Companies Act
Part 1 of 6 · provisions 1–200
The Cabinet Secretary must bring the remaining provisions into operation by notice in the Gazette; if the Cabinet Secretary fails to commence them within nine months, Parliament may bring those provisions into operation by resolution of each House.
- Jurisdiction
- Kenya
- Instrument
- Act or statute
- Citation
- Cap. 486
- Version
- 27 Dec 2024
- Language
- en
- Official source
- View official record ↗
- Complete work
- View statute overview
Source attribution: Source: Kenya Law
Statute overview
About this statute
The Cabinet Secretary must bring the remaining provisions into operation by notice in the Gazette; if the Cabinet Secretary fails to commence them within nine months, Parliament may bring those provisions into operation by resolution of each House. The Act's objects are to facilitate commerce, industry and other socio-economic activities by enabling one or more natural persons to incorporate as entities with perpetual succession, with or without limited liability, and to provide for the regulation of those entities in the public interest, particularly in the interests of their members and creditors. Section 3 sets out interpretation rules and many defined terms used in the Act, including rules on "address", "company", share capital references, insolvency references, and that definitions apply unless the context otherwise requires. Defines when a company is taken to control another company's board: if it can appoint or remove all or a majority of the other's directors without any other person's consent, and sets related rules about how shares and powers held in fiduciary, nominee, subsidiary, debenture or security contexts are treated for that definition. Section 10 is titled "Public companies".
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Provisions of Companies Act
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Part 1
PRELIMINARY
- 1 Verify source ↗
PRELIMINARY - 1. Short title and commencement
The Cabinet Secretary must bring the remaining provisions into operation by notice in the Gazette; if the Cabinet Secretary fails to commence them within nine months, Parliament may bring those provisions into operation by resolution of each House.
Section 1. Short title and commencement Section 1(1) This Act may be cited as the Companies Act. Section 1(2) This section comes into operation on the date on which this Act is published in Gazette . Section 1(3) The Cabinet Secretary shall, by notice ("notice in writing;") published in the Gazette , bring into operation the remaining provisions of this Act on such date or such different dates as the Cabinet Secretary appoint. Section 1(4) If the Cabinet Secretary has failed to bring all of the remaining provisions into operation within nine months after the date on which this section has come into operation, the Parliament may, by resolution of each of its Houses, bring into operation such of those provisions as have not yet been commenced. - 2 Verify source ↗
PRELIMINARY - 2. Objects of this Act
The Act's objects are to facilitate commerce, industry and other socio-economic activities by enabling one or more natural persons to incorporate as entities with perpetual succession, with or without limited liability, and to provide for the regulation of those entities in the public interest, particularly in the interests of their members and creditors.
Section 2. Objects of this Act Section The objects of this Act are to facilitate commerce, industry and other socio-economic activities by enabling one or more natural persons to incorporate as entities with perpetual succession, with or without limited liability, and to provide for the regulation of those entities in the public interest, and in particular in the interests of their members and creditors. - 3 Verify source ↗
PRELIMINARY - 3. Interpretation of provisions of this Act
Section 3 sets out interpretation rules and many defined terms used in the Act, including rules on "address", "company", share capital references, insolvency references, and that definitions apply unless the context otherwise requires.
Section 3. Interpretation of provisions of this Act Section 3(1) In this Act, unless the context otherwise requires— “address” includes— (a) a fax number, e-mail address or any other electronic address used for the purposes of sending or receiving documents or information by electronic means ; and (b) a postal and physical address; “administrator” , in relation to a company, means an administrator appointed under the laws relating to insolvency; "allotted share capital" , in relation to a company, means shares of the company ("the company whose shares are the subject of a takeover offer;") that have been allotted; "approved securities exchange" means a securities exchange approved by the Capital Markets Authority ("the Capital Markets Authority;") in accordance with the Capital Markets Act ( Cap. 485A ); “articles” means the articles of association of a company; “associate” — (a) in relation to a natural person means— (i) that person's spouse or child; (ii) a body corporate of which that person is a director ("a former director;") ; and (iii) an employee or partner of that person; (b) in relation to a body corporate means— (i) a body corporate of which that body corporate is a director ("a former director;") ; (ii) a body corporate in the same group as that body; and (iii) an employee or partner of that body corporate or of a body corporate in the same group; (c) in relation to a partnership that is not a legal person under the law by which it is governed, means any person who is an associate of any of the partners; “associated company” means— (a) a subsidiary of the company ("the company whose shares are the subject of a takeover offer;") ; (b) a holding company of the company ("the company whose shares are the subject of a takeover offer;") ; or (c) a subsidiary of such a holding company ; “auditor” means— (a) a person or firm appointed as an auditor of a company under Part XXVII; or (b) a person or firm appointed as an auditor of a body of a kind prescribed by the regulations ("the companies general regulations made and in force under this Act, but does not, unless expressly provided, include the foreign companies regulations or savings and transitional regulations;") for the purposes of this definition; “authorised signatory” in relation to a company, means a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") and also means— (a) in the case of a public company , the secretary or a joint secretary of the company ("the company whose shares are the subject of a takeover offer;") ; and (b) in the case of a private company that has a secretary, the secretary; “Attorney-General” means the Attorney-General appointed under Article 156 the Constitution; “beneficial owner” means the natural person who ultimately owns or controls a legal person or arrangements or the natural person on whose behalf a transaction is conducted, and includes those persons who exercise ultimate effective control over a legal person or arrangement ; “body corporate” includes a firm that is a legal person under the law by which it is governed; "Cabinet Secretary" deleted by ActNo. 28 of 2017, s. 2(b); "called-up share capital" means so much of a company's share capital as equals the aggregate amount of the calls made on its shares , whether or not those calls have been paid, together with— (a) any share capital paid up without being called; and (b) any share capital to be paid on a specified future date under the articles , the terms of allotment of the relevant shares or any other arrangements for payment of those shares ; "company" means a company formed and registered under this Act or an existing company; "company limited by guarantee" has the meaning given by section 7 ; “company records" (or “records of a company” ) means— (a) any register , index, accounting records, agreement, memorandum, minutes or other document required by or under this Act to be kept by the company ("the company whose shares are the subject of a takeover offer;") ; or (b) any register kept by the company ("the company whose shares are the subject of a takeover offer;") of its debenture holders; “company secretary” has the meaning assigned to it under the Certified Public Secretaries of Kenya Act ( Cap. 534 ) "the Court" means (unless some other court is specified) the High Court; "credit sale agreement" means an agreement for the sale of goods under which payment of the whole or a part of the purchase price is deferred and a security interest in the goods is created or provided for in order to secure the payment of the whole or a part of the purchase price; "debenture" , in relation to a company, includes debenture stock, bonds and any other securities of a company (whether or not constituting a charge on the assets of the company ("the company whose shares are the subject of a takeover offer;") ); "deed" means a legal document that grants a right by transferring the right from one person to another; "direction" means direction in writing; “director” , in relation to a body corporate , includes— (a) any person occupying the position of a director of the body (by whatever name the person is called); and (b) any person in accordance with whose directions or instructions (not being advice given in a professional capacity) the directors of the body are accustomed to act; “document” means information recorded in any form; and in particular includes a summons, notice ("notice in writing;") , order or other legal process and a register (whether in hard copy or electronic form ); “dormant company” means a company that is dormant during any period in which it has no significant accounting transaction ;; “electronic address” means an address used for the purposes of sending or receiving documents or information by electronic means ; “electronic copy” in relation to a document or information, means a copy of the document or information that is stored or kept in electronic form ; “electronic form” in relation to a document or information, means the storage or keeping of the document or information in the form of data, text or images by means of guided or unguided electromagnetic energy, or both; “electronic means” , in relation to a document or information, means— (a) sending, supplying or delivering the document or information initially, and receiving it at its destination, by means of electronic equipment for the processing (including by digital compression) or storage of data; and (b) being entirely transmitted, conveyed and received by wire, radio, optical means or by other electromagnetic means; “electronic money" means electronically (including magnetically) stored monetary value as represented by a claim on the electronic money issuer that— (a) is issued on receipt of funds for the purpose of making payment transactions; (b) is accepted by a person other than the electronic money issuer; and (c) is not excluded by the regulations ("the companies general regulations made and in force under this Act, but does not, unless expressly provided, include the foreign companies regulations or savings and transitional regulations;") ; "electronic money issuer" means a person authorised by the regulations ("the companies general regulations made and in force under this Act, but does not, unless expressly provided, include the foreign companies regulations or savings and transitional regulations;") to issue electronic money; "eligible member" , in relation a resolution of a company, means a member ("a member of a company;") who, under the articles of the company ("the company whose shares are the subject of a takeover offer;") , is entitled to vote on the resolution; "employees’ share scheme" means a scheme for encouraging or facilitating the holding of shares in, or debentures of, a company by or for the benefit of— (a) the bona fide employees or former employees of— (i) the company ("the company whose shares are the subject of a takeover offer;") ; (ii) a subsidiary of the company ("the company whose shares are the subject of a takeover offer;") ; (iii) the company ("the company whose shares are the subject of a takeover offer;") 's holding company or a subsidiary of the company ("the company whose shares are the subject of a takeover offer;") 's holding company ; or (b) the spouses, surviving spouses, or minor children or step-children of those employees or former employees; "equity share capital" means a company's issued share capital excluding any part of that capital that does not confer any right, either with respect to dividends or to capital, to participate beyond a specified amount in a distribution ; “equity securities " means— (a) ordinary shares ("shares other than shares that, with respect to dividends and capital, confer a right to participate only up to a specified amount in a distribution;") in a company; or (b) rights to subscribe for, or to convert securities into ordinary shares ("shares other than shares that, with respect to dividends and capital, confer a right to participate only up to a specified amount in a distribution;") in the company ("the company whose shares are the subject of a takeover offer;") ; "excluded from consolidation", in relation to a group financial statement, means that the undertaking concerned is not included or liable to be included in that statement; “expenses" includes costs; and “expenses” (of an investigation) includes expenses incidental to the investigation; "expression" includes sign , symbol, logo and mark; “existing company" means— (a) a company formed and registered under the repealed Act; or (b) a company that was formed and registered under either of the repealed Ordinances (as defined by that Act); “firm" means an entity, whether or not a legal person, that is not a natural person; and includes a body corporate , sole proprietorship, partnership or other unincorporated association; “Foreign Companies Register " means the register kept under section 994 ; “foreign company" means a company incorporated outside Kenya; "foreign companies regulations" means regulations made under section 995 and in force; "former name " means a name by which a natural person was formerly known for business purposes; "general meeting" in relation to a company, means a general meeting which may be a physical, virtual or hybrid meeting of the company ("the company whose shares are the subject of a takeover offer;") ; “group", in relation to a body corporate , means the body corporate , any other body corporate that is its holding company or subsidiary and any other body corporate that is a subsidiary of that holding company ; “group undertaking ", in relation to an individual undertaking , means an undertaking that is— (a) a parent undertaking or subsidiary undertaking of the individual undertaking ; or (b) a subsidiary undertaking of any parent undertaking of the individual undertaking ; "hard copy form" means a document or information that is sent, supplied or delivered in a paper copy or similar form capable of being read and references to hard copy have a corresponding meaning; "hire-purchase agreement" means a hire-purchase agreement as defined in section 2(1) of the Hire Purchase Act ( Cap. 507 ); "holding company" (of another company) means a company of which the other company is a subsidiary company of the company ("the company whose shares are the subject of a takeover offer;") ; "holding company" in relation to another company, means a company that— (a) controls the composition of that other company's board of directors; (b) controls more than half of the voting rights in that other company; (c) holds more than half of that other company's issued share capital ; or (d) is a holding company of a company that is that other company's holding company; "hybrid meeting" in relation to a company general meeting, means a meeting where some participants are in the same physical location while other participants join the meeting through electronic means including video conference, audio conference, web conference or such other electronic means ; "in default" , in relation to an officer of a company, has the meaning given by section 996 ; "in liquidation" has the same meaning as the meaning provided under the laws relating to insolvency; "intellectual property" means— (a) any patent, trade mark, registered design, copyright or design right; or (b) any licence under or in respect of a patent, trade mark, registered design, copyright or design right; "issued share capital" , in relation to a company, means shares of the company ("the company whose shares are the subject of a takeover offer;") that have been issued; "key performance indicators" , in relation to a company, means factors by reference to which the development, performance or position of the company ("the company whose shares are the subject of a takeover offer;") 's business can be measured effectively; "liabilities" includes duties; "limited company" has the meaning given by section 5 ; "lodge" , in relation to a document or information required or permitted to be registered, includes deliver, file, send, submit the document or information or, in the case of a notice ("notice in writing;") , give the notice ("notice in writing;") ; "member" means a member of a company; "name" , in relation to a natural person, means the person's given name and family name, or if the person is usually known by a title, the person's title, either in addition to or instead of the person's given name or family name, or both; “nominator” means an individual, group of individuals or legal person that issues instructions directly or indirectly to a nominee to act on their behalf in the capacity of a director ("a former director;") or a shareholder; “nominee” means an individual or legal person instructed by the nominator to act on their behalf in a certain capacity regarding a company; “nominee director” means an individual or legal entity that routinely exercises the functions of the director ("a former director;") in the company ("the company whose shares are the subject of a takeover offer;") on behalf of and subject to the direct or indirect instructions of the nominator ; “nominee shareholder” means a shareholder who exercises the associated voting rights according to the instructions of the nominator or receives dividends on behalf of the nominator ; "notice" means notice in writing; "notify" means notify in writing; “net assets", in relation to a company, means the aggregate of the assets less the aggregate of its liabilities ("duties;") , and for the purpose of this definition, " liabilities ("duties;") " includes provisions of any kind; “officer", in relation to a company or other body corporate , means— (a) any director ("a former director;") , manager or secretary of the company ("the company whose shares are the subject of a takeover offer;") or body; and (b) any other person who is, because of a provision of this Act, to be treated as an officer of the company ("the company whose shares are the subject of a takeover offer;") or body for the purposes of the provision; "ordinary shares" means shares other than shares that, with respect to dividends and capital, confer a right to participate only up to a specified amount in a distribution ; "parent undertaking" (of another undertaking ) means an undertaking that— (a) holds a majority of the voting rights in the other undertaking ; (b) is a member ("a member of a company;") of the other undertaking and has the right to appoint or remove a majority of its board of directors; (c) has the right to exercise a dominant influence over the other undertaking — (i) because of provisions contained in the other undertaking 's articles ; or (ii) of a control contract; (d) has the power to exercise, or actually exercises, dominant influence or control over the other undertaking ; or (e) is a member ("a member of a company;") of the other undertaking and controls alone, under an agreement with other shareholders or members, a majority of the voting rights in it; "pension scheme" means a scheme for the provision of benefits consisting of or including a pension, lump sum benefit, gratuity or other similar benefit given or to be given on the retirement or death, or in anticipation of the retirement of employees or former employees or, in connection with the past service of employees or former employees, either after their retirement or death; "personal injury" includes any disease and any impairment of a person's physical or mental condition; "printed" includes typewritten or lithographed or produced by any mechanical means; "private company" has the meaning given by section 9 ; “prescribed financial accounting standards” means statements of standard accounting practice issued by the Institute of Certified Public Accountants of Kenya in accordance with the Accountants Act ( Cap. 531 ); "profit and loss account" includes an income statement or other equivalent financial statement required to be prepared in accordance with the prescribed financial accounting standards ; "property" includes all rights and interests in property; "public company" has the meaning given by section 10 ; “publish", in relation to a document or information, means to issue or circulate the document or information or otherwise make it available for public inspection in a manner calculated to invite members of the public generally, or any class of members of the public, to read it; “qualified", in relation to an auditor 's report (or a statement contained in an auditor 's report) on a company's financial statement, means that the report or statement does not state the auditor 's unqualified opinion that the financial statement has been properly prepared— (a) in accordance with this Act; or (b) if an undertaking not required to prepare financial statements in accordance with this Act—in accordance with any corresponding written law under which the undertaking is, or its directors are, required to prepare financial statements or accounts; “qualifying person” in relation to a meeting of a company means— (a) a natural person who is a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") ; (b) a person authorised under section 297 to act as the representative of a corporation in relation to the meeting; or (c) a person appointed as proxy of a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") in relation to the meeting; “quoted company” means a company whose equity share capital ("a company's issued share capital excluding any part of that capital that does not confer any right, either with respect to dividends or to capital, to participate beyond a specified amount in a distribution;") has been included in the official list on a stock exchange or other regulated market in Kenya; “register” (when used as a verb) means register under this Act; “Register” means the Register of Companies kept under this Act, but does not include the Foreign Companies Register; “registered foreign company” means a foreign company registered, or taken to be registered, in accordance with Part XXXVII; "the Registrar" means the person for the time being holding office as Registrar of Companies under section 831 ; "the regulations" means the companies general regulations made and in force under this Act, but does not, unless expressly provided, include the foreign companies regulations or savings and transitional regulations; “the repealed Act" means the Companies Act ( Cap. 486 ) repealed by this Act; “resolution for reducing share capital", in relation to a company that has a share capital, means a special resolution passed by the company ("the company whose shares are the subject of a takeover offer;") in accordance with section 407 ; "retention of title agreement" means an agreement for the sale of goods to a company, being an agreement— (a) that does not constitute a charge on the goods; but (b) under which, if the seller is not paid and the company ("the company whose shares are the subject of a takeover offer;") is wound up, the seller will have priority over all other creditors of the company ("the company whose shares are the subject of a takeover offer;") with respect to the goods or any property ("all rights and interests in property;") representing the goods; “securities” includes— (a) options; (b) futures; and (c) contracts for differences, and rights or interests in those investments; “service address” , in relation to a person, means an address at which documents may be effectively served on that person for the purposes of this Act; “services” means anything other than goods or land; “shares” — (a) in relation to an undertaking with a share capital, means shares in the share capital of the undertaking ; (b) in relation to an undertaking with capital but no share capital, means rights to share in the capital of the undertaking ; and (c) in relation to an undertaking without capital, means interests— (i) conferring a right to share in the profits, or the liability to contribute to the losses, of the undertaking ; or (ii) giving rise to an obligation to contribute to the debts or expenses of the undertaking in the event of a liquidation; “sign” includes sign by means of an electronic signature; "significant accounting transaction" , in relation to a dormant company , means a transaction that is required by section 638 to be entered in the company's accounting records; "subsidiary” means a company of which another company is its holding company ; "subsidiary undertaking ” (of another undertaking ) means an undertaking of which the other undertaking is its parent; "traded company" , means a company whose securities are admitted to trading on a securities exchange or other regulated market operating in Kenya; "turnover" , in relation to a company, means the amounts derived from the provision of goods or services ("anything other than goods or land") , or goods and services ("anything other than goods or land") , in the course of the company ("the company whose shares are the subject of a takeover offer;") ordinary business, after deducting— (a) trade discounts; (b) value added tax; and (c) any other taxes based on the amounts so derived; “uncalled share capital” , in relation to a company, means so much means so much of the company ("the company whose shares are the subject of a takeover offer;") 's share capital as is not called-up share capital of the company ("the company whose shares are the subject of a takeover offer;") ; “under administration" has the same meaning as provided for in the laws related to insolvency; “undertaking” means— (a) a body corporate or partnership; or (b) an unincorporated association carrying on a trade or business, with or without a view to profit; "undistributable reserves" (of a company) means those reserves of the company ("the company whose shares are the subject of a takeover offer;") that comprise— (a) its share premium account; (b) its capital redemption reserve; (c) the amount by which its accumulated, unrealised profits (so far as not previously utilised by capitalisation) exceed its accumulated, unrealised losses (so far as not previously written off in a reduction or reorganisation of capital duly made); and (d) any other reserve that the company ("the company whose shares are the subject of a takeover offer;") is prohibited from distributing by its articles ; “unlimited company” has the meaning given by section 8 ; "virtual meeting" in relation to a company general meeting, means a meeting where all members join and participate in the meeting through electronic means including video conference, audio conference, web conference or such other electronic means ; “wholly-owned subsidiary company" (of another company) means a company that has no members other than that other company and that other company's wholly owned subsidiaries (or persons acting on behalf of that other company or its wholly-owned subsidiaries; “working day" means any day between Monday and Friday, but does not include a public holiday. Section 3(2) In this Act, a reference to a company having a share capital is to a company that has power under its constitution to issue shares . Section 3(3) In this Act, a reference to issued or allotted shares , or to issued or allotted share capital , includes shares taken on the formation of the company ("the company whose shares are the subject of a takeover offer;") by the subscribers to the company ("the company whose shares are the subject of a takeover offer;") 's memorandum. Section 3(4) For the purposes of this Act, shares in a company are allotted when a person acquires the unconditional right to be included in the company ("the company whose shares are the subject of a takeover offer;") 's register of members in respect of the shares . Section 3(5)(a) to profit and loss; and Section 3(5)(b) in relation to a group financial statement—to a consolidated profit and loss account ("an income statement or other equivalent financial statement required to be prepared in accordance with the prescribed financial accounting standards;") , is to be construed accordingly. Section 3(6) The reference in paragraph (c) of the definition of " undistributable reserves " in subsection (1) to capitalisation does not include a transfer of profits of the company to its capital redemption reserve. Section 3(7) In a provision of this Act in which a reference to the laws relating to insolvency occurs, the reference includes, so far as relevant to a matter existing before the commencement of the provision, a reference to the corresponding provision (if any) of the repealed Act. Section 3(8) The regulations may, for the purposes of this Act, explain and circumscribe the definitions of " parent undertaking " and "subsidiary undertaking " in subsection (1) and otherwise supplement those definitions. Act No. 28 of 2017 , s. 2, Act No. 1 of 2021 s. 7, Act No. 10 of 2023 , Sch. - 4 Verify source ↗
PRELIMINARY - 4. Provisions supplementing definition of “holding company” insection 3
Defines when a company is taken to control another company's board: if it can appoint or remove all or a majority of the other's directors without any other person's consent, and sets related rules about how shares and powers held in fiduciary, nominee, subsidiary, debenture or security contexts are treated for that definition.
Section 4. Provisions supplementing definition of “holding company” insection 3 Section 4(1) For the purposes of paragraph (a) of the definition of "holding company" in section 3 (1), a company controls the composition of another company's board of directors if it has power to appoint or remove all, or a majority, of that other company's directors without any other person's consent. Section 4(2)(a) without the exercise of the power in a person's favour by the company ("the company whose shares are the subject of a takeover offer;") , the person cannot be appointed as a director ("a former director;") of that other company; or Section 4(2)(b) it necessarily follows from a person being a director ("a former director;") or other officer of the company ("the company whose shares are the subject of a takeover offer;") that the person is appointed as a director ("a former director;") of that other company. Section 4(3) In paragraph (c) of that definition, a reference to a company's issued share capital excludes any part of it that carries no right to participate beyond a specified amount in a distribution of profits or capital. Section 4(4)(a) if any share is held, or any power is exercisable, by a company in a fiduciary capacity, the share or power is to be regarded as not being held or exercisable by the company ("the company whose shares are the subject of a takeover offer;") ; and Section 4(4)(b) subject to subsections (5) and (6) , if any share is held, or any power is exercisable, by a subsidiary of a company, or by a person as nominee for a company or such a subsidiary, the share or power is to be regarded as being held or exercisable by the company. Section 4(5) For the purposes of that definition, any share in another company held, or any power in relation to another company exercisable, by a person by virtue of a debenture of that other company, or of a trust deed ("a legal document that grants a right by transferring the right from one person to another;") for securing an issue of such a debenture , is to be regarded as not being held or exercisable by the person. Section 4(6)(a) the ordinary business of the company ("the company whose shares are the subject of a takeover offer;") or subsidiary includes the lending of money; and Section 4(6)(b) the share or power is held or exercisable by way of security only for the purpose of a transaction entered into in the ordinary course of that business. Section 4(7) In subsection (4)(b) , a reference to a company or subsidiary excludes a company or subsidiary that is concerned only in a fiduciary capacity.
Part II
COMPANIES AND COMPANY FORMATION
- 10 Verify source ↗
COMPANIES AND COMPANY FORMATION - 10. Public companies
Section 10 is titled "Public companies".
Section 10. Public companies - 11 Verify source ↗
COMPANIES AND COMPANY FORMATION - 11. Method of forming company
To form a company, persons must subscribe their names to a memorandum of association and comply with the requirements of sections 13 to 16 for registration; a company formed for an unlawful purpose may not be registered.
Section 11. Method of forming company Section 11(1)(a) subscribe their names to a memorandum of association; and Section 11(1)(b) comply with the requirements of sections 13 to 16 with respect to registration. Section 11(2) A company formed for an unlawful purpose may not be registered. - 12 Verify source ↗
COMPANIES AND COMPANY FORMATION - 12. Memorandum of association
Subscribers to the memorandum must express a wish to form a company, agree to become members and, for a company with share capital, take at least one share; the memorandum must be in the form prescribed by the regulations and authenticated by each subscriber.
Section 12. Memorandum of association Section 12(1)(a) wish to form a company under this Act; and Section 12(1)(b) agree to become members of the company ("the company whose shares are the subject of a takeover offer;") and, in the case of a company that is to have a share capital, to take at least one share each. Section 12(2)(a) in the form prescribed by the regulations ("the companies general regulations made and in force under this Act, but does not, unless expressly provided, include the foreign companies regulations or savings and transitional regulations;") ; and Section 12(2)(b) authenticated by each subscriber. - 13 Verify source ↗
COMPANIES AND COMPANY FORMATION - 13. Registration documents
Lists the documents and particulars required for registration of a company, including application, memorandum, proposed articles, proposed name and registered office, liability type, company type (private or public), statements of capital or guarantee, proposed officers and beneficial owners, document formality requirements, and attestation of subscriber signatures.
Section 13. Registration documents Section 13(1)(a) an application for registration of the company ("the company whose shares are the subject of a takeover offer;") that complies with subsections (2) and (4) ; Section 13(1)(b) a memorandum of association of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 13(1)(c) except as provided by section 21 , a copy of the proposed articles of association. Section 13(2)(a) the proposed name of the company ("the company whose shares are the subject of a takeover offer;") ; Section 13(2)(b) the proposed location of the registered office of the company ("the company whose shares are the subject of a takeover offer;") ; Section 13(2)(c) whether the liability of the members of the company ("the company whose shares are the subject of a takeover offer;") is to be limited, and if so whether it is to be limited by shares or by guarantee; and Section 13(2)(d) whether the company ("the company whose shares are the subject of a takeover offer;") is to be a private or a public company . Section 13(3) If the application for registration of a company is submitted by an agent for the subscribers to the memorandum of association, the agent shall include in the application the name and address of the agent . Section 13(4)(a) in the case of a company that is to have a share capital, a statement of capital and initial shareholding in accordance with section 14 ; Section 13(4)(b) in the case of a company that is to be limited by guarantee, a statement of guarantee in accordance with section 15 ; Section 13(4)(c) a statement of the company ("the company whose shares are the subject of a takeover offer;") 's proposed officers in accordance with section 16 ; and Section 13(4)(d) a statement of the particulars in respect of each beneficial owner of the proposed company in accordance with section 16A of this Act. Section 13(5)(a) be contained in a single document ; Section 13(5)(b) be printed ("typewritten or lithographed or produced by any mechanical means;") ; Section 13(5)(c) be divided into paragraphs numbered consecutively; Section 13(5)(d) be dated; and Section 13(5)(e) be signed by each subscriber to the articles . Section 13(6) A subscriber's signature is required to be attested by a witness, whose name , occupation and postal address are required to be written or printed ("typewritten or lithographed or produced by any mechanical means;") below the subscriber's signature. [Act No. 10 of 2023 , Sch.] - 14 Verify source ↗
COMPANIES AND COMPANY FORMATION - 14. Statement of capital and initial shareholdings
Applicants for registration must provide a statement of capital and initial shareholdings that includes specified items (total number of shares taken on formation, aggregate nominal value, particulars of rights, class totals and nominal values, amounts paid and unpaid, and subscriber identification including nominee details).
Section 14. Statement of capital and initial shareholdings Section 14(1) If the company ("the company whose shares are the subject of a takeover offer;") is to have a share capital, the applicants for registration shall ensure that the requisite statement of capital and initial shareholding comply with subsections (2) and (3) . Section 14(2)(a) the total number of shares of the company ("the company whose shares are the subject of a takeover offer;") to be taken on formation by the subscribers to the memorandum of association; Section 14(2)(b) the aggregate nominal value of those shares ; Section 14(2)(c) the particulars of the rights attached to the shares prescribed by the regulations ("the companies general regulations made and in force under this Act, but does not, unless expressly provided, include the foreign companies regulations or savings and transitional regulations;") for the purposes of this subsection; Section 14(2)(c)(i) the particulars of the rights attached to the shares prescribed by the regulations ("the companies general regulations made and in force under this Act, but does not, unless expressly provided, include the foreign companies regulations or savings and transitional regulations;") for the purposes of this subsection; Section 14(2)(c)(ii) the total number of shares of that class; and Section 14(2)(c)(iii) the aggregate nominal value of shares of that class; and Section 14(2)(d) the amount to be paid up and the amount (if any) to be unpaid on each share, whether on account of the nominal value of the share or in the form of a premium. Section 14(3)(a) contains such information as may be prescribed for the purpose of identifying the subscribers to the memorandum of association; Section 14(3)(aa) contains information as to whether any shareholder is a nominee and the particulars of their nominator ; Section 14(3)(b) the number, nominal value of each share and class of shares to be taken by the subscriber on formation; and Section 14(3)(b)(i) the number, nominal value of each share and class of shares to be taken by the subscriber on formation; and Section 14(3)(b)(ii) the amount to be paid up and the amount, if any to be unpaid on each share, whether on account of the nominal value of the share or in the form of a premium. Section 14(4) If a subscriber to the memorandum of association is to take shares of more than one class, the information required under subsection (3)(b)(i) is required for each class. [Act No. 10 of 2023 , Sch.] - 15 Verify source ↗
COMPANIES AND COMPANY FORMATION - 15. Statement of guarantee
Applicants registering a company limited by guarantee must ensure the statement of guarantee includes the prescribed information so subscribers to the memorandum can be identified.
Section 15. Statement of guarantee Section 15(1) The applicant for registration of a company to be limited by guarantee shall ensure that the requisite statement of guarantee contains the prescribed information to enable the subscribers to the memorandum of association to be identified. Section 15(2)(a) paying the debts and liabilities ("duties;") of the company ("the company whose shares are the subject of a takeover offer;") contracted before the person ceases to be a member ("a member of a company;") ; Section 15(2)(b) paying the costs, charges and expenses of liquidation; and Section 15(2)(c) adjusting the rights of the contributories among themselves. - 16 Verify source ↗
COMPANIES AND COMPANY FORMATION - 16. Statement of proposed officers
The applicant for registration must ensure the company's statement of proposed officers complies with subsections (2) and (4).
Section 16. Statement of proposed officers Section 16(1) The applicant for registration shall ensure that the requisite statement of the company ("the company whose shares are the subject of a takeover offer;") 's proposed officers complies with subsections (2) and (4) . Section 16(2)(a) the person who is, or persons who are, to be the first director ("a former director;") or directors of the company ("the company whose shares are the subject of a takeover offer;") ; Section 16(2)(b) in the case of a company that is to be a public company , the person who is or the persons who are to be the first secretary or joint secretaries of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 16(2)(c) any person who is to be appointed as an authorised signatory of the company ("the company whose shares are the subject of a takeover offer;") . Section 16(3)(a) in the case of a director ("a former director;") , in the company ("the company whose shares are the subject of a takeover offer;") 's register of directors and register of directors' residential addresses; Section 16(3)(b) in the case of a secretary of a public company , in the company ("the company whose shares are the subject of a takeover offer;") 's register of secretaries; Section 16(3)(c) in the case of a person appointed as an authorised signatory , in the company ("the company whose shares are the subject of a takeover offer;") 's register of authorised signatories; and Section 16(3)(d) in the case of a nominee director , the fact that they are nominees and the particulars of their nominator . Section 16(4) The statement of the company ("the company whose shares are the subject of a takeover offer;") 's proposed officers complies with this subsection if it contains a consent by each of the persons named as a director ("a former director;") , as secretary or as one of joint secretaries or as an authorised signatory , to act in the relevant capacity. Section 16(5) If all the partners in a firm are to be joint secretaries, consent can be given by one partner on behalf of all the partners. [Act No. 10 of 2023 , Sch.] - 16A Verify source ↗
COMPANIES AND COMPANY FORMATION - 16A. Statement of particulars of beneficial owners
Applicants for registration must ensure the company's statement of particulars of beneficial owners complies with subsection (2).
Section 16A. Statement of particulars of beneficial owners Section 16A(1) The applicant for registration shall ensure that the requisite statement of particulars of the company ("the company whose shares are the subject of a takeover offer;") 's beneficial owners complies with subsection (2) . Section 16A(2)(a) the required particulars of anyone who is a beneficial owner ; and Section 16A(2)(b) any other matters that, on incorporation, shall be required to be entered in the company ("the company whose shares are the subject of a takeover offer;") 's register of beneficial owners under this Act. - 17 Verify source ↗
COMPANIES AND COMPANY FORMATION - 17. Registrar toregistercompany if requirements of Act are complied with
If satisfied that an application meets the Act's registration requirements, the Registrar must register the company and allocate it a unique identifying number.
Section 17. Registrar toregistercompany if requirements of Act are complied with Section If satisfied that an application for registration complies with the requirements of this Act relating to registration, the Registrar ("the person for the time being holding office as Registrar of Companies under;") shall register the company ("the company whose shares are the subject of a takeover offer;") and allocate to it a unique identifying number. - 18 Verify source ↗
COMPANIES AND COMPANY FORMATION - 18. Registrar to issue company with certificate of incorporation
When a company is registered in accordance with section 17, the Registrar must issue the company a certificate of incorporation that complies with this section and must sign and authenticate that certificate with the Registrar's official seal.
Section 18. Registrar to issue company with certificate of incorporation Section 18(1) On the registration of a company in accordance with section 17 , the Registrar shall issue to the company a certificate of incorporation that complies with this section. Section 18(2)(a) the name of the company ("the company whose shares are the subject of a takeover offer;") and its unique identifying number; Section 18(2)(b) the date of the company ("the company whose shares are the subject of a takeover offer;") 's incorporation; Section 18(2)(c) whether the company ("the company whose shares are the subject of a takeover offer;") 's liability is limited or unlimited, and if it is limited, whether it is limited by shares or by guarantee; and Section 18(2)(d) whether the company ("the company whose shares are the subject of a takeover offer;") a private or a public one. Section 18(3) The Registrar shall sign the certificate of incorporation and authenticate it with the Registrar ("the person for the time being holding office as Registrar of Companies under;") 's official seal. Section 18(4) The certificate is conclusive evidence that the requirements of this Act relating to registration have been complied with and that the company ("the company whose shares are the subject of a takeover offer;") is duly registered under this Act. - 19 Verify source ↗
COMPANIES AND COMPANY FORMATION - 19. Effect of registration
The subscribers to the memorandum and any persons who later become members become a body corporate named in the certificate of incorporation.
Section 19. Effect of registration Section the subscribers to the memorandum, together with such other persons as may from time to time become members of the company ("the company whose shares are the subject of a takeover offer;") , become a body corporate by the name stated in the certificate of incorporation; - 5 Verify source ↗
COMPANIES AND COMPANY FORMATION - 5. Limited companies
Defines a "limited company" as a company limited by shares or by guarantee.
Section 5. Limited companies Section For the purposes of this Act, a company is a limited company if it is a company limited by shares or by guarantee. - 6 Verify source ↗
COMPANIES AND COMPANY FORMATION - 6. Companies limited byshares
Defines when a company is a 'company limited by shares': where members' liability is limited by the company's articles to any amount unpaid on their shares.
Section 6. Companies limited byshares Section 6(1) For the purposes of this Act, a company is a company limited by shares if the liability of its members is limited by the company ("the company whose shares are the subject of a takeover offer;") 's articles to any amount unpaid on the shares held by the members. Section 6(2) For the purposes of subsection (1) , the liability of the members of an existing company is taken to be limited by the company's articles to any amount unpaid on the shares held by the members if a condition of the memorandum of association of the company stating that the liability of the members is limited is regarded as a provision of the articles by virtue of section 70 . - 7 Verify source ↗
COMPANIES AND COMPANY FORMATION - 7. Companies limited by guarantee
Defines a "company limited by guarantee" by three criteria: (a) it does not have a share capital; (b) members' liability is limited by the company's articles to the amount they undertake to contribute on liquidation; and (c) its certificate of incorporation states it is a company limited by guarantee.
Section 7. Companies limited by guarantee Section 7(1)(a) it does not have a share capital; Section 7(1)(b) the liability of its members is limited by the company ("the company whose shares are the subject of a takeover offer;") 's articles to the amount that the members undertake, by those articles , to contribute to the assets of the company ("the company whose shares are the subject of a takeover offer;") in the event of its liquidation; and Section 7(1)(c) its certificate of incorporate states that it is a company limited by guarantee. Section 7(2) Subsection (1) does not prohibit a company limited by guarantee from having a share capital if it was formed and registered before the commencement of this section. - 8 Verify source ↗
COMPANIES AND COMPANY FORMATION - 8. Unlimited companies
There is no limit on the liability of its members.
Section 8. Unlimited companies Section there is no limit on the liability of its members; and - 9 Verify source ↗
COMPANIES AND COMPANY FORMATION - 9. Private companies
Section 9 defines characteristics and membership rules for private companies and explains who counts as a member.
Section 9. Private companies Section 9(1)(a) restrict a member ("a member of a company;") 's right to transfer shares ; Section 9(1)(a)(i) restrict a member ("a member of a company;") 's right to transfer shares ; Section 9(1)(a)(ii) limit the number of members to fifty; and Section 9(1)(a)(iii) prohibit invitations to the public to subscribe for shares or debentures of the company ("the company whose shares are the subject of a takeover offer;") ; Section 9(1)(a)(iv) requires the consent of all members to add a new member ("a member of a company;") Section 9(1)(b) it is not a company limited by guarantee; and Section 9(1)(c) its certificate of incorporation states that it is a private company . Section 9(2)(a) a member ("a member of a company;") who is an employee of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 9(2)(b) a person who was a member ("a member of a company;") while being an employee of the company ("the company whose shares are the subject of a takeover offer;") and who continues to be a member ("a member of a company;") after ceasing to be such an employee. Section 9(3) For the purposes of this section, two or more persons who hold shares in a company jointly are taken to be a single member ("a member of a company;") . [Act No. 12 of 2019 , sch.]
Part III
A COMPANY'S CONSTITUTION
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A COMPANY'S CONSTITUTION - 20. Regulation may prescribe modelarticles
Regulations may prescribe model articles (including different versions); a company may adopt any prescribed provisions; amendments to prescribed model articles do not affect companies already registered before the amendment.
Section 20. Regulation may prescribe modelarticles Section 20(1) The regulations may prescribe model articles for companies. Section 20(2) Different versions of model articles may be prescribed for different descriptions of companies. Section 20(3) A company may adopt all or any of the provisions of a prescribed version of model articles . Section 20(4) An amendment to regulations prescribing a version of model articles does not affect a company registered before the amendment took effect. - 21 Verify source ↗
A COMPANY'S CONSTITUTION - 21. Default application of modelarticles
If a company's own articles are absent or do not modify the model articles, the relevant model articles form part of that company's articles as if registered.
Section 21. Default application of modelarticles Section 21(1)(a) if its articles are not registered; or Section 21(1)(b) if its articles are registered, in so far as they do not exclude or modify the relevant model articles , the relevant model articles , so far as applicable, form part of the company ("the company whose shares are the subject of a takeover offer;") 's articles in the same manner and to the same extent as if articles in the form of those articles had been duly registered. Section 21(2) In subsection (1) , "relevant model articles" means the model articles prescribed for a company of that kind in force on the date the company is registered. - 22 Verify source ↗
A COMPANY'S CONSTITUTION - 22. Amendment ofarticles
A company may amend its articles only by special resolution.
Section 22. Amendment ofarticles Section A company may amend its articles only by special resolution. - 23 Verify source ↗
A COMPANY'S CONSTITUTION - 23. Effect of amendment ofarticleson company’s members
Amendments that force a member to take more shares or increase the member's liability bind the member only if the member agrees in writing, either before or after the amendment.
Section 23. Effect of amendment ofarticleson company’s members Section 23(1)(a) requires the person to take or subscribe for more shares than the number held by the person at the date on which the amendment is made; or Section 23(1)(b) in any way increases the person liability as at that date to contribute to the company ("the company whose shares are the subject of a takeover offer;") 's share capital or otherwise to pay money to the company ("the company whose shares are the subject of a takeover offer;") . Section 23(2) Subsection (1) does not apply if the member agrees in writing, either before or after the amendment is made, to be bound by the amendment. - 24 Verify source ↗
A COMPANY'S CONSTITUTION - 24. Amendedarticlesto be sent to Registrar
A company that amends its articles must lodge a copy of the amended articles with the Registrar for registration within fourteen days of the resolution; failure is an offence liable to fines up to 200,000 shillings, and continuing failure after conviction is a daily offence liable to fines up to 20,000 shillings per day.
Section 24. Amendedarticlesto be sent to Registrar Section 24(1) If a company amends its articles , the company ("the company whose shares are the subject of a takeover offer;") shall lodge with the Registrar ("the person for the time being holding office as Registrar of Companies under;") for registration a copy of the articles as amended not later than fourteen days after the resolution containing the amendment is passed. Section 24(2)(a) are applied by the articles ; or Section 24(2)(b) apply because of section 2 . Section 24(3) If a company fails to comply with subsection (1) , the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding two hundred thousand shillings. Section 24(4) If, after a company or any of its officers is convicted of an offence under subsection (3) , the company continues to fail to lodge an amended copy of its articles, the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding twenty thousand shillings for each such offence. - 25 Verify source ↗
A COMPANY'S CONSTITUTION - 25. Registrar’snoticeto comply in case of failure with respect to amendedarticles
A company must comply with a written notice to lodge amended articles or a document evidencing amendment within twenty eight days; failure leads to offences and fines.
Section 25. Registrar’snoticeto comply in case of failure with respect to amendedarticles Section 25(1)(a) to lodge with the Registrar ("the person for the time being holding office as Registrar of Companies under;") a document making or evidencing an amendment in the company ("the company whose shares are the subject of a takeover offer;") 's articles ; or Section 25(1)(b) to lodge with the Registrar ("the person for the time being holding office as Registrar of Companies under;") a copy of the company ("the company whose shares are the subject of a takeover offer;") 's articles as amended, Section 25(2)(a) specify the date on which it is issued; and Section 25(2)(b) require the company ("the company whose shares are the subject of a takeover offer;") to comply with the notice ("notice in writing;") within twenty eight days from that date. Section 25(3) If a company fails to comply with a notice ("notice in writing;") under subsection (2) within the required period, the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding two hundred thousand shillings. Section 25(4) If, after a company or any of its officers is convicted of an offence under subsection (4) , the company continues to fail to comply with the notice, the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding twenty thousand shillings for each such offence. - 26 Verify source ↗
A COMPANY'S CONSTITUTION - 26. Existing companies provisions of memorandum treated as provisions ofarticles
Existing companies' provisions in the memorandum are treated as provisions of the articles.
Section 26. Existing companies provisions of memorandum treated as provisions ofarticles - 27 Verify source ↗
A COMPANY'S CONSTITUTION - 27. Copies of resolutions or agreements recorded by Registrar
Companies must lodge copies of certain resolutions or written memoranda with the Registrar; the Registrar must record lodged items; failure by a company or its officers is an offence punishable by fines.
Section 27. Copies of resolutions or agreements recorded by Registrar Section 27(1)(a) a copy of the resolution or agreement; or Section 27(1)(b) in the case of a resolution or agreement that is not in writing, a written memorandum setting out the terms of the resolution or agreement. Section 27(2)(a) a special resolution; Section 27(2)(b) a resolution or agreement agreed to by all the members of a company that, if not so agreed to, would not have been effective for its purpose unless passed as a special resolution; Section 27(2)(c) a resolution or agreement agreed to by all the members of a class of shareholders that, if not so agreed to, would not have been effective for its purpose unless passed by a particular majority or otherwise in a particular manner; Section 27(2)(d) a resolution or agreement that effectively binds all members of a class of shareholders though not agreed to by all those members; Section 27(2)(e) a resolution to give, vary, revoke or renew authority for the purposes of section 451 ; Section 27(2)(f) a resolution conferring, varying, revoking or renewing authority following market purchase of a company's own shares ; Section 27(2)(g) a resolution for voluntary liquidation; Section 27(2)(h) a resolution of the director ("a former director;") of a private company that the company ("the company whose shares are the subject of a takeover offer;") should be converted into a public company ; or Section 27(2)(i) a resolution passed regarding transfer of securities . Section 27(3) The Registrar shall record a resolution or agreement lodged under subsection (1) . Section 27(4) If a company fails to comply with subsection (1) , the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding two hundred thousand shillings. Section 27(5) If, after a company or any of its officers is convicted of an offence under subsection (4) , the company continues to fail to lodge the relevant copy or written memorandum, the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding twenty thousand shillings for each such offence. Section 27(6) For the purposes of this section, a liquidator of the company ("the company whose shares are the subject of a takeover offer;") is treated as an officer of the company ("the company whose shares are the subject of a takeover offer;") . [Act No. 28 of 2017 , s. 3.] - 28 Verify source ↗
A COMPANY'S CONSTITUTION - 28. Statement of company’s objects
On receipt of a notice of amendment, the Registrar must register it.
Section 28. Statement of company’s objects Section 28(1) Unless the articles of a company specifically restrict the objects of the company ("the company whose shares are the subject of a takeover offer;") , its objects are unrestricted. Section 28(2)(a) it shall lodge with the Registrar ("the person for the time being holding office as Registrar of Companies under;") for registration a notice ("notice in writing;") giving particulars of the amendment; Section 28(2)(b) on receipt of the notice ("notice in writing;") , the Registrar ("the person for the time being holding office as Registrar of Companies under;") shall register it; and Section 28(2)(c) the amendment is not effective until the notice ("notice in writing;") is recorded on the Register . Section 28(3) An amendment to the company ("the company whose shares are the subject of a takeover offer;") 's objects does not affect rights or obligations of the company ("the company whose shares are the subject of a takeover offer;") or render defective legal proceedings by or against it. - 29 Verify source ↗
A COMPANY'S CONSTITUTION - 29. Documents to be provided to members
Section 29 lists documents a company must provide to a member on request and sets costs, offence and fines for non‑compliance.
Section 29. Documents to be provided to members Section 29(1)(a) an up-to-date copy of the articles of the company ("the company whose shares are the subject of a takeover offer;") ; Section 29(1)(b) a copy of any resolution or agreement relating to the company ("the company whose shares are the subject of a takeover offer;") that has been recorded by the Registrar ("the person for the time being holding office as Registrar of Companies under;") under section 27 ; Section 29(1)(c) a copy of any court order under this Act that alters the company ("the company whose shares are the subject of a takeover offer;") 's constitution; Section 29(1)(d) a copy of any court order under Part XXXIV that sanctions a compromise or arrangement involving the company ("the company whose shares are the subject of a takeover offer;") or facilitating its reconstruction or amalgamation; Section 29(1)(e) copy of any court order under section 782 that alters the company's constitution; Section 29(1)(f) copy of the current certificate of incorporation of the company ("the company whose shares are the subject of a takeover offer;") and of any past certificates of incorporation; Section 29(1)(g) in the case of a company with a share capital, a current statement of the company ("the company whose shares are the subject of a takeover offer;") 's capital; Section 29(1)(h) the case of a company limited by guarantee, a copy of the statement of guarantee. Section 29(2)(a) the total number of shares of the company ("the company whose shares are the subject of a takeover offer;") ; Section 29(2)(b) the aggregate nominal value of those shares ; Section 29(2)(c) the particulars of the rights attached to the shares prescribed by the regulations ("the companies general regulations made and in force under this Act, but does not, unless expressly provided, include the foreign companies regulations or savings and transitional regulations;") for the purposes of this subsection; Section 29(2)(c)(i) the particulars of the rights attached to the shares prescribed by the regulations ("the companies general regulations made and in force under this Act, but does not, unless expressly provided, include the foreign companies regulations or savings and transitional regulations;") for the purposes of this subsection; Section 29(2)(c)(ii) the total number of shares of that class; Section 29(2)(c)(iii) the aggregate nominal value of shares of that class; and Section 29(2)(d) the amount paid up and the amount (if any) unpaid on each share, whether on account of the nominal value of the share or in the form of a premium. Section 29(3) A company is not required to comply with a request under subsection (1) unless the member meets the costs of preparing and sending the documents. Section 29(4) If a company fails to comply with a request made under subsection (1) , the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings. Section 29(5) If, after a company or any of its officers is convicted of an offence under subsection (4) , the company continues to fail to comply with the request or a further request made by the member concerned, the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding fifty thousand shillings for each such offence. - 30 Verify source ↗
A COMPANY'S CONSTITUTION - 30. Effect of company’s constitution
A company's constitution binds the company and its members as if they had agreed to observe it; money payable by a member to the company under the constitution is recoverable in court as a debt.
Section 30. Effect of company’s constitution Section 30(1) A company's constitution binds the company ("the company whose shares are the subject of a takeover offer;") and its members to the same extent as if the company ("the company whose shares are the subject of a takeover offer;") and its members had covenanted agreed with each other to observe the constitution. Section 30(2) Money payable by a member ("a member of a company;") to the company ("the company whose shares are the subject of a takeover offer;") under its constitution is recoverable in a court of competent jurisdiction as a debt due from the member ("a member of a company;") to the company ("the company whose shares are the subject of a takeover offer;") . - 31 Verify source ↗
A COMPANY'S CONSTITUTION - 31. Right to participate is profits otherwise than amemberis void
A provision in the articles or in a company resolution that gives a person a right to participate in the divisible profits otherwise than as a member is void.
Section 31. Right to participate is profits otherwise than amemberis void Section In the case of a company limited by guarantee, a provision in the articles of the company ("the company whose shares are the subject of a takeover offer;") , or in a resolution of the company ("the company whose shares are the subject of a takeover offer;") , purporting to give a person a right to participate in the divisible profits of the company ("the company whose shares are the subject of a takeover offer;") otherwise than as a member ("a member of a company;") is void. - 32 Verify source ↗
A COMPANY'S CONSTITUTION - 32. Application to singlemembercompanies of enactment and rules of law
Enactments and rules of law that apply to companies with two or more persons also apply, with necessary modifications, to a company formed by one person or having only one member.
Section 32. Application to singlemembercompanies of enactment and rules of law Section Any enactment or rule of law applicable to companies formed by two or more persons or having two or more members applies with any necessary modification in relation to a company formed by one person or having only one person as a member ("a member of a company;") .
Part IV
CAPACITY OF COMPANY
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CAPACITY OF COMPANY - 33. Company’s capacity
The validity of an act or omission of a company may not be challenged for lack of capacity because of a provision in the company’s constitution.
Section 33. Company’s capacity Section The validity of an act or omission of a company may not be called into question on the ground of lack of capacity because of a provision in the constitution of the company ("the company whose shares are the subject of a takeover offer;") . - 34 Verify source ↗
CAPACITY OF COMPANY - 34. Power of directors to bind company
Directors have the power to bind the company (or authorise others) free of limitations in the company's constitution when dealing with a person in good faith; third parties dealing in good faith are not required to enquire into such limitations, are presumed to have acted in good faith unless proved otherwise, and a member may bring proceedings to restrain acts beyond directors' powers subject to an exception.
Section 34. Power of directors to bind company Section 34(1) In favour of a person dealing with a company in good faith, the power of the directors to bind the company ("the company whose shares are the subject of a takeover offer;") , or authorise others to do so, is free of any is limitation contained in the company ("the company whose shares are the subject of a takeover offer;") 's constitution. Section 34(2)(a) a person deals with a company if the person is a party to a transaction or other act to which the company ("the company whose shares are the subject of a takeover offer;") is a party; and Section 34(2)(b) is not bound to enquire as to any limitation on the powers of the directors to bind the company ("the company whose shares are the subject of a takeover offer;") or to authorise others to do so; Section 34(2)(b)(i) is not bound to enquire as to any limitation on the powers of the directors to bind the company ("the company whose shares are the subject of a takeover offer;") or to authorise others to do so; Section 34(2)(b)(ii) is presumed to have acted in good faith unless the contrary is proved; and Section 34(2)(b)(iii) is not to be regarded as having acted in bad faith only because the person knew that a particular act is beyond the powers of the directors under the constitution of the company ("the company whose shares are the subject of a takeover offer;") . Section 34(3)(a) from a resolution of the company ("the company whose shares are the subject of a takeover offer;") or of any class of shareholders of the company ("the company whose shares are the subject of a takeover offer;") ; or Section 34(3)(b) from an agreement between the members of the company ("the company whose shares are the subject of a takeover offer;") or of any class of shareholders of the company ("the company whose shares are the subject of a takeover offer;") . Section 34(4) This section does not affect a right of a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") to bring proceedings to restrain the doing of an act that is beyond the powers of the directors, but no such proceedings lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the company ("the company whose shares are the subject of a takeover offer;") . Section 34(5) This section does not affect a liability incurred by the directors, or by any other person, because the directors have exceeded their powers. Section 34(6) This section has effect subject to section 36 . - 35 Verify source ↗
CAPACITY OF COMPANY - 35. Company contracts
A company may make contracts in writing, and contracts may be made on its behalf by a person acting under its authority (express or implied); formalities that apply to natural persons' contracts also apply to company contracts unless a contrary intention appears.
Section 35. Company contracts Section 35(1)(a) by a company, in writing; or Section 35(1)(b) on behalf of a company, by a person acting under its authority, express or implied. Section 35(2) Any formalities required by law for a contract made by a natural person also apply, unless a contrary intention appears, to a contract made by or on behalf of a company. [Act No. 1 of 2020 , s. 29.] - 36 Verify source ↗
CAPACITY OF COMPANY - 36. Constitutional limitations: transactions involving directors or their associates
If a company enters a transaction involving a director or a person connected to a director, the company may void the transaction; the director must account for any gain and indemnify the company for loss, subject to exceptions and court orders.
Section 36. Constitutional limitations: transactions involving directors or their associates Section 36(1) This section applies to a transaction if or to the extent that its validity depends on section 34 . Section 36(2) Nothing in this section precludes the operation of any other written law under which the transaction can be questioned or any liability to the company ("the company whose shares are the subject of a takeover offer;") may arise. Section 36(3)(a) a company enters into such a transaction; and Section 36(3)(b) a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") or of its holding company ; or Section 36(3)(b)(i) a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") or of its holding company ; or Section 36(3)(b)(ii) a person connected with any such director ("a former director;") , the transaction is voidable at the instance of the company ("the company whose shares are the subject of a takeover offer;") . Section 36(4)(a) to account to the company ("the company whose shares are the subject of a takeover offer;") for any gain the director ("a former director;") has made from the transaction (whether directly or indirectly); and Section 36(4)(b) to indemnify the company ("the company whose shares are the subject of a takeover offer;") for any loss or damage resulting from the transaction. Section 36(5)(a) restitution of any money or other asset which was the subject matter of the transaction is no longer possible; Section 36(5)(b) the company ("the company whose shares are the subject of a takeover offer;") is indemnified for any loss or damage resulting from the transaction; Section 36(5)(c) rights acquired in good faith for value and without actual notice ("notice in writing;") of the directors' exceeding their powers by a person who is not party to the transaction would be affected by the avoidance; or Section 36(5)(d) the transaction is affirmed by the company ("the company whose shares are the subject of a takeover offer;") . Section 36(6) A person other than a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") is not liable under subsection (4) if the person shows that, at the time the transaction was entered into, the person did not know that the directors were exceeding their powers. Section 36(7) Nothing in the preceding provisions of this section affects the rights of any party to the transaction not within subsection (3)(b)(i) or (ii) . Section 36(8) But the Court ("(unless some other court is specified) the High Court;") may, on the application of the company ("the company whose shares are the subject of a takeover offer;") or any such party, make an order affirming, severing or setting aside the transaction on such terms as appear to the Court ("(unless some other court is specified) the High Court;") to be just. Section 36(9)(a) "transaction" includes any act; and Section 36(9)(b) the reference to a person connected with a director ("a former director;") has the same meaning as in Part IX. - 37 Verify source ↗
CAPACITY OF COMPANY - 37. Execution of documents
A company’s document is effective for a purchaser if it appears signed either by two authorised signatories or by a director (including a former director) in the presence of a witness; if one person signs for multiple companies they must sign separately for each; 'purchaser' is defined to include persons who acquire an interest for valuable consideration.
Section 37. Execution of documents Section 37(1) Deleted by ActNo. 1 of 2020, s. 30. Section 37(2)(a) by two authorised signatories; or Section 37(2)(b) by a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") in the presence of a witness who attests the signature. Section 37(3) A document in favour of a purchaser is effectively executed by a company if it purports to be signed in accordance with subsection (2) . Section 37(4) For purpose of subsection (3) , "purchaser" means a purchaser in good faith for valuable consideration, and includes a lessee, mortgagee or other person who for valuable consideration acquires an interest in property. Section 37(5) If a document is to be signed by a person on behalf of more than one company, it is not effective for the purposes of this section unless the person signs it separately in each capacity. Section 37(6) A reference in this section to a document being, or purporting to be, signed by a director ("a former director;") or secretary is, if that office is held by a firm, to be read as a reference to its being, or purporting to be, signed by a natural person authorised by the firm to sign on its behalf. Section 37(7) This section applies to a document that is, or purports to be, executed by a company in the name of, or on behalf of, another person (whether or not that person is also a company). [Act No. 1 of 2020 , s. 30.] - 38 Verify source ↗
CAPACITY OF COMPANY - 38.[Deleted by ActNo. 1 of 2020, s. 31.]
Section 38 has been deleted by Act No. 1 of 2020, section 31.
Section 38.[Deleted by ActNo. 1 of 2020, s. 31.] - 39 Verify source ↗
CAPACITY OF COMPANY - 39. Execution of deeds by companies
A deed must be duly executed by the company (the company whose shares are the subject of a takeover offer) and delivered; a document is presumed delivered when executed unless a contrary intention is proved.
Section 39. Execution of deeds by companies Section 39(1)(a) duly executed by the company ("the company whose shares are the subject of a takeover offer;") ; and Section 39(1)(b) delivered as a deed ("a legal document that grants a right by transferring the right from one person to another;") . Section 39(2) For the purposes of subsection (1)(b) , a document is presumed to be delivered when it is executed, unless a contrary intention is proved. - 40 Verify source ↗
CAPACITY OF COMPANY - 40. Execution of deeds or other documents by attorney
A company may in writing authorise a person to execute deeds or other documents on its behalf; such deeds or documents executed by an authorised person have the same effect as if executed by the company.
Section 40. Execution of deeds or other documents by attorney Section 40(1) A company may, in writing, authorise person, either generally or in respect of specified matters, as its attorney to execute deeds or other documents on its behalf. Section 40(2) A deed ("a legal document that grants a right by transferring the right from one person to another;") or other document executed by a person authorised under subsection (1) has effect as if executed by the company. - 41 Verify source ↗
CAPACITY OF COMPANY - 41. Authentication of documents
A company's document or proceedings that require authentication are sufficiently authenticated if signed by a person the company has authorised to act on its behalf.
Section 41. Authentication of documents Section A document or proceedings requiring authentication by a company is sufficiently authenticated by a signature of a person authorised by the company ("the company whose shares are the subject of a takeover offer;") to act on its behalf. - 42 Verify source ↗
CAPACITY OF COMPANY - 42.[Deleted by ActNo. 1 of 2020, s. 32.]
This section has been deleted.
Section 42.[Deleted by ActNo. 1 of 2020, s. 32.] - 43 Verify source ↗
CAPACITY OF COMPANY - 43.[Deleted by ActNo. 1 of 2020, 33.]
Section 43 has been deleted.
Section 43.[Deleted by ActNo. 1 of 2020, 33.] - 44 Verify source ↗
CAPACITY OF COMPANY - 44. Pre-incorporation contracts, deeds and obligations
If someone purports to act for a company that is not yet formed and makes a contract or deed, that person is personally liable on the contract.
Section 44. Pre-incorporation contracts, deeds and obligations Section 44(1) A contract that purports to be made by or on behalf of a company at a time when the company ("the company whose shares are the subject of a takeover offer;") has not been formed has effect, subject to any agreement to the contrary, as a contract made with the person purporting to act for the company ("the company whose shares are the subject of a takeover offer;") or as agent for it, and the person is personally liable on the contract accordingly. Section 44(2) Subsection (1) applies to a deed as it applies to the making of a contract. - 45 Verify source ↗
CAPACITY OF COMPANY - 45. Execution of bills of exchange and promissory notes by companies
A company is bound by a bill of exchange or promissory note if it was made, accepted or endorsed in the company's name, by or on behalf of, or on account of the company, by a person acting under the company's authority.
Section 45. Execution of bills of exchange and promissory notes by companies Section A bill of exchange or promissory note is binding on a company if made, accepted or endorsed in the name of, by or on behalf or on account, of the company ("the company whose shares are the subject of a takeover offer;") by a person acting under its authority. - 46 Verify source ↗
CAPACITY OF COMPANY - 46. Company to have registered office
A company must at all times have a registered office where communications and notices may be addressed.
Section 46. Company to have registered office Section A company shall at all times ensure that it has a registered office to which all communication and notices registered office may be addressed. - 47 Verify source ↗
CAPACITY OF COMPANY - 47. Company tonotifychange ofaddressof registered office
Section 47. Company tonotifychange ofaddressof registered office Section 47(1) A company may change the address of its registered office by lodging with the Registrar ("the person for the time being holding office as Registrar of Companies
Section 47. Company tonotifychange ofaddressof registered office Section 47(1) A company may change the address of its registered office by lodging with the Registrar ("the person for the time being holding office as Registrar of Companies under;") for registration a notice ("notice in writing;") of the change. Section 47(2) The change of address takes effect only when it is registered by the Registrar ("the person for the time being holding office as Registrar of Companies under;") . Section 47(3) A person is entitled to serve a document on the company ("the company whose shares are the subject of a takeover offer;") at the previously registered address within fourteen days after the new address is registered by the Registrar ("the person for the time being holding office as Registrar of Companies under;") . Section 47(4)(a) to keep available for inspection at its registered office any records; or Section 47(4)(b) to state the address of its registered office in any document , Section 47(5)(a) makes the records available at other premises as soon as practicable; and Section 47(5)(b) gives notice ("notice in writing;") accordingly to the Registrar ("the person for the time being holding office as Registrar of Companies under;") of the change of the location of its registered office within fourteen days after doing so.
Part IX
COMPANY DIRECTORS
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COMPANY DIRECTORS - 122. Persons who are connected with adirectorfor purposes of this Part
Defines persons who are 'connected with' a director for this Part, listing family members, connected bodies corporate, certain beneficiaries and trusts (with an exclusion for employee share or pension schemes), and partners.
Section 122. Persons who are connected with adirectorfor purposes of this Part Section 122(1)(a) a member ("a member of a company;") of the director ("a former director;") 's family as defined in section 123 ; Section 122(1)(b) a body corporate with which the director ("a former director;") is connected as defined in section 124 ; Section 122(1)(c) the beneficiaries of which include the director ("a former director;") or a person who because of paragraph (a) or (b) is connected with the person; or Section 122(1)(c)(i) the beneficiaries of which include the director ("a former director;") or a person who because of paragraph (a) or (b) is connected with the person; or Section 122(1)(c)(ii) the terms of which confer a power on the trustees that may be exercised for the benefit of the director ("a former director;") or any such person, other than a trust for the purposes of an employees' share scheme or a pension scheme ("a scheme for the provision of benefits consisting of or including a pension, lump sum benefit, gratuity or other similar benefit given or to be given on the retirement or death, or in anticipation of the retirement of employees or former employees or, in connection with the past service of employees or former employees, either after their retirement or death;") ; Section 122(1)(d) of the director ("a former director;") ; or Section 122(1)(d)(i) of the director ("a former director;") ; or Section 122(1)(d)(ii) of a person who, because of paragraph (a) , (b) or (c) , is connected with that director; or Section 122(1)(e) the director ("a former director;") is a partner; Section 122(1)(e)(i) the director ("a former director;") is a partner; Section 122(1)(e)(ii) a partner is a person who, because of paragraph (a) , (b) or (c) is connected with the director; or Section 122(1)(e)(iii) a partner is a firm in which the director ("a former director;") is a partner or in which there is a partner who, because of paragraph (a) , (b) or (c) , is connected with the director. Section 122(2) A reference in this Part to a person connected with a director ("a former director;") of a company does not include a person who is himself or herself a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") . - 123 Verify source ↗
COMPANY DIRECTORS - 123. Members of adirector’s family
Members of a director’s family (as stated): "a former director;" and 's spouse.
Section 123. Members of adirector’s family Section the director ("a former director;") 's spouse; - 124 Verify source ↗
COMPANY DIRECTORS - 124. When adirectorconnected with abody corporatefor purposes of this Part
Defines when a director is 'connected' with a body corporate: if the director is interested in at least twenty percent of the company's issued share capital or can exercise or control more than twenty percent of the voting power; also directs that the First Schedule rules apply and that treasury shares and their voting rights are disregarded.
Section 124. When adirectorconnected with abody corporatefor purposes of this Part Section 124(1)(a) are interested in shares comprised in the equity share capital ("a company's issued share capital excluding any part of that capital that does not confer any right, either with respect to dividends or to capital, to participate beyond a specified amount in a distribution;") of the body corporate of a nominal value equal to at least twenty percent of that share capital; or Section 124(1)(b) are entitled to exercise or control the exercise of more than twenty percent of the voting power at any general meeting of that body. Section 124(2) The rules set out in the First Schedule apply for the purposes of this section. Section 124(3) A reference in this section to voting power the exercise of which is controlled by a director ("a former director;") includes voting power whose exercise is controlled by a body corporate controlled by the director ("a former director;") . Section 124(4) Shares in a company held as treasury shares , and any voting rights attached to those shares , are to be disregarded for the purposes of this section. Section 124(5)(a) a body corporate with which a director ("a former director;") is connected is not, for the purposes of this section, connected with the director ("a former director;") unless it is also connected with the director ("a former director;") because of subsection (1)(c) or (d) of that section; and Section 124(5)(b) a trustee of a trust the beneficiaries of which include (or may include) a body corporate with which a director ("a former director;") is connected is not, for the purposes of this section, connected with a, director ("a former director;") only because of that fact. - 125 Verify source ↗
COMPANY DIRECTORS - 125. When adirectoris to be regarded as controlling abody corporatefor purposes of this Part
Rules for when a director is to be regarded as controlling a body corporate: having an interest in equity share capital; entitled to exercise or control voting power; being interested in more than fifty percent of share capital; or entitled to exercise or control more than fifty percent of voting power.
Section 125. When adirectoris to be regarded as controlling abody corporatefor purposes of this Part Section 125(1)(a) has an interest in any part of the equity share capital ("a company's issued share capital excluding any part of that capital that does not confer any right, either with respect to dividends or to capital, to participate beyond a specified amount in a distribution;") of that body; or Section 125(1)(a)(i) has an interest in any part of the equity share capital ("a company's issued share capital excluding any part of that capital that does not confer any right, either with respect to dividends or to capital, to participate beyond a specified amount in a distribution;") of that body; or Section 125(1)(a)(ii) is entitled to exercise or control the exercise of any part of the voting power at any general meeting of that body; and Section 125(1)(b) are interested in more than fifty percent of that share capital; or Section 125(1)(b)(i) are interested in more than fifty percent of that share capital; or Section 125(1)(b)(ii) are entitled to exercise or control the exercise of more than fifty percent of that voting power. Section 125(2) The rules set out in the First Schedule (references to interest in shares or debentures) apply for the purposes of this section. Section 125(3) A reference in this section to voting power the exercise of which is controlled by a director ("a former director;") includes voting power whose exercise is controlled by a body corporate controlled by the director ("a former director;") . Section 125(4) Shares in a company held as treasury shares , and any voting rights attached to those shares , are to be disregarded for the purposes of this section. Section 125(5)(a) a body corporate with which a director ("a former director;") is connected is not, for the purposes of this section, connected with the director ("a former director;") unless it is also connected with the director ("a former director;") because of subsection (1)(c) or (d) of that section (connection as trustee or partner);; and Section 125(5)(b) a trustee of a trust the beneficiaries of which include (or may include) a body corporate with which a director ("a former director;") is connected is not, for the purposes of this section, connected with a, director ("a former director;") only because of that fact. - 126 Verify source ↗
COMPANY DIRECTORS - 126. When bodies corporate are to be treated as being associated for purposes of this Part
Defines when two bodies corporate are treated as associated: when one is a subsidiary of the other or both are subsidiaries of the same body corporate.
Section 126. When bodies corporate are to be treated as being associated for purposes of this Part Section bodies corporate are associated if one is a subsidiary of the other or both are subsidiaries of the same body corporate ; and - 127 Verify source ↗
COMPANY DIRECTORS - 127. References to company’s constitution
This section is titled "References to company’s constitution."
Section 127. References to company’s constitution - 128 Verify source ↗
COMPANY DIRECTORS - 128. Company required to have directors
Private companies must have at least one director; public companies must have at least two directors.
Section 128. Company required to have directors Section 128(1) A private company is required to have at least one director ("a former director;") . Section 128(2) A public company is required to have at least two directors. - 129 Verify source ↗
COMPANY DIRECTORS - 129. Company required to have at least one natural person as adirector
A company must have at least one director who is a natural person.
Section 129. Company required to have at least one natural person as adirector Section 129(1) A company is required to have at least one director ("a former director;") who is a natural person. Section 129(2) Subsection (1) is complied with if the office of director is held by a natural person as a corporation sole or otherwise by holding a specified office. - 130 Verify source ↗
COMPANY DIRECTORS - 130. Direction requiring company to make appointment
The Registrar may direct a company (in breach of section 128 or 129) to make specified appointments and comply within a period of not less than one month and not more than three months; failure is an offence punishable by fines (up to 500,000 shillings, and thereafter up to 50,000 shillings per day).
Section 130. Direction requiring company to make appointment Section 130(1) On forming the opinion that a company is in breach of section 128 or 129 , the Registrar may give the company a direction in accordance with subsection (2) . Section 130(2)(a) the statutory requirement of which the company ("the company whose shares are the subject of a takeover offer;") appears to be in breach; Section 130(2)(b) the action that the company ("the company whose shares are the subject of a takeover offer;") is required to take in order to comply with the direction ("direction in writing;") ; Section 130(2)(c) the period within which the company ("the company whose shares are the subject of a takeover offer;") is required to comply with the direction ("direction in writing;") ; and Section 130(2)(d) the consequences of the company ("the company whose shares are the subject of a takeover offer;") failing to comply with the direction ("direction in writing;") . Section 130(3) The period referred to in subsection (2)(c) may not be shorter than one month, or longer than three months, after the date on which the direction is given. Section 130(4)(a) making the necessary appointment or appointments; and Section 130(4)(b) giving notice ("notice in writing;") of the appointment under section 138 , Section 130(5) If the company ("the company whose shares are the subject of a takeover offer;") has already made the necessary appointment or appointments, it shall comply with the direction ("direction in writing;") by giving notice ("notice in writing;") of the appointment under section 138 before the end of the period specified in the direction. Section 130(6) If a company fails to comply with a direction ("direction in writing;") given under this section, the company ("the company whose shares are the subject of a takeover offer;") , and each officer of the company ("the company whose shares are the subject of a takeover offer;") who is in default , commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings. Section 130(7) If, after a company or any of its officers is convicted of an offence under subsection (6) , the company continues to fail to comply with the direction, the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding fifty thousand shillings for each such offence. - 131 Verify source ↗
COMPANY DIRECTORS - 131. Minimum age fordirector
Persons under eighteen years of age may not be appointed as directors.
Section 131. Minimum age fordirector Section 131(1) A person who has not reached eighteen years of age may not be appointed to be a director ("a former director;") of a company. Section 131(2) An appointment made in contravention of subsection (1) is void. - 132 Verify source ↗
COMPANY DIRECTORS - 132. Appointment ofdirectorofpublic company
A public company must ensure that a single-resolution appointment of two or more directors at a general meeting is moved only after the meeting first agrees that it should be moved without any vote against it.
Section 132. Appointment ofdirectorofpublic company Section 132(1) A public company shall ensure that at a general meeting of the company ("the company whose shares are the subject of a takeover offer;") a motion for the appointment of two or more persons as directors of the company ("the company whose shares are the subject of a takeover offer;") by a single resolution is moved only if a resolution that it should be so moved has first been agreed to by the meeting without any vote being cast against it. Section 132(2) A resolution moved in contravention of subsection (1) is void, whether or not any objection to its being so moved was made at the relevant time. Section 132(3) If such a resolution is passed, any provision of the company ("the company whose shares are the subject of a takeover offer;") 's constitution for the automatic reappointment of retiring directors in default of another appointment does not apply. Section 132(4) For the purposes of this section, a motion for approving a person's appointment, or for nominating a person for appointment, is taken to be a motion for the person's appointment. - 133 Verify source ↗
COMPANY DIRECTORS - 133. Validity of acts of directors
The acts of a director (including a former director) are valid even if the resolution appointing that director is void under section 132.
Section 133. Validity of acts of directors Section 133(1)(a) the appointment of the director ("a former director;") was defective; or Section 133(1)(b) was disqualified from holding office; Section 133(1)(b)(i) was disqualified from holding office; Section 133(1)(b)(ii) had ceased to hold office; or Section 133(1)(b)(iii) was not entitled to vote on the relevant matter. Section 133(2) The acts of a director ("a former director;") are valid even if the resolution for director ("a former director;") 's appointment is void under section 132 . - 134 Verify source ↗
COMPANY DIRECTORS - 134. Company to keepregisterof directors
Companies must keep a register of directors, make it available for inspection (members free; others for a prescribed fee), and face offences and fines for non-compliance; the Court can order inspection and costs where refusal is unjustified.
Section 134. Company to keepregisterof directors Section 134(1) Every company shall keep a register of its directors. Section 134(2) A company shall ensure that its register of directors complies with sections 135 and 136 . Section 134(3) A company shall keep its register of directors open for inspection at its registered office or at some other place prescribed or authorised by the regulations ("the companies general regulations made and in force under this Act, but does not, unless expressly provided, include the foreign companies regulations or savings and transitional regulations;") . Section 134(4)(a) any member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") without charge; and Section 134(4)(b) any other person on payment of a fee (if any) not exceeding the amount prescribed for the purposes of this subsection. Section 134(5) If a company refuses to allow a person to inspect the register , that person may apply to the Court ("(unless some other court is specified) the High Court;") for an order under subsection (6) . Section 134(6) If, on the hearing of an application made under subsection (5) , the Court is satisfied that the company's refusal was without justification, it shall make an order directing the company to allow the applicant or the applicant's representative to inspect the company's register and, if it does so, it may make a further order directing the company to pay the applicant's costs in the matter. Section 134(7) If a company fails to comply with a requirement of this section, the company ("the company whose shares are the subject of a takeover offer;") , and each officer of the company ("the company whose shares are the subject of a takeover offer;") who is in default , commit an offence and on conviction are each liable to a fine not exceeding one million shillings. Section 134(8) If, after a company or any of its officers is convicted of an offence under subsection (7) , the company continues to fail to comply with the relevant requirement, the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding one hundred thousand shillings for each such offence. - 135 Verify source ↗
COMPANY DIRECTORS - 135. Particulars of directors to be registered: natural persons
Section lists particulars about natural-person directors that are to be registered, including name, service address, usual residence, nationality, business or occupation, date of birth, and other directorships.
Section 135. Particulars of directors to be registered: natural persons Section 135(1)(a) the person's name and any former name ; Section 135(1)(b) a service address ; Section 135(1)(c) the country or state (or part of Kenya) in which the person is usually resident; Section 135(1)(d) the person's nationality; Section 135(1)(e) the person's business or occupation (if any); Section 135(1)(f) the person's date of birth; Section 135(1)(g) the person's other company directorships, if any. Section 135(2)(a) " name " means a person's forename and surname; and Section 135(2)(b) "former name " means a name by which the natural person was formerly known for business purposes. Section 135(3) If a person is or was formerly known by more than one such name , each of them has to be stated. Section 135(4)(a) was changed or disused before the person attained the age of eighteen years; or Section 135(4)(b) has been changed or disused for twenty years or more. Section 135(5) A person's service address may be stated to be "The company's registered office". [Act No. 28 of 2017 , s. 11.] - 136 Verify source ↗
COMPANY DIRECTORS - 136. Particulars of directors to be registered: corporate directors
Particulars of directors to be registered: corporate directors; the body's corporate name.
Section 136. Particulars of directors to be registered: corporate directors Section the body's corporate name ; - 137 Verify source ↗
COMPANY DIRECTORS - 137. Company to keepregisterof directors’ residential addresses
Every company must keep a register of directors' residential addresses containing each director's usual residential address; limited entries are allowed where the residential and service addresses are the same; failure leads to offences and fines.
Section 137. Company to keepregisterof directors’ residential addresses Section 137(1) Every company shall keep a register of directors' residential addresses that contains the usual residential address of each of the company ("the company whose shares are the subject of a takeover offer;") 's directors. Section 137(2) If a director ("a former director;") 's usual residential address is the same as the director ("a former director;") 's service address (as stated in the company ("the company whose shares are the subject of a takeover offer;") 's register of directors), the register of directors', residential addresses need only contain an entry to that effect. Section 137(3) Subsection (2) does not apply if the director's service address is stated to be "The company's registered office". Section 137(4) If a company fails to comply with subsection (1) , the company, and each officer of the company who is in default, commit and offence and on conviction is liable to a fine not exceeding five hundred thousand shillings. Section 137(5) If, after a company or any of its officers is convicted of an offence under subsection (4) , the company continues to fail to comply with subsection (1) , the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding fifty thousand shillings, for each such offence. Section 137(6) This section applies only to directors who, are natural persons, not if the director ("a former director;") is a body corporate . - 138 Verify source ↗
COMPANY DIRECTORS - 138. Duty of company tonotifyRegistrar of changes of directors and directors’ addresses
Companies must notify the Registrar in writing when a director is appointed, ceases to hold office, or when particulars in the register of directors or their residential addresses change.
Section 138. Duty of company tonotifyRegistrar of changes of directors and directors’ addresses Section 138(1)(a) a person is appointed or ceases to hold appointment as a director ("a former director;") of a company; or Section 138(1)(b) any change occurs in the particulars contained in a company's register of directors or its register of directors' residential addresses, the company ("the company whose shares are the subject of a takeover offer;") shall give notice ("notice in writing;") to the Registrar ("the person for the time being holding office as Registrar of Companies under;") of the appointment, cessation of appointment or change of particulars and of the date on which it occurred. Section 138(2)(a) include in a notice ("notice in writing;") of the appointment of a new director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") a statement of the particulars of that director ("a former director;") that are required to be included in the company ("the company whose shares are the subject of a takeover offer;") 's register of directors and its register of directors' residential addresses; and Section 138(2)(b) attach to or enclose with the notice ("notice in writing;") a written consent by that director ("a former director;") to act in that capacity. Section 138(3) If a company fails to comply with subsection (1) or (2) , the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding two hundred thousand shillings. Section 138(4) If, after a company or any of its officers is convicted of an offence under subsection (3) , the company continues to fail to comply with the relevant requirement, the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding twenty thousand shillings for each such offence. - 138A Verify source ↗
COMPANY DIRECTORS - 138A.Registerofnomineedirectors
Companies must keep a register of nominee directors at their registered office and lodge it (and later amendments) with the Registrar within specified time limits; a penalty applies for failure to lodge.
Section 138A.Registerofnomineedirectors Section 138A(1) Every company shall keep a register of nominee directors at its registered office. Section 138A(2)(a) the name and address of the nominee director ; Section 138A(2)(b) the date on which the person became a nominee director ; and Section 138A(2)(c) the name and address of the nominee director ’s nominator . Section 138A(3) Every company registered before the coming into effect of this provision shall lodge with the Registrar ("the person for the time being holding office as Registrar of Companies under;") , a copy of its register of nominee directors within sixty days of coming into effect of this provision. Section 138A(4) A company shall lodge with the Registrar ("the person for the time being holding office as Registrar of Companies under;") , a copy of any amendment to its register of nominee directors within fourteen days after making the amendment. Section 138A(5) The register of nominee directors shall not be open to inspection by membersof the public. Section 138A(6) If a company fails to comply with a requirement under subsection (3) or subsection (4) , the company, and each officer of the company in default is liable to pay to the Registrar, an administrative penalty of two thousand shillings. Section 138A(7) This section shall apply to foreign companies registered in Part XXXVII of this Act. [Act No. 10 of 2023 , Sch.] - 139 Verify source ↗
COMPANY DIRECTORS - 139. Resolution to remove directors from office
A company may remove a director by ordinary resolution at a meeting.
Section 139. Resolution to remove directors from office Section 139(1) A company may, by ordinary resolution at a meeting, remove a director ("a former director;") before the end of the director ("a former director;") 's period of office, despite anything to the contrary in any agreement between the company ("the company whose shares are the subject of a takeover offer;") and the director ("a former director;") . Section 139(2) However, a special notice ("notice in writing;") is required for a resolution to remove a director ("a former director;") under this section or to appoint a person to replace the director ("a former director;") so removed at the meeting at which the director ("a former director;") is removed. Section 139(3) A person appointed to replace a director ("a former director;") who is removed under this section is, for the purpose of determining the time at which the person is to retire from office, taken to have become a director ("a former director;") on the day on which the director ("a former director;") in whose place the person is appointed was last appointed as a director ("a former director;") . Section 139(4) A vacancy created by the removal of a director ("a former director;") under this section, if not filled at the meeting at which the director ("a former director;") is removed, can be filled as a casual vacancy. Section 139(5)(a) to avoid conflicts of interest with regard to the exploitation of any property ("all rights and interests in property;") , information or opportunity that the person became aware of while a director ("a former director;") ; and Section 139(5)(b) not to accept benefits from third parties with regard to things done or omitted to be done by that person before ceasing to be a director ("a former director;") Section 139(6)(a) deprive a person removed under it of compensation or damages payable in respect of the termination of the person's appointment as director ("a former director;") ; or Section 139(6)(b) limit any power to remove a director ("a former director;") that may exist apart from this section. - 140 Verify source ↗
COMPANY DIRECTORS - 140. Scope and nature of general duties
Directors (including former directors) owe the general duties set out in this Division to the company; those duties include the duty in section 146 about exploiting property, information or opportunity learned while a director and the duty in section 147 for acts or omissions before ceasing to be a director; the general duties are based on common law and equitable principles and are to be interpreted and applied in the same way as those principles.
Section 140. Scope and nature of general duties Section 140(1) The general duties specified in this Division are owed by a director ("a former director;") of a company to the company ("the company whose shares are the subject of a takeover offer;") . Section 140(2)(a) the duty in section 146 with respect to the exploitation of any property, information or opportunity of which the person became aware while a director; and Section 140(2)(b) the duty in section 147 with respect to things done or omitted by the person before ceasing to be a director, Section 140(3) The general duties of directors are based on common law rules and equitable principles that apply in relation to directors and have effect in place of those rules and principles with respect to the duties owed to a company by a director ("a former director;") . Section 140(4) The general duties of directors are to be interpreted and applied in the same way as common law rules or equitable principles, and those interpreting and applying those rules and principles are required to have regard to the corresponding common law rules and equitable principles. - 141 Verify source ↗
COMPANY DIRECTORS - 141. Director’s right to protest against removal
When notice of a resolution to remove a director is given, the company must send a copy of that notice to the director; the director may make written representations within twenty-one days and may be heard at the meeting; the company must notify members about the representations and send copies to members; if copies are not sent in time the director may require them to be read at the meeting; the Court may order that defamatory representations need not be sent or read.
Section 141. Director’s right to protest against removal Section 141(1) On receipt of notice ("notice in writing;") of a motion for a resolution to remove a director ("a former director;") under section 139 , the company shall send a copy of the notice to the director concerned. Section 141(2) The director ("a former director;") , whether or not a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") may be heard on the discussion of the motion at the meeting. Section 141(3) Subsection (4) applies when notice is given of a proposed resolution to remove a director under section 139 . Section 141(4) Within twenty-one days after the notice ("notice in writing;") is given, the director ("a former director;") may make, with respect to the motion representations in writing to the company ("the company whose shares are the subject of a takeover offer;") and request that the members of the company ("the company whose shares are the subject of a takeover offer;") be notified of the director ("a former director;") 's representations. Section 141(5)(a) in any notice ("notice in writing;") of the resolution given to members of the company ("the company whose shares are the subject of a takeover offer;") , state the fact of the representations having been made; and Section 141(5)(b) send a copy of the representations to every member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") to whom notice ("notice in writing;") of the meeting is sent, whether before or after receipt of the representations by the company ("the company whose shares are the subject of a takeover offer;") . Section 141(6) If a copy of the representations is not sent as required by subsection (5) because the representations were received too late or because of the company's default, the director may orally require the representations to be read out at the meeting. Section 141(7) If the company ("the company whose shares are the subject of a takeover offer;") or a person affected claims that the representations made by the director ("a former director;") contain defamatory matter, the company ("the company whose shares are the subject of a takeover offer;") or the person may apply to the Court ("(unless some other court is specified) the High Court;") for an order under subsection (9) . Section 141(8) The director ("a former director;") is entitled to be served with a copy of such an application and to be heard at the hearing of the application by the Court ("(unless some other court is specified) the High Court;") . Section 141(9) On the hearing of such an application, the Court ("(unless some other court is specified) the High Court;") shall, if satisfied that the representations of the director ("a former director;") contain defamatory matter, make an order that they need not be sent out to the company ("the company whose shares are the subject of a takeover offer;") 's members and need not be read out at the meeting, but if not so satisfied, it shall dismiss the application. Section 141(10)(a) copies of the director ("a former director;") 's representations need not be sent out to the company ("the company whose shares are the subject of a takeover offer;") 's members; and Section 141(10)(b) those representations need not be read out at the meeting. - 142 Verify source ↗
COMPANY DIRECTORS - 142. Duty ofdirectorto act within powers
Directors must act within their powers and must act in accordance with the company's constitution.
Section 142. Duty ofdirectorto act within powers Section act in accordance with the constitution of the company ("the company whose shares are the subject of a takeover offer;") ; and - 143 Verify source ↗
COMPANY DIRECTORS - 143. Duty ofdirectorto promote the success ofthe company
Directors must promote the success of the company, taking into account specified factors such as long-term consequences, employee interests, business relationships, community and environmental impact, reputation, and fairness between directors and members.
Section 143. Duty ofdirectorto promote the success ofthe company Section 143(1)(a) the long term consequences of any decision of the directors; Section 143(1)(b) the interests of the employees of the company ("the company whose shares are the subject of a takeover offer;") ; Section 143(1)(c) the need to foster the company ("the company whose shares are the subject of a takeover offer;") 's business relationships with suppliers, customers and others; Section 143(1)(d) the impact of the operations of the company ("the company whose shares are the subject of a takeover offer;") on the community and the environment; Section 143(1)(e) the desirability of the company ("the company whose shares are the subject of a takeover offer;") to maintain a reputation for high standards of business conduct; and Section 143(1)(f) the need to act fairly as between the directors and the members of the company ("the company whose shares are the subject of a takeover offer;") . Section 143(2) If, or to the extent that, the purposes of the company ("the company whose shares are the subject of a takeover offer;") consist of or include purposes other than the benefit of its members, subsection (1) has effect as if the reference to promoting the success of the company for the benefit of its members were to achieving those purposes. Section 143(3) The duty imposed by this section has effect subject to any law requiring directors, in certain circumstances, to consider or act in the interests of creditors of the company ("the company whose shares are the subject of a takeover offer;") . - 144 Verify source ↗
COMPANY DIRECTORS - 144. Duty ofdirectorto exercise independent judgement
Directors must exercise independent judgment, subject to clauses allowing action under a company agreement or the company's constitution.
Section 144. Duty ofdirectorto exercise independent judgement Section 144(1) A director ("a former director;") of a company shall exercise independent judgment. Section 144(2)(a) in accordance with an agreement duly entered into by the company ("the company whose shares are the subject of a takeover offer;") that restricts the future exercise of discretion by its directors; or Section 144(2)(b) in a way authorised by the constitution of the company ("the company whose shares are the subject of a takeover offer;") . - 145 Verify source ↗
COMPANY DIRECTORS - 145. Duty ofdirectorto exercise reasonable care, skill and diligence
Directors must exercise reasonable care, skill and diligence.
Section 145. Duty ofdirectorto exercise reasonable care, skill and diligence Section the general knowledge, skill and experience that may reasonably be expected of a person carrying out the functions performed by the director ("a former director;") in relation to the company ("the company whose shares are the subject of a takeover offer;") ; and - 146 Verify source ↗
COMPANY DIRECTORS - 146. Duty ofdirectorto avoid conflicts of interest
Directors must avoid situations where their personal interests conflict or may conflict with the company's interests; other directors may authorise conflicts in specified ways; a contravening director commits an offence and may be disqualified for up to five years.
Section 146. Duty ofdirectorto avoid conflicts of interest Section 146(1) A director ("a former director;") of a company shall avoid a situation in which the director ("a former director;") has, or can have, a direct or indirect interest that conflicts, or may conflict, with the interests of the company ("the company whose shares are the subject of a takeover offer;") . Section 146(2)(a) any property ("all rights and interests in property;") ; Section 146(2)(b) confidential information of the company ("the company whose shares are the subject of a takeover offer;") ; Section 146(2)(c) the director ("a former director;") 's position in the company ("the company whose shares are the subject of a takeover offer;") ; or Section 146(2)(d) opportunities in or for the company ("the company whose shares are the subject of a takeover offer;") : Section 146(3)(a) deleted by ActNo. 28 of 2017, s. 12(b); Section 146(3)(b) if the matter has been authorised by the other directors. Section 146(4) An authorisation under subsection (3)(b) may, in the case of a private company, be given by the directors by the matter concerned being proposed to and authorised by them, so long as nothing in the company's constitution invalidates the giving of such an authorisation. Section 146(5)(a) a majority of members of the board of directors who do not have a personal interest; or Section 146(5)(b) a majority of the votes of members who do not have a personal interest, in the case of a transaction valued at an amount that is ten percent or more of the value of the assets of the company ("the company whose shares are the subject of a takeover offer;") . Section 146(6)(a) any requirement relating to the quorum at the meeting at which the matter is considered is satisfied without counting the director ("a former director;") concerned or any other interested director ("a former director;") ; and Section 146(6)(b) the matter was agreed to without that director ("a former director;") or any other interested director ("a former director;") voting. Section 146(7) Any reference in this section to a conflict of interest includes references to a conflict of interest and duty and to a conflict of duties. Section 146(8)(a) is a party to the transaction or has material financial interest in the transaction; or Section 146(8)(b) has material financial interest in the transaction that could be expected to affect their judgment adversely to the company ("the company whose shares are the subject of a takeover offer;") . Section 146(9)(a) restitution of any money or other asset that was the subject matter of the arrangement or transaction is no longer possible; Section 146(9)(b) the company ("the company whose shares are the subject of a takeover offer;") has been indemnified in accordance with this section by other persons for the loss or damage suffered by it; or Section 146(9)(c) rights acquired in good faith, for value and without actual notice ("notice in writing;") of the contravention by a person who is not a party to the arrangement or transaction would be affected by the avoidance. Section 146(10)(a) to account to the company ("the company whose shares are the subject of a takeover offer;") for any gain that the person has made (directly or indirectly) as a result of the arrangement or transaction; and Section 146(10)(b) jointly and severally with any other person so liable under this section, to indemnify the company ("the company whose shares are the subject of a takeover offer;") for any loss or damage resulting from the arrangement or transaction. Section 146(11)(a) any director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") or of its holding company with whom the company ("the company whose shares are the subject of a takeover offer;") entered into the arrangement in contravention of this section; Section 146(11)(b) any person with whom the company ("the company whose shares are the subject of a takeover offer;") entered into the arrangement in contravention of this section who is connected with a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") or of its holding company ; Section 146(11)(c) the director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") , or of its holding company , with whom any such person is connected; and Section 146(11)(d) any other director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") who authorised the arrangement or a transaction entered into in accordance with such an arrangement . Section 146(12) A director ("a former director;") who contravenes this section commits an offence and is liable on conviction to disqualification for a period not exceeding five years. [Act No. 28 of 2017 , s. 12.] - 147 Verify source ↗
COMPANY DIRECTORS - 147. Duty not to accept benefits from third parties
Persons (including directors) must not accept benefits from third parties; certain benefits for services provided to the company are excluded; contravention is an offence with fines and forfeiture.
Section 147. Duty not to accept benefits from third parties Section 147(1)(a) to the fact that the person is a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") ; or Section 147(1)(b) to any act or omission of the person as a director ("a former director;") . Section 147(2) Benefits received by a director ("a former director;") from a person by whom his or her services ("anything other than goods or land") (as a director ("a former director;") or otherwise) are provided to the company ("the company whose shares are the subject of a takeover offer;") are not regarded as conferred by a third party. Section 147(3) Deleted by ActNo. 28 of 2017, s. 13. Section 147(4) A reference in this section to a conflict of interest includes a conflict of interest and duty and a conflict of duties. Section 147(5) A person who contravenes subsection (1) commits an offence and is liable on conviction to a fine not exceeding one million shillings. Section 147(6) On the conviction of a person for an offence under subsection (2) , the benefit or its equivalent accepted by the person under subsection (1) is forfeited to the company. Section 147(7) In this section, "third party" means a person other than the company ("the company whose shares are the subject of a takeover offer;") , an associated body corporate or a person acting on behalf of the company ("the company whose shares are the subject of a takeover offer;") or an associated body corporate . [Act No. 28 of 2017 , s. 13.] - 148 Verify source ↗
COMPANY DIRECTORS - 148. Civil consequences of breach of general duties
Breach or threatened breach of the general duties of directors carries the same consequences as the corresponding common law or equitable rules, and those duties (except the duty in section 145) are enforceable in the same way as other fiduciary duties owed to a company by its directors.
Section 148. Civil consequences of breach of general duties Section 148(1) The consequences of breach (or threatened breach) of the general duties of directors set out in this Division are the same as would apply if the corresponding common law rule or equitable principle applied. Section 148(2) Those duties (with the exception of the duty set out in section 145 ) are enforceable in the same way as any other fiduciary duty owed to a company by its directors. - 149 Verify source ↗
COMPANY DIRECTORS - 149. Cases within more than one of the general duties
More than one general duty may apply to a director (including a former director) in a given case, except as otherwise provided.
Section 149. Cases within more than one of the general duties Section Except as otherwise provided, more than one of the general duties may apply to a director ("a former director;") in any given case. - 150 Verify source ↗
COMPANY DIRECTORS - 150. Consent, approval or authorisation by members
If authorised by the directors (or if section 151 is complied with), a transaction or arrangement is not liable to be set aside; approval requirements in Division 5 still apply and directors may be exempt from complying with sections 146 or 147 when approval is given or not required.
Section 150. Consent, approval or authorisation by members Section 150(1)(a) section 146 is complied with by authorisation by the directors; or Section 150(1)(b) section 151 is complied with, the transaction or arrangement is not liable to be set aside because of any common law rule or equitable principle requiring the consent or approval of the members of the company. Section 150(2) Subsection (1) does not affect the operation of any enactment, or provision of the company's constitution, that requires any such consent or approval. Section 150(3)(a) approval is given under that Division; or Section 150(3)(b) the matter is one as to which it is provided that approval is not needed, it is not necessary also for the director ("a former director;") to comply with section 146 or 147 . Section 150(4) Compliance by a director ("a former director;") with the general duties does not remove the need for approval under any applicable provision of Division 5. Section 150(5)(a) have effect subject to any rule of law enabling the company ("the company whose shares are the subject of a takeover offer;") to give authority, specifically or generally, for anything to be done (or omitted) by the directors, or any of them, that would otherwise be a breach of duty; and Section 150(5)(b) if the company ("the company whose shares are the subject of a takeover offer;") 's articles contain provisions for dealing with conflicts of interest — are not infringed by anything done or omitted to be done by the directors (or by any of them) in accordance with those provisions. Section 150(6) Except as provided by this section, the general duties of directors have effect (except as otherwise provided or the context otherwise requires) irrespective of any other enactment or rule of law. - 151 Verify source ↗
COMPANY DIRECTORS - 151. Duty to declare interest in proposed or existing transaction orarrangement
Directors must declare any interest in a proposed or existing transaction or arrangement, and make the declaration before the company enters into that transaction or arrangement.
Section 151. Duty to declare interest in proposed or existing transaction orarrangement Section 151(1)(a) to the other directors; and Section 151(1)(b) if the company ("the company whose shares are the subject of a takeover offer;") is a public company , to the members of the company ("the company whose shares are the subject of a takeover offer;") within seventy-two hours. Section 151(2)(a) at a general meeting of the company ("the company whose shares are the subject of a takeover offer;") ; or Section 151(2)(b) by notice ("notice in writing;") given to the members, in accordance with section 152 . Section 151(3) A declaration is not effective for the purpose of subsection (2) unless the valuation of the goods or services and the valuation of the assets of the company are certified by the company's external and independent auditors as being the true market value of those goods or services and those assets. Section 151(4) If a declaration of interest under this section, is inaccurate or incomplete, the director ("a former director;") shall make a further declaration. Section 151(5) A director ("a former director;") shall make a declaration required by this section before the company ("the company whose shares are the subject of a takeover offer;") enters into the transaction or arrangement concerned. Section 151(6)(a) is not aware of the interest; or Section 151(6)(b) is not aware of the transaction or arrangement to which the interest relates. Section 151(7) For the purpose of subsection (6) , a director is taken to be aware of matters of which the director ought reasonably to be aware. Section 151(8)(a) if it cannot reasonably be regarded as likely to give rise to a conflict of interest; Section 151(8)(b) if, or to the extent that, the other directors are already aware of it, and for this purpose the other directors are treated as being aware of anything which they ought reasonably to be aware; or Section 151(8)(c) by a meeting of the directors; or Section 151(8)(c)(i) by a meeting of the directors; or Section 151(8)(c)(ii) by a committee of the directors appointed for the purpose under the constitution of the company ("the company whose shares are the subject of a takeover offer;") . Section 151(9) For the purpose of subsection (8)(b) , the other directors are treated as being aware of anything of which they ought reasonably to be aware. Section 151(10) A director ("a former director;") who contravenes this section commits an offence and is liable on conviction to a fine not exceeding one million shillings. [Act No. 28 of 2017 , s. 14, Act No. 18 of 2018 , sch. ] - 152 Verify source ↗
COMPANY DIRECTORS - 152. Director to make declaration bynoticein writing
If a director is required to declare an interest, the director must give a written notice to the other directors; the director may give that notice in hard copy or, where the recipient has agreed, in an agreed electronic form.
Section 152. Director to make declaration bynoticein writing Section 152(1) A director ("a former director;") who is required to make a declaration of interest shall give a notice ("notice in writing;") to the other directors. Section 152(2) The director ("a former director;") may give the notice ("notice in writing;") in hard copy form ("a document or information that is sent, supplied or delivered in a paper copy or similar form capable of being read and references to hard copy have a corresponding meaning;") or, if the recipient has agreed to receive it in electronic form , in an agreed electronic form . Section 152(3)(a) by hand or by post; or Section 152(3)(b) if the recipient has agreed to receive such notices by electronic means , by the agreed electronic means . Section 152(4)(a) the making of the declaration forms part of the proceedings at the next meeting of the directors after the notice ("notice in writing;") is given; and Section 152(4)(b) section 210 applies as if the declaration had been made at that meeting. - 153 Verify source ↗
COMPANY DIRECTORS - 153. Generalnoticeto be regarded as sufficient declaration
A general notice must state the nature and extent of a director's interest to be effective, and the director must take reasonable steps to ensure the notice is brought to the attention of directors and read at the next directors' meeting.
Section 153. Generalnoticeto be regarded as sufficient declaration Section 153(1) A general notice ("notice in writing;") given in accordance with this section is a sufficient declaration of interest in relation to the matters to which it relates. Section 153(2)(a) has an interest as a member ("a member of a company;") , officer, employee or otherwise in a specified body corporate or firm and is to be regarded as interested in any transaction or arrangement that may, after the date of the notice ("notice in writing;") , be made with that body corporate or firm; or Section 153(2)(b) is connected with a specified person, other than a body corporate , and is to be regarded as interested in any transaction or arrangement that may, after the date of the notice ("notice in writing;") , be made with that person Section 153(3) A general notice ("notice in writing;") is not effective unless it states the nature and extent of the director ("a former director;") 's interest in the body corporate or firm or the nature of the director ("a former director;") 's connection with the person. Section 153(4)(a) it is given at a meeting of the directors; Section 153(4)(b) the director ("a former director;") takes reasonable steps to ensure that the notice ("notice in writing;") is brought to the attention of the directors and read aloud at the next meeting of the directors after it is given; or Section 153(4)(c) the board of directors notifies the members in the next meeting of the action to be taken. [Act No. 28 of 2017 , s. 15.] - 154 Verify source ↗
COMPANY DIRECTORS - 154. Declaration of interest in case of company with soledirector
The company (the company whose shares are the subject of a takeover offer) must record the declaration in writing.
Section 154. Declaration of interest in case of company with soledirector Section 154(1)(a) the company ("the company whose shares are the subject of a takeover offer;") shall record the declaration in writing; Section 154(1)(b) the making of the declaration forms part of the proceedings at the next meeting of the directors after the notice ("notice in writing;") is given; and Section 154(1)(c) section 210 applies as if the declaration had been made at that meeting. Section 154(2) This section does not affect the operation of section 193 . - 155 Verify source ↗
COMPANY DIRECTORS - 155. Definition of credit transaction for purposes of Division 5
Section 155 defines what counts as a "credit transaction" by listing types of supply or disposition of goods, land or services (including hire-purchase, conditional sale, leases, deferred payment arrangements and retention of title) and provides related definitions for "conditional sale agreement" and "services".
Section 155. Definition of credit transaction for purposes of Division 5 Section 155(1)(a) supplies any goods under a hire-purchase agreement , a conditional sale agreement ("a contract or agreement under which a buyer takes possession of goods but the title to the goods and the right to repossess them remains with the seller until the buyer has paid the full purchase price for the goods; and") or retention of title agreement ; Section 155(1)(b) leases or hires goods in return for periodical payments; Section 155(1)(c) otherwise disposes supplies goods or services ("anything other than goods or land") on the terms that payment (whether in a lump sum or by means of periodical payments or otherwise) is to be deferred; Section 155(1)(d) sells land on terms under which the buyer will mortgage the land to the seller or a third person; Section 155(1)(e) leases land; or Section 155(1)(f) otherwise disposes of land on the terms that payment (whether in a lump sum or by means of periodical payments or otherwise) is to be deferred. Section 155(2) In subsection (1) , a reference to the person for whose benefit a credit transaction is entered into is to the person to whom goods, land or services are supplied, sold, leased, hired or otherwise disposed of under the transaction. Section 155(3)(a) "conditional sale agreement" means a contract or agreement under which a buyer takes possession of goods but the title to the goods and the right to repossess them remains with the seller until the buyer has paid the full purchase price for the goods; and Section 155(3)(b) "services" means anything other than goods or land. - 156 Verify source ↗
COMPANY DIRECTORS - 156. Meaning of "quasi-loan" and related expressions
Defines "quasi-loan" by listing forms of payment or agreement that create a borrower's liability, states that the person to whom a quasi-loan is made is the borrower, and provides that the borrower's liabilities include liabilities of anyone who agrees to reimburse the creditor on the borrower's behalf.
Section 156. Meaning of "quasi-loan" and related expressions Section 156(1)(a) agrees to pay, or pays otherwise than in accordance with an agreement, an amount for another person (a borrower); or Section 156(1)(b) on terms that the borrower, or a third person on the borrower's behalf, will reimburse the creditor; or Section 156(1)(b)(i) on terms that the borrower, or a third person on the borrower's behalf, will reimburse the creditor; or Section 156(1)(b)(ii) in circumstances giving rise to a liability on the borrower to reimburse the creditor. Section 156(2) A reference in subsection (1) to the person to whom a quasi -loan is made is a reference to the borrower Section 156(3) The liabilities ("duties;") of the borrower under a quasi -loan include the liabilities ("duties;") of any person who has agreed to reimburse the creditor on behalf of the borrower. - 157 Verify source ↗
COMPANY DIRECTORS - 157. Director’s long-term service contracts: requirement of members’ approval
Section requires members’ approval by resolution for certain long-term service contracts of directors in takeover-related companies and sets related continuation, notice and validation rules.
Section 157. Director’s long-term service contracts: requirement of members’ approval Section 157(1)(a) with the company ("the company whose shares are the subject of a takeover offer;") ; or Section 157(1)(b) if the person is the director ("a former director;") of a holding company , within the group that comprises the company ("the company whose shares are the subject of a takeover offer;") and its subsidiaries, Section 157(2)(a) by resolution of the members of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 157(2)(b) in the case of a director ("a former director;") of a holding company , by a resolution of the members of that company. Section 157(3)(a) is to continue, or could be continued, otherwise than at the instance of the company ("the company whose shares are the subject of a takeover offer;") , whether under the original contract or under a new contract entered into under it; and Section 157(3)(a)(i) is to continue, or could be continued, otherwise than at the instance of the company ("the company whose shares are the subject of a takeover offer;") , whether under the original contract or under a new contract entered into under it; and Section 157(3)(a)(ii) cannot be terminated by the company ("the company whose shares are the subject of a takeover offer;") by notice ("notice in writing;") , or can be so terminated only in specified circumstances; or Section 157(3)(b) in the case of employment that can be terminated by the company ("the company whose shares are the subject of a takeover offer;") by notice ("notice in writing;") — the period of notice ("notice in writing;") required to be given, Section 157(4) If, more than six months before the end of the guaranteed term of a director ("a former director;") 's employment, the company ("the company whose shares are the subject of a takeover offer;") enters into a further service contract, otherwise than in accordance with a right conferred, by or under the original contract, on the other party to it, this section applies as if there were added to the guaranteed term of the new contract the unexpired period of the guaranteed term of the original contract. Section 157(5)(a) in the case of a written resolution, by being sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to member ("a member of a company;") ; or Section 157(5)(b) at the company ("the company whose shares are the subject of a takeover offer;") 's registered office for not less than fourteen days ending with the date of the meeting; and Section 157(5)(b)(i) at the company ("the company whose shares are the subject of a takeover offer;") 's registered office for not less than fourteen days ending with the date of the meeting; and Section 157(5)(b)(ii) at the meeting itself. Section 157(6)(a) is not a company registered under this Act; or Section 157(6)(b) is a wholly-owned subsidiary of another body corporate . Section 157(7) In this section, "employment" means any employment under a director ("a former director;") 's service contract. Section 157(8)(a) the contract is void to the extent of the contravention; and Section 157(8)(b) the contract is taken to include a term entitling the company ("the company whose shares are the subject of a takeover offer;") to terminate it at any time by giving reasonable notice ("notice in writing;") . - 158 Verify source ↗
COMPANY DIRECTORS - 158. Substantialpropertytransactions: requirement of members’ approval
Members' approval is required for substantial non-cash asset transactions between a company and a director (or connected person); holding company members' approval is also required in certain cases.
Section 158. Substantialpropertytransactions: requirement of members’ approval Section 158(1)(a) a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") or of its holding company , or a person connected with such a director ("a former director;") , acquires or is to acquire from the company ("the company whose shares are the subject of a takeover offer;") (directly or indirectly) a substantial non-cash asset; or Section 158(1)(b) the company ("the company whose shares are the subject of a takeover offer;") acquires or is to acquire a substantial non-cash asset (directly or indirectly) from such a director ("a former director;") or a person so connected, unless the arrangement has been approved by a resolution of the members of the company ("the company whose shares are the subject of a takeover offer;") or is conditional on such an approval being obtained. Section 158(2) If the director ("a former director;") or connected person is a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") 's holding company or is a person connected with such a director ("a former director;") , the arrangement also needs to have been approved by a resolution of the members of the holding company or be conditional on such an approval being obtained. Section 158(3) A company is not subject to a liability only because it has failed to obtain an approval required by this section. Section 158(4)(a) that is not a company registered under this Act; or Section 158(4)(b) that is a wholly-owned subsidiary of another body corporate . Section 158(5)(a) an arrangement involving more than one non-cash asset; or Section 158(5)(b) an arrangement that is one of a series involving non-cash assets, is to be treated as if it involved a non-cash asset of a value equal to the aggregate value of all the non-cash assets involved in the arrangement , or the series. Section 158(6)(a) to anything to which a director ("a former director;") of a company is entitled under the director ("a former director;") ’s service contract; or Section 158(6)(b) to payment for loss of office as defined in section 180 . Section 158(7)(a) exceeds ten per cent of the company ("the company whose shares are the subject of a takeover offer;") ’s asset value and is more than five million shillings; or Section 158(7)(b) exceeds ten million shillings. Section 158(8)(a) the value of the company ("the company whose shares are the subject of a takeover offer;") 's net assets determined by reference to its most recent statutory financial statement; or Section 158(8)(b) if no such statement has been prepared—the amount of the company ("the company whose shares are the subject of a takeover offer;") 's called-up share capital. Section 158(9)(a) a company's statutory financial statement is its annual financial statement as prepared in accordance with Part XXV; and Section 158(9)(b) its most recent statutory financial statement is that in relation to which the time for sending it to members is most recent. Section 158(10) Whether a non-cash asset is substantial for the purposes of this section is to be determined as at the time when relevant arrangement is entered into. - 159 Verify source ↗
COMPANY DIRECTORS - 159. Exception for transactions with members or other group companies
Creates an exception for transactions between a company and its members or other group companies.
Section 159. Exception for transactions with members or other group companies Section for a transaction between a company and a person as a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") ; or - 160 Verify source ↗
COMPANY DIRECTORS - 160. Exception in case of companyin liquidationor under administration
Section 160 creates exceptions where a company to which the section applies is in liquidation (except a members' voluntary liquidation) or is under administration; it also addresses exceptions relating to members (160(2)(a)) and arrangements entered into by such a company (160(2)(b)).
Section 160. Exception in case of companyin liquidationor under administration Section 160(1)(a) that is in liquidation , unless the liquidation is a members' voluntary liquidation; or Section 160(1)(b) that is under administration. Section 160(2)(a) from the members of a company to which this section applies; or Section 160(2)(b) for an arrangement entered into by a company to which this section applies. - 161 Verify source ↗
COMPANY DIRECTORS - 161. Exception for transactions on recognised investment exchange
Directors (and persons connected to them) do not need approval under section 158 for transactions on an approved securities exchange if the transaction is effected through an independent broker.
Section 161. Exception for transactions on recognised investment exchange Section 161(1) An approval is not required to be obtained under section 158 for a transaction on an approved securities exchange that is effected by a director, or a person connected with the director, through the agency of a person who, in relation to the transaction, acts as an independent broker. Section 161(2) For the purposes of this section, "independent broker" means a person who, independently of the director ("a former director;") or any person connected with the director ("a former director;") , selects the person with whom the transaction is to be effected. - 162 Verify source ↗
COMPANY DIRECTORS - 162. Property transactions: civil consequences of contraveningsection 159
Persons who enter into arrangements or transactions in contravention of section 158 must account for any gains to the company and indemnify the company for losses; certain directors may be exempt if they show they took all reasonable steps.
Section 162. Property transactions: civil consequences of contraveningsection 159 Section 162(1)(a) restitution of any money or other asset that was the subject matter of the arrangement or transaction is no longer possible; Section 162(1)(b) the company ("the company whose shares are the subject of a takeover offer;") has been indemnified in accordance with this section by other persons for the loss or damage suffered by it; or Section 162(1)(c) rights acquired in good faith, for value and without actual notice ("notice in writing;") of the contravention by a person who is not a party to the arrangement or transaction would be affected by the avoidance. Section 162(2)(a) to account to the company ("the company whose shares are the subject of a takeover offer;") for any gain that the person has made (directly or indirectly) as a result of the arrangement or transaction; and Section 162(2)(b) jointly and severally with any other person so liable under this section, to indemnify the company ("the company whose shares are the subject of a takeover offer;") for any loss or damage resulting from the arrangement or transaction. Section 162(3)(a) any director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") or of its holding company with whom the company ("the company whose shares are the subject of a takeover offer;") entered into the arrangement in contravention of section 158 ; Section 162(3)(b) any person with whom the company ("the company whose shares are the subject of a takeover offer;") entered into the arrangement in contravention of that section who is connected with a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") or of its holding company ; Section 162(3)(c) the director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") , or of its holding company , with whom any such person is connected; and Section 162(3)(d) any other director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") who authorised the arrangement , or a transaction entered into in accordance with such an arrangement . Section 162(4) Subsections (2) and (3) are subject to subsections (5) and (6) . Section 162(5) A director ("a former director;") of a company, or of its holding company , is not, in relation to an arrangement entered into by the company ("the company whose shares are the subject of a takeover offer;") in contravention of section 158 with a person connected with the director, liable because of subsection (3)(c) if the director shows that all reasonable steps were taken by the director to ensure that the company did not contravene that section. Section 162(6) Deleted by ActNo. 28 of 2017, s. 16(a). Section 162(7) Deleted by ActNo. 28 of 2017, s. 16(b). Section 162(8) This section does not preclude the operation of any other enactment or rule of law under which the arrangement or transaction could be questioned, or any liability to the company ("the company whose shares are the subject of a takeover offer;") could arise. [Act No. 28 of 2017 , s. 16.] - 163 Verify source ↗
COMPANY DIRECTORS - 163. Property transactions: effect of subsequent affirmation
If the members of the company (or the holding company) pass a resolution under section 163(1)(a) or (b) affirming a transaction or arrangement, that transaction or arrangement can no longer be avoided under section 162; and a period that exceeds three months is not a reasonable period for the purposes of subsection (1).
Section 163. Property transactions: effect of subsequent affirmation Section 163(1)(a) in the case of a contravention of subsection (1) of that section, by resolution of the members of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 163(1)(b) in the case of a contravention of subsection (2) of that section, by resolution of the members of the holding company , the transaction or arrangement can no longer be avoided under section 162 . Section 163(2) A period that exceeds three months is not a reasonable period for the purposes of subsection (1) . - 164 Verify source ↗
COMPANY DIRECTORS - 164. Loans to directors to be approved by members
Member approval by resolution is required for loans to a director or for guarantees or security given in connection with such loans.
Section 164. Loans to directors to be approved by members Section 164(1)(a) make a loan to a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") or of its member ("a member of a company;") , holding company ; or Section 164(1)(b) give a guarantee or provide security in connection with a loan made by any person to such a director ("a former director;") , unless the transaction has been approved by a resolution of the members of the company ("the company whose shares are the subject of a takeover offer;") . Section 164(2) If the director ("a former director;") is a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") 's holding company , the transaction also needs to have been approved by a resolution of the members of the holding company . Section 164(3)(a) in the case of a written resolution, by being sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to the member ("a member of a company;") ; or Section 164(3)(b) at the company ("the company whose shares are the subject of a takeover offer;") 's registered office for not less than fourteen days ending with the day before the date of the meeting; and Section 164(3)(b)(i) at the company ("the company whose shares are the subject of a takeover offer;") 's registered office for not less than fourteen days ending with the day before the date of the meeting; and Section 164(3)(b)(ii) at the meeting itself. Section 164(4)(a) the nature of the transaction; Section 164(4)(b) the amount of the loan and the purpose for which it is required; and Section 164(4)(c) the extent of the company ("the company whose shares are the subject of a takeover offer;") 's liability under any transaction connected with the loan. Section 164(5)(a) that is not a company registered under this Act; or Section 164(5)(b) that is a wholly-owned subsidiary of another body corporate . - 165 Verify source ↗
COMPANY DIRECTORS - 165. Quasi-loans to directors: requirement of members' approval
A company must not make quasi-loans to (or provide guarantees/security for quasi-loans to) its directors (or directors of its holding company) unless the transaction is approved by a members' resolution; where applicable, the holding company's members must also approve. Notices/resolutions must provide specified particulars and follow the stated notice/meeting availability rules.
Section 165. Quasi-loans to directors: requirement of members' approval Section 165(1)(a) a public company ; or Section 165(1)(b) a company associated with a public company . Section 165(2)(a) make a quasi -loan to a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") or of its holding company ; or Section 165(2)(b) give a guarantee or provide security in connection with a quasi -loan made by any person to such a director ("a former director;") , unless the transaction has been approved by a resolution of the members of the company ("the company whose shares are the subject of a takeover offer;") . Section 165(3) If the director ("a former director;") is a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") 's holding company , the transaction also needs to have been approved by a resolution of the members of the holding company . Section 165(4)(a) in the case of a written resolution, by being sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to the member ("a member of a company;") ; or Section 165(4)(b) at the company ("the company whose shares are the subject of a takeover offer;") 's registered office for not less than fourteen days ending with the date of the meeting; and Section 165(4)(b)(i) at the company ("the company whose shares are the subject of a takeover offer;") 's registered office for not less than fourteen days ending with the date of the meeting; and Section 165(4)(b)(ii) at the meeting itself. Section 165(5)(a) the nature of the transaction; Section 165(5)(b) the amount of the quasi -loan and the purpose for which it is required; and Section 165(5)(c) the extent of the company ("the company whose shares are the subject of a takeover offer;") 's liability under any transaction connected with the quasi -loan. Section 165(6)(a) is not a company registered under this Act; or Section 165(6)(b) is a wholly-owned subsidiary of another body corporate . - 166 Verify source ↗
COMPANY DIRECTORS - 166. Loans orquasi-loans to persons connected with directors: requirement of members’ approval
Members' approval is required before a public company (or a company associated with a public company) makes a loan or quasi‑loan to, or gives a guarantee or security for a loan to, a person connected with a director.
Section 166. Loans orquasi-loans to persons connected with directors: requirement of members’ approval Section 166(1)(a) a public company ; or Section 166(1)(b) a company associated with a public company . Section 166(2)(a) make a loan or quasi -loan to a person connected with a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") or of its holding company ; or Section 166(2)(b) give a guarantee or provide security in connection with a loan or quasi -loan made by any person to a person connected with such a director ("a former director;") , unless the transaction has been approved by a resolution of the members of the company ("the company whose shares are the subject of a takeover offer;") . Section 166(3) If the connected person is a person connected with a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") 's holding company , the transaction also needs to have been approved by a resolution of the members of the holding company . Section 166(4)(a) in the case of a written resolution, by being sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to the member ("a member of a company;") ; and Section 166(4)(b) at the company ("the company whose shares are the subject of a takeover offer;") 's registered office for not less than fourteen days ending with the day before the date of the meeting; and Section 166(4)(b)(i) at the company ("the company whose shares are the subject of a takeover offer;") 's registered office for not less than fourteen days ending with the day before the date of the meeting; and Section 166(4)(b)(ii) at the meeting itself. Section 166(5)(a) the nature of the transaction; Section 166(5)(b) the amount of the loan or quasi -loan and the purpose for which it is required; and Section 166(5)(c) the extent of the company ("the company whose shares are the subject of a takeover offer;") 's liability under any transaction connected with the loan or quasi -loan. Section 166(6)(a) is not a company registered under this Act; or Section 166(6)(b) is a wholly-owned subsidiary of another body corporate . - 167 Verify source ↗
COMPANY DIRECTORS - 167. Credit transactions: requirement of members' approval
Members' approval is required for certain credit transactions benefiting a director or connected person of a public company (or company associated with a public company); holding company members must also approve in specified cases; notice and written-resolution procedures and disclosure requirements are set out.
Section 167. Credit transactions: requirement of members' approval Section 167(1)(a) a public company ; or Section 167(1)(b) a company associated with a public company . Section 167(2)(a) enter into a credit transaction as creditor for the benefit of a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") or of its holding company ; and a person connected with such a director ("a former director;") ; or Section 167(2)(b) a transaction involving the giving of a guarantee or the provision of security in connection with a credit transaction entered into by a person for the benefit of such a director ("a former director;") , or a person connected with such a director ("a former director;") , unless the transaction has been approved by a resolution of the members of the company ("the company whose shares are the subject of a takeover offer;") . Section 167(3) If the director ("a former director;") or connected person is a director ("a former director;") of its holding company or a person connected with such a director ("a former director;") , the transaction also needs to have been approved by a resolution of the members of the holding company . Section 167(4)(a) in the case of a written resolution — by being sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to him; Section 167(4)(b) at the company ("the company whose shares are the subject of a takeover offer;") 's registered office for not less than fourteen days ending with the day before the date of the meeting; and Section 167(4)(b)(i) at the company ("the company whose shares are the subject of a takeover offer;") 's registered office for not less than fourteen days ending with the day before the date of the meeting; and Section 167(4)(b)(ii) at the meeting itself. Section 167(5)(a) the nature of the transaction; Section 167(5)(b) the value of the credit transaction and the purpose for which the land, goods or services ("anything other than goods or land") sold or otherwise disposed of, leased, hired or supplied under the credit transaction are required; and Section 167(5)(c) the extent of the company ("the company whose shares are the subject of a takeover offer;") 's liability under any transaction connected with the credit transaction. Section 167(6)(a) is not a company registered under this Act; or Section 167(6)(b) is a wholly-owned subsidiary of another body corporate . - 168 Verify source ↗
COMPANY DIRECTORS - 168. Related arrangements: requirement of members’ approval
Arrangements that substitute a related transaction require approval by a members’ resolution of the company (and in some cases the holding company).
Section 168. Related arrangements: requirement of members’ approval Section 168(1)(a) another person enters into a transaction that, if it had been entered into by the company ("the company whose shares are the subject of a takeover offer;") , would have required approval under this Act; and Section 168(1)(a)(i) another person enters into a transaction that, if it had been entered into by the company ("the company whose shares are the subject of a takeover offer;") , would have required approval under this Act; and Section 168(1)(a)(ii) that person, in accordance with the arrangement , obtains a benefit from the company ("the company whose shares are the subject of a takeover offer;") or a body corporate associated with it; and Section 168(1)(b) arrange for the assignment to it, or assumption by it, of any rights, obligations or liabilities ("duties;") under a transaction that, if it had been entered into by the company ("the company whose shares are the subject of a takeover offer;") , would have required such an approval, unless the arrangement has been approved by a resolution of the members of the company ("the company whose shares are the subject of a takeover offer;") . Section 168(2) If the director ("a former director;") or connected person for whom the transaction is entered into is a director ("a former director;") of its holding company or a person connected with such a director ("a former director;") , the arrangement also needs to have been approved by a resolution of the members of the holding company . Section 168(3)(a) in the case of a written resolution, by being sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to him; Section 168(3)(b) at the company ("the company whose shares are the subject of a takeover offer;") 's registered office for not less than fourteen days ending with the day before the date of the meeting; and Section 168(3)(b)(i) at the company ("the company whose shares are the subject of a takeover offer;") 's registered office for not less than fourteen days ending with the day before the date of the meeting; and Section 168(3)(b)(ii) at the meeting itself. Section 168(4)(a) the matters that would have to be disclosed if the company ("the company whose shares are the subject of a takeover offer;") were seeking approval of the transaction to which the arrangement relates; Section 168(4)(b) the nature of the arrangement ; and Section 168(4)(c) the extent of the company ("the company whose shares are the subject of a takeover offer;") 's liability under the arrangement or any transaction connected with it. Section 168(5)(a) is not a company registered under this Act; or Section 168(5)(b) is a wholly-owned subsidiary of another body corporate . Section 168(6) In determining for the purposes of this section whether a transaction is one that would have required approval under section 164 , 165 , 166 or 167 if it had been entered into by the company, the transaction is taken to have been entered into on the date of the arrangement. - 169 Verify source ↗
COMPANY DIRECTORS - 169. Exceptions for expenditure on company business
Provides exceptions for expenditure on company business referencing the company whose shares are the subject of a takeover offer and a former director, to enable the director to properly perform duties and to enable such persons to avoid incurring expenditure.
Section 169. Exceptions for expenditure on company business Section 169(1)(a) for the purposes of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 169(1)(a)(i) for the purposes of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 169(1)(a)(ii) for the purpose of enabling the director ("a former director;") properly to perform the director ("a former director;") 's duties as an officer of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 169(1)(b) to enable any such person to avoid incurring such expenditure. Section 169(2)(a) the value of the transaction; and Section 169(2)(b) the value of any other relevant transactions or arrangements, - 170 Verify source ↗
COMPANY DIRECTORS - 170. Exception for expenditure on defending proceedingsetc
Directors (including former directors) may have expenditure on defending criminal or civil proceedings in connection with alleged negligence, default, breach of duty or breach of trust paid or enabled, subject to the conditions and finality rules in subsection (2) and the other provisions of section 170.
Section 170. Exception for expenditure on defending proceedingsetc Section 170(1)(a) in defending any criminal or civil proceedings in connection with any alleged negligence, default, breach of duty or breach of trust by the director ("a former director;") in relation to the company ("the company whose shares are the subject of a takeover offer;") or an associated company ; and Section 170(1)(a)(i) in defending any criminal or civil proceedings in connection with any alleged negligence, default, breach of duty or breach of trust by the director ("a former director;") in relation to the company ("the company whose shares are the subject of a takeover offer;") or an associated company ; and Section 170(1)(a)(ii) in connection with an application for relief; or Section 170(1)(b) to enable any such director ("a former director;") to avoid incurring such expenditure, if it is done on the terms prescribed by subsection (2) . Section 170(2)(a) the director ("a former director;") is convicted in the proceedings; Section 170(2)(a)(i) the director ("a former director;") is convicted in the proceedings; Section 170(2)(a)(ii) judgment is given against the director ("a former director;") in the proceedings; and Section 170(2)(a)(iii) the Court ("(unless some other court is specified) the High Court;") refuses to grant the director ("a former director;") relief on the application; and Section 170(2)(b) the date on which the conviction becomes final; Section 170(2)(b)(i) the date on which the conviction becomes final; Section 170(2)(b)(ii) the date on which the judgment becomes final; or Section 170(2)(b)(iii) the date on which the refusal of relief becomes final. Section 170(3)(a) section 426 (3) and (4) in the case of acquisition of shares by an innocent nominee; or Section 170(3)(b) section 1005 in the case of honest and reasonable conduct. - 171 Verify source ↗
COMPANY DIRECTORS - 171. Exception for expenditure in connection with regulatory action or investigation
Provides an exception for expenditure in connection with regulatory action or investigation.
Section 171. Exception for expenditure in connection with regulatory action or investigation Section in an investigation by a regulatory authority; and - 172 Verify source ↗
COMPANY DIRECTORS - 172. Exceptions for minor and business transactions
Sets exceptions for minor and business transactions where transaction values do not exceed specified thresholds (one million shillings; seven million five hundred thousand shillings) and where transactions are in the ordinary course of the company’s business.
Section 172. Exceptions for minor and business transactions Section 172(1)(a) the value of the transaction; and Section 172(1)(b) the value of any other relevant transactions or arrangements, does not exceed one million shillings. Section 172(2)(a) the value of the transaction, that is, of the credit transaction, guarantee or security; and Section 172(2)(b) the value of any other relevant transactions or arrangements, does not exceed seven million five hundred thousand shillings. Section 172(3)(a) the transaction is entered into by the company ("the company whose shares are the subject of a takeover offer;") in the ordinary course of the company ("the company whose shares are the subject of a takeover offer;") 's business; and Section 172(3)(b) the value of the transaction is not greater, and the terms on which it is entered into are not more favourable, than it is reasonable to expect the company ("the company whose shares are the subject of a takeover offer;") would have offered to, or in respect of, a person of the same financial standing but unconnected with the company ("the company whose shares are the subject of a takeover offer;") . - 173 Verify source ↗
COMPANY DIRECTORS - 173. Exceptions for intra-group transactions
Lists exceptions for intra-group transactions including loans or quasi-loans to an associated body corporate and guarantees or security in connection with such loans or credit transactions for the benefit of an associated body corporate.
Section 173. Exceptions for intra-group transactions Section 173(1)(a) the making of a loan or quasi -loan to an associated body corporate ; and Section 173(1)(b) the giving of a guarantee or provision of security in connection with a loan or quasi -loan made to an associated body corporate . Section 173(2)(a) to enter into a credit transaction as creditor for the benefit of an associated body corporate ; and Section 173(2)(b) to give a guarantee or provide security in connection with a credit transaction entered into by any person for the benefit of an associated body corporate . - 174 Verify source ↗
COMPANY DIRECTORS - 174. Exceptions for money-lending companies
Permits a company (the subject of a takeover offer) to enter into loans, quasi-loans, guarantees or securities in specified cases (ordinary course, comparable value/terms, loans to directors or employees under stated conditions, and certain residential loan purposes).
Section 174. Exceptions for money-lending companies Section 174(1)(a) the transaction, that is, the loan, quasi -loan, guarantee or security, is entered into by the company ("the company whose shares are the subject of a takeover offer;") in the ordinary course of the company ("the company whose shares are the subject of a takeover offer;") 's business; and Section 174(1)(b) the value of the transaction is not greater, and its terms are not more favourable, than it is reasonable to expect the company ("the company whose shares are the subject of a takeover offer;") would have offered to a person of the same financial standing but unconnected with the company ("the company whose shares are the subject of a takeover offer;") . Section 174(2) A company is a money lending company for the purpose of subsection (1) if its ordinary business comprises or includes making loans or quasi -loans, or giving guarantees or providing security in connection with loans or quasi -loans. Section 174(3)(a) to a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") or of its holding company ; and Section 174(3)(b) to an employee of the company ("the company whose shares are the subject of a takeover offer;") , if the company ("the company whose shares are the subject of a takeover offer;") normally makes loans of that description to its employees and the terms of the loan are no more favourable than those on which it normally makes such loans. Section 174(4)(a) a loan made for the purpose of facilitating the purchase, for use as the only or main residence of the person to whom the loan is made, of the whole or part of any dwelling-house together with any land to be occupied and enjoyed with it; Section 174(4)(b) a loan made for the purpose of improving a dwelling-house or part of a dwelling-house so used or any land occupied and enjoyed with it; and Section 174(4)(c) a loan made in substitution for a loan made for the purpose of paragraph (a) or (b) . - 175 Verify source ↗
COMPANY DIRECTORS - 175. Other relevant transactions or arrangements
Defines when a transaction or arrangement counts as an "other relevant transaction or arrangement" for deciding whether certain exceptions (to sections 164–167) apply, and sets conditions in subsections (3)–(6) relating to directors, persons connected, companies, subsidiaries and holding companies.
Section 175. Other relevant transactions or arrangements Section 175(1) This section has effect for determining what are "other relevant transactions or arrangements" for the purposes of an exception to section 164 , 165 , 166 or 167 . Section 175(2) In subsections (3) to (6) , "the relevant exception" means the exception for the purposes of which that exception is to be determined. Section 175(3) Other relevant transactions or arrangements are those previously entered into, or entered into at the same time as the transaction or arrangement in relation to which the conditions set out in subsections (4) to (6) are satisfied. Section 175(4)(a) for a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") entering into it; and Section 175(4)(b) for a person connected with such a director ("a former director;") , the conditions are that the transaction or arrangement was entered into for that director ("a former director;") , or a person connected with the director ("a former director;") , because of the relevant exception by that company or by any of its subsidiaries. Section 175(5)(a) for a director ("a former director;") of the holding company of the company ("the company whose shares are the subject of a takeover offer;") that enters into it; and Section 175(5)(b) for a person connected with such a director ("a former director;") , the conditions are that the transaction or arrangement was (or is) entered into for that director ("a former director;") , or a person connected with the director ("a former director;") , because of the relevant exception by that company or by any of its subsidiaries. Section 175(6)(a) was a subsidiary of the company ("the company whose shares are the subject of a takeover offer;") entering into the transaction or arrangement ; and Section 175(6)(b) was a subsidiary of that company's holding company , is not a relevant transaction or arrangement if, at the time the question arises whether the relevant transaction or arrangement is within a relevant exception, it is no longer such a subsidiary. - 176 Verify source ↗
COMPANY DIRECTORS - 176. The value of transactions and arrangements
Sets how to determine the value of transactions and arrangements by specific rules in subsections (2)–(7); when a value cannot be expressed in money it is taken to exceed five million shillings.
Section 176. The value of transactions and arrangements Section 176(1)(a) the value of a transaction or arrangement is to be determined in accordance with subsections (2) to (7) ; and Section 176(1)(b) the value of any other relevant transaction or arrangement is taken to be the value so determined reduced by the amount (if any) by which the liabilities ("duties;") of the person for whom the transaction or arrangement was made have been reduced. Section 176(2) The value of a loan is the amount of its principal. Section 176(3) The value of a quasi -loan is the amount, or maximum amount, that the person to whom the quasi -loan is made is liable to reimburse the creditor. Section 176(4) The value of a credit transaction is the price that it is reasonable to expect could be obtained for the goods, services ("anything other than goods or land") or land to which the transaction relates if they had been supplied (at the time the transaction is entered into) in the ordinary course of business and on the same terms (apart from price) as they have been supplied, or are to be supplied under the relevant transaction. Section 176(5) The value of a guarantee or security is the amount guaranteed or secured. Section 176(6) The value of an arrangement to which section 169 applies is the value of the transaction to which the arrangement relates. Section 176(7) If, for whatever reason, the value of a transaction or arrangement is not capable of being expressed as a specific amount of money, its value is taken to exceed five million shillings. - 177 Verify source ↗
COMPANY DIRECTORS - 177. The person for whom a transaction orarrangementis entered into
Defines who counts as "the person for whom a transaction or arrangement is entered into" and, for a loan or quasi-loan, identifies that person as the person to whom the loan is made.
Section 177. The person for whom a transaction orarrangementis entered into Section in the case of a loan or quasi -loan, the person to whom it is made; - 178 Verify source ↗
COMPANY DIRECTORS - 178. Loansetc: civil consequences for contravention
This section makes transactions entered in contravention of sections 164–167 subject to civil consequences including restitution being impossible in some cases, liability to account for gains, and liability to indemnify the company; certain persons (directors or connected persons) may be exempt if they can establish specified defences.
Section 178. Loansetc: civil consequences for contravention Section 178(1) This section applies to a transaction or arrangement entered into by a company in contravention of section 164 , 165 , 166 or 167 . Section 178(2)(a) restitution of any money or other asset that was the subject-matter of the transaction or arrangement is no longer possible; Section 178(2)(b) the company ("the company whose shares are the subject of a takeover offer;") has been indemnified for any loss or damage resulting from the transaction or arrangement ; and Section 178(2)(c) rights acquired in good faith, for value and without actual notice ("notice in writing;") of the contravention by a person who is not a party to the transaction or arrangement would be affected by the avoidance. Section 178(3)(a) is liable to account to the company ("the company whose shares are the subject of a takeover offer;") for any gain that the person has made directly or indirectly by the transaction or arrangement ; and Section 178(3)(b) is jointly and severally liable with any other person so liable under this section, to indemnify the company ("the company whose shares are the subject of a takeover offer;") for any loss or damage resulting from the transaction or arrangement . Section 178(4)(a) any director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") or of its holding company with whom the company ("the company whose shares are the subject of a takeover offer;") entered into the transaction or arrangement in contravention of section 164 , 165 , 166 or 168 ; Section 178(4)(b) any person with whom the company ("the company whose shares are the subject of a takeover offer;") entered into the transaction or arrangement in contravention of any of those sections who is connected with a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") or of its holding company ; Section 178(4)(c) the director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") or its holding company with whom any such person is connected; Section 178(4)(d) any other director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") who authorised the transaction or arrangement . Section 178(5) Subsections (3) and (4) are subject to subsections (6) and (8) . Section 178(6) If a company has entered into a transaction with a person connected with a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") , or with a director ("a former director;") of its holding company , in contravention of section 166 , 167 or 168 , the director is not liable because of subsection (4)(c) if the director establishes that all practicable steps were taken to secure the company's compliance with the section concerned. Section 178(7)(a) a person referred to in subsection (4)(b) ; and Section 178(7)(b) a director ("a former director;") referred to in subsection (4)(d) . Section 178(8) A person to whom this subsection applies is not liable because of subsection(4) if the person establishes that, at the time the transaction or arrangement was entered into, the person was not aware, and had no reason to be aware, of the circumstances that constituted the contravention. Section 178(9) This section does not preclude the operation of any other enactment or rule of law as a result of which a transaction or arrangement to which this section applies could be questioned, or a company involved in the transaction or arrangement could become liable. - 179 Verify source ↗
COMPANY DIRECTORS - 179. Loansetc: effect of subsequent affirmation
Section 179. Loansetc: effect of subsequent affirmation
Section 179. Loansetc: effect of subsequent affirmation - 180 Verify source ↗
COMPANY DIRECTORS - 180. Payment for loss of office
Section 180 lists types of payments related to loss of office for a former director and states that compensation can include non-cash benefits; payments to connected persons or payments made at a director's direction are treated as payments to the director; and a payment by one person can include a payment by another at that person's direction.
Section 180. Payment for loss of office Section 180(1)(a) as compensation for loss of office as a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") ; Section 180(1)(b) any other office or employment in connection with the management of the affairs of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 180(1)(b)(i) any other office or employment in connection with the management of the affairs of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 180(1)(b)(ii) any office or employment in connection with the management of the affairs of a subsidiary undertaking of the company ("the company whose shares are the subject of a takeover offer;") ; Section 180(1)(c) as consideration in connection with the director ("a former director;") 's retirement from office as such; or Section 180(1)(d) any other office or employment in connection with the management of the affairs of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 180(1)(d)(i) any other office or employment in connection with the management of the affairs of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 180(1)(d)(ii) any office (as director ("a former director;") or otherwise) or employment in connection with the management of the affairs of any subsidiary undertaking of the company ("the company whose shares are the subject of a takeover offer;") . Section 180(2)(a) a reference to compensation and consideration include benefits otherwise than in cash; and Section 180(2)(b) a reference to a payment has a corresponding meaning. Section 180(3)(a) a payment to a person connected with a director ("a former director;") ; or Section 180(3)(b) a payment to any person at the direction ("direction in writing;") of, or for the benefit of, a director ("a former director;") or a person connected with the director ("a former director;") , is taken to be a payment to the director ("a former director;") . Section 180(4) A reference in this Division to a payment by a person includes a payment by another person at the direction ("direction in writing;") of, or on behalf of, the first-mentioned person. - 181 Verify source ↗
COMPANY DIRECTORS - 181. Amounts taken to be payments for loss of office
Excess amounts or consideration given to a former director by someone other than the company are treated as payments for loss of office.
Section 181. Amounts taken to be payments for loss of office Section 181(1)(a) is to cease to hold office; and Section 181(1)(b) of any other office or employment in connection with the management of the affairs of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 181(1)(b)(i) of any other office or employment in connection with the management of the affairs of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 181(1)(b)(ii) of any office or employment in connection with the management of the affairs of any subsidiary undertaking of the company ("the company whose shares are the subject of a takeover offer;") . Section 181(2)(a) the price to be paid to the director ("a former director;") for shares in the company ("the company whose shares are the subject of a takeover offer;") held by the director ("a former director;") is in excess of the price that could at the time have been obtained by other holders of similar shares ; and Section 181(2)(b) any valuable consideration is given to the director ("a former director;") by a person other than the company ("the company whose shares are the subject of a takeover offer;") , the excess, or the money value of the consideration, is taken for the purposes of those sections to be a payment for loss of office. - 182 Verify source ↗
COMPANY DIRECTORS - 182. Members’ approval required for payment by company
A company must not pay a director compensation for loss of office unless the payment is approved by a resolution of the members.
Section 182. Members’ approval required for payment by company Section 182(1) A company may not make a payment for loss of office to a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") unless the payment has been approved by a resolution of the members of the company ("the company whose shares are the subject of a takeover offer;") . Section 182(2) A company may not make a payment for loss of office to a director ("a former director;") of its holding company unless the payment has been approved by a resolution of the members of the company ("the company whose shares are the subject of a takeover offer;") and each of the companies that are associated with it. Section 182(3)(a) in the case of a written resolution, by being sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to the director ("a former director;") ; Section 182(3)(b) at the company ("the company whose shares are the subject of a takeover offer;") 's registered office for not less than fourteen days ending with the date of the meeting; and Section 182(3)(b)(i) at the company ("the company whose shares are the subject of a takeover offer;") 's registered office for not less than fourteen days ending with the date of the meeting; and Section 182(3)(b)(ii) at the meeting itself. Section 182(4)(a) is not a company registered under this Act; or Section 182(4)(b) is a wholly-owned subsidiary of another body corporate . - 183 Verify source ↗
COMPANY DIRECTORS - 183. Members’ approval required for payment in connection with transfer ofundertakingetc
Members must approve any payment for loss of office to a director in connection with a transfer of the company's undertaking or property; approval must be by members' resolution.
Section 183. Members’ approval required for payment in connection with transfer ofundertakingetc Section 183(1) A person may not make a payment for loss of office to a director ("a former director;") of a company in connection with the transfer of the whole or any part of the undertaking or property ("all rights and interests in property;") of the company ("the company whose shares are the subject of a takeover offer;") unless the payment has been approved by a resolution of the members of the company ("the company whose shares are the subject of a takeover offer;") . Section 183(2) A person may not make a payment for loss of office to a director ("a former director;") of a company in connection with the transfer of the whole or any part of the undertaking or property ("all rights and interests in property;") of a subsidiary of the company ("the company whose shares are the subject of a takeover offer;") , unless the payment has been approved by a resolution of the members of each of the companies. Section 183(3)(a) in the case of a written resolution, by being sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to the director ("a former director;") ; Section 183(3)(b) at the company ("the company whose shares are the subject of a takeover offer;") 's registered office for not less than fourteen days ending with the day before the date of the meeting; and Section 183(3)(b)(i) at the company ("the company whose shares are the subject of a takeover offer;") 's registered office for not less than fourteen days ending with the day before the date of the meeting; and Section 183(3)(b)(ii) at the meeting itself. Section 183(4)(a) is not a company registered under this Act; or Section 183(4)(b) is a wholly-owned subsidiary of another body corporate . Section 183(5)(a) entered into as part of the agreement for the relevant transfer, or within one year before or two years after the date on which that agreement is entered into; and Section 183(5)(b) to which the company ("the company whose shares are the subject of a takeover offer;") whose undertaking or property ("all rights and interests in property;") is transferred, or any person to whom the transfer is made, is privy, is presumed, except in so far as the contrary is shown, to be a payment to which this section applies. - 184 Verify source ↗
COMPANY DIRECTORS - 184. Members’ approval required for payment in connection with share transfer
A person must not pay a former director compensation for loss of office related to a share transfer from a takeover bid unless shareholders approve the payment by resolution.
Section 184. Members’ approval required for payment in connection with share transfer Section 184(1) A person may not make a payment for loss of office to a director ("a former director;") of a company in connection with a transfer of shares in the company ("the company whose shares are the subject of a takeover offer;") , or in a subsidiary of the company ("the company whose shares are the subject of a takeover offer;") , resulting from a takeover bid, unless the payment has been approved by a resolution of the relevant shareholders. Section 184(2) The relevant shareholders are the holders of the shares to which the bid relates and any holders of shares of the same class as any of those shares . Section 184(3)(a) in the case of a written resolution—by being sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to the director ("a former director;") ; Section 184(3)(b) at the company ("the company whose shares are the subject of a takeover offer;") 's registered office for not less than fourteen days ending with the day before the date of the meeting; and Section 184(3)(b)(i) at the company ("the company whose shares are the subject of a takeover offer;") 's registered office for not less than fourteen days ending with the day before the date of the meeting; and Section 184(3)(b)(ii) at the meeting itself. Section 184(4)(a) if the resolution is proposed as a written resolution, they are entitled (if they would otherwise be so entitled) to be sent a copy of it; and Section 184(4)(b) at any meeting to consider the resolution they are entitled, if they would otherwise be so entitled, to be given notice ("notice in writing;") of the meeting, to attend and speak and if present, either in person or by proxy, to count towards the quorum. Section 184(5) If at a meeting to consider the resolution a quorum is not present, and after the meeting has been adjourned to a later date a quorum is again not present, the payment is, for the purposes of this section, taken to have been approved. Section 184(6)(a) is not a company registered under this Act; or Section 184(6)(b) is a wholly-owned subsidiary of another body corporate . Section 184(7)(a) entered into as part of the agreement for the relevant transfer and within one year before or two years after the date that agreement is entered into; and Section 184(7)(b) to which the company ("the company whose shares are the subject of a takeover offer;") whose shares are the subject of the bid, or any person to whom the transfer is made, is privy, is presumed, except in so far as the contrary is shown, to be a payment to which this section applies - 185 Verify source ↗
COMPANY DIRECTORS - 185. Exception for payments in discharge of legal obligationsetc
Section 185 lists exceptions for payments: payments in discharge of existing legal obligations; damages for breach of such obligations; settling or compromising claims on termination of office or employment; and pensions for past services.
Section 185. Exception for payments in discharge of legal obligationsetc Section 185(1)(a) in discharge of an existing legal obligation; Section 185(1)(b) as damages for breach of such an obligation; Section 185(1)(c) in settling or compromising any claim arising in connection with the termination of a person's office or employment; or Section 185(1)(d) as a pension for past services ("anything other than goods or land") . Section 185(2) In relation to a payment referred to in section 182 , an existing legal obligation is an obligation of the company, or any body corporate associated with it, that was not entered into in connection with, or in consequence of, the event giving rise to the payment for loss of office. Section 185(3) In relation to a payment to which either section 183 or 184 applies, an existing legal obligation is an obligation of the person making the payment that was not entered into for the purposes of, in connection with or in consequence of, the relevant transfer. Section 185(4)(a) to which both sections 182 and section 183 apply; or Section 185(4)(b) to which both sections 182 and section 184 apply, subsection (2) applies and not subsection (3) . Section 185(5) A payment part of which is within subsection (1) applies and part of which is not is to be treated as if the parts were separate payments. - 186 Verify source ↗
COMPANY DIRECTORS - 186. Exception for small payments
Small payments (up to thirty thousand shillings) made by the company or its subsidiaries to a director in connection with the same event are treated as an exception.
Section 186. Exception for small payments Section 186(1)(a) the relevant payment is made by the company ("the company whose shares are the subject of a takeover offer;") or any of its subsidiaries; and Section 186(1)(b) the amount or value of the payment, together with the amount or value of any other relevant payments, does not exceed thirty thousand shillings. Section 186(2) For the purpose of subsection (1) , "other relevant payments" are payments for loss of office in relation to which the relevant conditions are satisfied. Section 186(3)(a) by the company ("the company whose shares are the subject of a takeover offer;") making the relevant payment or any of its subsidiaries; Section 186(3)(b) to the director ("a former director;") to whom that payment is made; and Section 186(3)(c) in connection with the same event Section 186(4)(a) to the director ("a former director;") to whom the relevant payment was made; and Section 186(4)(b) by the company ("the company whose shares are the subject of a takeover offer;") making that payment or any of its subsidiaries. - 187 Verify source ↗
COMPANY DIRECTORS - 187. Payments made without approval: civil consequences
Payments made in contravention of specified takeover provisions must be held on trust by the recipient for the named beneficiaries, and any director who authorised such a payment is jointly and severally liable to indemnify the company; certain distribution expenses must be borne by the director and not retained.
Section 187. Payments made without approval: civil consequences Section 187(1)(a) the payment is held by the recipient on trust for the company ("the company whose shares are the subject of a takeover offer;") making the payment; and Section 187(1)(b) any director ("a former director;") who authorised the payment is jointly and severally liable to indemnify the company ("the company whose shares are the subject of a takeover offer;") that made the payment for any loss resulting from it. Section 187(2) If a payment is made in contravention of section 183 , the payment is held by the recipient on trust for the company whose undertaking or property is or is proposed to be transferred. Section 187(3)(a) the payment is held by the recipient on trust for persons who have sold their shares as a result of the offer made; and Section 187(3)(b) the expenses incurred by the recipient in distributing the amount of the payment among those persons are to be borne by the director ("a former director;") and not retained out of that amount. Section 187(4) If a payment contravenes both sections 182 and 183 , subsection (2) applies instead of subsection (1) . Section 187(5) If a payment contravenes both sections 182 and 184 , subsection (3) applies instead of subsection (1) , unless the Court directs otherwise. - 188 Verify source ↗
COMPANY DIRECTORS - 188. Approval by written resolution: accidental failure to send memorandum
If a memorandum required to be sent to every eligible member before a written-resolution approval is accidentally not sent or submitted to one or more members, that accidental failure is disregarded when deciding whether the sending requirement has been met.
Section 188. Approval by written resolution: accidental failure to send memorandum Section 188(1)(a) approval under this Division is sought by written resolution; and Section 188(1)(b) a memorandum is required under this Division to be sent or submitted to every eligible member before the resolution is passed, an accidental failure to send or submit the memorandum to one or more members is to be disregarded for the purpose of determining whether the requirement has been satisfied. Section 188(2) Subsection (1) has effect subject to the company's articles. - 189 Verify source ↗
COMPANY DIRECTORS - 189. What happens if approval is required under more than one provision
If more than one section requires approval, the company must comply with each applicable section; no separate resolution is required for each provision; failure to comply makes the company and defaulting officers guilty of an offence liable to a fine not exceeding five hundred thousand shillings.
Section 189. What happens if approval is required under more than one provision Section 189(1) An approval may be required under more than one section of this Division. Section 189(2) If an approval is required under more than one section of this Division, the company ("the company whose shares are the subject of a takeover offer;") shall comply with each applicable section. Section 189(3) Subsection (2) does not require a separate resolution for the purposes of each provision. Section 189(4) If a company fails to comply with subsection (2) , the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings. - 190 Verify source ↗
COMPANY DIRECTORS - 190. Directors’ service contracts
Section 190 addresses directors' service contracts, stating that a director may personally undertake to perform services (defined as "anything other than goods or land") for the company or its subsidiary, or that such services may be made available to the company or its subsidiary by a third party.
Section 190. Directors’ service contracts Section 190(1)(a) a director ("a former director;") of a company undertakes personally to perform services ("anything other than goods or land") (as director ("a former director;") or otherwise) for the company ("the company whose shares are the subject of a takeover offer;") , or for a subsidiary of the company ("the company whose shares are the subject of a takeover offer;") ; or Section 190(1)(b) services ("anything other than goods or land") (as director ("a former director;") or otherwise) that a director ("a former director;") of a company undertakes personally to perform are made available by a third party to the company ("the company whose shares are the subject of a takeover offer;") , or to a subsidiary of the company ("the company whose shares are the subject of a takeover offer;") . Section 190(2) The provisions of this Part relating to directors' service contracts apply to the terms of a person's appointment as a director ("a former director;") of a company and are not restricted to contracts for the performance of services ("anything other than goods or land") outside the scope of the ordinary duties of a director ("a former director;") . - 191 Verify source ↗
COMPANY DIRECTORS - 191. Company to keep copy of contract or memorandum of terms available for inspection
Company must keep copies of directors' service contracts or written memoranda available for inspection and retain them for at least one year; failure attracts fines.
Section 191. Company to keep copy of contract or memorandum of terms available for inspection Section 191(1)(a) a copy of each director ("a former director;") 's service contract with the company ("the company whose shares are the subject of a takeover offer;") or with a subsidiary of the company ("the company whose shares are the subject of a takeover offer;") ; or Section 191(1)(b) if the contract is not in writing – a written memorandum setting out the terms of the contract. Section 191(2) Except in so far as the regulations ("the companies general regulations made and in force under this Act, but does not, unless expressly provided, include the foreign companies regulations or savings and transitional regulations;") otherwise provide, the company ("the company whose shares are the subject of a takeover offer;") shall keep the copy of the service contract or the memorandum available for inspection at the company ("the company whose shares are the subject of a takeover offer;") 's registered office. Section 191(3) The company shall retain the copy of the service contract or the memorandum for not less than one year from the date of termination or expiry of the relevant contract and shall keep it available for inspection during that period. Section 191(4) If a company fails to comply with a requirement of this section, the company ("the company whose shares are the subject of a takeover offer;") , and each officer of the company ("the company whose shares are the subject of a takeover offer;") who is in default , commit an offence and on conviction are each liable to a fine not exceeding two hundred thousand shillings. Section 191(5) If, after a company or any of its officers is convicted of an offence under subsection (4) , the company continues to fail to comply with the relevant requirement, the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding fifty thousand shillings for each such offence. Section 191(6) This section applies to a variation of a director ("a former director;") 's service contract as it applies to the original contract. - 192 Verify source ↗
COMPANY DIRECTORS - 192. Right ofmemberto inspect and to obtain copy of memorandum
Members of a company that must keep a director's service contract or its memorandum may inspect it free on request and may obtain a copy (company must provide within seven days, may charge prescribed fee). Failure to comply makes the company and defaulting officers guilty of an offence with fines up to 500,000 shillings, and continuing failure after conviction attracts daily fines up to 50,000 shillings.
Section 192. Right ofmemberto inspect and to obtain copy of memorandum Section 192(1) This section applies to a company that is required to keep a copy of a director ("a former director;") 's service contract, or a memorandum setting out the terms of the contract, available in accordance with section 191 . Section 192(2) A company to which this section applies shall, on being requested to do so by a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") , make the copy of the service contract, or the memorandum, available for inspection by the member ("a member of a company;") without charge. Section 192(3) A company to which this section applies shall, within seven days after being requested to do so by a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") , provide the member ("a member of a company;") with a copy of the relevant service contract or memorandum, subject to payment of the prescribed fee if any. Section 192(4) If the company ("the company whose shares are the subject of a takeover offer;") fails without reasonable excuse to comply with a request made under subsection (2) or (3) , the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings. Section 192(5) If, after a company or any of its officers is convicted of an offence under subsection (4) , the company continues to fail to comply with the relevant request, the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding fifty thousand shillings for each such offence. Section 192(6) If a company refuses to allow an inspection as requested under subsection (2) , or to provide a copy of the service contract or memorandum requested under subsection (3) , the Court may, on the application of a person affected by the refusal, make an order compelling the company to allow an immediate inspection of the service contract or memorandum, or to provide that person 40 with a copy of it. - 193 Verify source ↗
COMPANY DIRECTORS - 193. Contract with solememberwho is also adirector
A single-member company that enters into a contract with its sole member who is also a director must ensure the contract complies with subsection (2) unless the contract is in writing.
Section 193. Contract with solememberwho is also adirector Section 193(1)(a) a limited company having only one member ("a member of a company;") enters into a contract with the sole member ("a member of a company;") ; Section 193(1)(b) the sole member ("a member of a company;") is also a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 193(1)(c) the contract is not entered into in the ordinary course of the company ("the company whose shares are the subject of a takeover offer;") 's business. the company ("the company whose shares are the subject of a takeover offer;") shall, unless the contract is in writing, ensure that the contract complies with subsection (2) . Section 193(2)(a) set out in a written memorandum; or Section 193(2)(b) recorded in the minutes of the first meeting of the directors of the company ("the company whose shares are the subject of a takeover offer;") following the making of the contract. Section 193(3) If a company fails to comply with this section, the company ("the company whose shares are the subject of a takeover offer;") and the director ("a former director;") commit an offence and on conviction are each liable to a fine not exceeding two hundred thousand shillings. Section 193(4) Failure to comply with this section in relation to a contract does not affect the validity of the contract. Section 193(5) This section does not affect the operation of any other enactment or rule of law applying to contracts between a company and a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") . - 194 Verify source ↗
COMPANY DIRECTORS - 194. Provisions protecting directors from liability
Provisions that attempt to exempt or indemnify a director (including a former director) from liability for negligence, default, breach of duty or breach of trust in relation to the company are void, except as permitted under this Act.
Section 194. Provisions protecting directors from liability Section 194(1)(a) a provision of a company's constitution; Section 194(1)(b) a provision of any contract, scheme or arrangement to which the company ("the company whose shares are the subject of a takeover offer;") or a related company is a party; Section 194(1)(c) a provision of any other document of a class prescribed by the regulations ("the companies general regulations made and in force under this Act, but does not, unless expressly provided, include the foreign companies regulations or savings and transitional regulations;") for the purposes of this section. Section 194(2) A provision that purports to exempt a director ("a former director;") of a company, to any extent, from any liability that would otherwise attach to the director ("a former director;") in connection with any negligence, default, breach of duty or breach of trust in relation to the company ("the company whose shares are the subject of a takeover offer;") is void. Section 194(3) A provision by which a company provides (directly or indirectly) an indemnity for a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") , or of an associated company , against a liability attaching to the director ("a former director;") in connection with any negligence, default, breach of duty or breach of trust in relation to the company ("the company whose shares are the subject of a takeover offer;") concerned is void, except as permitted under this Act. - 195 Verify source ↗
COMPANY DIRECTORS - 195. Provision of insurance not prevented
A company may purchase and maintain insurance against liabilities specified in section 194(3) for its directors or directors of an associated company.
Section 195. Provision of insurance not prevented Section Section 194 (3) does not prevent a company from purchasing and maintaining insurance against any liability specified in that subsection for a director of the company or a director of an associated company. - 196 Verify source ↗
COMPANY DIRECTORS - 196. Qualifying third party indemnity provision not affected
Section 194(3) does not apply to a qualifying third party indemnity provision.
Section 196. Qualifying third party indemnity provision not affected Section 196(1) Section 194 (3) does not apply to a qualifying third party indemnity provision. Section 196(2) In this section, "third party indemnity provision", in relation to a director ("a former director;") , means provision for indemnity against liability incurred by the director ("a former director;") to a person other than the company ("the company whose shares are the subject of a takeover offer;") or an associated company . Section 196(3)(a) a fine imposed in criminal proceedings; or Section 196(3)(a)(i) a fine imposed in criminal proceedings; or Section 196(3)(a)(ii) an amount payable to a regulatory authority as a penalty in respect of non-compliance with a requirement of a regulatory nature; or Section 196(3)(b) in defending criminal proceedings in which the director ("a former director;") is convicted; or Section 196(3)(b)(i) in defending criminal proceedings in which the director ("a former director;") is convicted; or Section 196(3)(b)(ii) in defending civil proceedings brought by the company ("the company whose shares are the subject of a takeover offer;") , or an associated company , in which judgment is given against the director ("a former director;") . Section 196(4) The reference in subsection (3)(b) to a conviction or judgment is a reference to the final decision in the proceedings. Section 196(5)(a) if not appealed against, at the end of the period for bringing an appeal; or Section 196(5)(a)(i) if not appealed against, at the end of the period for bringing an appeal; or Section 196(5)(a)(ii) if appealed against, at the time when the appeal, or any further appeal, is disposed of; and Section 196(5)(b) if it is determined and the period for bringing any further appeal has ended; and Section 196(5)(b)(i) if it is determined and the period for bringing any further appeal has ended; and Section 196(5)(b)(ii) if it is abandoned or otherwise ceases to have effect. - 197 Verify source ↗
COMPANY DIRECTORS - 197. Directors to disclose qualifying indemnity provision in directors’ report
Directors must disclose qualifying indemnity provisions in the directors' report when such provisions benefit current directors or applied during the financial year, including provisions by the company or for associated company directors.
Section 197. Directors to disclose qualifying indemnity provision in directors’ report Section 197(1)(a) a qualifying third party indemnity provision; and Section 197(1)(b) a qualifying pension scheme ("a scheme for the provision of benefits consisting of or including a pension, lump sum benefit, gratuity or other similar benefit given or to be given on the retirement or death, or in anticipation of the retirement of employees or former employees or, in connection with the past service of employees or former employees, either after their retirement or death;") indemnity provision. Section 197(2) If, when a directors' report is approved, a qualifying indemnity provision (whether made by the company ("the company whose shares are the subject of a takeover offer;") or otherwise) has effect for the benefit of one or more directors of the company ("the company whose shares are the subject of a takeover offer;") , the directors shall state in the report that the provision has effect. Section 197(3) If, at any time during the financial year to which a directors' report relates, a qualifying indemnity provision had effect for the benefit of one or more persons who were then directors of the company ("the company whose shares are the subject of a takeover offer;") , the directors shall state in the report that the provision had effect at that time. Section 197(4) If, when a directors' report is approved, a qualifying indemnity provision made by the company ("the company whose shares are the subject of a takeover offer;") has effect for the benefit of one or more directors of an associated company , the directors shall state in the report that the provision has effect. Section 197(5) If, at any time during the financial year to which a directors' report relates, a qualifying indemnity provision had effect for the benefit of one or more persons who were then directors of an associated company , the directors shall state in the report that the provision had effect at that time. - 198 Verify source ↗
COMPANY DIRECTORS - 198. Copy of qualifying indemnity provision to be available for inspection
Companies to which this section applies must keep a copy (or written memorandum) of any qualifying indemnity provision for at least one year and make it available for inspection; failure attracts fines.
Section 198. Copy of qualifying indemnity provision to be available for inspection Section 198(1)(a) applies to the company ("the company whose shares are the subject of a takeover offer;") (whether the provision is made by the company ("the company whose shares are the subject of a takeover offer;") or by an associated company ); and Section 198(1)(b) if the provision is made by an associated company , also applies to that company. Section 198(2)(a) a copy of the qualifying indemnity provision; or Section 198(2)(b) if the provision is not in writing, a written memorandum setting out its terms. Section 198(3) A company to which this section applies shall retain the copy or memorandum for at least one year from the date of termination or expiry of the relevant provision and shall keep it available for inspection during that period. Section 198(4) If a company fails to comply with subsection (2) or (3) , the company, and each officer of the company who is in default commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings. Section 198(5) If, after a company or any of its officers is convicted of an offence under subsection (4) , the company continues to fail to comply with the requirement referred to in subsection (2) or (3) , the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding fifty thousand shillings for each such offence. Section 198(6) This section applies to a variation of a qualifying indemnity provision as it applies to the original provision. - 199 Verify source ↗
COMPANY DIRECTORS - 199. Right ofmemberto inspect and request copy of qualifying indemnity provision
A company required to keep a qualifying indemnity provision must, when requested by a member, allow that member to inspect a copy without charge and must provide a copy within seven days (subject to any prescribed fee); failure attracts fines and the Court may order compliance.
Section 199. Right ofmemberto inspect and request copy of qualifying indemnity provision Section 199(1) This section applies to a company that is required to keep available for inspection a copy of a qualifying indemnity provision or memorandum in accordance with section 198 . Section 199(2) A company to which this section applies shall, on being requested to do so by a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") , allow the member ("a member of a company;") to inspect a copy of the qualifying indemnity provision or memorandum without charge. Section 199(3) A company to which this section applies shall, within seven days after being requested to do so by a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") , provide the member ("a member of a company;") with a copy of the qualifying indemnity provision or the memorandum, subject to payment of the prescribed fee (if any). Section 199(4) If a company fails to comply with subsection (1) or (2) , the company, and every officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings. Section 199(5) If, after a company or any of its officers is convicted of an offence under subsection (4) , the company continues to fail to comply with the relevant request, the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding fifty thousand shillings for each such offence. Section 199(6) If a company refuses to allow an inspection as requested under subsection (2) , or to provide a copy of a qualifying indemnity provision or memorandum as requested under subsection (3) , the Court may, on the application of a person affected by the refusal, make an order compelling the company to allow an immediate inspection of the copy or memorandum, or to provide that person with a copy of it. - 200 Verify source ↗
COMPANY DIRECTORS - 200. Interpretation: Division 10
Division 10 defines 'director' to include a former director (but not non-natural persons) and defines 'protected information' as the information listed in subsection (1), which includes a director's usual residential address and where a director's service address is their usual residential address.
Section 200. Interpretation: Division 10 Section 200(1)(a) information about a director ("a former director;") 's usual residential address ; and Section 200(1)(b) the information that the director ("a former director;") 's service address is the director ("a former director;") 's usual residential address . Section 200(2) In this Division— "director" includes a former director but does not include a director who is not a natural person; “protected information" is information of the kind referred to in subsection (1) . Section 200(3) Information does not cease to be protected information only because a person ceases to be a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") . - 201 Verify source ↗
COMPANY DIRECTORS - 201. Protected information: restriction on use or disclosure by company
Protected information about a director may be used or disclosed if the director gives consent; subsection (1) lists some permitted disclosures including communication with the director, lodging particulars with the Registrar, or in accordance with section 204.
Section 201. Protected information: restriction on use or disclosure by company Section 201(1)(a) for communicating with the director ("a former director;") concerned; Section 201(1)(b) in order to comply with any requirement of this Act concerning particulars to be lodged with the Registrar ("the person for the time being holding office as Registrar of Companies under;") for registration; or Section 201(1)(c) in accordance with section 204 . Section 201(2) Subsection (1) does not prohibit protected information relating to a director from being used or disclosed with the consent of the director. - 202 Verify source ↗
COMPANY DIRECTORS - 202. Protected information: restriction on use or disclosure by Registrar
The Registrar must not use or disclose protected information except as permitted by section 203 or in accordance with section 204.
Section 202. Protected information: restriction on use or disclosure by Registrar Section 202(1)(a) it is contained in a document lodged with the Registrar ("the person for the time being holding office as Registrar of Companies under;") in which the information is required to be stated; and Section 202(1)(b) in the case of a document having more than one part, it is contained in a part of the document in which the information is required to be stated. Section 202(2)(a) to check other documents, or other parts of the document , to ensure the absence of protected information; or Section 202(2)(b) to omit from the material that is available for public inspection anything registered before this Division came into force. Section 202(3) The Registrar may not use or disclose protected information except as permitted by section 203 or in accordance with section 204 . - 203 Verify source ↗
COMPANY DIRECTORS - 203. Permitted use or disclosure bythe Registrar
The Registrar may use protected information about a director to communicate with them and may disclose such information to a prescribed public authority or a credit reference agency; regulations may require the Registrar, on application, to refrain from disclosing to a credit reference agency and may set conditions, fees and application procedures.
Section 203. Permitted use or disclosure bythe Registrar Section 203(1) The Registrar may use protected information relating to a director ("a former director;") for communicating with the director ("a former director;") . Section 203(2)(a) to a prescribed public authority; or Section 203(2)(b) to a credit reference agency. Section 203(3)(a) specify conditions for the disclosure of protected information in accordance with this section; Section 203(3)(b) provide for fees to be charged. Section 203(4) The regulations may also require the Registrar ("the person for the time being holding office as Registrar of Companies under;") , on application, to refrain from disclosing protected information relating to a director ("a former director;") to a credit reference agency. Section 203(5)(a) who may make such an application; Section 203(5)(b) the grounds on which an application can be made; Section 203(5)(c) the information to be included in and documents to accompany an application; and Section 203(5)(d) how an application is to be determined. Section 203(6)(a) confer a discretion on the Registrar ("the person for the time being holding office as Registrar of Companies under;") ; and Section 203(6)(b) provide for a question to be referred to a person other than the Registrar ("the person for the time being holding office as Registrar of Companies under;") for the purposes of determining the application. Section 203(7) In this section— “credit reference agency" means a person carrying on a business that comprises or includes the provision of information relevant to the financial standing of natural persons, being information collected by the agency for that 40 purpose; and "public authority" includes any person or body that has functions of a public nature. - 204 Verify source ↗
COMPANY DIRECTORS - 204. Disclosure under Court order
An order must specify the persons to whom, and purposes for which, disclosure is authorised.
Section 204. Disclosure under Court order Section 204(1)(a) there is evidence that service of documents at a service address other than the director ("a former director;") 's usual residential address is not effective to bring them to the notice ("notice in writing;") of the director ("a former director;") ; or Section 204(1)(b) it is necessary or expedient for the information to be provided in connection with the enforcement of an order or decree of the Court ("(unless some other court is specified) the High Court;") , Section 204(2)(a) does not have the director ("a former director;") 's usual residential address ; or Section 204(2)(b) has been dissolved. Section 204(3) The order is required to specify the persons to whom, and purposes for which, disclosure is authorised. Section 204(4)(a) a liquidator of the company ("the company whose shares are the subject of a takeover offer;") ; Section 204(4)(b) a creditor or member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") ; Section 204(4)(c) any other person appearing to the Court ("(unless some other court is specified) the High Court;") to have a sufficient interest in the matter concerned. - 205 Verify source ↗
COMPANY DIRECTORS - 205. Circumstances in which Registrar may placeaddresson the public record
The Registrar must send a written notice to a (former) director at their usual residential address (unless that would be ineffective) and may instead send it to a provided service address; the Registrar must consider any representations received; the specified response period is between fifteen and thirty days.
Section 205. Circumstances in which Registrar may placeaddresson the public record Section 205(1)(a) communications sent by the Registrar ("the person for the time being holding office as Registrar of Companies under;") to the director ("a former director;") and requiring a response within a specified period remain unanswered; or Section 205(1)(b) there is evidence that service of documents at a service address provided instead of the director ("a former director;") 's usual residential address is not effective to bring them to the notice ("notice in writing;") of the director ("a former director;") . Section 205(2)(a) to the director ("a former director;") ; and Section 205(2)(b) to every company of which the Registrar ("the person for the time being holding office as Registrar of Companies under;") has been notified that the person is a director ("a former director;") . Section 205(3)(a) state the grounds on which it is proposed to place the director ("a former director;") 's usual residential address on the public record; and Section 205(3)(b) specify a period within which representations may be made to the Registrar ("the person for the time being holding office as Registrar of Companies under;") before that is done. Section 205(4) The Registrar shall ensure that the notice ("notice in writing;") is sent to the director ("a former director;") at the director ("a former director;") 's usual residential address , unless it appears to the Registrar ("the person for the time being holding office as Registrar of Companies under;") that service at that address may be ineffective to bring it to the person's notice ("notice in writing;") , in which case it may be sent to any service address provided instead of that address . Section 205(5) The Registrar shall take account of any representations received within the specified period. Section 205(6) For the purposes of this section, the period specified is to be a period not less that fifteen days and not more than thirty days after the relevant communication is sent to the director ("a former director;") . - 206 Verify source ↗
COMPANY DIRECTORS - 206. Placing thedirector’saddresson the public record
Companies must record directors' usual residential addresses as their service addresses (and state when they are the same); companies must lodge notice of new residential addresses; failure is an offence punishable by a fine up to five hundred thousand shillings. A director whose usual residential address has been placed on the public record by the Registrar may not register a different service address for five years from the Registrar's decision.
Section 206. Placing thedirector’saddresson the public record Section 206(1)(a) stating that address as the director ("a former director;") 's service address ; and Section 206(1)(b) stating that the director ("a former director;") 's usual residential address is the same as the director ("a former director;") 's service address . Section 206(2)(a) to the director ("a former director;") ; and Section 206(2)(b) to the company ("the company whose shares are the subject of a takeover offer;") . Section 206(3)(a) enter the director ("a former director;") 's usual residential address in its register of directors as the director ("a former director;") 's service address ; and Section 206(3)(b) state in its register of directors' residential addresses that the directors’ usual residential address is the same as the director ("a former director;") 's service address . Section 206(4)(a) enter that address in its register of directors as the director ("a former director;") 's service address ; and Section 206(4)(b) lodge with the Registrar ("the person for the time being holding office as Registrar of Companies under;") for registration a notice ("notice in writing;") of the director ("a former director;") 's new residential address . Section 206(5) If a company fails to comply with subsection (3) or (4) , the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings. Section 206(6) A director ("a former director;") whose usual residential address has been placed on the public record by the Registrar ("the person for the time being holding office as Registrar of Companies under;") under this section may not register a service address other than the director ("a former director;") 's usual residential address for a period of five years from the date of the Registrar ("the person for the time being holding office as Registrar of Companies under;") 's decision. - 207 Verify source ↗
COMPANY DIRECTORS - 207. Ratification of acts of directors
Only the members may take a decision to ratify a director's conduct; such ratification can be approved by ordinary resolution unless the articles require unanimity or a higher majority. Votes by the director and members connected with the director are disregarded when calculating the required majority, and for written resolutions such persons are ineligible to vote. "Conduct" includes acts and omissions.
Section 207. Ratification of acts of directors Section 207(1) A decision of a company to ratify the conduct of a director ("a former director;") amounting to negligence, default, breach of duty or breach of trust in relation to the company ("the company whose shares are the subject of a takeover offer;") can be taken only by the members. However, unless the company ("the company whose shares are the subject of a takeover offer;") 's articles require unanimity or a higher majority, such a decision can be approved by an ordinary resolution of the members. Section 207(2) A resolution to ratify the conduct of a director ("a former director;") of a company is passed at a meeting of the members only if the required majority is obtained after disregarding the votes (if any) cast in favour of the resolution by the director ("a former director;") , and by any member ("a member of a company;") connected with the director ("a former director;") . Section 207(3)(a) attending the meeting at which the decision is considered; and Section 207(3)(b) being counted as part of the quorum for the meeting and taking part in its proceedings. Section 207(4) If the resolution is proposed as a written resolution, neither the director ("a former director;") (if a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") ) nor any member ("a member of a company;") who is connected with the director ("a former director;") is eligible to vote on the resolution. Section 207(5)(a) "conduct" includes acts and omissions; Section 207(5)(b) " director ("a former director;") " includes a former director ("a former director;") ; and Section 207(5)(c) in section 122 , subsection (3) does not apply. Section 207(6)(a) the validity of a decision taken by unanimous consent of the members of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 207(6)(b) any power of the directors to agree not to sue, or to settle or release a claim made by them on behalf of the company ("the company whose shares are the subject of a takeover offer;") ; or Section 207(6)(c) the operation of any other enactment or rule of law imposing additional requirements for valid ratification or of any rule of law as to acts that are incapable of being ratified by the company ("the company whose shares are the subject of a takeover offer;") . - 208 Verify source ↗
COMPANY DIRECTORS - 208. Power to make provision for employees on cessation or transfer of business
Directors of a company have the power to provide benefits for current or former employees in connection with the cessation or transfer of the whole or part of the company's undertaking.
Section 208. Power to make provision for employees on cessation or transfer of business Section 208(1) The powers of the directors of a company include a power to provide for the benefit of persons employed or formerly employed by the company ("the company whose shares are the subject of a takeover offer;") , or any of subsidiary of the company ("the company whose shares are the subject of a takeover offer;") , in connection with the cessation, or the transfer to any person, of the whole or part of the undertaking of the company ("the company whose shares are the subject of a takeover offer;") or that subsidiary. Section 208(2) The power referred to in subsection (1) is exercisable despite the general duty imposed by section 143 on a director to promote the success of the company. Section 208(3)(a) an ordinary resolution of the company ("the company whose shares are the subject of a takeover offer;") or, if the company ("the company whose shares are the subject of a takeover offer;") 's articles require a higher majority or unanimity, a resolution passed by that majority or unanimously; or Section 208(3)(b) a resolution of the directors authorised by the articles of a company. - 209 Verify source ↗
COMPANY DIRECTORS - 209. Limitations on the exercise of the power to make provision for employees
A directors' resolution under section 208(3) alone does not authorize payments to current or former directors.
Section 209. Limitations on the exercise of the power to make provision for employees Section 209(1) A resolution of the directors under section 208 (3) is not sufficient authority for payments to or for the benefit of directors, or former directors. Section 209(2) The power conferred by section 208 (1) is subject to compliance with any other requirement specified by the company's articles. Section 209(3)(a) before the liquidation of the company ("the company whose shares are the subject of a takeover offer;") has commenced; and Section 209(3)(b) out of profits of the company ("the company whose shares are the subject of a takeover offer;") that are available for the payment of dividends. - 210 Verify source ↗
COMPANY DIRECTORS - 210. Minutes of directors’ meetings
Companies must record minutes of all directors' meetings and keep them for at least seven years; failure is an offence punishable by a fine up to five hundred thousand shillings.
Section 210. Minutes of directors’ meetings Section 210(1) A company shall ensure that minutes of all proceedings at meetings of its directors are recorded. Section 210(2) A company shall keep the minutes of each meeting of its directors' for at least seven years from the date of the meeting. Section 210(3) If a company fails to comply with subsection (1) or (2) , the company, and each director of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings. Section 210(4) If a prosecution for an offence under subsection (3) is brought, every person who was a director at the time the meeting was held is taken to be a director of the company for the purposes of the prosecution and disposal of the offence, even if the person is no longer a director of the company. [Act No. 28 of 2017 , s. 17.] - 211 Verify source ↗
COMPANY DIRECTORS - 211. Minutes taken to be evidence of proceedings at meeting of company until contrary proved
Minutes of directors’ meetings that are authenticated by the presiding person (at that meeting or at the next directors' meeting) serve as evidence of the proceedings.
Section 211. Minutes taken to be evidence of proceedings at meeting of company until contrary proved Section 211(1) Minutes of a meeting of the directors recorded in accordance with section 210 are, if authenticated by the person presiding at the meeting or by the person presiding at the next directors' meeting, evidence of the proceedings of the meeting. Section 211(2)(a) the meeting is presumed to have been duly held and convened; Section 211(2)(b) all proceedings at the meeting are presumed to have duly taken place; and Section 211(2)(c) all appointments at the meeting are presumed to have been validly made. - 212 Verify source ↗
COMPANY DIRECTORS - 212. Transactions under foreign law
For the purposes of this Part, it does not matter whether the law governing an arrangement or transaction is Kenyan law or part of Kenyan law.
Section 212. Transactions under foreign law Section For the purposes of this Part, it does not matter whether the law that, apart from this Act, governs an arrangement or transaction is the law or part of the law of Kenya.
Part V
NAME OF COMPANY
- 48 Verify source ↗
NAME OF COMPANY - 48. Reservation ofname
The Registrar may, on written application, reserve a company name pending registration or a change of name; the reservation lasts 30 days or up to 60 days if extended by the Registrar, and during that period no other company may be registered by that name.
Section 48. Reservation ofname Section 48(1) The Registrar may, on written application reserve a name pending registration of a company or change of name by a company. Section 48(2) The reservation of a name under subsection (1) remains in force for a period of thirty days or such extended period, not exceeding sixty days, as the Registrar may, for a special reason, allow, and during that period of thirty days or that period as extended, no other company is entitled to be registered by that name. - 49 Verify source ↗
NAME OF COMPANY - 49. Prohibited names
Section 49 prohibits certain company names.
Section 49. Prohibited names Section 49(1)(a) the use of the name would constitute an offence; Section 49(1)(b) the name consists of abbreviations or initials not authorised by or under this Act; or Section 49(1)(c) the Registrar ("the person for the time being holding office as Registrar of Companies under;") is, after taking into account the relevant criteria, of the opinion that the name is offensive or undesirable. Section 49(2) For the purposes of subsection (1)(c) , the relevant criteria are the criteria (if any) prescribed by the regulations. - 50 Verify source ↗
NAME OF COMPANY - 50. Name suggesting connection with the State or local or public authority
Names that suggest a connection with the State, a local authority, or a public authority.
Section 50. Name suggesting connection with the State or local or public authority Section a State organ; - 51 Verify source ↗
NAME OF COMPANY - 51. Applicant to seek views of specified public officer or body if regulations so require
If the regulations require it, an applicant for the Registrar's approval to use a specified name must seek the views of a specified public officer or body; that officer or body may veto the name but only on reasonable grounds and after giving a written statement of those grounds.
Section 51. Applicant to seek views of specified public officer or body if regulations so require Section 51(1) If the regulations ("the companies general regulations made and in force under this Act, but does not, unless expressly provided, include the foreign companies regulations or savings and transitional regulations;") so require, an applicant for the Registrar ("the person for the time being holding office as Registrar of Companies under;") 's approval for the use of a specified name , or a name of a specified description, shall seek the views of a specified public officer or body. Section 51(2) If an applicant for the use of a specified name , or a name of a specified description, is required to seek the views of a specified public officer or public body, that officer or body may, in addition to giving those views, veto the use of the name , but only on reasonable grounds and on providing the applicant with a written statement setting out 0 those grounds. Section 51(3) In subsection (1) , "specified" means specified in the regulations. - 52 Verify source ↗
NAME OF COMPANY - 52. Regulations may permit or prohibit the use of certain characters, signs or symbols
Regulations may permit or prohibit use of certain characters, signs or symbols in company names for registration.
Section 52. Regulations may permit or prohibit the use of certain characters, signs or symbols Section 52(1)(a) provide for the letters or other characters, signs or symbols, including accents and other diacritical marks, and punctuation that may be used in the name of a company to be registered under this Act; and Section 52(1)(b) specify a standard style or format for the name of a company for the purposes of registration. Section 52(2) The regulations may prohibit the use of specified characters, signs or symbols when appearing in specified positions, in particular, at the beginning of a name . Section 52(3) The Registrar may not register a company by a 40 name that consists of or includes anything that is not permitted in accordance with the regulations ("the companies general regulations made and in force under this Act, but does not, unless expressly provided, include the foreign companies regulations or savings and transitional regulations;") . - 53 Verify source ↗
NAME OF COMPANY - 53. Registration of public limited companies
A company that is both a limited company and a public company must register with a name ending in "public limited company" or the abbreviation "plc".
Section 53. Registration of public limited companies Section A company that is both a limited company and a public company may only be registered with a name that ends with the words "public limited company " or the abbreviation "plc". - 54 Verify source ↗
NAME OF COMPANY - 54. Registration of private limited companies
A company that is both a limited company and private company must be registered only with a name ending with "limited" or the abbreviation "ltd."
Section 54. Registration of private limited companies Section A company that is both a limited company and private company may be registered only with a name that ends with the word "limited" or the abbreviation "ltd." - 55 Verify source ↗
NAME OF COMPANY - 55. Exemption from requirement to use of “limited”
The Cabinet Secretary may exempt a private company from using the word "limited" or "Itd" by giving notice to the company.
Section 55. Exemption from requirement to use of “limited” Section The Cabinet Secretary may, by notice ("notice in writing;") given to the company ("the company whose shares are the subject of a takeover offer;") , exempt a private company from using the word "limited" or "Itd" as required by section 54 . - 56 Verify source ↗
NAME OF COMPANY - 56. Inappropriate use of company type or legal form
The Registrar must not register a company using words or expressions that regulations prohibit.
Section 56. Inappropriate use of company type or legal form Section 56(1)(a) that are associated with a particular type of company or kind of organisation; or Section 56(1)(b) that are similar to words, expressions or other indications associated with a particular type of company or kind of organisation. Section 56(2)(a) in a specified part, or otherwise than in a specified part, of the name of a company; or Section 56(2)(b) in conjunction with, or otherwise than in conjunction with, such other words or expressions as may be specified. Section 56(3) The Registrar may not register a company by a name that consists of or includes words or expressions prohibited by the regulations ("the companies general regulations made and in force under this Act, but does not, unless expressly provided, include the foreign companies regulations or savings and transitional regulations;") . - 57 Verify source ↗
NAME OF COMPANY - 57. Name not to be the same a another in the index
The Registrar must not register a company under this Act using a name that is identical to a name already appearing in the index of company names.
Section 57. Name not to be the same a another in the index Section 57(1) The Registrar shall not register a company under this Act by a name that is the same as another name appearing in the index of company names. Section 57(2)(a) in specified circumstances; or Section 57(2)(a)(i) in specified circumstances; or Section 57(2)(a)(ii) with a specified consent; and Section 57(2)(b) that, if those circumstances are existing or that consent is given at the time a company is registered by a name , a subsequent change of circumstances or withdrawal of consent, does not affect the registration. - 58 Verify source ↗
NAME OF COMPANY - 58. Power to direct change ofnamein case of similarity to existingname
The Registrar may direct a company to change its name if that name is similar to an existing name; if the company fails to comply within the specified period (or within 14 days after a direction where applicable) the Registrar must publish a notice to strike the company's name off the Register, and publication results in the company being deemed dissolved.
Section 58. Power to direct change ofnamein case of similarity to existingname Section 58(1)(a) a name appearing at the time of the registration in the Registrar ("the person for the time being holding office as Registrar of Companies under;") 's index of company names; or Section 58(1)(b) a name that should have appeared in that index at that time. Section 58(2) A direction ("direction in writing;") under subsection (1) may be given only within twelve months after the date on which the company concerned was registered or within such extended period as the Registrar may specify in writing in a particular case. Section 58(3) In giving a direction ("direction in writing;") under subsection (1) , the Registrar shall specify the period within which the company is required to comply with the direction. Section 58(4)(a) in specified circumstances; or Section 58(4)(a)(i) in specified circumstances; or Section 58(4)(a)(ii) if specified consent is given; and Section 58(4)(b) that a subsequent change of circumstances or withdrawal of consent does not give rise to grounds for a direction ("direction in writing;") under this section. Section 58(5) If the company ("the company whose shares are the subject of a takeover offer;") does not comply with the direction ("direction in writing;") issued under subsection (1) within fourteen days, the Registrar shall publish a notice in the Gazette to strike the name of the company ("the company whose shares are the subject of a takeover offer;") off the Register . Section 58(6) As soon as practicable after striking the name of the company ("the company whose shares are the subject of a takeover offer;") off the Register , the Registrar ("the person for the time being holding office as Registrar of Companies under;") shall publish in the Gazette a notice ("notice in writing;") indicating that the name of the company ("the company whose shares are the subject of a takeover offer;") has been struck off the register . Section 58(7) Upon publication of the notice ("notice in writing;") under subsection (6) , the company shall be deemed to have been dissolved. Section 58(8)(a) the liability, if any, of every officer and member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") shall continue and may be enforced as if the company ("the company whose shares are the subject of a takeover offer;") had not been dissolved; and Section 58(8)(b) nothing in this section shall affect the power of the Court ("(unless some other court is specified) the High Court;") to liquidate a company the name of which has been struck off the Register . [Act No. 28 of 2017 , s. 4.] - 59 Verify source ↗
NAME OF COMPANY - 59. Power to make regulations for purposes of sections57and58
Grants a power to make regulations for the purposes of sections 57 and 58.
Section 59. Power to make regulations for purposes of sections57and58 - 60 Verify source ↗
NAME OF COMPANY - 60. Power of Registrar to direct company to change itsnamebecause of misleading information given for registration of company or because itsnamegives misleading indication of company’s activities
The Registrar may direct a company to change its name if misleading information was given for registration or the name is misleading; the company must comply within 21 days (or an extended period the Registrar allows), subject to a pending court application, and failure leads to fines.
Section 60. Power of Registrar to direct company to change itsnamebecause of misleading information given for registration of company or because itsnamegives misleading indication of company’s activities Section 60(1)(a) that misleading information has been given for the purposes of a company's registration by a particular name and that an undertaking or assurance has been given for that purpose and has not been fulfilled; or Section 60(1)(b) that the name by which a company is registered gives an indication of the nature of its activities that is so misleading as to be likely to cause harm to the public. Section 60(2)(a) is not given within five years after the company ("the company whose shares are the subject of a takeover offer;") 's registration by that name ; and Section 60(2)(b) does not specify the period within which the company ("the company whose shares are the subject of a takeover offer;") is to comply with it. Section 60(3) The Registrar may, by a further direction ("direction in writing;") , extend the period within which the company ("the company whose shares are the subject of a takeover offer;") is required to change its name , but shall ensure that any such direction ("direction in writing;") is given before the end of the period for the time being specified. Section 60(4) The company shall comply with the direction ("direction in writing;") within twenty-one days after the date of the direction ("direction in writing;") or within such extended period as the Registrar ("the person for the time being holding office as Registrar of Companies under;") may allow. Section 60(5) Subsection (4) does not have effect if the outcome of an application made to the Court under subsection is pending. Section 60(6) If a company fails to comply with a direction ("direction in writing;") given to it under this section, the company ("the company whose shares are the subject of a takeover offer;") , and each officer of the company ("the company whose shares are the subject of a takeover offer;") who is in default , commits an offence and on conviction is liable to a fine not exceeding two hundred thousand shillings. Section 60(7) If, after a company or any of its officers is convicted of an offence under subsection (6) , the company continues to fail to comply with the direction, the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding twenty thousand shillings for each such offence. - 61 Verify source ↗
NAME OF COMPANY - 61. Company may apply to court for order to quashdirectionundersection 60
A company dissatisfied with a direction under section 60 may apply to the Court to quash the direction.
Section 61. Company may apply to court for order to quashdirectionundersection 60 Section 61(1) A company that is dissatisfied with a direction ("direction in writing;") given to it under section 60 may apply to the Court to quash the direction. Section 61(2) An application under subsection (1) is ineffective if not made within twenty-one days after the date on which the direction is notified to the company. Section 61(3) On the hearing of an application made under subsection (1) , the Court may either quash the direction or confirm it. Section 61(4) If the direction ("direction in writing;") is confirmed, the Court ("(unless some other court is specified) the High Court;") shall specify the period within which the company ("the company whose shares are the subject of a takeover offer;") is required to comply with the direction ("direction in writing;") . - 62 Verify source ↗
NAME OF COMPANY - 62. Company may change thename
A company may change its name by special resolution or as provided for by its articles.
Section 62. Company may change thename Section by special resolution or as may be provided for by the articles of the company ("the company whose shares are the subject of a takeover offer;") ; - 63 Verify source ↗
NAME OF COMPANY - 63. Change ofnameby special resolution
Companies must lodge specified notices with the Registrar within fourteen days after a change of name is agreed by special resolution or after a stated event occurs; the Registrar must not register a change if a notice says the event has not occurred and may rely on lodged notices as evidence.
Section 63. Change ofnameby special resolution Section 63(1) Within fourteen days after a change of name has been agreed to by a company by special resolution, the company ("the company whose shares are the subject of a takeover offer;") shall lodge with the Registrar ("the person for the time being holding office as Registrar of Companies under;") for registration a notice ("notice in writing;") of change, together with a copy of the resolution. Section 63(2)(a) specify that the change is conditional; and Section 63(2)(b) state whether the event has occurred. Section 63(3) If the notice ("notice in writing;") states that the event has not occurred, the Registrar ("the person for the time being holding office as Registrar of Companies under;") may not register the change of name until the event has occurred. Section 63(4) Within fourteen days after the event occurs, the company ("the company whose shares are the subject of a takeover offer;") shall lodge with the Registrar ("the person for the time being holding office as Registrar of Companies under;") for registration a notice ("notice in writing;") stating that it has occurred. Section 63(5) The Registrar is entitled to rely on the contents of a notice ("notice in writing;") lodged under this section as sufficient evidence of the matters stated in it. - 64 Verify source ↗
NAME OF COMPANY - 64. Change ofnameby means provided for inarticlesof company
A company must, within fourteen days after it changes its name by a method allowed in its articles, lodge with the Registrar a notice of the change and a statement that the change was made in accordance with the company's articles.
Section 64. Change ofnameby means provided for inarticlesof company Section 64(1) Within fourteen days after a company changes its name by other means provided for in its articles , it shall lodge with the Registrar ("the person for the time being holding office as Registrar of Companies under;") for registration notice ("notice in writing;") of the change, together with a statement that the change has been made in accordance with the company ("the company whose shares are the subject of a takeover offer;") 's articles . Section 64(2) The Registrar may rely on the statement as sufficient evidence of the matters stated in it. - 65 Verify source ↗
NAME OF COMPANY - 65. Change ofname: registration and issue of certificate of change ofname
The Registrar must enter a company's new name on the register when the new name and related requirements are complied with, and must issue a certificate of change of name as soon as practicable after registering the new name.
Section 65. Change ofname: registration and issue of certificate of change ofname Section 65(1)(a) that the new name complies with the requirements of this Act; and Section 65(1)(b) that the requirements of this Act and any relevant requirements of the articles of the company ("the company whose shares are the subject of a takeover offer;") , with respect to a change of name are complied with, the Registrar ("the person for the time being holding office as Registrar of Companies under;") shall enter the new name on the register in place of the former name . Section 65(2) As soon as practicable after registering the new name , the Registrar ("the person for the time being holding office as Registrar of Companies under;") shall issue a certificate of change of name to the company ("the company whose shares are the subject of a takeover offer;") . - 66 Verify source ↗
NAME OF COMPANY - 66. Effect of change ofname
A company's change of name takes effect from the date the certificate of change of name is issued; the change does not affect any rights or obligations of the company or invalidate any legal proceedings, and proceedings that could have been continued or commenced under the former name may be continued or started under the new name.
Section 66. Effect of change ofname Section 66(1) A change of a company's name has effect from the date on which the certificate of change of name is issued. Section 66(2) The change does not affect any rights or obligations of the company ("the company whose shares are the subject of a takeover offer;") or invalidate any legal proceedings by or against it. Section 66(3) Any legal proceedings that might have been continued or commenced against it by its former name may be continued or started against it by its new name . - 67 Verify source ↗
NAME OF COMPANY - 67. Company to display its companynameetc
Companies must display their name and prescribed information as specified; officers in default and the company commit an offence with a fine up to five hundred thousand shillings for contravention; regulations may prescribe manner of disclosure; variations in wording of a company name are disregarded for disclosure purposes; victims may sue for damages.
Section 67. Company to display its companynameetc Section 67(1)(a) display its name and other prescribed information in specified places; Section 67(1)(b) state prescribed information in prescribed kinds of the company ("the company whose shares are the subject of a takeover offer;") 's documents and communications; and Section 67(1)(c) provide prescribed information on request to those with whom the company ("the company whose shares are the subject of a takeover offer;") deals with in the course of its business. Section 67(2) The regulations may prescribe the manner in which prescribed information is to be displayed, stated or provided. Section 67(3) For the purposes of a requirement to disclose the name of a company, any variations between a word or words are to be disregarded. Section 67(4) If a company contravenes subsection (1) , the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings. Section 67(5) A person who claims to have sustained financial loss as a result of a contravention by a company of subsection (1) may bring civil proceedings against the company and, if in any such proceedings, the person is able to substantiate the claim, the person is entitled to be awarded damages as compensation for the loss. - 68 Verify source ↗
NAME OF COMPANY - 68. Minor variations in form ofname
Minor differences in a company name's form — such as upper/lower case, presence or absence of diacritical marks or punctuation, or use of the same format/style specified under section 52(1) for registration — are not treated as different names provided there is no real likelihood that such differences would cause the names to be taken as different.
Section 68. Minor variations in form ofname Section 68(1)(a) upper or lower case characters or a combination of the two are used; Section 68(1)(b) diacritical marks or punctuation are present or absent; or Section 68(1)(c) the name is in the same format or style as is specified under section 52 (1) for the purposes of registration, so long as there is no real likelihood of names differing only in those respects being taken to be different names. Section 68(2) This section does not affect the operation of regulations referred to in section 52 (2) prohibiting specified characters, diacritical marks or punctuation.
Part VI
ALTERATION OF STATUS OF COMPANIES
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ALTERATION OF STATUS OF COMPANIES - 69. How companies may alter their status
Section title indicating provisions on how companies may change their legal status.
Section 69. How companies may alter their status - 70 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 70. Conversion ofprivate companytopublic company
A company may be converted to a public company only if it passes a special resolution, satisfies the conditions in subsection (2), and lodges an application for registration of the conversion with the Registrar together with the documents required by section 74.
Section 70. Conversion ofprivate companytopublic company Section 70(1)(a) it passes a special resolution to that effect; Section 70(1)(b) the conditions specified in subsection (2) are satisfied; and Section 70(1)(c) an application for registration of the conversion is lodged with the Registrar ("the person for the time being holding office as Registrar of Companies under;") in accordance with section 74 , together with the documents required by that section. Section 70(2)(a) that the company ("the company whose shares are the subject of a takeover offer;") has a share capital; Section 70(2)(b) that the requirements of section 71 are satisfied as regards its share capital; Section 70(2)(c) that the requirements of section 72 are satisfied as regards its net assets; Section 70(2)(d) if section 73 applies, that the requirements of that section are satisfied; Section 70(2)(e) that the company ("the company whose shares are the subject of a takeover offer;") has not previously been converted itself into an unlimited company ; Section 70(2)(f) that the company ("the company whose shares are the subject of a takeover offer;") has made such changes to its name and to its articles as are necessary in order for it to become a public company ; and Section 70(2)(g) if the company ("the company whose shares are the subject of a takeover offer;") is unlimited, that it has also made such changes to its articles as are necessary in order for it to become a company limited by shares . - 71 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 71. Requirement as to share capital
Section 71 sets requirements for a company's allotted share capital and conditions about shares being paid up, undertakings for payment by services, disregarding certain employee-share-scheme shares, and conditions for reductions of share capital.
Section 71. Requirement as to share capital Section 71(1)(a) the nominal value of the company ("the company whose shares are the subject of a takeover offer;") 's allotted share capital are not less than the authorised minimum; Section 71(1)(b) each of the company ("the company whose shares are the subject of a takeover offer;") 's allotted shares is be paid up at least as to one-quarter of the nominal value of that share and the whole of any premium on it; Section 71(1)(c) if any shares in the company ("the company whose shares are the subject of a takeover offer;") or any premium on them have been fully or partly paid up by an undertaking given by a person that the person or another person should do work or perform services ("anything other than goods or land") (whether for the company ("the company whose shares are the subject of a takeover offer;") or any other person)—the undertaking has performed or otherwise discharged; and Section 71(1)(d) the undertaking has been performed or otherwise discharged; or Section 71(1)(d)(i) the undertaking has been performed or otherwise discharged; or Section 71(1)(d)(ii) a contract exists between the company ("the company whose shares are the subject of a takeover offer;") and some other person under which the undertaking is to be performed within five years after the date on which the special resolution is passed. Section 71(2) For the purpose of determining whether the requirements of subsection (1)(b) , (c) and (d) are satisfied, shares allotted in accordance with an employees' share scheme are to be disregarded if they would, but for this subsection, prevent the company from being converted to a public company because the requirement of subsection (1)(b) could not be satisfied. Section 71(3) Shares disregarded under subsection (2) do not form part of the allotted share capital for the purposes of subsection (1)(a) . Section 71(4)(a) the company ("the company whose shares are the subject of a takeover offer;") has resolved to reduce its share capital; Section 71(4)(b) is made under section 407 ; Section 71(4)(b)(i) is made under section 407 ; Section 71(4)(b)(ii) has been confirmed by an order of the Court ("(unless some other court is specified) the High Court;") under section 410 ; or Section 71(4)(b)(iii) is supported by a solvency statement in accordance with section; and Section 71(4)(c) the effect of the reduction is, or will be, that the nominal value of the company ("the company whose shares are the subject of a takeover offer;") 's allotted share capital is below the authorised minimum. - 72 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 72. Requirements as to net assets
Section 72 requires an unqualified auditor's report and a written auditor statement that net assets are at least the called-up share capital plus undistributable reserves; the Registrar may refuse the application if net assets fall below that aggregate between the balance sheet date and lodgement.
Section 72. Requirements as to net assets Section 72(1)(a) a balance sheet prepared as at a date not more than seven months before the date on which the application is lodged with the Registrar ("the person for the time being holding office as Registrar of Companies under;") ; Section 72(1)(b) an unqualified report by the company ("the company whose shares are the subject of a takeover offer;") 's auditor on that balance sheet; and Section 72(1)(c) a written statement by the company ("the company whose shares are the subject of a takeover offer;") 's auditor that in the auditor 's opinion at the balance sheet date the amount of the company ("the company whose shares are the subject of a takeover offer;") 's net assets was not less than the aggregate of its called-up share capital and undistributable reserves . Section 72(2) The Registrar may refuse the application if, between the balance sheet date and the date on which the application is lodged with the Registrar ("the person for the time being holding office as Registrar of Companies under;") , the company ("the company whose shares are the subject of a takeover offer;") 's financial position is found to have changed so that the amount of the company ("the company whose shares are the subject of a takeover offer;") 's net assets has become less than the aggregate of its called-up share capital and undistributable reserves . Section 72(3)(a) if the balance sheet was prepared for a financial year of the company ("the company whose shares are the subject of a takeover offer;") —a report stating without material qualification the auditor 's opinion that the balance sheet has been properly prepared in accordance with the requirements of this Act; or Section 72(3)(b) if the balance sheet was not prepared for a financial year of the company ("the company whose shares are the subject of a takeover offer;") —a report stating without material qualification the auditor 's opinion that the balance sheet has been properly prepared in accordance with the provisions of this Act that would have applied had it been prepared for a financial year of the company ("the company whose shares are the subject of a takeover offer;") . Section 72(4) For the purposes of an auditor 's report on a balance sheet that was not prepared for a financial year of the company ("the company whose shares are the subject of a takeover offer;") , the provisions of this Act apply with such modifications as are necessary because of that fact. Section 72(5) For the purposes of subsection (3) , a qualification is material unless the auditor states in the auditor's report that the matter giving rise to the qualification is not material for the purpose of determining by reference to the company's balance sheet whether at the balance sheet date the amount of the company's net assets was not less than the aggregate of its called-up share capital and undistributable reserves. - 73 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 73. Recent allotment ofsharesfor non-cash consideration
This section applies to shares allotted by a company between the balance sheet date required by section 72 and the passing of the resolution converting the company into a public company when those shares are paid otherwise than in cash.
Section 73. Recent allotment ofsharesfor non-cash consideration Section 73(1) This section applies to shares that are allotted by a company during the period between the date as at which the balance sheet required by section 72 is prepared and the passing of the resolution converting the company into a public company if the shares are allotted as fully or partly paid up as to their nominal value or any premium on them otherwise than in cash. Section 73(2)(a) an independent valuation of non-cash consideration has been conducted not more than six months before an allotment of shares ; or Section 73(2)(b) a share exchange; or Section 73(2)(b)(i) a share exchange; or Section 73(2)(b)(ii) a proposed merger ("a scheme of the kind described in;") with one or more other companies. Section 73(3)(a) the transfer to the company ("the company whose shares are the subject of a takeover offer;") allotting the shares of shares , or shares of a particular class, in another company; or Section 73(3)(a)(i) the transfer to the company ("the company whose shares are the subject of a takeover offer;") allotting the shares of shares , or shares of a particular class, in another company; or Section 73(3)(a)(ii) the cancellation of shares , or shares of a particular class, in another company; and Section 73(3)(b) the allotment is open to all the holders of the shares of the other company, or, if the arrangement applies only to shares of a particular class, to all the holders of the company ("the company whose shares are the subject of a takeover offer;") 's shares of that class, to take part in the arrangement in connection with which the shares are allotted. Section 73(4)(a) shares held by, or by a nominee of, the company ("the company whose shares are the subject of a takeover offer;") allotting the shares ; Section 73(4)(b) the holding company of the company ("the company whose shares are the subject of a takeover offer;") allotting the shares ; Section 73(4)(b)(i) the holding company of the company ("the company whose shares are the subject of a takeover offer;") allotting the shares ; Section 73(4)(b)(ii) a subsidiary of the company ("the company whose shares are the subject of a takeover offer;") allotting the shares ; or Section 73(4)(b)(iii) a subsidiary of the holding company of the company ("the company whose shares are the subject of a takeover offer;") allotting the shares . Section 73(5) For the purposes of deciding whether an allotment is in connection with a share exchange, it does not matter whether the arrangement in connection with which the shares are allotted involves the issue to the company ("the company whose shares are the subject of a takeover offer;") allotting the shares of shares , or shares of a particular class, in the other company or companies. Section 73(6) A proposed merger ("a scheme of the kind described in;") between two or more companies exists for the purposes of this section if one of the companies proposes to acquire all the assets and liabilities ("duties;") of the other or others in exchange for the issue of its shares or other securities to shareholders of the other or others, whether or not the issue is accompanied by a cash payment. Section 73(7)(a) "another company" or "other companies" includes a body corporate that is not a company within the meaning of this Act; Section 73(7)(b) the consideration for an allotment does not include an amount standing to the credit of any of the company ("the company whose shares are the subject of a takeover offer;") 's reserve accounts, or of its profit and loss account ("an income statement or other equivalent financial statement required to be prepared in accordance with the prescribed financial accounting standards;") , that has been applied in paying up (to any extent) any of the shares allotted or any premium on those shares ; and Section 73(7)(c) " arrangement " means any agreement, scheme or arrangement , including an arrangement sanctioned under this Act or under the law relating to insolvency. - 74 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 74. Requirements for registration of conversion ofprivate company
The Registrar must refuse an application to register the conversion of a company into a public company if the application does not comply with subsection (2).
Section 74. Requirements for registration of conversion ofprivate company Section 74(1) The Registrar shall refuse an application for the registration of the conversion of a company into public company if the application does not comply with subsection (2) . Section 74(2)(a) a statement of the company ("the company whose shares are the subject of a takeover offer;") 's new name after conversion; and Section 74(2)(a)(i) a statement of the company ("the company whose shares are the subject of a takeover offer;") 's new name after conversion; and Section 74(2)(a)(ii) if the company ("the company whose shares are the subject of a takeover offer;") does not have a secretary, a statement of the company ("the company whose shares are the subject of a takeover offer;") 's proposed secretary that complies with section 75 ; and Section 74(2)(b) a copy of the special resolution converting the company ("the company whose shares are the subject of a takeover offer;") into a public company , unless a copy has already been lodged with the Registrar ("the person for the time being holding office as Registrar of Companies under;") ; Section 74(2)(b)(i) a copy of the special resolution converting the company ("the company whose shares are the subject of a takeover offer;") into a public company , unless a copy has already been lodged with the Registrar ("the person for the time being holding office as Registrar of Companies under;") ; Section 74(2)(b)(ii) a copy of the company ("the company whose shares are the subject of a takeover offer;") ’s articles as proposed to be amended; Section 74(2)(b)(iii) a copy of the balance sheet and other documents referred to in section 72 (1); and Section 74(2)(b)(iv) if section 73 applies, a copy of the valuation report (if any) referred to in subsection (2)(a) of that section. - 75 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 75. Statement of proposed secretary
A statement of proposed secretary must include the required particulars of the person(s) to be secretary or joint secretaries and a consent by the named person(s) to act; the "required particulars" are those required in the company's register of secretaries.
Section 75. Statement of proposed secretary Section 75(1)(a) it contains the required particulars of the person who is or the persons who are to be the secretary or joint secretaries of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 75(1)(b) a consent by the person named as secretary, or each of the persons named as joint secretaries, to act as such. Section 75(2) The required particulars are the particulars that would be required to be included in the company ("the company whose shares are the subject of a takeover offer;") 's register of secretaries. Section 75(3) If all the partners in a firm are to be joint secretaries, the requisite consent can be given by one partner on behalf of all of them. - 76 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 76. Registrar to issue certificate of incorporation on registration of conversion
The Registrar must register a company's conversion to a public company when satisfied the registration application meets this Division's requirements, allocate a unique identifying number if needed, issue and specify details in a certificate of incorporation, and sign and authenticate that certificate.
Section 76. Registrar to issue certificate of incorporation on registration of conversion Section 76(1) The Registrar shall register the conversion of a company into a public company if satisfied that the registration of application for registration complies with the requirements of this Division. Section 76(2) If the company ("the company whose shares are the subject of a takeover offer;") does not already have a unique identifying number, the Registrar ("the person for the time being holding office as Registrar of Companies under;") shall allocate such a number to the company ("the company whose shares are the subject of a takeover offer;") . Section 76(3) The Registrar shall issue to the company ("the company whose shares are the subject of a takeover offer;") a certificate of incorporation stating the company ("the company whose shares are the subject of a takeover offer;") ’s unique identifying number and that the company ("the company whose shares are the subject of a takeover offer;") is a public company . Section 76(4) The Registrar shall specify in the certificate of incorporation that the certificate is issued on registration of the conversion and the date on which the certificate is issued. Section 76(5) The Registrar shall sign the certificate of incorporation and authenticate it with the Registrar ("the person for the time being holding office as Registrar of Companies under;") 's official seal. Section 76(6)(a) the conversion of the company ("the company whose shares are the subject of a takeover offer;") into a public company takes effect; Section 76(6)(b) the changes in the company ("the company whose shares are the subject of a takeover offer;") 's name and articles take effect; and Section 76(6)(c) if the application contained a statement complying with section 75 , the person or persons named in the statement as secretary or joint secretary of the company assume that office. Section 76(7) The certificate of incorporation is conclusive evidence that the requirements of this Act as to conversion of the company ("the company whose shares are the subject of a takeover offer;") into a public company have been complied with. - 77 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 77. Conversion ofpublic companyinto privatelimited company
Conversion of a public company into a private limited company requires a special resolution, satisfaction of the conditions in subsection (2), and lodging an application for registration of the conversion with the Registrar in accordance with section 80.
Section 77. Conversion ofpublic companyinto privatelimited company Section 77(1)(a) a special resolution to that effect is passed; Section 77(1)(b) the conditions specified in subsection (2) are satisfied; and Section 77(1)(c) an application for registration of the conversion is lodged with the Registrar ("the person for the time being holding office as Registrar of Companies under;") in accordance with section 80 . Section 77(2)(a) having regard to the number of members who consented to or voted in favour of the resolution, no such application could be made; or Section 77(2)(a)(i) having regard to the number of members who consented to or voted in favour of the resolution, no such application could be made; or Section 77(2)(a)(ii) the period within which such an application could be made has expired; Section 77(2)(b) the application has been withdrawn; or Section 77(2)(b)(i) the application has been withdrawn; or Section 77(2)(b)(ii) an order has been made confirming the resolution and a copy of that order has been lodged with the Registrar ("the person for the time being holding office as Registrar of Companies under;") ; Section 77(2)(c) the company ("the company whose shares are the subject of a takeover offer;") has made such changes to its name and to its articles as are necessary in order for it to convert itself into a private company limited by shares . [Act No. 28 of 2017 , s. 5.] - 78 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 78. Application to Court to cancel conversion resolution
Specified shareholders or members meeting listed thresholds may apply to the Court within 28 days to cancel or confirm a conversion resolution; the Court must either cancel or confirm and has powers to set terms, adjourn to allow purchase arrangements, direct purchases and alter the company's articles.
Section 78. Application to Court to cancel conversion resolution Section 78(1)(a) by the holders of not less in the aggregate than five per cent in nominal value of the company ("the company whose shares are the subject of a takeover offer;") 's issued share capital or any class of the company ("the company whose shares are the subject of a takeover offer;") 's issued share capital , disregarding any shares held by the company ("the company whose shares are the subject of a takeover offer;") as treasury shares ; Section 78(1)(b) if the company ("the company whose shares are the subject of a takeover offer;") is not limited by shares , by not less than five per cent of its members; or Section 78(1)(c) by not less than fifty of the company ("the company whose shares are the subject of a takeover offer;") 's members, Section 78(2)(a) is made within twenty eight days after the passing of the resolution; and Section 78(2)(b) is made on behalf of the persons entitled to make it by such one or more of their number as they may appoint for the purpose. Section 78(3) On the hearing of the application, the Court ("(unless some other court is specified) the High Court;") shall make an order either cancelling or confirming the resolution. Section 78(4)(a) make that order on such terms and conditions as it considers appropriate; Section 78(4)(b) if it considers it appropriate to do so, adjourn the proceedings in order that an arrangement may be made to the satisfaction of the Court ("(unless some other court is specified) the High Court;") for the purchase of the interests of dissenting members; and Section 78(4)(c) give such directions, and make such orders, as it thinks expedient for facilitating or carrying into effect any such arrangement . Section 78(5)(a) direct the purchase by the company ("the company whose shares are the subject of a takeover offer;") of the shares of any of its members and provide for the consequential reduction of the company ("the company whose shares are the subject of a takeover offer;") ’s capital; and Section 78(5)(b) make such alteration to the company ("the company whose shares are the subject of a takeover offer;") 's articles as may be required in consequence of that direction ("direction in writing;") . - 79 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 79. Notices of application to Court and court order application or order to be given to Registrar
Applicants and companies must give immediate written notice to the Registrar when making or being served with an application under section 78; companies must lodge a copy of any Court order with the Registrar within 14 days (or as extended), and failure to comply attracts fines.
Section 79. Notices of application to Court and court order application or order to be given to Registrar Section 79(1) On making an application under section 78 , the applicants, or the person making the application on their behalf, shall immediately give notice to the Registrar. Section 79(2) Subsection (1) applies without affecting any provision of rules of the Court as to service of notice of the application. Section 79(3) On being served with notice ("notice in writing;") of any such application, the company ("the company whose shares are the subject of a takeover offer;") shall immediately give notice ("notice in writing;") to the Registrar ("the person for the time being holding office as Registrar of Companies under;") . Section 79(4) Within fourteen days after the Court ("(unless some other court is specified) the High Court;") makes an order on the application, or such extended period as the Court ("(unless some other court is specified) the High Court;") directs, the company ("the company whose shares are the subject of a takeover offer;") shall lodge with the Registrar ("the person for the time being holding office as Registrar of Companies under;") a copy of the order. Section 79(5) If a company fails to comply with subsection (4) , the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding two hundred thousand shillings. Section 79(6) If, after a company or any of its officers is convicted of an offence under subsection (4) , the company continues to fail to lodge a copy of the Court's order, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding twenty thousand shillings for each such offence. - 80 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 80. Requirements for registration of conversion ofpublic companyintoprivate company
Registration of a conversion from a public company into a private company must include a statement of the company's new name on conversion.
Section 80. Requirements for registration of conversion ofpublic companyintoprivate company Section contains a statement of the company ("the company whose shares are the subject of a takeover offer;") 's new name on conversion; and - 81 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 81. Registrar to issue certificate of incorporation on registration of conversion
The Registrar must register a conversion to a private limited company and issue a certificate of incorporation that states the company's unique identifying number and the date, and must sign and authenticate the certificate.
Section 81. Registrar to issue certificate of incorporation on registration of conversion Section 81(1) The Registrar shall register the conversion of a public company into a private limited company if satisfied that the application for registration complies with the requirements of this Division. Section 81(2) If the company ("the company whose shares are the subject of a takeover offer;") does not already have a unique identifying number, the Registrar ("the person for the time being holding office as Registrar of Companies under;") shall allocate such a number to the company ("the company whose shares are the subject of a takeover offer;") . Section 81(3) The Registrar shall issue a certificate of incorporation stating the company ("the company whose shares are the subject of a takeover offer;") 's unique identifying number and that the company ("the company whose shares are the subject of a takeover offer;") is registered as a private limited company . Section 81(4) The Registrar shall specify in the certificate of incorporation that the certificate is issued on registration of the conversion and the date on which the certificate is issued. Section 81(5) The Registrar shall sign the certificate of incorporation and authenticate it with the Registrar ("the person for the time being holding office as Registrar of Companies under;") 's official seal. Section 81(6)(a) the company ("the company whose shares are the subject of a takeover offer;") becomes a private limited company ; and Section 81(6)(b) the changes in the company ("the company whose shares are the subject of a takeover offer;") 's name and articles take effect. Section 81(7) The certificate of incorporation is conclusive evidence that the requirements of this Act as to registration of the conversion have been complied with. - 82 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 82. Registration of conversion of privatelimited companyintounlimited company
Registration of conversion requires that all members have assented; a bankruptcy trustee may assent to the exclusion of the member; an executor or administrator may assent for a deceased member.
Section 82. Registration of conversion of privatelimited companyintounlimited company Section 82(1)(a) all the members of the company ("the company whose shares are the subject of a takeover offer;") have assented to its conversion; Section 82(1)(b) the company ("the company whose shares are the subject of a takeover offer;") has not previously been registered as an unlimited company ; and Section 82(1)(c) an application for registration of the conversion is lodged with the Registrar ("the person for the time being holding office as Registrar of Companies under;") in accordance with section 83 . Section 82(2)(a) as are necessary in connection with its becoming an unlimited company ; and Section 82(2)(b) if it is to have a share capital, as are necessary in connection with its becoming an unlimited company having a share capital. Section 82(3)(a) a bankruptcy trustee in respect of the estate of a bankrupt member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") is entitled, to the exclusion of the member ("a member of a company;") , to assent to the company ("the company whose shares are the subject of a takeover offer;") 's becoming unlimited; and Section 82(3)(b) the executor or administrator of a deceased member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") may assent on behalf of the deceased. - 83 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 83. Requirements for application for registration of conversion of company intounlimited company
Section 83 requires the company to include a statement of the company's new name on conversion.
Section 83. Requirements for application for registration of conversion of company intounlimited company Section contains a statement of the company ("the company whose shares are the subject of a takeover offer;") 's new name on conversion; and - 84 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 84. Registrar to issue certificate of incorporation on registration of conversion
The Registrar must register a private limited company's conversion to an unlimited company if the application meets the Division's requirements, allocate a unique company number if one is absent, issue and sign a certificate of incorporation stating the number and that the company is unlimited, specify the date of issue, and authenticate the certificate with the Registrar's official seal; the certificate is conclusive evidence that registration requirements have been met.
Section 84. Registrar to issue certificate of incorporation on registration of conversion Section 84(1) The Registrar shall register the conversion of a private limited company into an unlimited company if satisfied that the application for registration complies with the requirements of this Division. Section 84(2) If the company ("the company whose shares are the subject of a takeover offer;") does not already have a unique identifying number, the Registrar ("the person for the time being holding office as Registrar of Companies under;") shall allocate such a number to the company ("the company whose shares are the subject of a takeover offer;") . Section 84(3) The Registrar shall issue a certificate of incorporation to the company ("the company whose shares are the subject of a takeover offer;") stating the company ("the company whose shares are the subject of a takeover offer;") 's unique identifying number and that the company ("the company whose shares are the subject of a takeover offer;") is an unlimited company . Section 84(4) The Registrar shall specify in the certificate of incorporation that the certificate is issued on registration of the conversion and the date on which the certificate is issued. Section 84(5) The Registrar shall sign the certificate of incorporation and authenticate it with the Registrar ("the person for the time being holding office as Registrar of Companies under;") 's official seal. Section 84(6)(a) the company ("the company whose shares are the subject of a takeover offer;") becomes an unlimited company ; and Section 84(6)(b) the changes in the company ("the company whose shares are the subject of a takeover offer;") 's name and articles take effect. Section 84(7) The certificate of incorporation is conclusive evidence that the requirements of this Act as to registration of the conversion have been complied with. - 85 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 85. Conversion ofunlimited companyinto a privatelimited company
An unlimited company may convert itself into a private limited company if the conditions in subsection (2) are complied with.
Section 85. Conversion ofunlimited companyinto a privatelimited company Section 85(1) An unlimited company may convert itself into a private limited company if (but only if) the conditions specified in subsection (2) are complied with. Section 85(2)(a) a special resolution that it should be so converted has been passed that complies with subsection (3) ; Section 85(2)(b) the company ("the company whose shares are the subject of a takeover offer;") has not previously been registered as a private limited company ; Section 85(2)(c) an application for registration of the conversion is lodged with the Registrar ("the person for the time being holding office as Registrar of Companies under;") in accordance with section 86 ; and Section 85(2)(d) the company ("the company whose shares are the subject of a takeover offer;") has made such changes to its, name and to its articles as are necessary in connection with its becoming a private company limited by shares . Section 85(3) A special resolution has no effect unless it states whether the company ("the company whose shares are the subject of a takeover offer;") is to be limited by shares or by guarantee. [Act No. 28 of 2017 , s. 6.] - 86 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 86. Requirements for registration ofunlimited companyas privatelimited company
When an unlimited company registers as a private limited company it must include its new name, provide a copy of the converting resolution (unless already sent to the Registrar), provide a statement of guarantee if to be limited by guarantee complying with subsection (2), and provide its proposed amended articles; subsection (2) requires payment of prior debts and liabilities, liquidation costs, and adjustment of contributories' rights.
Section 86. Requirements for registration ofunlimited companyas privatelimited company Section 86(1)(a) contains a statement of the company ("the company whose shares are the subject of a takeover offer;") 's new name on registration of the conversion; and Section 86(1)(b) a copy of the resolution converting the company ("the company whose shares are the subject of a takeover offer;") into a private limited company , unless a copy has already been forwarded to the Registrar ("the person for the time being holding office as Registrar of Companies under;") ; Section 86(1)(b)(i) a copy of the resolution converting the company ("the company whose shares are the subject of a takeover offer;") into a private limited company , unless a copy has already been forwarded to the Registrar ("the person for the time being holding office as Registrar of Companies under;") ; Section 86(1)(b)(ii) if the company ("the company whose shares are the subject of a takeover offer;") is to be limited by guarantee, a statement of guarantee that complies with subsection (2) ; and Section 86(1)(b)(iii) a copy of the company ("the company whose shares are the subject of a takeover offer;") ’s articles as proposed to be amended. Section 86(2)(a) payment of the debts and liabilities ("duties;") of the company ("the company whose shares are the subject of a takeover offer;") contracted before the person ceases to be a member ("a member of a company;") ; Section 86(2)(b) payment of the costs, charges and expenses of liquidation; and Section 86(2)(c) adjustment of the rights of the contributories among themselves, - 87 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 87. Registrar to issue certificate of incorporation on registration of conversion
The Registrar must register a company's conversion to a private limited company (if the application meets Division requirements), allocate a unique identifying number if needed, issue and sign a certificate of incorporation stating the number and incorporation, specify the issuance date in the certificate, and authenticate it with the Registrar's official seal; the certificate is conclusive evidence that registration requirements were met and the company becomes a limited company with changes to name and articles taking effect.
Section 87. Registrar to issue certificate of incorporation on registration of conversion Section 87(1) The Registrar shall register the conversion an unlimited company into a private limited company if satisfied that the application for registration complies with the requirements of this Division. Section 87(2) If the company ("the company whose shares are the subject of a takeover offer;") does not already have a unique identifying number, the Registrar ("the person for the time being holding office as Registrar of Companies under;") shall allocate such a number to the company ("the company whose shares are the subject of a takeover offer;") . Section 87(3) The Registrar shall issue a certificate of incorporation stating the company ("the company whose shares are the subject of a takeover offer;") 's unique identifying number and that the company ("the company whose shares are the subject of a takeover offer;") is incorporated as a limited company . Section 87(4) The Registrar shall specify in the certificate of incorporation that the certificate is issued on registration of the conversion and the date on which the certificate is so issued. Section 87(5) The Registrar shall sign the certificate of incorporation and authenticate it with the Registrar ("the person for the time being holding office as Registrar of Companies under;") 's official seal. Section 87(6)(a) the company ("the company whose shares are the subject of a takeover offer;") becomes a limited company ; and Section 87(6)(b) the changes in the company ("the company whose shares are the subject of a takeover offer;") 's name and articles take effect. Section 87(7) The certificate of incorporation is conclusive evidence that the requirements of this Act as to registration of the conversion have been complied with. - 88 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 88. Statement of capital required if company already has share capital
A company that already has allotted share capital must, within fourteen days after registration of conversion, lodge with the Registrar a statement of capital complying with subsection (3).
Section 88. Statement of capital required if company already has share capital Section 88(1) If, in the case of a company whose conversion has been registered under section 87 , the company has already allotted share capital, it shall, within fourteen days after the registration, lodge with the Registrar a statement of capital that complies with subsection (3) . Section 88(2)(a) a statement of capital and initial shareholdings; or Section 88(2)(b) a statement of capital contained in an annual return. Section 88(3)(a) the total number of shares of the company ("the company whose shares are the subject of a takeover offer;") ; Section 88(3)(b) the aggregate nominal value of those shares ; Section 88(3)(c) the prescribed particulars (if any) of the rights attached to the shares ; Section 88(3)(c)(i) the prescribed particulars (if any) of the rights attached to the shares ; Section 88(3)(c)(ii) the total number of shares of that class; and Section 88(3)(c)(iii) the aggregate nominal value of shares of that class; and Section 88(3)(d) the amount paid up and the amount (if any) unpaid on each share, whether on account of the nominal value of the share or in the form of a premium. Section 88(4) If a company fails to comply with subsection (1) , the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding two hundred thousand shillings. Section 88(5) If, after a company or any of its officers is convicted of an offence under subsection (4) , the company continues to fail to lodge a statement of capital with the Registrar, the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding twenty thousand shillings for each such offence. - 89 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 89. Conversion ofpublic companyinto private andunlimited company
Conversion of a public company to a private and unlimited company is permitted only where all members have assented, the condition in subsection (2) is satisfied, and an application for registration is lodged with the Registrar together with the required documents; trustees and executors/administrators have specified rights or permissions to assent in place of certain members.
Section 89. Conversion ofpublic companyinto private andunlimited company Section 89(1)(a) all the members of the company ("the company whose shares are the subject of a takeover offer;") have assented to its being so converted; Section 89(1)(b) the condition specified in subsection (2) is satisfied; and Section 89(1)(c) an application for registration of the conversion is lodged with the Registrar ("the person for the time being holding office as Registrar of Companies under;") in accordance with section 90 , together with the other documents required by that section. Section 89(2) The condition is that the company ("the company whose shares are the subject of a takeover offer;") has not previously been registered as a limited company or as an unlimited company . Section 89(3)(a) in its name ; and Section 89(3)(b) in its articles , Section 89(4)(a) a bankruptcy trustee in respect of the estate of a bankrupt member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") is entitled, to the exclusion of the member ("a member of a company;") , to assent to the company ("the company whose shares are the subject of a takeover offer;") 's conversion; and Section 89(4)(b) the executor or administrator of a deceased member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") may assent on behalf of the deceased. - 90 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 90. Registrar not toregisterconversion unless application for registration complies withprescribedrequirements
The Registrar must not register a company's conversion unless the application for registration complies with the prescribed requirements.
Section 90. Registrar not toregisterconversion unless application for registration complies withprescribedrequirements Section contains a statement of the company ("the company whose shares are the subject of a takeover offer;") 's new name on conversion; and - 91 Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 91. Registrar to issue certificate of incorporation on registration of conversion
The Registrar must register a public company's conversion to an unlimited private company and issue and authenticate a certificate of incorporation stating the company's unique identifying number, the conversion date, and the company's status.
Section 91. Registrar to issue certificate of incorporation on registration of conversion Section 91(1) The Registrar shall register the conversion of a public company into an unlimited private company if satisfied that the application for registration complies with the requirements of this Division. Section 91(2) If the company ("the company whose shares are the subject of a takeover offer;") does not already have a unique identifying number, the Registrar ("the person for the time being holding office as Registrar of Companies under;") shall allocate such a number to the company ("the company whose shares are the subject of a takeover offer;") . Section 91(3) The Registrar shall issue a certificate of incorporation stating the company ("the company whose shares are the subject of a takeover offer;") 's unique identifying number and that the company ("the company whose shares are the subject of a takeover offer;") is incorporated as an unlimited private company . Section 91(4) The Registrar shall specify in the certificate of incorporation that the certificate is issued on registration of the conversion and the date on which the certificate is so issued. Section 91(5) The Registrar shall sign the certificate of incorporation and authenticate it with the Registrar ("the person for the time being holding office as Registrar of Companies under;") 's official seal. Section 91(6)(a) the company ("the company whose shares are the subject of a takeover offer;") becomes an unlimited private company ; and Section 91(6)(b) the changes in the company ("the company whose shares are the subject of a takeover offer;") 's name and articles take effect. Section 91(7) The certificate of incorporation is conclusive evidence that the requirements of this Act as to registration of the conversion have been complied with. - 91A Verify source ↗
ALTERATION OF STATUS OF COMPANIES - 91A. Information sharing
The Registrar of Companies must immediately send details about newly incorporated or registered companies that are set up to carry out manufacturing to the Kenya Bureau of Standards.
Section 91A. Information sharing Section The Registrar of Companies shall immediately upon the incorporation or registration of a company under the Companies Act whose purpose or object is to undertake manufacturing business submit particulars of the information on the company to the Kenya Bureau of Standards for purpose of section 5A of the Standards Act. [Act No. 20 of 2024 , s. 37]
Part VII
COMPANY MEMBERS
- 100 Verify source ↗
COMPANY MEMBERS - 100. Company to provide information as to state ofregisterof members and index of members’ names
When someone inspects a company's register or index of members (or is given a copy), the company must tell them the most recent date amendments were made (and if there are no further amendments); when inspecting the index the company must say if the index omits any amendments. If the company or an officer fails to provide this information they commit an offence and are liable to a fine not exceeding five hundred thousand shillings.
Section 100. Company to provide information as to state ofregisterof members and index of members’ names Section 100(1) When a person inspects a company's register of members, or a company provides the person with a copy of the register or any part of it, the company ("the company whose shares are the subject of a takeover offer;") shall inform the person of the most recent date (if any) on which amendments were made to the register and (if that is the case) that there were no further amendments to be made. Section 100(2) When a person inspects a company's index of the names of its members, the company ("the company whose shares are the subject of a takeover offer;") shall inform the person whether any amendment has been made to the register of members that is not reflected in the index. Section 100(3) If a company fails to provide the information required under subsection (1) or (2) , the company, and each officer of the company who is in default commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings. - 101 Verify source ↗
COMPANY MEMBERS - 101. Removal of entries relating to former members
A company may remove from its register an entry for a former member after ten years from when they ceased to be a member; removing such an entry earlier is an offence for the company and defaulting officers, punishable by a fine up to five hundred thousand shillings.
Section 101. Removal of entries relating to former members Section 101(1) A company may expunge from its register of members an entry relating to a person who was formerly a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") after the expiry of ten years after the date on which the person ceased to be a member ("a member of a company;") . Section 101(2) If a company expunges from its register of members an entry relating to a person who was formerly a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") before the expiry of ten years after the date on which the person ceased to be a member ("a member of a company;") , the company ("the company whose shares are the subject of a takeover offer;") , and each officer of the company ("the company whose shares are the subject of a takeover offer;") who is in default , commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings. - 102 Verify source ↗
COMPANY MEMBERS - 102. Singlemembercompanies
The Registrar must enter in the register of members the sole member's name and address and a statement that the company has only one member; specified additional entries are required when a company becomes or ceases to be a single-member company. Failure to comply is an offence with fines.
Section 102. Singlemembercompanies Section 102(1) If a limited company is formed under this Act with only one member ("a member of a company;") , the Registrar ("the person for the time being holding office as Registrar of Companies under;") shall enter in the register of members of the company ("the company whose shares are the subject of a takeover offer;") , the name and address of that member ("a member of a company;") and a statement that the company ("the company whose shares are the subject of a takeover offer;") has only one member ("a member of a company;") . Section 102(2)(a) the name and address of the member ("a member of a company;") ; Section 102(2)(b) a statement that the company ("the company whose shares are the subject of a takeover offer;") has only one member ("a member of a company;") ; and Section 102(2)(c) the date on which the company ("the company whose shares are the subject of a takeover offer;") became a company having only one member ("a member of a company;") . Section 102(3)(a) the name and address of the person who was formerly the sole member ("a member of a company;") ; Section 102(3)(b) a statement that the company ("the company whose shares are the subject of a takeover offer;") has ceased to have only one member ("a member of a company;") ; and Section 102(3)(c) the date on which the company ("the company whose shares are the subject of a takeover offer;") ceased to be a single member ("a member of a company;") company. Section 102(4) If a company fails to comply with subsection (2) or (3) , the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings. Section 102(5) If, after a company or any of its officers is convicted of an offence under subsection (4) , the company continues to fail to comply with the relevant subsection, the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding fifty thousand shillings for each such offence. - 103 Verify source ↗
COMPANY MEMBERS - 103. Power of Court to rectifyregister
The Court must, on hearing an application under subsection (1), either refuse the application or order rectification of the register and payment by the company of any damages; when ordering rectification for companies required to lodge a list of members, the Court must direct written notice to the Registrar, and the Registrar must on receipt make adjustments to the Register.
Section 103. Power of Court to rectifyregister Section 103(1)(a) the name of any person is, without sufficient cause, entered in or omitted from the register of members of a company; or Section 103(1)(b) the cessation of membership of a person who has ceased to be a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") has not been entered in that register , Section 103(2) On hearing an application made under subsection (1) , the Court shall either refuse the application or order rectification of the register and payment by the company of any damages sustained by any party affected by the error or is failure. Section 103(3)(a) decide any question relating to the title of a person who is a party to the application to have the person's name entered in or omitted from the register , whether the question arises between members or alleged members, or between members or alleged members on the one hand and the company ("the company whose shares are the subject of a takeover offer;") on the other hand; and Section 103(3)(b) generally decide any question that it considers should be decided in order to rectify the register . Section 103(4) In the case of a company required by this Act to lodge a list of its members with the Registrar ("the person for the time being holding office as Registrar of Companies under;") , the Court ("(unless some other court is specified) the High Court;") , when making an order for rectification of the register , shall by its order direct notice ("notice in writing;") of the rectification to be given to the Registrar ("the person for the time being holding office as Registrar of Companies under;") , who shall on receipt of the notice ("notice in writing;") make such adjustments to the Register as the Registrar ("the person for the time being holding office as Registrar of Companies under;") considers appropriate. - 104 Verify source ↗
COMPANY MEMBERS - 104.[Repealed by ActNo. 10 of 2023, Sch.]
This section is repealed by ActNo. 10 of 2023, Sch.
Section 104.[Repealed by ActNo. 10 of 2023, Sch.] - 105 Verify source ↗
COMPANY MEMBERS - 105.Registerto be evidence
Until the contrary is proved, the company's register of members is treated as evidence of the matters required or authorised to be included in it.
Section 105.Registerto be evidence Section Until the contrary is proved, the register of members of a company is evidence of the matters required or authorised to be included in it. - 106 Verify source ↗
COMPANY MEMBERS - 106. Time limit for claims arising from entry inregister
Time limits apply to claims arising from making, deleting, or failing to make or delete entries in the register of members; subsection (2) preserves any shorter limitation period that would otherwise apply.
Section 106. Time limit for claims arising from entry inregister Section 106(1)(a) from making or deleting an entry in the register of members; or Section 106(1)(b) from failing to make or delete any such entry, Section 106(2) Subsection (1) does not affect the application of a shorter period of limitation that would apply apart from this section. - 107 Verify source ↗
COMPANY MEMBERS - 107. Interpretation: Division 3
Defines 'shares' for companies other than companies limited by shares as the interest of their members, and treats a nominee acting for a subsidiary as included in references to the subsidiary.
Section 107. Interpretation: Division 3 Section 107(1) In relation to a company other than a company limited by shares , a reference in this Division to shares is a reference to the interest of its members as such, whatever the form of that interest. Section 107(2) If a nominee is acting on behalf of a subsidiary, a reference in this Division to a subsidiary includes a reference to a nominee of the subsidiary. - 108 Verify source ↗
COMPANY MEMBERS - 108. Prohibition on subsidiary being amemberof itsholding company
A body corporate must not be a member of a company that is its holding company.
Section 108. Prohibition on subsidiary being amemberof itsholding company Section 108(1)(a) a body corporate may not be a member ("a member of a company;") of a company that is its holding company ; and Section 108(1)(b) any allotment or transfer of shares in a company to its subsidiary is void. Section 108(2) An allotment of shares or other transaction that would, but for this section, have the effect of making a body corporate a member ("a member of a company;") of a company that is its holding company is void. - 109 Verify source ↗
COMPANY MEMBERS - 109. Subsidiary acting as executor, administrator or trustee
A subsidiary may act as an executor, administrator or trustee, subject to the exceptions listed in subsection (2).
Section 109. Subsidiary acting as executor, administrator or trustee Section 109(1)(a) executor or administrator; or Section 109(1)(b) trustee unless the subsidiary's holding company or any of its other subsidiaries is beneficially interested under the trust. Section 109(2)(a) an interest held only as security for the purposes of a transaction entered into by the holding company or subsidiary in the ordinary course of business that includes the lending of money; Section 109(2)(b) an interest under section 110 ; Section 109(2)(c) an interest under section 111 ; Section 109(2)(d) a right to recover its expenses or to be remunerated out of the trust property ("all rights and interests in property;") ; and Section 109(2)(d)(i) a right to recover its expenses or to be remunerated out of the trust property ("all rights and interests in property;") ; and Section 109(2)(d)(ii) a right to be indemnified out of the trust property ("all rights and interests in property;") for a liability incurred because of an act or omission in the performance of its duties as trustee. - 110 Verify source ↗
COMPANY MEMBERS - 110. Interest to be disregarded: residual interest underpension schemeoremployees’ share scheme
Residual interests in shares held in trust for a pension scheme or an employees' share scheme are to be disregarded for the purposes of section 109.
Section 110. Interest to be disregarded: residual interest underpension schemeoremployees’ share scheme Section 110(1) If shares in a company are held in trust for the purposes of a pension scheme ("a scheme for the provision of benefits consisting of or including a pension, lump sum benefit, gratuity or other similar benefit given or to be given on the retirement or death, or in anticipation of the retirement of employees or former employees or, in connection with the past service of employees or former employees, either after their retirement or death;") or an employees' share scheme, any residual interest that has not yet vested in possession. is to be disregarded for the purposes of section 109 . Section 110(2)(a) all the liabilities ("duties;") arising under the scheme have been satisfied or provided for; Section 110(2)(b) the company ("the company whose shares are the subject of a takeover offer;") or subsidiary ceases to participate in the scheme; or Section 110(2)(c) the trust property ("all rights and interests in property;") at any time exceeds what is necessary for satisfying the liabilities ("duties;") arising or expected to arise under the scheme. Section 110(3)(a) the reference to a right includes a right dependent on the exercise of a discretion vested by the scheme in the trustee or another person; and Section 110(3)(b) the reference to liabilities ("duties;") arising under a scheme includes liabilities ("duties;") that have resulted, or may result, from the exercise of any such discretion. Section 110(4)(a) for the purpose of subsection (2)(a) , when the relevant liabilities have been satisfied or provided for, whether or not the amount of the property receivable pursuant to the right is ascertained; and Section 110(4)(b) for the purpose of subsection (2)(b) or (c) , when the company or subsidiary becomes entitled to require the trustee to transfer any of the property in accordance with the right. - 111 Verify source ↗
COMPANY MEMBERS - 111. Employers' rights of recovery underpension schemeor employees' share scheme
When company shares are held in trust for a pension or employees' share scheme, charges, security rights, liens or set-offs against benefits or other rights under the scheme are to be disregarded for enabling an employer or former employer to obtain discharge of a monetary obligation due from the member.
Section 111. Employers' rights of recovery underpension schemeor employees' share scheme Section 111(1) For purposes of section 110 , if shares in a company are held in trust for the purposes of a pension scheme or an employees' share scheme, of any charge security right or lien on, or set-off against, any benefit or other right or interest under the scheme is to be disregarded for the purpose of enabling the employer or former employer of a member of the scheme to obtain the discharge of a monetary obligation due from the member to the employer or former employer. Section 111(2)(a) to receive from the trustee of the scheme; or Section 111(2)(b) as trustee of the scheme to retain, an amount that can be recovered or retained or otherwise as reimbursement or partial reimbursement for any contributions equivalent to the premiums paid in connection with the scheme is to be disregarded. Section 111(3) For the purpose of this section, a director ("a former director;") of a company is to be regarded as an employee of the company ("the company whose shares are the subject of a takeover offer;") . [Act No. 13 of 2017 , Sch.] - 112 Verify source ↗
COMPANY MEMBERS - 112. Subsidiary acting as authorised dealer insecurities
A subsidiary may hold shares despite section 108 if the shares are held in the ordinary course of its business as an intermediary and the subsidiary meets the conditions in section 112(2) and does not carry on an excluded business.
Section 112. Subsidiary acting as authorised dealer insecurities Section 112(1) The prohibition in section 108 does not apply if the shares are held by the subsidiary in the ordinary course of its business as an intermediary. Section 112(2)(a) carries on a genuine business of dealing in securities ; Section 112(2)(b) is a member ("a member of a company;") of an approved securities exchange ("a securities exchange approved by the Capital Markets Authority in accordance with the Capital Markets Act ();") in Kenya or is otherwise approved or supervised as a dealer in securities in Kenya; and Section 112(2)(c) does not carry on an excluded business. Section 112(3)(a) a business that consists wholly or mainly in the making or managing of investments; Section 112(3)(b) a business that consists wholly or mainly of, or is carried on wholly or mainly for the purposes of, providing services ("anything other than goods or land") to persons who are associates of the person carrying on the business; Section 112(3)(c) an insurance business; Section 112(3)(d) a business that involves managing or acting as trustee in relation to a pension scheme ("a scheme for the provision of benefits consisting of or including a pension, lump sum benefit, gratuity or other similar benefit given or to be given on the retirement or death, or in anticipation of the retirement of employees or former employees or, in connection with the past service of employees or former employees, either after their retirement or death;") , or that is carried on by the manager or trustee of such a scheme in connection with or for the purposes of the scheme; and Section 112(3)(e) a business that consists of operating or acting as trustee in relation to a collective investment scheme, or that is carried on by the manager or trustee of such a scheme in connection with, and for the purposes of, the scheme. Section 112(4)(a) "collective investment scheme" has the meaning given by section 2 of the Capital Markets Act ( Cap. 485A ); and Section 112(4)(b) "insurance business" means business that involves effecting or carrying out of contracts of insurance. - 113 Verify source ↗
COMPANY MEMBERS - 113. Protection of third parties in cases if subsidiary acting as dealer insecurities
If a subsidiary that is a dealer in securities has purportedly acquired shares in its holding company in contravention of the prohibition in section 108, this section addresses protection of third parties.
Section 113. Protection of third parties in cases if subsidiary acting as dealer insecurities Section a subsidiary that is a dealer in securities has purportedly acquired shares in its holding company in contravention of the prohibition in section 108 ; and - 92 Verify source ↗
COMPANY MEMBERS - 92. How persons become members of company
Subscribers to a company's memorandum and articles become members on registration; the company must record subscribers' names, addresses and membership dates in its register as soon as practicable after registration; persons who agree later become members when their names are entered in the register.
Section 92. How persons become members of company Section 92(1) The subscribers to the memorandum and articles become members of the company ("the company whose shares are the subject of a takeover offer;") on the registration of the company ("the company whose shares are the subject of a takeover offer;") . Section 92(2) As soon as practicable after the registration of the company ("the company whose shares are the subject of a takeover offer;") , it shall enter in its register of members the names and addresses of persons who subscribed to its memorandum and the date on which they became members of the company ("the company whose shares are the subject of a takeover offer;") . Section 92(3) Any other person who later agrees to become a member ("a member of a company;") of a company becomes a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") when the person's name is entered into the register of members.
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