a practising certificate, issued annually by the Sheriff. If they fail to renew, or breach the Code of Conduct, they may be removed from the official register.
The profession is now tightly regulated and only those who meet legal, financial and ethical standards may remain in practice.
4. Code of Conduct, Tariff Caps and Complaint Procedure
The Deputy Sheriffs Regulations, 2025 (S.I. No. 33 of 2025) introduce a Code of Conduct (Schedule 3) and a fixed tariff schedule (Schedule 2). Both are designed to protect clients and creditors from abuse or uncertainty.
The Code of Conduct requires Deputy Sheriffs to act with diligence, use only reasonable force, avoid property damage during enforcement, and most importantly for creditors, remit client funds without delay or unauthorised deductions. These obligations are enforceable and failure to comply can result in suspension or removal.
The tariff system standardises Deputy Sheriffs’ fees. Execution of a writ against immovable property, for example, is now capped at BWP 2,000.00, with travel and service charges clearly regulated. If enforcement is withdrawn or becomes unnecessary due to insolvency, the Deputy Sheriff may claim 1.5% of the writ amount, making the costs predictable even where full recovery has not been achieved.
In addition to the above, procedures governing how execution and civil imprisonment are to be carried out are set out in the Deputy Sheriffs (Execution) Regulations, 2025 (S.I. No. 34 of 2025) and the Deputy Sheriffs (Procedure for Civil Imprisonment) Regulations, 2025 (S.I. No. 32 of 2025).
When a Deputy Sheriff fails to comply with the procedures or standards set out in the Regulations, creditors now have a formal complaint procedure to turn to. In terms of Regulation 9 of the Deputy Sheriffs Regulations (S.I. No. 33 of 2025), complaints against a Deputy Sheriff may be lodged with the Board of Deputy Sheriffs using a prescribed form (Form 6, Schedule 1). Complaints may also be forwarded to the Board by the Judicial Service Commission, a court or a member of the Administration of Justice. If the Board finds the complaint reasonable, it may initiate a hearing, order a refund of unaccounted funds, suspend the Deputy Sheriff’s certificate or refer the matter for prosecution or civil action (Regulation 10).
Conclusion
The Deputy Sheriffs Act, 2024 represents a significant shift from a loosely regulated enforcement environment to one that is professionally governed, financially accountable and protective of creditors’ interests. With stronger oversight, predictable costs and legal protections for recovered funds, creditors can now enforce their rights with greater speed, security and confidence.
Deputy Sheriffs who were operating under the old system have been given a 12-month window from the commencement of the Act to align with the new requirements. After that, they must be fully licensed under the new regime to continue practising. This transition ensures continuity while reinforcing the expectation that all enforcement is now subject to a more reliable legal framework.
The Companies Act (the “Act”) has recently undergone significant amendments, which took effect on 24 January 2025 (“Commencement Date”). These changes aim to enhance corporate governance, transparency, and regulatory compliance.
Below, we outline the key amendments:
Mandatory Company Constitutions
The Act now requires all companies to have a constitution in a prescribed form. Previously, companies could operate without a constitution and would be governed solely by the Companies Act. The amendment suggests that companies without a constitution must adopt the prescribed version set out in the Schedule to the Act. Companies have been given 12 (Twelve) months from the Commencement Date, to comply with this requirement.
Private Companies to File Financial Statements
Private companies are now required to file financial statements with the Registrar of Companies.
Exempt private companies (those with (i) total assets of less than P5,000,000 and (ii) annual turnover of less than P10,000,000 in the preceding financial year) must file financial statements in a prescribed form.
Non-exempt private companies (those with (i) total assets exceeding P5,000,000 and (ii) annual turnover exceeding P10,000,000, in the preceding year) must file financial statements, any group financial statements (in the form prescribed for public companies under the Act), and an auditor’s report.
Previously, this requirement only applied to public companies, companies in which a public company holds more than 25% of the share capital, or companies required by law to submit financial statements to the Registrar.
Licensing of Company Secretaries
Company secretaries must now be licensed by the Registrar of Companies (in a manner to be prescribed) before being appointed. Previously, a company secretary only needed to meet the qualification requirements set out in the Act and consent to the appointment. Companies have 24 (Twenty-Four) months from the Commencement Date, to comply with this requirement.
New Provisions Relating to Nominee Directors and Shareholders
The amendment introduces new definitions for the terms “Nominee” and “Nominator”:
A nominee is defined as an individual or legal entity instructed by another to act on their behalf in relation to a company.
A nominator is defined as an individual, group, or legal entity issuing instructions (directly or indirectly) to a nominee to act as a director or shareholder. This includes shadow directors and silent partners.
Nominee shareholders and directors must disclose their nominee status and the identity of their nominator to the Registrar, which will be recorded in the register. Additionally, nominees must disclose their status to any competent authority upon request, and any changes to this information must be reported to the Registrar within 10 (ten) days.
Registrar Empowered to Exchange Company Information
The Registrar of Companies is now authorized to exchange company information including basic details, beneficial ownership records, and nominee-nominator information, with foreign corporate registries or competent authorities.
Maintenance of Beneficial Ownership Records
All companies must now maintain an up-to-date record of beneficial ownership information, including details of any shareholder companies registered outside Botswana. Companies must update this record and notify the Registrar within 10 (Ten) days of any changes. Failure to comply is an offence punishable under the Act.
Trading After Removal from the Company Register
The amendment makes it an offence for a company that has been removed from the register to continue trading.
Other Key Changes
The threshold for substantial shareholders under Section 329 of the Act has increased from 5% to 10%.
Companies that have been removed from the register for more than five years may not be restored.
Companies removed from the register for failing to pay annual returns may be restored within seven days of payment.
Conclusion
These amendments are designed to strengthen Botswana’s corporate regulatory framework and promote greater transparency and compliance among companies in Botswana. However, there will be no doubt that the amendment will increase the administrative burden associated wtih regulating companies in Botswana.
For more information on these changes and general company law in Botswana, please contact:
Bigamy is one of those crimes we think doesn’t happen anymore, like challenging your rival to a duel or cheque fraud. But it appears that it still has a place in modern society.
Bigamy is the crime of going through a marriage ceremony with a second person while still being in a marriage that has not been dissolved by death, divorce, or annulment. It is provided for in our Penal Code, along with marriage with dishonest or fraudulent intent, which also carries a 5-year sentence. Additionally, signing a false marriage certificate can result in a 7-year sentence.
The effect of bigamy is that the second “marriage” is void.
As with all crimes, there must be the appropriate mens rea or criminal intent. The mens rea is undoubtedly present when the bigamist knows that he or she is still married, as is most often the case—separation from your spouse is not enough to allow a second marriage.
The Indian Court dealt with a landmark case involving a woman married to a man who converted to another religion. He had been married to his wife for a long period, and they had children from their marriage. However, he entered into a second marriage. The Court ruled that the husband had converted to avoid prosecution under bigamy and had no faith in his new religion. The second “marriage” was found to be fraudulent, and the first marriage could not be dissolved simply because the husband converted to a different religion.
Bigamy can, and should be, dealt with by criminal law, but there are also remedies in civil law.
The Natal High Court found that where a man purported to enter into a second civil marriage while his first marriage was still valid, the second marriage was bigamous and unlawful. In that case, the second wife was unaware of the first marriage and had a claim for damages against the husband. However, she had no claim for spousal support.
A duped second “wife” may apply for the marriage to be declared null and void and may claim damages for impairment of dignity, insult, and degradation, as may the wronged first wife.
However, if you know a person to be already married and receive a proposal of marriage from them, don’t expect to be able to make a claim for breach of promise to marry!
In our own courts, the reported case of Ntshekang v Pule dealt with the position of the law in regard to customary law. It was found that “A party married according to civil rights commits bigamy if he or she marries again before divorcing the spouse in the first marriage. Similarly, a party married according to customary law commits bigamy if he or she contracts a civil rights marriage with a third party. The only time a party married according to customary law may contract a civil rights marriage is if he or she marries the spouse already married to him or her according to customary law before a second customary marriage is contracted by the husband with a third party.”
At Armstrongs, we have very recently dealt with two cases of bigamy—both instances committed by husbands. In the first, the husband from Botswana was married under civil law. The marriage turned sour, but instead of seeking a divorce, he simply married his new paramour in a neighboring country, swearing on oath that there was no impediment to the second marriage. Because the offense was not committed in Botswana, our neighbors’ authorities are dealing with it.
In the second case, the husband had been married for many years following a civil ceremony in the United Kingdom and is still married. He and his wife have two adult children. The wife quite by chance discovered a marriage certificate from a marriage officer in Botswana and a video of the wedding. The husband is shown in the video swearing that he had never been married before and that there was no impediment to his marriage to his very young bride, whom he apparently met on a dating site.
We obtained an order ring-fencing the husband’s considerable assets in Botswana pending the wife’s divorce action in the United Kingdom and her claim for her half-share of the assets.
The lessons to be learned—unless you want five years in prison and two mothers-in-law—dissolve your first marriage first, and be careful of whom you meet on a dating site.
