Micro and Small Enterprises Act

This Act may be cited as the Micro and Small Enterprises Act.

Defines the phrase "Section whose annual turnover does not exceed five hundred thousand shillings".

Provides an enabling business environment.

The Registrar may publish a notice requiring a registered association or umbrella organization to prove it still exists within three months; if not satisfied after that period the Registrar must cancel the registration and publish notice, and if satisfied beyond doubt may immediately cancel without prior notice.

Aggrieved associations or umbrella organizations may appeal the Registrar’s refusal or cancellation to the Tribunal within thirty days, and may further appeal the Tribunal’s decision to the High Court within thirty days on points of law.

Registered associations and umbrella organizations must have an office and a postal address and notify the Registrar in the prescribed form when applying for registration; any change of office or postal address must be notified to the Registrar within fourteen days and the notice must be signed by three registered officers.

Registered associations and umbrella organizations must notify the Registrar in the prescribed form within fourteen days of any change of officers or office title, and the notice must be signed by three registered officers; failure to give the notice is an offence.

The Registrar may order a registered association or umbrella organization to produce evidence within thirty days if there is a dispute as to who are the lawful officers; failure to satisfy the Registrar may lead to cancellation of registration; an aggrieved association may appeal to the Tribunal within thirty days of cancellation.

Registered associations and umbrella organizations must have constitutions or rules that include the matters in the First Schedule; the Registrar can order existing registered bodies to amend constitutions within three months; contravention is an offence with fines and possible imprisonment; officers can avoid conviction if they prove due diligence and matters beyond their control.

Associations and umbrella organizations must obtain the Registrar's consent before amending their name or constitution, affiliating with political organizations, or dissolving; applications must be accompanied by certified minutes and delivered to the Registrar within fourteen days; contravention is an offence.

An officer of a registered association or umbrella organization must not be appointed as an auditor of that association or organization.

It addresses acting or purporting to act as an officer of a registered association or umbrella organization without being duly appointed or elected.

Registered associations or umbrella organizations must keep a members register with each member's name, address, admission date and cessation date.

Registered associations and umbrella organizations must keep one or more books of account and enter details of all money received and payments made; contravening this requirement is an offence.

The treasurer must render accounts yearly (at times in the association's constitution or rules), when required by members' resolution or rules, and on resigning or vacating office; after accounts are rendered the treasurer or officer must forthwith hand over money, records and property to the successor; contravention is an offence punishable by a fine not exceeding one hundred thousand shillings or imprisonment up to one year, or both.

Associations must provide books, documents and member lists to the Registrar when required; officers, members, the Registrar, or authorized persons may inspect accounts and documents; obstruction is an offence with specified penalties.

Registered associations and umbrella organizations must render true accounts of money (audited under their rules) and elect or appoint required officers, trustees, auditors and committees; contravention of these requirements is an offence.

Registered associations and umbrella organizations must submit prescribed annual returns, accounts and documents to the Registrar on or before the prescribed date; incomplete returns are treated as not furnished; contravention and falsification are offences with penalties.

The Registrar may order associations or umbrella organizations to provide specified documents and information; specified minimum compliance periods apply; failure to comply is an offence; audited accounts must be by a person approved by the Registrar.

The Registrar may publish information received under sections 43 or 53 if doing so appears to be in the interests of members of an association or umbrella organization.

The Registrar, an administrative officer, or a police officer (Senior Sergeant or above) may in writing require persons believed able to give information about associations to attend at specified places; persons who, without reasonable cause, fail to comply or refuse to give name, address, truthful answers or produce documents commit an offence punishable by a fine not exceeding 100,000 shillings or imprisonment up to six months or both; the requiring officer may record written statements and may order photographs and fingerprints for identification.

The Cabinet Secretary must consider the potential and viability of micro and small enterprises when determining which categories will be assisted.

Creates an office of the Registrar of Micro and Small Enterprises, states it is an office in the public service, provides that the office is headed by an officer designated the Registrar, and makes the Registrar responsible for registering micro and small enterprises in accordance with this Act.

Associations or umbrella organisations that intend to register must apply to the Registrar within twenty-eight days of formation and the applicant must supply specified documents and information.

Consider the application and any further information provided by the applicant.

When an association or umbrella organisation is registered, the Registrar must issue a certificate of registration in the prescribed form.

If the Registrar is satisfied that an association or umbrella organization is a branch of, or affiliated to or connected with, a political organization, that is stated under the heading "Refusal of registration."

The Registrar may cancel or suspend the registration of an association or umbrella organization for specified grounds after giving written notice and allowing the association to show cause within the period specified.

Establishes the Micro and Small Enterprises Authority and lists powers including suing and being sued; acquiring and disposing of property; borrowing and investing; entering contracts; and performing other acts for its functions.

Section 30 sets out the Authority's membership (various named officers and nominated representatives), allows the Authority to co-opt persons for advice, and provides that co-opted persons may not vote or be counted for quorum; it also requires persons to hold a minimum KCSE (or equivalent) and five years' relevant experience to qualify for appointment.

theAuthority formulate and review policies and programs for micro and small enterprises

The Authority has the power to enter into contracts.

The Authority's conduct and regulation of its business and affairs must follow the Second Schedule; except where the Second Schedule provides otherwise, the Authority may regulate its own procedure.

The Authority may, by resolution, delegate its powers or functions to a committee or to any member, officer, employee or agent of the Authority.

The Authority must appoint a Chief Executive Officer by competitive process; the CEO serves for five years, may be re-appointed for one final five-year term, is an ex officio member without a vote, and has specified management and secretary responsibilities.

Qualifications for appointment as Chief Executive officer: experience in micro and small enterprise development and entrepreneurship.

The Authority may appoint officers, agents and other staff as necessary for efficient discharge of its functions and may determine their terms and conditions of service.

The Authority must keep its common seal in custody (with the Chief Executive Officer or another person it directs) and the seal must be authenticated by the chairperson and the Chief Executive Officer; the Authority may nominate a member to authenticate in their absence.

Members, officers, staff, agents and persons acting on their directions are exempt from personal liability for acts done bona fide in executing the Authority's functions, powers or duties under this Act.

The Authority remains liable to pay compensation or damages to any person for injury to them, their property or interests caused by exercising powers or by failure of works; section 39 does not relieve that liability.

The Authority's funds include specified sources in subsection (1); the Authority must retain all its funds and year-end balances for its established purposes and must establish a reserve account.

The Authority's financial year is twelve months ending on the thirtieth June each year.

The Authority must prepare annual revenue and expenditure estimates at least three months before each financial year and must approve and submit those estimates to the Cabinet Secretary before the financial year begins.

The Authority must ensure proper books and records of accounts are kept for its income, expenditure and assets.

The Authority may invest its funds in specified securities or approved banks, and may place surplus moneys on deposit with banks it chooses.

The Authority must advise and liaise with relevant authorities to earmark and zone land for developing micro and small enterprises.

The Authority must advise and facilitate government ministries and agencies on worksite management policy and must provide suitable infrastructure and facilities for micro and small enterprises.

Develop and administer certified demand-driven capacity building and entrepreneurship programmes for micro and small enterprises.

Provide technical assistance in the development of products.

Mobilise funds and resources for the development of appropriate technology in relevant research institutions and enterprises that develop technology for the micro and small enterprises sector.

Establishes the Micro and Small Enterprises Development Fund, lists its purposes and funding sources, authorizes the Cabinet Secretary to fix the Fund's size by Gazette notice, and requires the Authority to invest surplus monies in government securities with income credited to the Fund.

The Authority must administer the Fund.

Certain organisations may apply to the Authority to access funds for micro and small enterprise programmes; associations or umbrella organisations registered under the Act may apply for loans, factoring, guarantees and micro-insurance from the Fund for their members; the Authority must draw up the Fund's management organisation and regulations.

There is hereby established a Tribunal to be known as the Micro and Small Enterprises Tribunal to deal with claims enumerated in section 56 of this Act.

The Tribunal has jurisdiction to hear the types of disputes listed in Section 55, including disputes among members and commercial disputes involving micro and small enterprises.

The Tribunal is exempt from the Evidence Act; it must, on written application by a party or referral by the Authority, inquire into matters under this Act and make awards, directions, orders or decisions (and notify those affected); it must sit at times and places it appoints; proceedings are open to the public unless the Tribunal directs otherwise for good cause; the Tribunal shall regulate its proceedings except where this Act or regulations provide otherwise.

Section 57 gives the Tribunal powers to order attendance, require documents, take evidence on oath, summon witnesses, and (when it enters judgment) must issue a decree enforceable as a court decree; it also lists prohibited conduct such as failing to attend, refusal to take oath or produce documents, giving false evidence, insulting or interrupting proceedings, and failing to comply with Tribunal orders.

Specifies the Tribunal quorum, who must not sit due to interest, decision rule by majority with presiding member's casting vote, Chairperson's solo jurisdiction for temporary injunctions, and substitution rules for incapacity or authorization.

Decisions made by the Registrar or the chief executive officer may be appealed to the Tribunal, which can confirm, set aside or vary decisions, exercise the Authority's powers in the proceedings, and make other orders including costs; status quo is to be maintained pending determination.

A person aggrieved by a Tribunal decision may appeal to the High Court within thirty days; the High Court may confirm, set aside, vary, remit or make other orders on appeal.

The chairperson of the Tribunal may appoint persons with special skills or knowledge on micro and small enterprise issues to act as assessors in an advisory capacity when such expertise is needed for proper determination of a matter.

The Authority may refer complex or important matters to the Tribunal after giving notice; where referred, the Authority and the parties are entitled to be heard and may appear personally or by advocate before any decision.

A person who is a party to proceedings before the Tribunal may appear in person or be represented by an advocate.

The chairperson and other Tribunal members are immune from being sued for acts or omissions in the discharge of their tribunal duties if they in good faith believed they had jurisdiction; contempt of the Tribunal is an offence and the Tribunal may punish it under the Act.

The Authority must pay the Tribunal's expenses from the Authority's funds; remuneration and allowances are to be paid to the chairperson, vice-chairperson and members as determined by the Cabinet Secretary in consultation with the Authority.

An association or umbrella organization charged with an offence may appear through a representative, who may enter a plea and conduct the organization’s defence.

If an association or umbrella organization is convicted for an offence under this Act where no penalty is provided, the association is liable to a fine up to one hundred thousand shillings; every officer is likewise liable to that fine or to imprisonment for up to six months (or both). An officer is not to be convicted under subsection (1) if they can satisfy the court that they exercised due diligence and the offence occurred due to matters beyond their control.

Certain papers certified by the Registrar are admissible as prima facie evidence; courts generally must not issue processes compelling production of Registrar documents without the court's leave, and any process issued must state it was issued with the court's leave.

Anyone may, on payment of the prescribed fees, inspect at the Registrar's office the register and related documents lodged with the Registrar and may obtain a copy or extract.

Orders are binding on the association or umbrella organization if served in accordance with section 72 (1) of this Act.

A document sent by registered post is treated as having reached the addressee seven days after posting.

Public officers are exempt from being sued for acts or omissions done in good faith and without negligence while performing powers or duties under this Act.

The Authority must prepare and submit an annual report to the Cabinet Secretary within three months after the end of each financial year; the Cabinet Secretary must, within three months after receiving the report, transmit it to the Clerk of the National Assembly for tabling.

The Cabinet Secretary may, in consultation with the Authority, make regulations to prescribe matters under the Act and to give effect to its provisions, including forms, fees, licensing, loan access, account forms, returns and penalties.

Associations or umbrella organizations previously registered under any written law are treated as registered under this Act and must operate subject to necessary modifications to give effect to the Act.