Companies Act — Part 2 | Cap. 486 — Kenya law | Esheria

Companies Act

Part 2 of 6 · provisions 201–400

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
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Complete work
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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".

Legal text

Provisions of Companies Act

Showing 200 of 1,035

Part VII

COMPANY MEMBERS

  1. 93

    COMPANY MEMBERS - 93. Company to keepregisterof members

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    Companies must keep a register of members and lodge copies with the Registrar (within 30 days of preparation) and lodge amendments (within 14 days); failure attracts fines up to 500,000 shillings and continuing defaults attract daily fines up to 50,000 shillings.

    Section 93. Company to keepregisterof members Section 93(1) Every company shall keep a register of its members. Section 93(2)(a) the names and addresses of the members including information on whether the member ("a member of a company;") is a nominee shareholder ; Section 93(2)(b) the date on which each person was registered as a member ("a member of a company;") or a nominee shareholder ; and Section 93(2)(c) deleted by ActNo. 12 of 2019, Sch.; Section 93(2)(d) the date on which any person ceased to be a member ("a member of a company;") or a nominee shareholder . Section 93(3)(a) by its number if the share has a number; and Section 93(3)(a)(i) by its number if the share has a number; and Section 93(3)(a)(ii) if the company ("the company whose shares are the subject of a takeover offer;") has more than one class of issued shares , by its class; and Section 93(3)(b) the amount paid or agreed to be considered as paid on the shares of the member ("a member of a company;") . Section 93(4) If the shares of a company are held jointly, the company ("the company whose shares are the subject of a takeover offer;") shall ensure that the name of each joint holder is entered in its register of members. Section 93(5) If a company does not have a share capital but has more than one class of members, it shall enter in its register of members, along with the names and address of each member ("a member of a company;") , a statement of the class to which the member ("a member of a company;") belongs. Section 93(6)(a) the applicable requirements of this section need not be complied with if the company ("the company whose shares are the subject of a takeover offer;") cancels all of the shares immediately after the purchase; and Section 93(6)(b) if the company ("the company whose shares are the subject of a takeover offer;") does not cancel all of the shares immediately after the purchase, any share that is so cancelled is to be disregarded for the purposes of this section. Section 93(7) Subject to subsection (6) , if a company holds shares as treasury shares, the company shall ensure that it is entered in its register of members as the member holding those shares. Section 93(8) A company shall lodge with the Registrar ("the person for the time being holding office as Registrar of Companies under;") a copy of its register of members within thirty days after completing its preparation. Section 93(9) A company other than a public limited company other than a public listed 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 members within fourteen days after making the amendment. Section 93(10) 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 five hundred thousand shillings. Section 93(11) If, after a company or any of its officers is convicted of an offence under subsection (10) , 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. [Act No. 11 of 2017 , Sch., Act No. 28 of 2017 , s. 8, Act No. 12 of 2019 , Sch, Act No. 10 of 2023 , Sch.]
  2. 93A

    COMPANY MEMBERS - 93A. Company to keepregisterof beneficial owners

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    Companies must keep a register of beneficial owners, enter prescribed information, lodge amendments with the Registrar within set timeframes, retain records for ten years, and face penalties and fines for non‑compliance.

    Section 93A. Company to keepregisterof beneficial owners Section 93A(1) Every company shall keep a register of its beneficial owners. Section 93A(2) A company shall enter in its register of beneficial owners, information relating to its beneficial owners as prescribed in 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 93A(3)(a) in the case of a proposed company; when submitting documents as provided for under section 13 of this Act; and Section 93A(3)(b) in the case of existing companies, within sixty days of coming into force of this section. Section 93A(4) The Registrar may, on the application of the company ("the company whose shares are the subject of a takeover offer;") or for any other reason the Registrar ("the person for the time being holding office as Registrar of Companies under;") thinks fit, extend the period referred to in subsection (3)(b) for a period not exceeding thirty days. Section 93A(5) A company, other than a public listed 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 beneficial owners within fourteen days after making the amendment. Section 93A(6) Notwithstanding the provisions of subsection (5) , a public listed company shall lodge with the Registrar a copy of any amendment to its register of beneficial owners within thirty days after making the amendment. Section 93A(7) Every company shall keep records of its beneficial owner ’s information for at least ten years from the date which a person ceases to be a beneficial owner . Section 93A(8) If a company fails to comply with the requirements of subsection (5) or subsection (6) , 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 93A(9) If the company ("the company whose shares are the subject of a takeover offer;") continues to fail to comply with the requirement of subsection (8) , the company, and each officer of the company in default, is liable to pay to the Registrar a further administrative penalty of one hundred shillings for each day of default. Section 93A(10) If the company ("the company whose shares are the subject of a takeover offer;") does not comply with subsection (3)(b) , 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 93A(11) If, after a company or any of its officers is convicted of an offence under subsection (10) , 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 93A(12)(a) the statutory requirement of which the company ("the company whose shares are the subject of a takeover offer;") is in breach; Section 93A(12)(b) the action that the company ("the company whose shares are the subject of a takeover offer;") is required to take; Section 93A(12)(c) that the company ("the company whose shares are the subject of a takeover offer;") has to comply with the direction ("direction in writing;") within fourteen days; and Section 93A(12)(d) the consequence provided for under section 894 for failure to comply with the direction by the Registrar.
  3. 94

    COMPANY MEMBERS - 94. Company to keepregisterof members of its registered office

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    Companies must keep a register of members at their registered office; copies may be kept at another company office or at another person's office, or lodged with the Registrar. Failure to comply is an offence with a fine not exceeding five hundred thousand shillings for the company and each officer in default.

    Section 94. Company to keepregisterof members of its registered office Section 94(1)(a) kept at its registered office; Section 94(1)(aa) if the register is prepared at another office of the company ("the company whose shares are the subject of a takeover offer;") other than the registered office, a copy of the register may be kept at that other office; Section 94(1)(ab) if the register is prepared by another person on behalf of the company ("the company whose shares are the subject of a takeover offer;") , a copy of the register may be kept at the office of that other person; and Section 94(1)(b) lodged with the Registrar ("the person for the time being holding office as Registrar of Companies under;") . Section 94(2) If a company fails to comply with a 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. [Act No. 28 of 2017 , s. 9.]
  4. 95

    COMPANY MEMBERS - 95. Certain companies to keep index of members

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    Companies with more than fifty members must keep an index of members and, unless the register itself serves as an index, must keep and lodge the index at the registered office and with the Registrar; they must update the index within 14 days of register changes and lodge a copy within 28 days of establishing it. Failure by the company or an officer in default is an offence with fines (up to 500,000 shillings, and 50,000 shillings per day for continued failure).

    Section 95. Certain companies to keep index of members Section 95(1) A company that has more than fifty members shall keep an index of the names of the members of the company ("the company whose shares are the subject of a takeover offer;") , unless the register of members is in such a form as to constitute in itself an index. Section 95(2) A company shall make any necessary alteration in the index within fourteen days after the date on which any alteration is made in the register of members. Section 95(3) A company shall ensure that the index contains in respect of each member ("a member of a company;") , a sufficient indication to enable the account of that member ("a member of a company;") in the register to be readily found. Section 95(4) 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, a company shall keep its index of the names of members of the company ("the company whose shares are the subject of a takeover offer;") at its registered office and shall, within twenty-eight days after establishing it, lodge a copy with the Registrar ("the person for the time being holding office as Registrar of Companies under;") . Section 95(5) 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 five hundred thousand shillings. Section 95(6) If, after a company or any of its officers is convicted of an offence under subsection (5) , 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.
  5. 96

    COMPANY MEMBERS - 96. Rights of persons to inspectregisterof members and require copies

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    Members may inspect the company's register of members without charge; other persons may inspect it on payment of any prescribed fee. A public company must, on request and on receipt of any prescribed fee, provide a copy of the register or part specified.

    Section 96. Rights of persons to inspectregisterof members and require copies Section 96(1)(a) a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") without charge; and Section 96(1)(b) any other person on payment of the fee (if any) 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 96(2) On being requested to do so by a person and on receipt of the prescribed fee (if any), a public company shall issue to the person a copy of the company ("the company whose shares are the subject of a takeover offer;") 's register of members or such part of it as the person specifies. Section 96(3)(a) in the case of a natural person, the person's name and address ; Section 96(3)(b) in the case of an organisation the name and address of the person responsible for making the application on behalf of the organisation; Section 96(3)(c) the purpose for which the information is to be used; and Section 96(3)(d) if the person is a natural person, the person's name and address ; Section 96(3)(d)(i) if the person is a natural person, the person's name and address ; Section 96(3)(d)(ii) if the person is an organisation, the name and address of the person responsible for receiving the information on its behalf; and Section 96(3)(d)(iii) the purpose for which the information is to be used by that person.
  6. 97

    COMPANY MEMBERS - 97. Consequences of company refusing inspection of itsregisteror to provide copy of itsregisterof members

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    If a company applies to the Court regarding inspection or a copy of the register of members, it must notify the person who made the request and that person is entitled to be heard; the company may either comply with the request or decline it by giving sufficient reasons in writing or apply to the Court.

    Section 97. Consequences of company refusing inspection of itsregisteror to provide copy of itsregisterof members Section 97(1)(a) comply with the request or decline it by giving sufficient reasons in writing; or Section 97(1)(b) apply to the Court ("(unless some other court is specified) the High Court;") . Section 97(2) If the company ("the company whose shares are the subject of a takeover offer;") applies to the Court ("(unless some other court is specified) the High Court;") , it shall notify ("notify in writing;") the person who made request and that person is entitled to be heard.
  7. 98

    COMPANY MEMBERS - 98. Offence to refuse inspection ofregisterof members or to fail to provide copy

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    If, after conviction under subsection (1), a company or any of its officers continues to refuse inspection or to fail to provide the required copy, the company and each defaulting officer commit a further offence each day and on conviction are liable to a fine not exceeding seventy-five thousand shillings for each such offence.

    Section 98. Offence to refuse inspection ofregisterof members or to fail to provide copy Section 98(1)(a) refuses to allow an inspection required under section 96 ; or Section 98(1)(b) fails to provide a copy required under that section, Section 98(2) If, after a company or any of its officers is convicted of an offence under subsection (1) , the company continues to refuse to allow an inspection or to fail provide. the required copy, 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 seventy-five thousand shillings for each such offence.
  8. 99

    COMPANY MEMBERS - 99.Registerof members: offences in connection with request for or disclosure of information

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    It is an offence for a person to make a request under section 96 containing a statement they know or suspect to be false or misleading in a material respect; associated acts or failures that result in disclosure to another person are covered; conviction can lead to a fine of up to five hundred thousand shillings or up to two years' imprisonment, or both.

    Section 99.Registerof members: offences in connection with request for or disclosure of information Section 99(1) A person who makes a request under section 96 that contains a statement that the person knows, or has reason to suspect, is false or misleading in a material respect commits an offence. Section 99(2)(a) to do anything that results in the information being disclosed to another person; or Section 99(2)(b) to fail to do anything with the result that the information is disclosed to another person, Section 99(3) A person found guilty of an offence under this section is on conviction liable to a fine not exceeding five hundred thousand shillings or imprisonment for a term not exceeding two years, or to both.

Part VIII

EXERCISE OF RIGHTS OF MEMBERS

  1. 114

    EXERCISE OF RIGHTS OF MEMBERS - 114. Effect of provisions ofarticlesrelating to enjoyment or exercise of rights of members

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    Where the articles allow a member to nominate another person, that nominated person can exercise or enjoy specified member rights and, for acts required by the Act, those acts are to be done by or in relation to the nominated person; acts authorised may instead be done by or in relation to the nominated person.

    Section 114. Effect of provisions ofarticlesrelating to enjoyment or exercise of rights of members Section 114(1) This section applies to a provision in the articles of a company that enables a member ("a member of a company;") to nominate another person or persons to enjoy or exercise all or any specified rights of the member ("a member of a company;") in relation to the company ("the company whose shares are the subject of a takeover offer;") . Section 114(2)(a) anything required by or under this Act to be done by or in relation to a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") is instead to be done; and Section 114(2)(b) anything authorised by or under this Act to be done by or in relation to a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") may instead be done, by or in relation to the nominated person as if that person were a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") . Section 114(3)(a) the right to be sent a proposed written resolution; Section 114(3)(b) the right to require circulation of a written resolution; Section 114(3)(c) the right to require directors to call a general meeting; Section 114(3)(d) the right to receive notices of general meetings; Section 114(3)(e) the right to require circulation of a statement; Section 114(3)(f) the right to appoint a proxy to act at a meeting; Section 114(3)(g) the right to be sent a copy of the company ("the company whose shares are the subject of a takeover offer;") 's annual financial statement and reports; and Section 114(3)(h) if the company ("the company whose shares are the subject of a takeover offer;") is a public company , the right to require the circulation of a resolution for the annual general meeting of the company ("the company whose shares are the subject of a takeover offer;") . Section 114(4)(a) confer rights enforceable against the company ("the company whose shares are the subject of a takeover offer;") by anyone, other than the member ("a member of a company;") ; or Section 114(4)(b) affect the requirements for an effective transfer or other disposition of the whole or part of a member ("a member of a company;") 's interest in the company ("the company whose shares are the subject of a takeover offer;") .
  2. 115

    EXERCISE OF RIGHTS OF MEMBERS - 115. Traded companies: nomination of persons to enjoy information rights

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    Members of traded companies who hold shares for others may nominate a person to receive certain information rights, including company communications, annual reports, and hard-copy documents; a company may decline to act on some nominations.

    Section 115. Traded companies: nomination of persons to enjoy information rights Section 115(1) A member ("a member of a company;") of a company whose shares are admitted to trading on a regulated market and who holds shares on behalf of another person may nominate a person to enjoy information rights. Section 115(2)(a) the right to receive a copy of all communications that the company ("the company whose shares are the subject of a takeover offer;") sends to its members generally or to any class of its members that includes the person making the nomination; Section 115(2)(b) the right to be sent copies of the company ("the company whose shares are the subject of a takeover offer;") 's annual financial statement and reports; Section 115(2)(c) the right to receive a hard copy version of a document or information provided in another form. Section 115(3) A company need not act on a nomination purporting to relate to certain information rights only.
  3. 116

    EXERCISE OF RIGHTS OF MEMBERS - 116. Information rights: form in which copies to be provided

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    If a nominated person notifies in writing they want hard copy documents and provides an address, the company must provide hard copy versions when given notice under subsection (4) or (5); if no notification or address is provided the nominated person is taken to have agreed to receive documents via a website.

    Section 116. Information rights: form in which copies to be provided Section 116(1)(a) request the person making the nomination to notify ("notify in writing;") the company ("the company whose shares are the subject of a takeover offer;") of that fact; and Section 116(1)(b) provide an address to which those copies may be sent. Section 116(2)(a) notifies the company ("the company whose shares are the subject of a takeover offer;") that the nominated person wishes to receive documents and other information 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;") ; and Section 116(2)(b) provide an address to which such copies may be sent, Section 116(3) If no notification is received or no address is provided, the nominated person is taken to have agreed that documents or information may be sent or supplied to the person by means of a website. Section 116(4)(a) revoke the agreement taken to have been made under subsection (3) ; and Section 116(4)(b) require the company ("the company whose shares are the subject of a takeover offer;") to provide the person with hard copy versions of the relevant documents or information. Section 116(5) On receiving a notice ("notice in writing;") under subsection (4) , the company shall provide the nominated person with hard copy versions of the relevant documents and other information.
  4. 117

    EXERCISE OF RIGHTS OF MEMBERS - 117. Information on possible rights in relation to voting

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    A nominated person may have rights under an agreement with the nominating member to be appointed (or to have someone else appointed) as a proxy, or, if they lack or decline that right, to give the member instructions on how to exercise voting rights.

    Section 117. Information on possible rights in relation to voting Section 117(1)(a) the nominated person may have a right under an agreement between the person and the member ("a member of a company;") by whom the person was nominated to be appointed, or to have someone else appointed, as a proxy for the meeting; or Section 117(1)(b) if the nominated person has no such right or does not wish to exercise it, the person may have a right under such an agreement to give instructions to the member ("a member of a company;") as to the exercise of voting rights. Section 117(2)(a) omit the notice ("notice in writing;") required by that section; or Section 117(2)(b) include the notice ("notice in writing;") but state that it does not apply to the nominated person.
  5. 118

    EXERCISE OF RIGHTS OF MEMBERS - 118. Information rights and status of rights

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    A person nominated under section 115 is entitled to enjoy the rights conferred by that nomination and those rights are enforceable against the company as if they were rights conferred by the company’s articles.

    Section 118. Information rights and status of rights Section 118(1) This section has effect as regards the rights conferred by a nomination under section 115 . Section 118(2) Enjoyment by the nominated person of the rights conferred by the nomination is enforceable against the company ("the company whose shares are the subject of a takeover offer;") by the member ("a member of a company;") as if they were rights conferred by the company ("the company whose shares are the subject of a takeover offer;") 's articles . Section 118(3) An enactment, or a provision of the company ("the company whose shares are the subject of a takeover offer;") ’s articles , having effect in relation to communications with members has a corresponding effect (subject to any necessary modification) in relation to communications with the nominated person. Section 118(4)(a) whose nomination was received by the company ("the company whose shares are the subject of a takeover offer;") after that date or time; or Section 118(4)(a)(i) whose nomination was received by the company ("the company whose shares are the subject of a takeover offer;") after that date or time; or Section 118(4)(a)(ii) if that date or time occurs during a period of suspension of the nomination; and Section 118(4)(b) if under an enactment, or a provision of the company ("the company whose shares are the subject of a takeover offer;") 's articles , the right of a member ("a member of a company;") to receive a document or information depends on the company ("the company whose shares are the subject of a takeover offer;") having a current address for the member ("a member of a company;") , the same applies to any person nominated by the member ("a member of a company;") . Section 118(5)(a) are in addition to the rights of the member ("a member of a company;") ; and Section 118(5)(b) do not affect any rights exercisable under section 114 . Section 118(6) A failure to give effect to the rights conferred by the nomination does not affect the validity of anything done by or on behalf of the company ("the company whose shares are the subject of a takeover offer;") . Section 118(7)(a) the rights referred to in section 115 ; and Section 118(7)(b) if applicable, the rights conferred by sections 116 (2) and 117 .
  6. 119

    EXERCISE OF RIGHTS OF MEMBERS - 119. Termination or suspension of nomination

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    Nominations under section 115 can be terminated at the request of the member or the nominated person; nominations are suspended if there are more nominated persons than shares, and the company may ask a nominated person to confirm information rights — lack of response within 28 days causes the nomination to cease.

    Section 119. Termination or suspension of nomination Section 119(1) The nomination of a person under section 115 may be terminated at the request of the member or of the nominated person. Section 119(2)(a) in the case of a natural person, the person dies or is adjudicated bankrupt; or Section 119(2)(b) in the case of a body corporate , the body is dissolved or an order is made for the liquidation of the body otherwise than for the purposes of reconstruction. Section 119(3)(a) the reference to bankruptcy includes the sequestration of a person's estate; and Section 119(3)(b) the reference to the making of an order for liquidation is to the making of such an order under the law relating to insolvency, or any corresponding proceeding under the law of a country or territory outside Kenya. Section 119(4) The effect of any nominations made by a member ("a member of a company;") is suspended at any time when there are more nominated persons than the member ("a member of a company;") has shares in the company ("the company whose shares are the subject of a takeover offer;") . Section 119(5)(a) the member ("a member of a company;") holds different classes of shares with different information rights; and Section 119(5)(b) there are more nominated persons than the member ("a member of a company;") has shares conferring a particular right, Section 119(6)(a) requests a nominated person to specify whether the person wishes to retain information rights; and Section 119(6)(b) does not receive a response within twenty eight days from and including the date on which the company ("the company whose shares are the subject of a takeover offer;") ’s request was sent, the nomination ceases to have effect at the end of that period. Section 119(7) Such a request may not be made of a person more than once in any twelve-month period. Section 119(8) Although the termination or suspension of a nomination means that the company ("the company whose shares are the subject of a takeover offer;") is no longer required to act on it, it does not prevent the company ("the company whose shares are the subject of a takeover offer;") from continuing to do so, to such extent or for such period as it considers appropriate.
  7. 120

    EXERCISE OF RIGHTS OF MEMBERS - 120. Exercise of rights ifsharesheld on behalf of others

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    Members who exercise some or part of rights attached to shares must inform the company about the extent or manner of exercise; the company may assume members exercise all rights in the same way when members do not inform otherwise.

    Section 120. Exercise of rights ifsharesheld on behalf of others Section 120(1)(a) rights attached to the shares ; and Section 120(1)(b) rights under any written law exercisable because of holding the shares , Section 120(2) A member ("a member of a company;") who exercises the rights referred to in subsection (1) but does not exercise all those rights shall inform the company to what extent the member is exercising the rights. Section 120(3) A member ("a member of a company;") who exercises the rights in different ways shall inform the company ("the company whose shares are the subject of a takeover offer;") of the ways in which the member ("a member of a company;") is exercising the rights and to what extent the member ("a member of a company;") is exercising the rights in each way. Section 120(4)(a) is not exercising all the member ("a member of a company;") 's rights; or Section 120(4)(b) is exercising those rights in different ways, the company ("the company whose shares are the subject of a takeover offer;") is entitled to assume that the member ("a member of a company;") is exercising all of those rights and is exercising them in the same way.
  8. 121

    EXERCISE OF RIGHTS OF MEMBERS - 121. Exercise of rights ifsharesheld on behalf of others: members’ requests

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    Section 121 sets out requirements for members’ requests where shares are held on behalf of others.

    Section 121. Exercise of rights ifsharesheld on behalf of others: members’ requests Section 121(1) This section applies to sections 289 , 312 and 766 . Section 121(2)(a) it is made by at least one hundred persons; Section 121(2)(b) it is authenticated by all the persons making it; Section 121(2)(c) specifying the full name and address of a person who is the member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") and holds shares on behalf of that person; Section 121(2)(c)(i) specifying the full name and address of a person who is the member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") and holds shares on behalf of that person; Section 121(2)(c)(ii) stating that the member ("a member of a company;") is holding the shares on behalf of that person in the course of a business; Section 121(2)(c)(iii) specifying the number of shares in the company ("the company whose shares are the subject of a takeover offer;") that the member ("a member of a company;") holds on behalf of that person; Section 121(2)(c)(iv) specifying the total amount paid up on the shares ; Section 121(2)(c)(v) stating that the shares are not held on behalf of anyone else or, if they are, that the other person or persons are not among the other persons making the request; Section 121(2)(c)(vi) stating that some or all of the shares confer voting rights that are relevant for the purposes of making a request under the relevant section; and Section 121(2)(c)(vii) stating that the person has the right to instruct the member ("a member of a company;") how to exercise the rights; Section 121(2)(d) holds shares otherwise than on behalf of another person; or Section 121(2)(d)(i) holds shares otherwise than on behalf of another person; or Section 121(2)(d)(ii) holds shares on behalf of one or more other persons but those persons are not among the other persons making the request; Section 121(2)(e) it is accompanied by such evidence as the company ("the company whose shares are the subject of a takeover offer;") may reasonably require of the matters referred to in paragraphs (c) and (d) ; Section 121(2)(f) shares held as referred to in paragraph (c) ; and Section 121(2)(f)(i) shares held as referred to in paragraph (c) ; and Section 121(2)(f)(ii) shares held as referred to in paragraph (d) , divided by the number of persons making the request, is not less than ten thousand shillings; Section 121(2)(g) the request complies with any other requirements of the section.

Part X

DISQUALIFICATION OF DIRECTORS

  1. 213

    DISQUALIFICATION OF DIRECTORS - 213. Interpretation: Part X

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    Title: "Section 213. Interpretation: Part X".

    Section 213. Interpretation: Part X
  2. 214

    DISQUALIFICATION OF DIRECTORS - 214. Effect of order disqualifying person from being adirectoror secretary

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    A person subject to a disqualification order must not, for the period specified in the order, act as a director, secretary, liquidator (or similar officer), supervisor of an approved voluntary arrangement, or be involved in promoting, forming or managing a company.

    Section 214. Effect of order disqualifying person from being adirectoror secretary Section 214(1)(a) being or acting as a director ("a former director;") or secretary of a company; Section 214(1)(b) being or acting as a liquidator, provisional liquidator or administrator of a company; Section 214(1)(c) being or acting as a supervisor of a voluntary arrangement approved by a company; or Section 214(1)(d) in any way, whether directly or indirectly, being concerned in the promotion, formation or management of a company, for such period as may be specified in the order. Section 214(2) A period of disqualification specified in a disqualification order begins at the end of twenty-one days from and including the date of the order, unless the relevant court otherwise orders. Section 214(3) If a disqualification order is made against a person who is already subject to another such order, or to a disqualification undertaking , the periods specified in those orders or in the order and the undertaking run concurrently. Section 214(4) A disqualification order may be made on grounds that are or include matters other than criminal convictions, whether or not the person in respect of whom it is to be made may be criminally liable in respect of those matters.
  3. 215

    DISQUALIFICATION OF DIRECTORS - 215. Disqualification on conviction for offence

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    When a person is convicted of an offence relating to a company's promotion, formation, management, liquidation or administration, the court may make a disqualification order; if made by a magistrate's court the disqualification is five years, otherwise fifteen years; "court" includes a magistrate's court; the section applies beyond offences under this Act.

    Section 215. Disqualification on conviction for offence Section 215(1) On convicting a person of an offence relating to the promotion, formation, management, liquidation or administration of a company, the court may make a disqualification order against the person. Section 215(2)(a) if the disqualification order is made by a magistrate's court, five years; and Section 215(2)(b) in any other case, fifteen years. Section 215(3) In this section, "court" includes a magistrate's court. Section 215(4) The application of this section is not limited to offences under this Act.
  4. 216

    DISQUALIFICATION OF DIRECTORS - 216. Disqualification for fraud or breach of duty committed while companyin liquidationor under administration

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    Disqualification may be imposed for fraud or breach of duty committed while a company is in liquidation or under administration; the maximum disqualification period is fifteen years.

    Section 216. Disqualification for fraud or breach of duty committed while companyin liquidationor under administration Section 216(1)(a) an officer of the company ("the company whose shares are the subject of a takeover offer;") ; Section 216(1)(b) a liquidator or provisional liquidator of the company ("the company whose shares are the subject of a takeover offer;") ; Section 216(1)(c) if the company ("the company whose shares are the subject of a takeover offer;") is under administration — the administrator, Section 216(2)(a) fraud in relation to the company ("the company whose shares are the subject of a takeover offer;") ; or Section 216(2)(b) any breach of duty as the holder of such an office. Section 216(3) The maximum period that can be imposed in a disqualification order made under this section is fifteen years
  5. 217

    DISQUALIFICATION OF DIRECTORS - 217. Disqualification on conviction of offence involving failure tolodgereturns or other documents with Registrar

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    The convicting court may make a disqualification order against a person convicted of offences under this section if, within the five years ending on the conviction date, the person has at least three such convictions; the maximum disqualification period is five years.

    Section 217. Disqualification on conviction of offence involving failure tolodgereturns or other documents with Registrar Section 217(1)(a) a return, financial statement or other document to be lodged with, or sent to; or Section 217(1)(b) a matter to be notified to, the Registrar ("the person for the time being holding office as Registrar of Companies under;") , whether the failure is by the person or any company of which the person is an officer. Section 217(2) If a person is convicted of an offence to which this section applies, the convicting court may make a disqualification order against the person if, during the five years ending with the date of the conviction, the person has been convicted of no fewer than three such offences. Section 217(3) The offences referred to in subsection (2) may include the one of which the person is convicted and any other offence to which this section applies of which the person is convicted on the same occasion. Section 217(4) The maximum period that can be imposed in a disqualification order made under this section is five years.
  6. 218

    DISQUALIFICATION OF DIRECTORS - 218. Duty of court to disqualify unfit directors and secretaries of insolvent companies

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    The court must disqualify persons who are or have been directors or secretaries of companies that became insolvent when their conduct makes them unfit to manage a company.

    Section 218. Duty of court to disqualify unfit directors and secretaries of insolvent companies Section 218(1)(a) that the person is or has been a director ("a former director;") or secretary of a company that has at any time become insolvent whether while the person was a director ("a former director;") or secretary or subsequently; and Section 218(1)(b) that the conduct of the person as a director ("a former director;") or secretary of that company either taken alone or taken together with the person's conduct as a director ("a former director;") or secretary of any other company or companies makes the person unfit to take part in the management of a company. Section 218(2)(a) to the matters referred to in Part 1 of the Second Schedule; and Section 218(2)(b) if the company ("the company whose shares are the subject of a takeover offer;") has become insolvent, to the matters referred to in Part 2 of that Schedule, and references in that Schedule to the director ("a former director;") or secretary and the company ("the company whose shares are the subject of a takeover offer;") are to be read accordingly. Section 218(3)(a) the company ("the company whose shares are the subject of a takeover offer;") is placed in liquidation at a time when its assets are insufficient for the payment of its debts and other liabilities ("duties;") and the expenses of the liquidation; or Section 218(3)(b) the company ("the company whose shares are the subject of a takeover offer;") is under administration. Section 218(4) A reference in this section to the conduct of a person as a director ("a former director;") or secretary of a company or companies include, if that company or any of those companies has become insolvent, the conduct of that person in relation to any matter connected with or arising out of the insolvency of that company. Section 218(5) The maximum period that can be imposed in a disqualification order made under this section is fifteen years and the minimum period is two years.
  7. 219

    DISQUALIFICATION OF DIRECTORS - 219. Applications to court undersection 219

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    Office holders must report and provide requested information and records to the Attorney-General; the Attorney-General and Official Receiver may apply to court or accept undertakings; there is a two-year limit for making certain applications and a fine of up to two hundred thousand shillings for failure to comply.

    Section 219. Applications to court undersection 219 Section 219(1)(a) the Attorney-General ; or Section 219(1)(b) if the Attorney-General so directs in the case of a person who is or has been a director ("a former director;") or secretary of a company that is being liquidated by the Court ("(unless some other court is specified) the High Court;") —the Official Receiver, may make an application to a court for such an order. Section 219(2) Except with the leave of the relevant court, an application for the making of an order under section 218 of a disqualification order against a person may not be made after the expiry of two years from and including the day on which the company ("the company whose shares are the subject of a takeover offer;") of which the person is or has been a director ("a former director;") or secretary became insolvent. Section 219(3) If satisfied that the conditions referred to in section 218 (1) are complied with in relation to a person who has offered to enter into a disqualification undertaking, the Attorney-General may accept the undertaking if of the view that it would be in the public interest to do so, instead of applying, or proceeding with an application, for a disqualification order. Section 219(4)(a) in the case of a company that is being liquidated by the Court ("(unless some other court is specified) the High Court;") —the Official Receiver; Section 219(4)(b) in the case of a company that is being liquidated otherwise that by the Court ("(unless some other court is specified) the High Court;") —the liquidator; Section 219(4)(c) in the case of a company that is under administration —the administrator. Section 219(5) If an office holder is satisfied that the conditions specified in section 218 (1) are complied with in relation to a person who is or has been a director or secretary of the company concerned, the office-holder shall immediately report the matter to the Attorney-General. Section 219(6)(a) to provide the Attorney-General or Official Receiver with such information with respect to the conduct of a person as a director ("a former director;") or secretary of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 219(6)(b) to produce and permit inspection of such records relevant to the conduct of the person as a director ("a former director;") or secretary, as the Attorney-General or the Official Receiver may reasonably require for the purpose of determining whether to make an application under subsection (1) . Section 219(7) As soon as practicable after receiving a request under subsection (6) , an office holder or former office holder shall comply with the request so far as it is possible to do so. Section 219(8) An officer holder or former office holder who, without reasonable excuse, fails to comply with subsection (5) or (6) commits an offence and on conviction is liable to a fine not exceeding two hundred thousand shillings.
  8. 220

    DISQUALIFICATION OF DIRECTORS - 220. Disqualification undertakings

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    Section 220. Disqualification undertakings

    Section 220. Disqualification undertakings Section 220(1)(a) act or accept an appointment as a director ("a former director;") or secretary of a company; or Section 220(1)(a)(i) act or accept an appointment as a director ("a former director;") or secretary of a company; or Section 220(1)(a)(ii) in any way (whether directly or indirectly) be concerned in the promotion, formation or management of a company; and Section 220(1)(b) will not act as a liquidator, provisional liquidator or administrator of a company. Section 220(2) The maximum period that may be specified in a disqualification undertaking is fifteen years and the minimum period that may be so specified is two years. Section 220(3) If a disqualification undertaking by a person who is already subject to such an undertaking or to a disqualification order is accepted, the periods specified in those undertakings or the undertaking and the order run concurrently. Section 220(4) In determining whether to accept a disqualification undertaking by any person, the Attorney-General may take account of matters other than criminal convictions even if the person may be criminally liable in respect of those matters.
  9. 221

    DISQUALIFICATION OF DIRECTORS - 221. Disqualification after investigation of company

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    After an investigation report, the Attorney-General may apply to the High Court for a disqualification order against a current or former director or secretary; the court may make an order if satisfied the person's conduct makes them unfit to manage a company; the maximum disqualification period is fifteen years; the Attorney-General may accept a disqualification undertaking instead of applying for an order if it is in the public interest.

    Section 221. Disqualification after investigation of company Section 221(1) If, as result of a report of an investigation conducted under Part XXX, the Attorney-General considers that it would be in the public interest for a disqualification order to be made against a person who is or has been a director ("a former director;") or secretary of any company, the Attorney-General may apply to the Court ("(unless some other court is specified) the High Court;") for a disqualification order to be made against that person. Section 221(2) The court may make a disqualification order against a person if, on an application under this section, it is satisfied that the person's conduct in relation to the company ("the company whose shares are the subject of a takeover offer;") makes that person unfit to take part in the management of a company. Section 221(3) The maximum period that can be imposed in a disqualification order made under this section is fifteen years. Section 221(4)(a) the Attorney-General is of the opinion that the conduct of a person in relation to a company of which the person is or has been a director ("a former director;") or secretary makes the person unfit to be concerned in the management of a company; and Section 221(4)(b) the person has offered to provide a disqualification undertaking , the Attorney-General may, instead of applying, or proceeding with an application, for a disqualification order, accept the undertaking if of the view that it would be in the public interest to do so.
  10. 222

    DISQUALIFICATION OF DIRECTORS - 222. Variation of disqualificationundertaking

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    On the hearing of an application under subsection (1), the Attorney-General must appear, draw the Court's attention to relevant matters, and may personally give evidence or call witnesses.

    Section 222. Variation of disqualificationundertaking Section 222(1)(a) reduce the period for which the undertaking is to be in force; and Section 222(1)(b) provide for it to cease to be in force. Section 222(2) On the hearing of an application under subsection (1) , the Attorney-General shall appear and draw the attention of the Court to any matters that appear to the Attorney-General to be relevant, and may personally give evidence or call witnesses. Section 222(3) In this section, “relevant court” means a court to which, if the Attorney-General had applied for a disqualification order under the relevant section at the time when the disqualification order under the relevant section at the time when the disqualification undertaking was provided, the application could have been made.
  11. 223

    DISQUALIFICATION OF DIRECTORS - 223. Offence for undischarged bankrupts to act asdirectoror secretary of company

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    An undischarged bankrupt must not act as a director or secretary of a company or participate in its promotion, formation or management; doing so is an offence punishable by a fine up to five hundred thousand shillings or imprisonment up to two years, or both.

    Section 223. Offence for undischarged bankrupts to act asdirectoror secretary of company Section 223(1)(a) acts as a director ("a former director;") or secretary of a company; and Section 223(1)(b) directly or indirectly participates in its promotion, formation or management, while an undischarged bankrupt commits an offence Section 223(2) A court may not give leave under subsection (1) unless notice of intention to apply for it has been served on the Official Receiver. Section 223(3) If of the opinion that it would be contrary to the public interest for the application to be granted, the Official Receiver shall attend the hearing of the application and oppose it. Section 223(4) A person found guilty of offence under subsection (1) is liable on conviction to a fine not exceeding five hundred thousand shillings or to imprisonment for a term not exceeding two years, or to both.
  12. 224

    DISQUALIFICATION OF DIRECTORS - 224. Personal liability for company’s debts if person acts while disqualified

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    Persons who act in the management of a company while disqualified, or who act (or are willing to act) on instructions from a disqualified person or undischarged bankrupt without the Court's leave, are personally liable for the company's relevant debts and are jointly and severally liable with the company.

    Section 224. Personal liability for company’s debts if person acts while disqualified Section 224(1)(a) the person is concerned in the management of the company ("the company whose shares are the subject of a takeover offer;") in contravention of a disqualification order or of section 223 ; or Section 224(1)(b) as a person who is involved in the management of the company ("the company whose shares are the subject of a takeover offer;") , the person acts or is willing to act on instructions given without the leave of the Court ("(unless some other court is specified) the High Court;") by another person whom the person knows at that time to be the subject of a disqualification order or to be an undischarged bankrupt. Section 224(2) A person who is personally liable under this section for the relevant debts of a company is jointly and severally liable in respect of those debts with the company ("the company whose shares are the subject of a takeover offer;") and any other person who, whether under this section or otherwise, is so liable. Section 224(3)(a) in relation to a person who is personally responsible under subsection (1)(a) , such debts and other liabilities of the company as are incurred at a time when that person was involved in the management of the company; and Section 224(3)(b) in relation to a person who is personally responsible under subsection (1)(b) , such debts and other liabilities of the company as were incurred at a time when that person was acting or was willing to act on instructions given as referred to in that paragraph. Section 224(4)(a) is a director ("a former director;") or secretary of the company ("the company whose shares are the subject of a takeover offer;") ; or Section 224(4)(b) is concerned, whether directly or indirectly, or participates, in the management of the company ("the company whose shares are the subject of a takeover offer;") . Section 224(5) For the purposes of this section, a person who, as a person involved in the management of a company, has, without the leave of the Court ("(unless some other court is specified) the High Court;") , at any time acted on instructions given by another person -whom the person knew at that time to be the subject of a disqualification order or to be an undischarged bankrupt is presumed, unless the contrary is shown, to have been willing at any time afterwards to act on any instructions given by that other person.
  13. 225

    DISQUALIFICATION OF DIRECTORS - 225. Application for leave under an order orundertaking

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    A person may apply to the High Court for a disqualification order only if they have given the person against whom the order is sought written notice of intention to apply.

    Section 225. Application for leave under an order orundertaking Section 225(1) A person may make an application to the Court ("(unless some other court is specified) the High Court;") for a disqualification order only if the person has given the person against whom the order is sought a notice ("notice in writing;") of intention to apply for such an order. Section 225(2) At the hearing of the application, the person against whom a disqualification order is sought is entitled to appear as respondent to the application. Section 225(3) An application to a court for a disqualification order may be made by the Attorney-General , the Registrar ("the person for the time being holding office as Registrar of Companies under;") , the Official Receiver, the liquidator or any past or present member ("a member of a company;") or creditor of any company in relation to which that person has committed or is alleged to have committed an offence or other default. Section 225(4) On the hearing of an application made by the Attorney-General , the Registrar ("the person for the time being holding office as Registrar of Companies under;") , the Official Receiver the liquidator, the applicant shall appear and draw the attention of the Court ("(unless some other court is specified) the High Court;") to any matters that appear to be relevant, and may give evidence or call witnesses.
  14. 226

    DISQUALIFICATION OF DIRECTORS - 226. Application for leave under an order orundertaking

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    Specifies which court an application for leave under sections 214(1) or 222(1) must be made to depending on whether the person is subject to certain disqualification orders or undertakings, and requires the Attorney-General to appear and may give evidence or call witnesses.

    Section 226. Application for leave under an order orundertaking Section 226(1) If a person is subject to a disqualification order made by the Court ("(unless some other court is specified) the High Court;") , an application for leave for the purposes of section 214 (1) may be made only to the Court. Section 226(2)(a) a person is subject to a disqualification order made under section 215 by a court other than the Court; and Section 226(2)(b) a person is subject to a disqualification order made under section 217 , an application for leave for the purposes of section 214 (1) may be made only to the court that convicted the person of the relevant offence or, if the person was convicted of more than one such offence, of any of those offences. Section 226(3) If a person is subject to a disqualification undertaking , any application for leave for the purposes of section 222 (1) may be made only to a court to which, if the Attorney-General had applied for a disqualification order under the relevant section at that time, the application could have been made. Section 226(4)(a) to two or more disqualification orders or undertakings; or Section 226(4)(b) to one or more disqualification orders and to one or more disqualification undertakings, an application for leave for the purposes of section 214 (1) or 222 (1) may be made only to a court to which any such application relating to the latest order to be made, or undertaking to be accepted, could be made. Section 226(5) On the hearing of an application for leave for the purposes of section 214 (1) or 222 (1), the Attorney-General shall appear and draw the attention of the court to any matters that appear to the Attorney-General to be relevant, and may personally give evidence or call witnesses.
  15. 227

    DISQUALIFICATION OF DIRECTORS - 227.Registerof disqualification orders and disqualification undertakings

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    The Registrar must keep a public register of disqualification orders and undertakings; courts' prescribed officers and the Attorney-General must lodge documents with the Registrar, and the Registrar must delete cancelled entries and keep the register open for public inspection (fee may apply).

    Section 227.Registerof disqualification orders and disqualification undertakings Section 227(1) The Registrar shall establish and maintain a register of disqualification orders and disqualification undertakings in which the Registrar ("the person for the time being holding office as Registrar of Companies under;") shall enter all particulars, provided in accordance with subsection (2) or (3) . Section 227(2)(a) makes a disqualification order; Section 227(2)(b) takes action in consequence of which such an order is varied or is cancelled; or Section 227(2)(c) grants leave for a person who is subject to such an order to do anything that the order would otherwise prohibit or restrict the person from doing, the prescribed officer of the court shall, within fourteen days after the order is made, the action is taken or leave is granted, lodge with the Registrar ("the person for the time being holding office as Registrar of Companies under;") for registration under this section a copy of the order or written particulars of the action or leave. Section 227(3) As soon as practicable after accepting a disqualification undertaking , the Attorney-General shall lodge with the Registrar ("the person for the time being holding office as Registrar of Companies under;") a copy of the undertaking for registration under this section. Section 227(4) On becoming aware that a disqualification order or disqualification undertaking particulars of which are entered in the register has been cancelled or otherwise ceased to be in force, the Registrar ("the person for the time being holding office as Registrar of Companies under;") shall delete the entry from the register and all particulars relating to it that have been lodged with the Registrar ("the person for the time being holding office as Registrar of Companies under;") under subsection (2) or (3) . Section 227(5) The Registrar shall keep the register required by this section open for inspection by members of the public on payment of the prescribed fee (if any). Section 227(6) In this section, " prescribed officer", in relation to a court, means the registrar of the court or, if the court does not have a registrar, the clerk or other officer of the court responsible for the administration of the court's day-to-day business.
  16. 228

    DISQUALIFICATION OF DIRECTORS - 228. Offence to breach of disqualification order orundertaking

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    It is an offence for a person subject to a disqualification order or undertaking to contravene it; on conviction they are liable to a fine not exceeding one million shillings or to imprisonment for a term not exceeding five years, or to both.

    Section 228. Offence to breach of disqualification order orundertaking Section A person who, while subject to a disqualification order or disqualification undertaking , contravenes the order or undertaking commits an offence and on conviction liable to a fine not exceeding one million shillings or to imprisonment for a term not exceeding five years, or to both.
  17. 229

    DISQUALIFICATION OF DIRECTORS - 229. Disqualified person may apply tothe Courtfor permission to act in way that would otherwise breach disqualification

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    A person disqualified under this Part may apply to the Court for permission to act despite the disqualification; the Attorney-General is entitled to appear, be represented, give evidence or call witnesses at the hearing of such an application.

    Section 229. Disqualified person may apply tothe Courtfor permission to act in way that would otherwise breach disqualification Section 229(1) A person who is disqualified under this Part may apply to the Court ("(unless some other court is specified) the High Court;") for permission to act in a way that would otherwise be a breach of the disqualification. Section 229(2) The Attorney-General is entitled to appear or be represented at the hearing of an application made under subsection (1) and to give evidence or call witnesses at the hearing of such an application.
  18. 230

    DISQUALIFICATION OF DIRECTORS - 230. Statements from persons who are disqualified

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    Regulations may require that a notice lodged under certain sections about a person subject to disqualification be accompanied by an additional statement; that additional statement must confirm the person has obtained a court's permission (under regulations for section 229) to act as a director or secretary.

    Section 230. Statements from persons who are disqualified Section 230(1) The regulations may require a statement or notice ("notice in writing;") lodged with the Registrar ("the person for the time being holding office as Registrar of Companies under;") under section 16 , 135 or 248 that relates (wholly or partly) to a person who is a person subject to a disqualification order or disqualification undertaking from being a director or secretary of a company to be accompanied by an additional statement. Section 230(2) The additional statement is a statement that the person has obtained permission from a court, on an application under regulations made for the purpose of section 229 , to act as a director or secretary of a company.
  19. 231

    DISQUALIFICATION OF DIRECTORS - 231. Statements to be made public

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    A statement lodged with the Registrar in accordance with regulations made for the purpose of section 230 is to be treated as a record relating to a company for the purposes of the Register.

    Section 231. Statements to be made public Section 231(1) A statement that is lodged with the Registrar ("the person for the time being holding office as Registrar of Companies under;") in accordance with regulations made for the purpose of section 230 is to be treated as a record relating to a company for the purposes of the Register. Section 231(2)(a) withheld from public inspection; or Section 231(2)(b) removed from the Register . Section 231(3) The regulations may require such a statement not to be withheld from public inspection or removed from the Register unless the person to whom it relates provides such information, and satisfies such other conditions, as may be specified 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;") .
  20. 232

    DISQUALIFICATION OF DIRECTORS - 232. Offence relating to statement

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    Section title: "Offence relating to statement"

    Section 232. Offence relating to statement
  21. 233

    DISQUALIFICATION OF DIRECTORS - 233. Persons who are subject to foreign restrictions

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    Persons who are subject to foreign restrictions may be disqualified, required to get permission, restricted, or prohibited from acting in connection with the affairs of a company; the section also defines "company" and "director" for companies formed outside Kenya.

    Section 233. Persons who are subject to foreign restrictions Section 233(1)(a) disqualified to any extent from acting in connection with the affairs of a company; or Section 233(1)(a)(i) disqualified to any extent from acting in connection with the affairs of a company; or Section 233(1)(a)(ii) required to obtain permission from a court or regulatory authority, or satisfy any other condition or requirement, before acting in connection with the affairs of a company; or Section 233(1)(b) not to act in connection with the affairs of a company; or Section 233(1)(b)(i) not to act in connection with the affairs of a company; or Section 233(1)(b)(ii) restricting the extent to which, or the way in which, the person may act in connection with the affairs of a company. Section 233(2)(a) being a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") ; or Section 233(2)(b) being concerned or taking part in the promotion, formation or management of the company ("the company whose shares are the subject of a takeover offer;") . Section 233(3)(a) "company" means a company incorporated or formed under the law of the country or territory outside Kenya; and Section 233(3)(b) in relation to such a company, " director ("a former director;") " means the holder of an office corresponding to that of director ("a former director;") of a Kenyan company.
  22. 234

    DISQUALIFICATION OF DIRECTORS - 234. Disqualification of persons who are subject to foreign restrictions

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    Persons who are subject to foreign restrictions are disqualified from being a director or secretary of a Kenyan company or from being involved in the promotion, formation or management of a Kenyan company; they stop being disqualified when they cease to be subject to foreign restrictions.

    Section 234. Disqualification of persons who are subject to foreign restrictions Section 234(1)(a) being a director ("a former director;") or secretary of a Kenyan company; or Section 234(1)(b) in any way, whether directly or indirectly, being concerned in the promotion, formation or management of a Kenyan company. Section 234(2) A person ceases to be disqualified under subsection (1) on ceasing to be subject to foreign restrictions.
  23. 235

    DISQUALIFICATION OF DIRECTORS - 235. Persons subject to foreign restrictions to be personally liable for debts of company

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    Directors, secretaries or other persons involved in the management who are subject to foreign restrictions are personally liable for company debts and other liabilities incurred while subject to those restrictions.

    Section 235. Persons subject to foreign restrictions to be personally liable for debts of company Section 235(1)(a) is a director ("a former director;") or secretary of a company registered in Kenya; and Section 235(1)(b) is involved in the management of a Kenyan company, is personally responsible for all debts and other liabilities ("duties;") of the company ("the company whose shares are the subject of a takeover offer;") incurred during a time when the person is subject to foreign restrictions. Section 235(2)(a) the company ("the company whose shares are the subject of a takeover offer;") ; and Section 235(2)(b) any other person who, whether because of this section or otherwise, is so liable. Section 235(3) For the purposes of this section, a person is involved in the management of a company if the person directly or indirectly participates in the management of the company ("the company whose shares are the subject of a takeover offer;") . Section 235(4)(a) the conduct on the basis of which the person became subject to foreign restrictions; Section 235(4)(b) the nature of the foreign restrictions; Section 235(4)(c) the country or territory under whose law the foreign restrictions were imposed.
  24. 236

    DISQUALIFICATION OF DIRECTORS - 236. Registrar to establish and maintainRegisterof foreign restrictions

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    The Registrar must establish and maintain a register of foreign restrictions and keep it open for public inspection (fees may apply); the Registrar must enter particulars when aware and cancel entries when restrictions cease.

    Section 236. Registrar to establish and maintainRegisterof foreign restrictions Section 236(1) The Registrar shall establish and maintain a register of foreign restrictions in which the Registrar ("the person for the time being holding office as Registrar of Companies under;") shall enter particulars of foreign restrictions relating to a persons who is or may become a director ("a former director;") or secretary of a Kenyan company or a local representative of a registered foreign company . Section 236(2) On becoming aware that a person is or may be a person who is or may become a director ("a former director;") or secretary of a Kenyan company or a local representative of a registered foreign company , the Registrar ("the person for the time being holding office as Registrar of Companies under;") shall enter in the register particulars of, and of the foreign restrictions relating to, the person. Section 236(3) On becoming aware that foreign restrictions recorded in the register in respect of a person have ceased to apply to the person, the Registrar ("the person for the time being holding office as Registrar of Companies under;") shall cancel the entry and all particulars relating to it. Section 236(4) The Registrar shall keep the register required by this section open for inspection by members of the public on payment of the prescribed fee (if any).
  25. 237

    DISQUALIFICATION OF DIRECTORS - 237. Admissibility in evidence of statements

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    Statements made in compliance with requirements under this Part or the Fourth Schedule are admissible in evidence against the person making or concurring in the statement; but the prosecution may not adduce evidence relating to such a statement or ask questions about it unless the person has adduced evidence or asked such a question in the proceedings.

    Section 237. Admissibility in evidence of statements Section 237(1) In any legal proceedings (whether or not under this Act), any statement made in compliance or purported compliance with a requirement imposed by or under this Part or the Fourth Schedule, or by or under any regulations made for the purposes of this Part, are admissible in evidence against any person making or concurring in making the statement. Section 237(2)(a) no evidence relating to the statement may be adduced; and Section 237(2)(b) no question relating to it may be asked, by or on behalf of the prosecution, unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person. Section 237(3)(a) an offence (if any) that is created 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; or Section 237(3)(b) section 107 of the Penal Code ( Cap. 63 ) (perjury and subornation of perjury); or Section 237(3)(b)(i) section 107 of the Penal Code ( Cap. 63 ) (perjury and subornation of perjury); or Section 237(3)(b)(ii) section 114 of that Code (false swearing).

Part XI

DERIVATIVE ACTIONS

  1. 238

    DERIVATIVE ACTIONS - 238. Interpretation: Part XI

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    A derivative claim may be brought by a member in respect of causes of action involving negligence, default, breach of duty or breach of trust by a director; such a claim may be brought against the director or another person.

    Section 238. Interpretation: Part XI Section 238(1)(a) in respect of a cause of action vested in the company ("the company whose shares are the subject of a takeover offer;") ; and Section 238(1)(b) seeking relief on behalf of the company ("the company whose shares are the subject of a takeover offer;") . Section 238(2)(a) under this Part; or Section 238(2)(b) in accordance with an order of the Court ("(unless some other court is specified) the High Court;") in proceedings for protection of members against unfair prejudice brought under this Act. Section 238(3) A derivative claim under this Part may be brought only in respect of a cause of action arising from an actual or proposed act or omission involving negligence, default, breach of duty or breach of trust by a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") . Section 238(4) A derivative claim may be brought against the director ("a former director;") or another person, or both. Section 238(5) It is immaterial whether the cause of action arose before or after the person seeking to bring or continue the derivative claim became a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") . Section 238(6)(a) "director" includes a former director; Section 238(6)(b) a reference to a member ("a member of a company;") of a company includes a person who is not a member ("a member of a company;") but to whom shares in the company ("the company whose shares are the subject of a takeover offer;") have been transferred or transmitted by operation of law.
  2. 239

    DERIVATIVE ACTIONS - 239. Application for permission to continue derivative claim

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    Members who bring a derivative claim must apply to the Court for permission to continue it; the Court may dismiss the application, make consequential orders, give directions or adjourn to obtain evidence, and may (or has power to) grant permission on terms, refuse permission and dismiss, or adjourn and give directions.

    Section 239. Application for permission to continue derivative claim Section 239(1) In order to continue a derivative claim brought under this Part by a member ("a member of a company;") , the member ("a member of a company;") has to apply to the Court ("(unless some other court is specified) the High Court;") for permission to continue it. Section 239(2)(a) shall dismiss the application; and Section 239(2)(b) may make any consequential order it considers appropriate. Section 239(3)(a) may give directions as to the evidence to be provided by the company ("the company whose shares are the subject of a takeover offer;") ; and Section 239(3)(b) may adjourn the proceedings to enable the evidence to be obtained. Section 239(4)(a) give permission to continue the claim on such terms as it considers appropriate; Section 239(4)(b) refuse permission and dismiss the claim; or Section 239(4)(c) adjourn the proceedings on the application and give such directions as it considers appropriate.
  3. 240

    DERIVATIVE ACTIONS - 240. Application to Court for permission to continue claim as a derivative claim: how disposed of

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    A member may apply to the Court for permission to continue a company's claim as a derivative claim where (i) the company has brought a claim and (ii) the cause of action could be pursued as a derivative claim, on the ground in subsection (2).

    Section 240. Application to Court for permission to continue claim as a derivative claim: how disposed of Section 240(1)(a) a company has brought a claim; and Section 240(1)(b) the cause of action on which the claim is based could be pursued as a derivative claim under this Part, a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") may apply to the Court ("(unless some other court is specified) the High Court;") for permission to continue the claim as a derivative claim on the ground specified in subsection (2) . Section 240(2)(a) the manner in which the company ("the company whose shares are the subject of a takeover offer;") commenced or continued the claim amounts to an abuse of the process of the Court ("(unless some other court is specified) the High Court;") ; Section 240(2)(b) the company ("the company whose shares are the subject of a takeover offer;") has failed to prosecute the claim diligently; and Section 240(2)(c) it is appropriate for the member ("a member of a company;") to continue the claim as a derivative claim. Section 240(3)(a) shall dismiss the application; and Section 240(3)(b) may make any consequential order that it considers appropriate. Section 240(4)(a) may give directions as to the evidence to be provided by the company ("the company whose shares are the subject of a takeover offer;") ; and Section 240(4)(b) may adjourn the proceedings to enable the evidence to be obtained. Section 240(5)(a) give permission to continue the claim as a derivative claim on such terms as it considers appropriate; Section 240(5)(b) refuse permission and dismiss the application; or Section 240(5)(c) adjourn the proceedings on the application and give such directions as it considers appropriate.
  4. 241

    DERIVATIVE ACTIONS - 241. Application for permission to continue claim as a derivative action

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    Section 241(3) requires the Court to give particular regard to evidence of the views of company members who have no personal interest when deciding whether to allow a derivative claim to continue.

    Section 241. Application for permission to continue claim as a derivative action Section 241(1)(a) that a person acting in accordance with section 144 would not seek to continue the claim; Section 241(1)(b) if the cause of action arises from an act or omission that is yet to occur, that the act or omission has been authorised by the company ("the company whose shares are the subject of a takeover offer;") ; or Section 241(1)(c) was authorised by the company ("the company whose shares are the subject of a takeover offer;") before it occurred; or Section 241(1)(c)(i) was authorised by the company ("the company whose shares are the subject of a takeover offer;") before it occurred; or Section 241(1)(c)(ii) has been ratified by the company ("the company whose shares are the subject of a takeover offer;") since it occurred. Section 241(2)(a) whether the member ("a member of a company;") is acting in good faith in seeking to continue the claim; Section 241(2)(b) the importance that a person acting in accordance with section 143 would attach to continuing it; Section 241(2)(c) authorised by the company ("the company whose shares are the subject of a takeover offer;") before it occurs; or Section 241(2)(c)(i) authorised by the company ("the company whose shares are the subject of a takeover offer;") before it occurs; or Section 241(2)(c)(ii) ratified by the company ("the company whose shares are the subject of a takeover offer;") after it occurs; Section 241(2)(d) if the cause of action arises from an act or omission that has already occurred, whether the act or omission could be, and in the circumstances would be likely to be, ratified by the company ("the company whose shares are the subject of a takeover offer;") ; Section 241(2)(e) whether the company ("the company whose shares are the subject of a takeover offer;") has decided not to pursue the claim; Section 241(2)(f) whether the act or omission in respect of which the claim is brought gives rise to a cause of action that the member ("a member of a company;") could pursue in the member ("a member of a company;") 's own right rather than on behalf of the company ("the company whose shares are the subject of a takeover offer;") . Section 241(3) In deciding whether to give permission, the Court ("(unless some other court is specified) the High Court;") shall have particular regard to any evidence before it as to the views of members of the company ("the company whose shares are the subject of a takeover offer;") who have no personal interest (direct or indirect) in the matter.
  5. 242

    DERIVATIVE ACTIONS - 242. Application for permission to continue derivative claim brought by anothermember

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    Another member of the company may apply to the High Court for permission to continue a derivative claim; the Court may dismiss the application, make consequential orders, give directions, adjourn, grant or refuse permission, or adjourn and give directions.

    Section 242. Application for permission to continue derivative claim brought by anothermember Section 242(1)(a) has been brought by a member ("a member of a company;") of a company; Section 242(1)(b) was brought by a company and is continued by a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") as a derivative claim; or Section 242(1)(c) has been continued by a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") as a derivative claim, another member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") may apply to the Court ("(unless some other court is specified) the High Court;") for permission to continue a derivative claim to which this section applies on the ground specified in subsection (2) . Section 242(2)(a) the manner in which the proceedings have been commenced or continued by the claimant amounts to an abuse of the process of the Court ("(unless some other court is specified) the High Court;") ; Section 242(2)(b) the claimant has failed to prosecute the claim diligently; and Section 242(2)(c) it is appropriate for the applicant to continue the claim as a derivative claim. Section 242(3)(a) shall dismiss the application; and Section 242(3)(b) may make any consequential order that it considers appropriate. Section 242(4)(a) may give directions as to the evidence to be provided by the company ("the company whose shares are the subject of a takeover offer;") ; and Section 242(4)(b) may adjourn the proceedings to enable the evidence to be obtained. Section 242(5)(a) give permission to continue the claim on such terms as it considers appropriate; Section 242(5)(b) refuse permission and dismiss the application; and Section 242(5)(c) adjourn the proceedings on the application and give such directions as it considers appropriate.

Part XII

COMPANY SECRETARIES

  1. 243

    COMPANY SECRETARIES - 243. Private company not required to have secretary

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    A private company must have a secretary only if its paid-up capital is five million shillings or more.

    Section 243. Private company not required to have secretary Section 243(1) A private company is required to have a secretary only if it has a paid up capital of five million shillings or more. Section 243(2)(a) may be given or sent to, or served on, the company ("the company whose shares are the subject of a takeover offer;") itself; and Section 243(2)(a)(i) may be given or sent to, or served on, the company ("the company whose shares are the subject of a takeover offer;") itself; and Section 243(2)(a)(ii) if addressed to the secretary, is taken to be treated as addressed to the company ("the company whose shares are the subject of a takeover offer;") ; and Section 243(2)(b) a director ("a former director;") ; or Section 243(2)(b)(i) a director ("a former director;") ; or Section 243(2)(b)(ii) a person authorised generally or specifically for that purpose by the directors.
  2. 243A

    COMPANY SECRETARIES - 243A. Companies electing to have acompany secretaryor a contact person

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    Private companies with paid-up capital under five million shillings or companies limited by guarantee may appoint a company secretary; companies must lodge notices about contact persons and keep and make available certain records; failures attract fines.

    Section 243A. Companies electing to have acompany secretaryor a contact person Section 243A(1) A private company with a paid-up capital of less than five million shillings or a company limited by guarantee may appoint a company secretary . Section 243A(2)(a) appoint a contact person who shall be a natural person with a permanent residence in Kenya; and Section 243A(2)(b) in the case of a company registered before the coming into effect of this provision, lodge a notice ("notice in writing;") with the Registrar ("the person for the time being holding office as Registrar of Companies under;") of the said appointment, within sixty days of coming into force of this provision. Section 243A(3) The company 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 the appointment of the contact person, specifying the person’s and residential address and such other particulars (if any) as are prescribed for the purposes of this section. Section 243A(4)(a) keep a copy of the record relating to directorship, shareholding, beneficial ownership and any other information required to be kept by the company ("the company whose shares are the subject of a takeover offer;") under the Act; and Section 243A(4)(b) make the copies available to competent authorities and the Registrar ("the person for the time being holding office as Registrar of Companies under;") . Section 243A(5) A contact person who fails to comply with the provisions of subsection (4) commits an offence and on conviction is liable to a fine not exceeding five hundred thousand shillings. Section 243A(6)(a) died, resigned or otherwise ceased to be the contact person, 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;") to the effect that the person has ceased to be a contact person of the company ("the company whose shares are the subject of a takeover offer;") in Kenya and that a new contact person has been appointed in their place; or Section 243A(6)(b) changed his or her residential address in Kenya, 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;") giving details of the change. Section 243A(7) If the company ("the company whose shares are the subject of a takeover offer;") does not comply with subsection (2) , the company, and each officer of the company who is in default, commits an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings. Section 243A(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 fifty thousand shillings for each such offence. Section 243A(9)(a) the statutory requirement of which the company ("the company whose shares are the subject of a takeover offer;") is in breach; Section 243A(9)(b) the action that the company ("the company whose shares are the subject of a takeover offer;") is required to take; Section 243A(9)(c) that the company ("the company whose shares are the subject of a takeover offer;") has to comply with the direction ("direction in writing;") within fourteen days; and Section 243A(9)(d) the consequences of failing to comply with the direction ("direction in writing;") .
  3. 244

    COMPANY SECRETARIES - 244. Public company required to have secretary

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    Every public company must have at least one secretary.

    Section 244. Public company required to have secretary Section Every public company is required to have at least one secretary.
  4. 245

    COMPANY SECRETARIES - 245. Direction requiringpublic companyto appoint secretary

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    The Registrar may direct a public company to appoint a secretary; the company must comply within a period (not less than one month and not more than three months) and officers and the company face fines for non-compliance.

    Section 245. Direction requiringpublic companyto appoint secretary Section 245(1) If satisfied that a public company is failing to comply with section 244 , the Registrar may give the company a direction under this section. Section 245(2)(a) what the company ("the company whose shares are the subject of a takeover offer;") is required to do in order to comply with the direction ("direction in writing;") ; Section 245(2)(b) the period within which it is to comply; and Section 245(2)(c) the consequence of failing to comply with the direction ("direction in writing;") . Section 245(3) The period specified under subsection (2)(b) may not be less than one month or more than three months after the date the direction is given. Section 245(4)(a) making the necessary appointment; and Section 245(4)(b) giving notice ("notice in writing;") of the appointment under section 249 , before the end of the period specified in the direction. Section 245(5) If the company ("the company whose shares are the subject of a takeover offer;") has already made the necessary appointment, it shall comply with the direction ("direction in writing;") by giving notice ("notice in writing;") of the appointment under section 249 before the end of the period specified in the direction. Section 245(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 , commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings. Section 245(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. [Act No. 11 of 2017 , Sch., Act No. 28 of 2017 , s. 18.]
  5. 246

    COMPANY SECRETARIES - 246. Qualifications of secretaries of public companies

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    Public company secretaries must either have the requisite knowledge and experience to discharge secretary functions or hold a practising certificate; a director of a public company who fails to comply with subsection (1) commits an offence and on conviction is liable to a fine not exceeding two hundred thousand shillings.

    Section 246. Qualifications of secretaries of public companies Section 246(1)(a) is a person who has the requisite knowledge and experience to discharge the functions of a secretary of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 246(1)(b) is the holder of a practising certificate issued under the Certified Public Secretaries of Kenya Act. Section 246(2) A director ("a former director;") of a public company who fails to comply with subsection (1) commits an offence and on conviction is liable to a fine not exceeding two hundred thousand shillings. [Act No. 28 of 2017 , s. 19.]
  6. 247

    COMPANY SECRETARIES - 247. Discharge of functions if office vacant or secretary unable to act

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    Discharge of functions if office vacant or secretary unable to act

    Section 247. Discharge of functions if office vacant or secretary unable to act Section by or to an assistant or deputy secretary (if any); or
  7. 248

    COMPANY SECRETARIES - 248. Duty to keepregisterof secretaries

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    A public company must keep a register of its secretaries; failure by the company or officers to comply is an offence punishable by fines.

    Section 248. Duty to keepregisterof secretaries Section 248(1) A public company shall keep a register of its secretaries. Section 248(2)(a) contains the required particulars of the person who is, or persons who are, the secretary or joint secretaries of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 248(2)(b) 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, is kept available for inspection at the registered office of the company ("the company whose shares are the subject of a takeover offer;") . Section 248(3)(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 248(3)(b) any other person on payment of the prescribed fee (if any). Section 248(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 on conviction to a fine not exceeding five hundred thousand shillings. Section 248(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, 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.
  8. 249

    COMPANY SECRETARIES - 249. Duty tonotifyRegistrar of change of secretary or joint secretary

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    Public companies must give notice of appointment (or changes) of secretaries and ensure an appointed person gives written consent; failure is an offence with fines.

    Section 249. Duty tonotifyRegistrar of change of secretary or joint secretary Section 249(1)(a) a person is appointed to be its secretary or one of its joint secretaries; Section 249(1)(b) ceases to be appointed as such; or Section 249(1)(c) any change occurs in the particulars contained in its register of secretaries, Section 249(2) A public company shall ensure that a notice ("notice in writing;") that a person has been appointed as a secretary, or a joint secretary, of the company ("the company whose shares are the subject of a takeover offer;") is accompanied by a written consent by the person to act as secretary or joint secretary. Section 249(3) If a public 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 249(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.
  9. 250

    COMPANY SECRETARIES - 250. What particulars of secretaries are required to be registered: natural persons

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    Natural-person secretaries must have their name (and any former name) and their address registered.

    Section 250. What particulars of secretaries are required to be registered: natural persons Section 250(1)(a) the name and any former name of the secretary; and Section 250(1)(b) the address of the secretary. Section 250(2)(a) the person's former name was changed or disused before the person reached eighteen years of age; or Section 250(2)(b) the person's name has been changed or disused for twenty years or more. Section 250(3) The address required to be stated in the register under subsection (1) is a service address, which may be the registered office of the company.
  10. 251

    COMPANY SECRETARIES - 251. What particulars of secretaries are required to be registered: corporate secretaries and firms

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    Corporate secretaries and firms must register particular details: the company or firm name; the registered or principal office; the legal form and governing law; and, if incorporated, the register where recorded and its registration number. If all partners in a firm are joint secretaries, it is sufficient to state the particulars as if the firm were a legal person and had been appointed secretary. Regulations may provide for adding or removing particulars in a public company's register of secretaries.

    Section 251. What particulars of secretaries are required to be registered: corporate secretaries and firms Section 251(1)(a) the name of the company ("the company whose shares are the subject of a takeover offer;") or the firm; Section 251(1)(b) the registered or principal office of the company ("the company whose shares are the subject of a takeover offer;") or the firm; Section 251(1)(c) the legal form of the company ("the company whose shares are the subject of a takeover offer;") or firm and the law by which it is governed; and Section 251(1)(d) in the case of a company or a firm that is incorporated, register in which it is recorded (including the place where the register is kept) and its registration number in the register . Section 251(2) If all the partners in a firm are joint secretaries, it is sufficient to state the particulars that would be required if the firm were a legal person and the firm had been appointed secretary. Section 251(3) The regulations may provide for the addition or removal of particulars required to be contained in a public company 's register of secretaries.
  11. 252

    COMPANY SECRETARIES - 252. Offence to include misleading, false or deceptive particulars inregisterof secretaries

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    It is an offence for a person who knowingly or recklessly authorises or permits misleading, false or deceptive particulars to be included in a register of secretaries; on conviction they face up to two years' imprisonment, a fine of up to one million shillings, or both.

    Section 252. Offence to include misleading, false or deceptive particulars inregisterof secretaries Section A person who knowingly or recklessly authorises or permits the inclusion of misleading, false or deceptive particulars in a register of secretaries commits an offence and is liable on conviction to imprisonment for a term not exceeding two years or a fine not exceeding one million shillings, or to both.
  12. 253

    COMPANY SECRETARIES - 253. Offence to fail to keepregisterof secretaries

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    If a public company fails to comply with a requirement of section 250 or 251, the company and each officer in default commit an offence and are liable to a fine; continued failure after conviction attracts a further daily offence and fine.

    Section 253. Offence to fail to keepregisterof secretaries Section 253(1) If a public company fails to comply with a requirement of section 250 or 251 , 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 253(2) If, after a company or any of its officers is convicted of an offence under subsection (2) , 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.
  13. 254

    COMPANY SECRETARIES - 254. Acts done by person in dual capacity

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    A requirement that something be done by both a director and the company secretary is not fulfilled if the same person acts in both roles.

    Section 254. Acts done by person in dual capacity Section A provision requiring or authorising a thing to be done by or to a director ("a former director;") and the secretary of a public company is not satisfied by its being done by or to the same person acting both as director ("a former director;") and as, or in place of, the secretary.

Part XIII

RESOLUTIONS AND MEETINGS

  1. 255

    RESOLUTIONS AND MEETINGS - 255. Requirements for passing company resolutions

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    A resolution of the members or of a class of members of a public company may be passed only at a meeting of the members.

    Section 255. Requirements for passing company resolutions Section 255(1)(a) as a written resolution; or Section 255(1)(b) at a meeting of the members. Section 255(2) A resolution of the members or of a class of members of a public company may be passed only at a meeting of the members.
  2. 256

    RESOLUTIONS AND MEETINGS - 256. Requirements for passing an ordinary resolution of a company

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    An ordinary resolution of members (or a class of members) is one passed by a simple majority; written resolutions, poll results and proxy votes are defined by reference to members representing a simple majority of voting rights, and the company may provide that matters done by ordinary resolution may be done by special resolution.

    Section 256. Requirements for passing an ordinary resolution of a company Section 256(1) A resolution is an ordinary resolution of the members (or of a class of members) of a company if it is passed by a simple majority. Section 256(2) A written resolution is passed by a simple majority if it is passed by members representing a simple majority of the total voting rights of eligible members. Section 256(3)(a) the members who, being entitled to do so, vote in person on the resolution; and Section 256(3)(b) the persons who vote on the resolution as duly appointed proxies of members entitled to vote on it. Section 256(4) A resolution passed on a poll taken at a meeting is passed by a simple majority if it is passed by members representing a simple majority of the total voting rights of members who, being entitled to do so, vote in person or by proxy. Section 256(5) Anything that may be done by ordinary resolution may also be done by special resolution if the company ("the company whose shares are the subject of a takeover offer;") 's so provide.
  3. 257

    RESOLUTIONS AND MEETINGS - 257. Requirements for the passing of special resolution

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    A special resolution is one passed by at least seventy-five percent of the members (or of a class of members).

    Section 257. Requirements for the passing of special resolution Section 257(1) A resolution is a special resolution of the members (or of a class of members) of a company if it passed by a majority of not less than seventy-five percent. Section 257(2) A written resolution is passed by a majority of not less than seventy-five percent if it is passed by members representing not less than seventy-five percent of the total voting rights of eligible members (see Division 2). Section 257(3)(a) the resolution is not a special resolution unless it stated that it was proposed as a special resolution; and Section 257(3)(b) if the resolution so stated, it may only be passed as a special resolution. Section 257(4)(a) the members who, being entitled to do so, vote in person on the resolution; and Section 257(4)(b) the persons who vote on the resolution as duly appointed proxies of members entitled to vote on it. Section 257(5) A resolution passed on a poll taken at a meeting is passed by a majority of not less than seventy-five percent if it is passed by members representing not less than seventy-five percent of the total voting rights of the members who (being entitled to do so) vote in person or by proxy on the resolution. Section 257(6)(a) included the text of the resolution; and Section 257(6)(b) specified an intention to propose the resolution as a special resolution,
  4. 258

    RESOLUTIONS AND MEETINGS - 258. General rules for voting on company resolutions

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    Members (or their duly appointed proxies) have voting entitlements: usually one vote per share (or per 100 shillings of stock) if the company has share capital, or one vote each if it does not; proxies and in-person attendees have votes; the section is subject to the company’s articles; if votes are equal, members must refer to the Memorandum and Articles of Association or Shareholders' Agreement.

    Section 258. General rules for voting on company resolutions Section 258(1)(a) if the company ("the company whose shares are the subject of a takeover offer;") has a share capital, each member ("a member of a company;") has one vote for each share, or each one hundred shillings of stock, held by the member ("a member of a company;") ; and Section 258(1)(b) if the company ("the company whose shares are the subject of a takeover offer;") does not have a share capital, each member ("a member of a company;") has one vote. Section 258(2)(a) each member ("a member of a company;") present in person has one vote; and Section 258(2)(b) each proxy present who has been duly appointed by a member ("a member of a company;") entitled to vote on the resolution has one vote. Section 258(3)(a) if the company ("the company whose shares are the subject of a takeover offer;") has a share capital, each member ("a member of a company;") present in person, or each proxy present who has been duly appointed by a member ("a member of a company;") , has one vote for each share, or each one hundred shillings of stock, held by the member ("a member of a company;") ; and Section 258(3)(b) if the company ("the company whose shares are the subject of a takeover offer;") does not have a share capital, each member ("a member of a company;") present in person, or each proxy present who has been duly appointed by a member ("a member of a company;") , has one vote. Section 258(4) This section has effect subject to provisions of the company ("the company whose shares are the subject of a takeover offer;") 's articles to the contrary. Section 258(5) If the number of votes for and against a proposal are equal, the Members shall refer to the Memorandum and Articles of Association or the Shareholders' Agreement. [Act No. 18 of 2018 , sch. ]
  5. 259

    RESOLUTIONS AND MEETINGS - 259. Specific requirements for voting on company resolutions

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    Provisions in the articles that fix the number of votes a proxy has on a show of hands are void, and a proxy is entitled to the same number of votes on a show of hands as the appointing member would have if present.

    Section 259. Specific requirements for voting on company resolutions Section 259(1)(a) the provision of the articles on the number of votes the proxy has on a show of hands is void; and Section 259(1)(b) the proxy has the same number of votes on a show of hands as the member ("a member of a company;") who appointed the proxy would have if the member ("a member of a company;") were present at the meeting. Section 259(2) If a member ("a member of a company;") entitled to vote on a resolution has appointed more than one proxy, subsection (1) applies as if the references to the proxy were references to the proxies taken together.
  6. 260

    RESOLUTIONS AND MEETINGS - 260. Votes of joint holders ofshares

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    When shares are held jointly, the company may only count the vote of the senior holder who votes and any proxies they have authorised.

    Section 260. Votes of joint holders ofshares Section 260(1) If two or more persons hold a share jointly, only the vote of the senior holder who votes and any proxies duly authorised by that holder are eligible for counting by the company ("the company whose shares are the subject of a takeover offer;") . Section 260(2) For the purposes of this section, the senior holder of a share is determined by the order in which the names of the joint holders appear in the register of members. Section 260(3) Subsections (1) and (2) have effect subject to Provisions of the company's articles to the contrary.
  7. 261

    RESOLUTIONS AND MEETINGS - 261. Effect of provision in company’sarticlesas to admissibility of votes

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    Section 261: Effect of provision in company’s articles as to admissibility of votes

    Section 261. Effect of provision in company’sarticlesas to admissibility of votes
  8. 262

    RESOLUTIONS AND MEETINGS - 262. Written resolutions of private companies

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    Directors or members of a private company may propose a written resolution; a written resolution is one proposed and passed by the company in accordance with this Division.

    Section 262. Written resolutions of private companies Section 262(1) For the purpose of this Division, a resolution is a written resolution of a private company if it is proposed and passed by the company ("the company whose shares are the subject of a takeover offer;") in accordance with this Division. Section 262(2)(a) a resolution under section 139 removing a director from office before the end of the director's period of office; or Section 262(2)(b) a resolution under section 739 removing an auditor before, the end of the auditor's term of office. Section 262(3) Either the directors or members of a company may propose a resolution as a written resolution. Section 262(4)(a) by the company ("the company whose shares are the subject of a takeover offer;") in a general meeting; or Section 262(4)(b) by a meeting of a class of members of the company ("the company whose shares are the subject of a takeover offer;") .
  9. 263

    RESOLUTIONS AND MEETINGS - 263. Who is entitled to vote on a written resolution

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    Members eligible to vote on a written resolution are those who would have been entitled to vote on the circulation date; if entitlement changes that day, those entitled when the first copy was sent or delivered are eligible.

    Section 263. Who is entitled to vote on a written resolution Section 263(1) In relation to a resolution proposed as a written resolution of a private company , the eligible members are the members who would have been entitled to vote on the resolution on the circulation date of the resolution. Section 263(2) If the persons entitled to vote on a written resolution change during the course of the day that is the circulation date of the resolution, the eligible members are the persons entitled to vote on the resolution at the time 40 when the first copy of the resolution was sent or delivered to members for their agreement.
  10. 264

    RESOLUTIONS AND MEETINGS - 264. Circulation date for written resolutions

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    The circulation date for a written resolution is the date when copies are sent or delivered to members; if copies reach members on different days, the circulation date is the first of those days.

    Section 264. Circulation date for written resolutions Section A reference in this Part to the circulation date of a written resolution is to the date on which copies of the written resolution are sent or delivered to members or, if copies are sent or delivered to members on different days, to the first of those days.
  11. 265

    RESOLUTIONS AND MEETINGS - 265. Circulation of written resolutions proposed by directors

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    Directors proposing a written resolution must circulate copies to all eligible members (hard copy, electronic, or website) as practicable; alternatively deliver copies in turn if possible without undue delay; failure to comply is an offence with fines.

    Section 265. Circulation of written resolutions proposed by directors Section 265(1) This section applies to a resolution proposed as a written resolution by the directors of the company ("the company whose shares are the subject of a takeover offer;") . Section 265(2)(a) by sending copies at the same time, so far as it is reasonably practicable, to all eligible members 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;") , in electronic form or by means of a website; or Section 265(2)(b) if it is possible to do so without undue delay, by delivering the same copy to each eligible member in turn, or different copies to each of a number of eligible members in turn, Section 265(3)(a) how to signify agreement to the resolution; and Section 265(3)(b) of the date by which the resolution is required to be passed if it is not to lapse. Section 265(4) The validity of the written resolution, if passed, is not affected by a failure to comply with this section. Section 265(5) If a requirement of this section is not complied with, 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 265(6) If, after a company or any of its officers is convicted of an offence under subsection (5) , 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.
  12. 266

    RESOLUTIONS AND MEETINGS - 266. Right of members to require circulation of written resolution

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    Members of a private company may require the company to circulate a written resolution and (if requested by sufficient members) a statement of up to one thousand words; the company must circulate them as soon as practicable once requests are received from members holding at least the "requisite percentage" (five per cent unless the articles specify a lower figure).

    Section 266. Right of members to require circulation of written resolution Section 266(1) The members of a private company may require the company ("the company whose shares are the subject of a takeover offer;") to circulate a resolution that may properly be moved and is proposed to be moved as a written resolution. Section 266(2)(a) it would, if passed, be void (whether because of inconsistency with a written 'law or the company ("the company whose shares are the subject of a takeover offer;") 's constitution or otherwise); Section 266(2)(b) it defames a person; or Section 266(2)(c) it is frivolous or vexatious. Section 266(3) If the members require a company to circulate a resolution, the members may require the company ("the company whose shares are the subject of a takeover offer;") to circulate with it a statement of not more than one thousand, words on the subject matter of the resolution. Section 266(4) A company is required to circulate the resolution and any accompanying statement as soon as practicable after it has received requests to do so from members representing not less than the requisite percentage of the total voting rights of all members entitled to vote on the resolution. Section 266(5) The "requisite percentage" is five per cent or, if a lower percentage is specified for this purpose in the articles of the company ("the company whose shares are the subject of a takeover offer;") , that percentage. Section 266(6)(a) it is 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 in electronic form ; Section 266(6)(b) it identifies the resolution and any accompanying statement; and Section 266(6)(c) it is authenticated by the person or persons making it.
  13. 267

    RESOLUTIONS AND MEETINGS - 267. Circulation of written resolution proposed by members

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    Companies must send or deliver requested copies of written resolutions (including the resolution and any accompanying statement) to eligible members, normally within 21 days; failure to comply is an offence with a fine up to five hundred thousand shillings.

    Section 267. Circulation of written resolution proposed by members Section 267(1)(a) a copy of the resolution; and Section 267(1)(b) a copy of any accompanying statement. Section 267(2) The requirement under subsection (1) is subject to sections 268 and 269 . Section 267(3)(a) by sending copies at the same time so far as reasonably practicable to every eligible member 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;") , in electronic form or by posting the resolution on the website of the company ("the company whose shares are the subject of a takeover offer;") ; Section 267(3)(b) if it is possible to do so without undue delay—by delivering the same copy to each eligible member in turn or different copies to each of a number of eligible members in turn; or Section 267(3)(c) by sending copies to some members in accordance with paragraph (a) and delivering a copy or copies to other members in accordance with paragraph (b) . Section 267(4) The company shall send or deliver the copies of the written resolution or, if copies are sent or delivered to members on different days, the first of those copies not more than twenty-one days after it receives a request to circulate the resolution. Section 267(5)(a) how they are to signify their agreement (or disagreement) with the resolution; and Section 267(5)(b) the deadline, for passing the resolution if it is not to lapse. Section 267(6) The validity of the resolution, if passed, is not affected by a failure to comply with this section. Section 267(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 five hundred thousand shillings.
  14. 268

    RESOLUTIONS AND MEETINGS - 268. Requisitioning members to meet expenses of circulation

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    Members who requested the circulation of a resolution must pay the cost of circulating it unless the company otherwise resolves.

    Section 268. Requisitioning members to meet expenses of circulation Section 268(1) The members who requested the circulation of the resolution shall meet the cost of circulating the resolution unless the company ("the company whose shares are the subject of a takeover offer;") otherwise resolves. Section 268(2) Unless the company ("the company whose shares are the subject of a takeover offer;") has previously so resolved, it is not bound to comply with section 267 unless there is deposited with or tendered to the company an amount reasonably sufficient to meet the expenses of the company in circulating the resolution.
  15. 269

    RESOLUTIONS AND MEETINGS - 269. Application not to circulate members’ statement

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    If the Court is satisfied that rights under section 266 and the section are being abused, a company need not circulate a members' statement under section 268; the Court may also order the members who requested circulation to pay the company's costs of the application, even if they are not parties.

    Section 269. Application not to circulate members’ statement Section 269(1) A company is not required to circulate a members’ statement under section 268 if, on an application by the company or another person who claims to be dissatisfied, the Court is satisfied that the rights conferred by section 266 and that section are being abused. Section 269(2) The Court may order the members who requested the circulation of the statement to pay the whole or part of the company ("the company whose shares are the subject of a takeover offer;") 's costs on such an application, even if they are not parties to the application.
  16. 270

    RESOLUTIONS AND MEETINGS - 270. Procedure for signifying agreement to written resolution

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    A member's agreement to a written resolution cannot be revoked after it has been signified.

    Section 270. Procedure for signifying agreement to written resolution Section 270(1)(a) identifying the resolution to which the agreement or the document relates; and Section 270(1)(b) indicating agreement to the resolution. Section 270(2) To be effective, the authenticated document is to be delivered or sent to the company ("the company whose shares are the subject of a takeover offer;") 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 in electronic form . Section 270(3) The agreement of a member ("a member of a company;") to a written resolution may not be revoked after it has been signified. Section 270(4) A written resolution is passed when the required majority of eligible members have signified their agreement to the written resolution.
  17. 271

    RESOLUTIONS AND MEETINGS - 271. Deadline for agreeing to written resolution

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    The deadline for agreeing to a written resolution is the deadline in the company's articles, or if none is specified, the expiry of twenty eight days from and including the circulation date.

    Section 271. Deadline for agreeing to written resolution Section 271(1)(a) the deadline specified for this purpose in the company ("the company whose shares are the subject of a takeover offer;") 's articles ; or Section 271(1)(b) if no deadline is specified the expiry of twenty eight days from and including the circulation date. Section 271(2) The agreement of a member ("a member of a company;") to a written resolution is void if signified after the deadline or the expiry of that period.
  18. 272

    RESOLUTIONS AND MEETINGS - 272. Sending documents relating to written resolutions byelectronic means

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    If a company has given an electronic address in a document containing (or enclosed with or attached to) a proposed written resolution, any document or information relating to that resolution may be validly sent by electronic means to that address, subject to any conditions or limitations specified in the document.

    Section 272. Sending documents relating to written resolutions byelectronic means Section If a company has given an electronic address in a document containing, or enclosed with or attached to, a proposed written resolution, any document or information relating to that resolution may be validly sent by electronic means to that address , subject to any conditions or limitations specified in the document .
  19. 273

    RESOLUTIONS AND MEETINGS - 273. Publication of written resolution on website

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    Publication of written resolution on website.

    Section 273. Publication of written resolution on website Section a written resolution; or
  20. 274

    RESOLUTIONS AND MEETINGS - 274. Relationship between this Division and provisions of company'sarticles

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    Section 274. Relationship between this Division and provisions of company'sarticles

    Section 274. Relationship between this Division and provisions of company'sarticles
  21. 275

    RESOLUTIONS AND MEETINGS - 275. Resolutions at general meetings

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    Text fragment referring to resolutions at general meetings and a requirement that notice in writing of the meeting and of the resolution is given.

    Section 275. Resolutions at general meetings Section notice ("notice in writing;") of the meeting and of the resolution is given; and
  22. 275A

    RESOLUTIONS AND MEETINGS - 275A. Annual general meeting

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    Every company must convene a general meeting once a year; single-member companies are exempt; the Registrar may extend the period; failure is an offence liable to a fine not exceeding one hundred thousand shillings.

    Section 275A. Annual general meeting Section 275A(1) Every company shall convene a general meeting once a year. Section 275A(2) Subsection (1) does not apply to single member companies. Section 275A(3) The Registrar may, on the application of the company ("the company whose shares are the subject of a takeover offer;") or for any other reason the Registrar ("the person for the time being holding office as Registrar of Companies under;") thinks fit, extend the period referred to in subsection (1) even if, as a result, the period is extended beyond the calendar year. Section 275A(4) A company that fails to comply with this section commits an offence and is liable to a fine not exceeding one hundred thousand shillings. [Act No. 12 of 2019 , Sch.]
  23. 276

    RESOLUTIONS AND MEETINGS - 276. Power of directors to convene general meetings

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    Directors of a company may convene a general meeting of the company.

    Section 276. Power of directors to convene general meetings Section The directors of a company may convene a general meeting of the company ("the company whose shares are the subject of a takeover offer;") .
  24. 277

    RESOLUTIONS AND MEETINGS - 277. Right of members to require directors to convene general meeting

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    Members of a company may require the directors to convene a general meeting.

    Section 277. Right of members to require directors to convene general meeting Section 277(1) The members of a company may require the directors to convene a general meeting of the company ("the company whose shares are the subject of a takeover offer;") . Section 277(2)(a) members representing at least the required percentage of such of the paid-up capital of the company ("the company whose shares are the subject of a takeover offer;") as carries the right of voting at general meetings of the company ("the company whose shares are the subject of a takeover offer;") ; or Section 277(2)(b) in the case of a company not having a share capital, members who represent at least the required percentage of the total voting rights of all the members having a right to vote at general meetings. Section 277(3) The required percentage for the purpose of subsection (2) is ten percent, except as provided by subsection (4) . Section 277(4)(a) more than twelve months has elapsed since the end of the last general meeting convened in accordance with a requirement under this section; or Section 277(4)(b) in relation to which members had, in accordance with an enactment or the company ("the company whose shares are the subject of a takeover offer;") 's articles , exercised a right to require the circulation of a resolution in respect of the meeting at their request. Section 277(5) A request for the directors to convene a general meeting is only effective if it states the general nature of the business to be dealt with at the meeting. However, such a request may include the text of a resolution that is proposed to be put to the meeting. Section 277(6)(a) it would, if passed, be void because of inconsistency with any written law or the constitution of the company ("the company whose shares are the subject of a takeover offer;") or otherwise; Section 277(6)(b) it defames a person; or Section 277(6)(c) it is frivolous or vexatious. Section 277(7)(a) 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 in electronic form ; and Section 277(7)(b) authenticated by the person or persons making it.
  25. 278

    RESOLUTIONS AND MEETINGS - 278. Directors’ duty to convene general meeting required by members

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    Directors must convene a members' requested general meeting within 21 days of the request, hold the meeting within 28 days of the notice convening it, and include a proposed resolution in the meeting notice if the request includes one.

    Section 278. Directors’ duty to convene general meeting required by members Section 278(1)(a) do so within twenty-one days from the date on which request was made; and Section 278(1)(b) hold the meeting on a date not more than twenty eight days after the date of the notice ("notice in writing;") convening the meeting. Section 278(2) If such a request includes a resolution intended to be moved at the meeting, the directors shall include in the notice ("notice in writing;") of the meeting a copy of the proposed resolution. Section 278(3) The business that may be dealt with at the meeting includes a resolution of which notice ("notice in writing;") is given in accordance with this section. Section 278(4) If the resolution is to be proposed as a special resolution, the directors are taken not to have duly convened the meeting if they do not give the required notice ("notice in writing;") of the resolution in accordance with this section
  26. 279

    RESOLUTIONS AND MEETINGS - 279. Power of members to convene general meeting at the expense ofthe company

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    If directors fail to convene a general meeting after being required to do so, the requesting members (or those representing over half the voting rights) may convene the meeting; members must include proposed resolution text in the notice, ensure the meeting is within three months, and convene it as nearly as practicable in the directors' manner; the company must reimburse reasonable expenses and deduct those from defaulting directors' remuneration.

    Section 279. Power of members to convene general meeting at the expense ofthe company Section 279(1) If, after having been required to convene a general meeting under section 277 , the directors fail to do as required by section 278 , the members who requested the meeting, or any of them representing more than one half of the total voting rights of all them, may convene a general meeting. Section 279(2) If the requests received by the company ("the company whose shares are the subject of a takeover offer;") included the text of a resolution intended to be moved at the meeting, the members concerned shall include in the notice ("notice in writing;") convening the meeting the text of the intended resolution. Section 279(3) The members concerned shall ensure that the meeting is convened for a date not more than three months after the date on which the directors were requested to convene a meeting. Section 279(4) The members concerned shall convene the meeting, as nearly as practicable, in the manner in which meetings are required to be convened by directors of the company ("the company whose shares are the subject of a takeover offer;") . Section 279(5) The business that may be dealt with at the meeting includes a resolution of which notice ("notice in writing;") is given in accordance with this section. Section 279(6) The company shall reimburse the members concerned for all reasonable expenses incurred by them because the directors failed to convene a meeting as required by section 278 . Section 279(7) The company shall deduct from the remuneration payable to the directors who were in default the amount of expenses reimbursed to members under subsection (6) .
  27. 280

    RESOLUTIONS AND MEETINGS - 280. Power of Court to order general meeting to be convened

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    The Court has the power to order a company's general meeting to be convened and may give directions related to such meetings, including treating one member present as a quorum.

    Section 280. Power of Court to order general meeting to be convened Section 280(1)(a) to convene a meeting of a company in any manner in which meetings of that company may be convened; or Section 280(1)(b) to conduct the meeting in the manner required by the articles of the company ("the company whose shares are the subject of a takeover offer;") or this Act. Section 280(2)(a) of a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") ; or Section 280(2)(b) of a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") who would be entitled to vote at the meeting, Section 280(3) If an order is made under subsection (2) , the Court may give such ancillary or consequential directions as it considers appropriate. Section 280(4) Directions given by the Court ("(unless some other court is specified) the High Court;") under subsection (3) may include a direction that one member of the company present at the meeting be regarded as constituting a quorum. Section 280(5) A meeting convened, held and conducted in accordance with an order under this section is taken for all purposes to be a meeting of the company ("the company whose shares are the subject of a takeover offer;") properly convened held and conducted.
  28. 281

    RESOLUTIONS AND MEETINGS - 281. Amount ofnoticeto be given for general meetings

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    Private companies must give at least 21 days' written notice to members when convening a general meeting (other than an adjourned meeting); annual general meetings require at least 21 days' notice and other meetings at least 14 days. Members may agree to shorter notice; the shorter notice is valid only if agreed by the required majority.

    Section 281. Amount ofnoticeto be given for general meetings Section 281(1) In convening a general meeting (other than an adjourned meeting), a private company shall give a least twenty-one days’ notice ("notice in writing;") . Section 281(2)(a) in the case of its annual general meeting, at least twenty-one days' notice ("notice in writing;") to members; or Section 281(2)(b) in the case of any other meeting, at least fourteen days notice ("notice in writing;") to members. Section 281(3) The company's articles may require a longer period of notice ("notice in writing;") than that specified in subsection (1) or (2) . Section 281(4) A general meeting may be convened by shorter notice ("notice in writing;") than that otherwise required if it is agreed by the members. Section 281(5) The shorter notice ("notice in writing;") referred to in subsection (4) is valid only if it is agreed to by the required majority of members. Section 281(6)(a) together hold not less than the requisite percentage in nominal value of the shares giving a right to attend and vote at the meeting; or Section 281(6)(b) in the case of a company that does not have a share capital, together represent not less than the requisite percentage of the total voting rights at that meeting of all the members. Section 281(7)(a) in the case of a private company , ninety per cent or such higher percentage, not exceeding ninety-five per cent, as may be specified in the company ("the company whose shares are the subject of a takeover offer;") 's articles ; or Section 281(7)(b) in the case of a public company , ninety-five percent. Section 281(8) The proceedings of a meeting that do not comply with the requirements of this section are void. [Act No. 18 of 2018 , sch. ]
  29. 282

    RESOLUTIONS AND MEETINGS - 282. Manner in whichnoticeof general meeting to be given

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    Defines "hard copy form" as a document or information sent, supplied or delivered in a paper copy or similar form capable of being read.

    Section 282. Manner in whichnoticeof general meeting to be given Section 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;") ;
  30. 283

    RESOLUTIONS AND MEETINGS - 283. Publication ofnoticeof general meeting on company's website

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    A company that gives notice of a general meeting by website must comply with this section; the company must ensure the notice is available on the website from the date of the notification until the meeting concludes.

    Section 283. Publication ofnoticeof general meeting on company's website Section 283(1) Notice of a general meeting that is given by a company by means of a website is not effective unless it is complies with this section. Section 283(2)(a) state that it concerns a notice ("notice in writing;") of a company meeting; Section 283(2)(b) specify the place, date and time of the meeting; Section 283(2)(ba) in the case of a hybrid or virtual meeting , specify the means of joining and participating in the meeting; and Section 283(2)(c) in the case of a public company , state whether the meeting will be an annual general meeting. Section 283(3) The company shall ensure that the notice ("notice in writing;") of the general meeting is available on the website throughout the period from and including the date of that notification and ending with the conclusion of the meeting. [Act No. 1 of 2021 , s. 8.]
  31. 284

    RESOLUTIONS AND MEETINGS - 284. Persons entitled to receivenoticeof general meetings

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    Members and directors (including certain former directors) of a company are entitled to receive notice of general meetings; member includes persons entitled by death or bankruptcy if the company has been notified.

    Section 284. Persons entitled to receivenoticeof general meetings Section 284(1)(a) each member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 284(1)(b) each director ("a former director;") . Section 284(2) In subsection (1) , the reference to a member includes any person who is entitled to a share in consequence of the death or bankruptcy of a member, if the company has been notified of their entitlement. Section 284(3) In subsection (2) , the reference to the bankruptcy of a member includes the sequestration of the estate of a member. Section 284(4)(a) any written law; and Section 284(4)(b) any provision of the company ("the company whose shares are the subject of a takeover offer;") 's articles to the contrary.
  32. 285

    RESOLUTIONS AND MEETINGS - 285. Contents of notices of general meetings

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    Notices of general meetings must state the time and date of the meeting.

    Section 285. Contents of notices of general meetings Section the time and date of the meeting;
  33. 286

    RESOLUTIONS AND MEETINGS - 286. Offence for company to fail to comply with section281,282,283,284or285

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    A company and any officer in default commit an offence for failing to comply with specified sections and, on conviction, each is liable to a fine (up to 500,000 shillings) and, if non-compliance continues after conviction, further daily fines (up to 50,000 shillings per day).

    Section 286. Offence for company to fail to comply with section281,282,283,284or285 Section 286(1) If a company fails to comply with a requirement of section 281 (1) or (2), 282 , 283 (2) or (3), 284 (1) or 285 , 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 286(2) If, after a company or any of its officers is convicted of an offence under subsection (1) , 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.
  34. 287

    RESOLUTIONS AND MEETINGS - 287. Resolution requiring specialnotice

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    The company must, if practicable, give its members written notice of such resolutions; the company may give that notice by newspaper advertisement or other methods allowed by its articles.

    Section 287. Resolution requiring specialnotice Section 287(1) If a provision of this Act requires a special notice ("notice in writing;") of a resolution to be given, the resolution is not effective unless notice ("notice in writing;") of the intention to move it has been given to the company ("the company whose shares are the subject of a takeover offer;") at least twenty-eight days before the meeting at which it is moved. Section 287(2) The company shall, if practicable, give its members notice ("notice in writing;") of any such resolution in the same manner and at the same time as it gives notice ("notice in writing;") of the meeting. Section 287(3)(a) by advertisement in a newspaper having a wide circulation in the area in which the company ("the company whose shares are the subject of a takeover offer;") carries on business; or Section 287(3)(b) in any other manner allowed by the company ("the company whose shares are the subject of a takeover offer;") 's articles . Section 287(4) If, after notice ("notice in writing;") of the intention to move such a resolution has been given to the company ("the company whose shares are the subject of a takeover offer;") , a meeting is called for a date twenty eight days or less after the notice ("notice in writing;") has been given, the notice ("notice in writing;") is nevertheless taken to have been effectively given even though it was not given within the required period.
  35. 288

    RESOLUTIONS AND MEETINGS - 288. Accidental failure to givenoticeof resolution or general meeting

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    An accidental failure to give written notice to one or more persons does not prevent notice of a meeting or resolution being treated as duly given for that meeting or resolution.

    Section 288. Accidental failure to givenoticeof resolution or general meeting Section 288(1)(a) a general meeting; or Section 288(1)(b) a resolution intended to be moved at a general meeting, an accidental failure to give notice ("notice in writing;") to one or more persons is to be disregarded for the purpose of determining whether notice ("notice in writing;") of the meeting or resolution has been duly given. Section 288(2) With the exception of a notice ("notice in writing;") given under section 275 , 279 or 312 , subsection (1) has effect subject to any provision of the company's articles.
  36. 289

    RESOLUTIONS AND MEETINGS - 289. Power of members to require circulation of statements

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    Members have rights to require circulation of statements and, in specified cases, have a right to vote at the meeting to which the requests relate.

    Section 289. Power of members to require circulation of statements Section 289(1)(a) a matter referred to in a proposed resolution to be dealt with at that meeting; or Section 289(1)(b) in the case of a quoted company , a new item to be put in the agenda of the general nature of business to be dealt with at the meeting. Section 289(1)(c) other business to be dealt with at that meeting. Section 289(2)(a) members representing at least five percent of the total voting rights of all the members who have a relevant right to vote; or Section 289(2)(b) at least one hundred members who have a relevant right to vote and hold shares in the company ("the company whose shares are the subject of a takeover offer;") on which there has been paid up an average sum, per member ("a member of a company;") , of at least one thousand shillings. Section 289(2)(c) in the case of subsection (1)(b) , by members representing at least five percent of the paid up capital of the company. Section 289(3)(a) in relation to a statement with respect to a matter referred to in a proposed resolution, a right to vote on that resolution at the meeting to which the requests relate; and Section 289(3)(b) in relation to any other statement, a right to vote at the meeting to which the requests relate. Section 289(4)(a) is 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 in electronic form , Section 289(4)(b) identifies the statement to be circulated; Section 289(4)(c) is authenticated by the person or persons making it; and Section 289(4)(d) is received by the company ("the company whose shares are the subject of a takeover offer;") at least seven days before the meeting to which it relates.
  37. 290

    RESOLUTIONS AND MEETINGS - 290. Duty of company to circulate members’ statements

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    Companies must circulate members’ statements in the same manner and at the same time (or as soon as reasonably practicable after) as the written notice of the meeting.

    Section 290. Duty of company to circulate members’ statements Section 290(1)(a) in the same manner as the notice ("notice in writing;") of the meeting; and Section 290(1)(b) at the same time as, or as soon as reasonably practicable after, it has given notice ("notice in writing;") of the meeting. Section 290(2) Subsection (1) has effect subject to section 291 (2) and section 292 . Section 290(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.
  38. 291

    RESOLUTIONS AND MEETINGS - 291. Who is liable to meet cost of circulating members’ statements

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    Members who requested circulating statements must pay the company's expenses for circulating them unless the company resolves otherwise; the company is required to comply with the circulation requirement only if a reasonably sufficient deposit is made not later than seven days before the meeting unless it has previously resolved not to circulate statements.

    Section 291. Who is liable to meet cost of circulating members’ statements Section 291(1)(a) the meeting to which the requests relate is an annual general meeting of a public company ; and Section 291(1)(b) the company ("the company whose shares are the subject of a takeover offer;") receives requests sufficient to require the company ("the company whose shares are the subject of a takeover offer;") to circulate the statement before the end of the financial year preceding the meeting. Section 291(2)(a) unless the company ("the company whose shares are the subject of a takeover offer;") resolves otherwise, the members who requested the statement to be circulated are liable to meet the expenses of the company ("the company whose shares are the subject of a takeover offer;") in complying with section 290 ; and Section 291(2)(b) unless the company ("the company whose shares are the subject of a takeover offer;") has previously resolved not to circulate statements to its members as required by section 289 , it is bound to comply with section 290 only if, not later than seven days before the meeting, an amount reasonably sufficient to meet its expenses in doing so is deposited or tendered to it.
  39. 292

    RESOLUTIONS AND MEETINGS - 292. Quorum for general meetings

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    For a company limited by shares or guarantee that has only one member, a single qualifying person present at a meeting counts as a quorum.

    Section 292. Quorum for general meetings Section 292(1) In the case of a company limited by shares or guarantee and having only one member ("a member of a company;") , one qualifying person present at a meeting constitutes a quorum. Section 292(2)(a) each is a qualifying person only because the person is authorised under section 297 to act as the representative of a body corporate in relation to the meeting, and they are representatives of the same body corporate; or Section 292(2)(b) each is a qualifying person only because the person is appointed as proxy of a member ("a member of a company;") in relation to the meeting, and they are proxies of the same member ("a member of a company;") .
  40. 293

    RESOLUTIONS AND MEETINGS - 293. Members present may elect person to preside at general meeting

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    Members present at a company's general meeting may, by ordinary resolution, elect one of the members to preside at the meeting; this is subject to any company articles that specify who may or may not chair or preside.

    Section 293. Members present may elect person to preside at general meeting Section 293(1) The members present at a general meeting of the company ("the company whose shares are the subject of a takeover offer;") may, by ordinary resolution, elect one of the members to preside at the meeting. Section 293(2) Subsection (1) is subject to a provision of the company's articles that states who may or may not be chairperson or preside at a general meeting of the company.
  41. 294

    RESOLUTIONS AND MEETINGS - 294. Person presiding at general meeting may declare result of voting on a show of hands

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    The person presiding at a general meeting may declare the result of voting on a show of hands.

    Section 294. Person presiding at general meeting may declare result of voting on a show of hands Section 294(1)(a) has or has not been passed; or Section 294(1)(b) has passed with a particular majority Section 294(2) Such a declaration is conclusive evidence of the result of the voting without proof of the number or proportion of the votes recorded in favour of or against the resolution. Section 294(3) An entry in respect of such a declaration in the minutes of the meeting recorded in accordance with section 292 is also conclusive evidence of that fact without further proof. Section 294(4) This section does not have effect if a poll is demanded for passing the resolution and the demand is not subsequently withdrawn.
  42. 295

    RESOLUTIONS AND MEETINGS - 295. Right of members to demand a poll at general meeting

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    Members of a company are entitled to demand a poll at a general meeting in specified circumstances.

    Section 295. Right of members to demand a poll at general meeting Section 295(1)(a) electing the member ("a member of a company;") who is to preside at the meeting; or Section 295(1)(b) adjourning the meeting. Section 295(2)(a) by no fewer than five members having the right to vote on the resolution; Section 295(2)(b) by a member ("a member of a company;") or members representing no less than ten percent of the total voting rights of all the members having the right to vote on the resolution; or Section 295(2)(c) by a member ("a member of a company;") or members holding shares in the company ("the company whose shares are the subject of a takeover offer;") conferring a right to vote on the resolution, being shares on which an aggregate amount has been paid up equal to not less than ten percent of the total amount paid up on all the shares conferring that right.
  43. 296

    RESOLUTIONS AND MEETINGS - 296. Member not obliged to use all votes when voting on a poll at general meeting

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    A member entitled to two or more votes at a general meeting may choose not to use all their votes or may cast them differently.

    Section 296. Member not obliged to use all votes when voting on a poll at general meeting Section A member ("a member of a company;") who is entitled to cast two or more votes at a poll taken at a general meeting of a company is not obliged to use all of those votes or to cast them all in the same way.
  44. 297

    RESOLUTIONS AND MEETINGS - 297. Representation of bodies corporate at general meetings

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    A body corporate may, by resolution of its directors or governing body, authorise one or more persons to represent it at a company meeting; if only one is authorised that person may exercise the body's powers, and if two or more are authorised any one of them may do so; where representatives act in the same way the power is taken to be exercised, otherwise it is not.

    Section 297. Representation of bodies corporate at general meetings Section 297(1) If a body corporate is a member ("a member of a company;") of a company, it may, by resolution of its directors or other governing body, authorise a person or persons to act as its representative or representatives at a meeting of the company ("the company whose shares are the subject of a takeover offer;") . Section 297(2) If the body corporate authorises only one person to act as its representative at a meeting of the company ("the company whose shares are the subject of a takeover offer;") , that person is entitled to exercise the same powers on behalf of the body as the body could exercise if it were 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;") . Section 297(3) If the body corporate authorises two or more persons to act as its representatives at a meeting of the company ("the company whose shares are the subject of a takeover offer;") , any one of them is entitled to exercise the same powers on behalf of the body as the body could exercise if it were 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;") . Section 297(4)(a) they purport to exercise the power in the same way, power is taken to be exercised in that way; and Section 297(4)(b) if they do not purport to exercise the power in the same way, power is taken not to be exercised.
  45. 298

    RESOLUTIONS AND MEETINGS - 298. Right of members to appoint proxies

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    A member of a company is entitled to appoint another person as their proxy to attend, speak and vote at company meetings; members with share capital may appoint more than one proxy if each proxy represents different shares.

    Section 298. Right of members to appoint proxies Section 298(1) A member ("a member of a company;") of a company is entitled to appoint another person as the member ("a member of a company;") ’s proxy to exercise all or any of the member ("a member of a company;") ’s rights to attend and to speak and vote at a meeting of the company ("the company whose shares are the subject of a takeover offer;") . Section 298(2) A member ("a member of a company;") of a company that has a share capital may appoint more than one proxy for a meeting provided each proxy is appointed to exercise the rights attached to a different share or different shares held by the member ("a member of a company;") .
  46. 299

    RESOLUTIONS AND MEETINGS - 299. Notice of general meeting to contain statement of rights of members to appoint proxies

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    Section requires the notice of a general meeting to state members' proxy appointment rights; failure to comply does not invalidate the meeting; non-compliance by a company or officers is an offence punishable by a fine up to five hundred thousand shillings.

    Section 299. Notice of general meeting to contain statement of rights of members to appoint proxies Section 299(1)(a) the member ("a member of a company;") 's rights under section 298 ; and Section 299(1)(b) any more extensive rights conferred by the company ("the company whose shares are the subject of a takeover offer;") 's articles to appoint more than one proxy. Section 299(2) Failure to comply with this section does not affect the validity of the meeting or of anything done at the meeting. Section 299(3) If a company fails to comply with this section in relation to a meeting 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.
  47. 300

    RESOLUTIONS AND MEETINGS - 300. Company sponsored invitations to appoint proxies

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    If a company pays for invitations for members to appoint specified proxies for a meeting, the company must issue those invitations to all members entitled to vote; if it fails to do so the company and any officer in default commit an offence and on conviction are liable to a fine not exceeding five hundred thousand shillings.

    Section 300. Company sponsored invitations to appoint proxies Section 300(1) If, for the purposes of a meeting, invitations are issued at the expense of the company ("the company whose shares are the subject of a takeover offer;") to members to appoint as a proxy a specified person, or a number of specified persons, the company ("the company whose shares are the subject of a takeover offer;") shall issue the invitations to all members entitled to vote at the meeting. Section 300(2)(a) there is issued to a member ("a member of a company;") , at the member ("a member of a company;") 's request, a form of appointment naming the proxy, or a list of persons willing to act as proxy; and Section 300(2)(b) the form or list is available on request to all members entitled to vote at the meeting. Section 300(3) If a company fails to comply with subsection (1) in relation to a meeting of a company, 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.
  48. 301

    RESOLUTIONS AND MEETINGS - 301. Notice of appointment of proxy to be given to company

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    Notice of appointment of a proxy must be given to the company.

    Section 301. Notice of appointment of proxy to be given to company Section 301(1)(a) the appointment of a proxy; and Section 301(1)(b) any document necessary to show the validity of, or otherwise relating to, the appointment of a proxy. Section 301(2)(a) in the case of a meeting or adjourned meeting, forty-eight hours before the time for holding the meeting or adjourned meeting; Section 301(2)(b) in the case of a poll taken more than forty-eight hours after it was demanded, twenty-four hours before the time appointed for the taking of the poll; Section 301(2)(c) in the case of a poll taken not more than forty-eight hours after it was demanded, the time at which it was demanded. Section 301(3) In calculating the periods referred to in subsection (2) , a day or part of a day that is not a working day is to be disregarded.
  49. 302

    RESOLUTIONS AND MEETINGS - 302. Proxy can be elected to preside at general meeting

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    A company may elect a proxy, by resolution at the meeting, to preside at a general meeting; this is subject to any article provision about who may or may not be chairperson.

    Section 302. Proxy can be elected to preside at general meeting Section 302(1) A proxy may be elected to preside at a general meeting by a resolution of the company ("the company whose shares are the subject of a takeover offer;") passed at the meeting. Section 302(2) Subsection (1) is subject to any provision of the company's articles that states who may or who may not be chairperson.
  50. 303

    RESOLUTIONS AND MEETINGS - 303. Right of proxy to demand a poll at general meeting

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    Appointment of a proxy to vote authorises the proxy to demand, or join in demanding, a poll on that matter.

    Section 303. Right of proxy to demand a poll at general meeting Section 303(1) The appointment of a proxy to vote on a matter at a meeting of a company authorises the proxy to demand, or join in demanding, a poll on that matter. Section 303(2)(a) for the purpose of subsection (2)(a) of that section, a demand by a proxy counts as a demand by the member ("a member of a company;") ; Section 303(2)(b) for the purpose of subsection (2)(b) of that section, a demand by the proxy counts as a demand by the member ("a member of a company;") representing the voting rights that the proxy is authorised to exercise; and Section 303(2)(c) for the purposes of subsection (2)(c) , a demand by the proxy counts as a demand by the member holding the shares to which those rights are attached.
  51. 304

    RESOLUTIONS AND MEETINGS - 304. Notice to be given to company of termination of proxy’s authority

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    A member of a company may terminate a proxy appointment by giving notice in writing.

    Section 304. Notice to be given to company of termination of proxy’s authority Section 304(1) A member ("a member of a company;") of a company who has appointed a person to act as a proxy of the member ("a member of a company;") may terminate the appointment by notice ("notice in writing;") . Section 304(2)(a) whether the person counts in deciding whether there is a quorum at a meeting of the company ("the company whose shares are the subject of a takeover offer;") ; Section 304(2)(b) the validity of anything that the person does in presiding at the meeting; or Section 304(2)(c) the validity of a poll demanded by the person at the meeting, Section 304(3)(a) before the start of the meeting or adjourned meeting at which the vote is cast; or Section 304(3)(b) in the case of a poll taken more than forty-eight hours after it is demanded, before the time fixed for taking the poll. Section 304(4) If the company ("the company whose shares are the subject of a takeover offer;") 's articles require or permit members to give notice ("notice in writing;") of termination to a person other than the company ("the company whose shares are the subject of a takeover offer;") , this section has effect as if the references in this section to a company included references to that person. Section 304(5) Subject to subsection (6) , subsections (2) and (3) have effect subject to any provision of the company's articles that has the effect of requiring notice of termination to be received by the company or another person at a time earlier than that specified in those subsections. Section 304(6)(a) in the case of a meeting or adjourned meeting, forty-eight hours before the time for holding the meeting or adjourned meeting; Section 304(6)(b) in the case of a poll taken more than forty-eight hours after it was demanded, twenty four hours before the time appointed for the taking of the poll; Section 304(6)(c) in the case of a poll taken not more than forty-eight hours after it was demanded, the time at which it was demanded. Section 304(7) In calculating the periods referred to in subsections (3)(b) and (6), no account is to be taken of any part of a day that is not a working day. [Act No. 28 of 2017 , s. 20.]
  52. 305

    RESOLUTIONS AND MEETINGS - 305. Articles may confer more extensive rights on members and proxies

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    Articles may grant broader rights to members and proxies.

    Section 305. Articles may confer more extensive rights on members and proxies
  53. 306

    RESOLUTIONS AND MEETINGS - 306. Resolutions passed at adjourned general meeting

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    A resolution passed at an adjourned general meeting is treated as passed on the actual date it was passed and cannot be treated as having been passed on an earlier date.

    Section 306. Resolutions passed at adjourned general meeting Section If a resolution is passed at an adjourned general meeting of a company, the resolution is for all purposes to be treated as having been passed on the date on which it was in fact passed, and may not be treated as having been passed on an earlier date.
  54. 307

    RESOLUTIONS AND MEETINGS - 307. Sending to members documents relating to general meetings inelectronic form

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    If a company has given an electronic address in the notice convening a general meeting, the company may send documents or information relating to the meeting, and documents relating to proxies, by electronic means to that address subject to any conditions or limitations specified in the notice.

    Section 307. Sending to members documents relating to general meetings inelectronic form Section 307(1) If a company has given an electronic address in a notice ("notice in writing;") convening a general meeting, any document or information relating to proceedings at the meeting can be sent by electronic means to that address subject to the conditions or limitations (if any) specified in the notice ("notice in writing;") . Section 307(2)(a) in a document of proxy sent out by the company ("the company whose shares are the subject of a takeover offer;") in relation to the meeting; or Section 307(2)(b) in an invitation to appoint a proxy issued by the company ("the company whose shares are the subject of a takeover offer;") in relation to the meeting, any document or information relating to proxies for that meeting can be sent by electronic means to that address , subject to any conditions or limitations specified in the notice ("notice in writing;") . Section 307(3)(a) the appointment of a proxy for a meeting; Section 307(3)(b) any document necessary to establish the validity of the appointment of a proxy; and Section 307(3)(c) a notice ("notice in writing;") terminating the appointment of a proxy.
  55. 308

    RESOLUTIONS AND MEETINGS - 308. Application of Division 3 to meetings of holders of classes ofshares

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    Division 3 applies (with necessary modifications) to meetings of holders of a class of shares, subject to the listed exceptions and specific quorum rules.

    Section 308. Application of Division 3 to meetings of holders of classes ofshares Section 308(1) Subject to subsection (2) and (3) , Division 3 applies, with necessary modifications, to a meeting of holders of a class of shares of a company as it applies to a general meeting of the company. Section 308(2) Sections 277 to 280 do not apply to a meeting of holders of a class of shares. Section 308(3) In addition to the sections specified in subsection (2) , sections 292 and 295 do not apply to a meeting convened to pass a resolution to vary rights attached to a class of shares. Section 308(4)(a) for a meeting other than an adjourned meeting, at least two persons who are present and holding at least one-third in nominal value of the issued shares of the relevant class; and Section 308(4)(b) for an adjourned meeting, one person who is present and holding shares of the relevant class. Section 308(5) For the purpose of subsection (4) , a person who is present as a holder of one or more proxies is taken to hold only the shares in respect of which those proxies are authorised to exercise voting rights. Section 308(6) At such a meeting, a holder of shares of the relevant class may demand a poll if present at the meeting. Section 308(7)(a) any amendment of a provision contained in a company's articles for the variation of the rights attached to a class of shares , or the insertion of any such provision into the articles , is itself taken to be a variation of those rights; and Section 308(7)(b) a reference to the variation of rights attached to a class of shares includes a reference to the abrogation of those rights. Section 308(8)(a) increases or decreases the number of authorized shares of such class; Section 308(8)(b) changes any of the rights or preferences of the shares of the class; Section 308(8)(c) creates a right of the holders of any other shares to exchange or convert their shares into shares of the type or class held by the class; Section 308(8)(d) changes the shares held by the group into a different number of shares or into shares of another class; Section 308(8)(e) has rights or preferences superior or substantially equal to those of the class; Section 308(8)(e)(i) has rights or preferences superior or substantially equal to those of the class; Section 308(8)(e)(ii) increases the rights and preferences of any class of shares having rights and references substantially equal to or superior to those of such class; or Section 308(8)(e)(iii) increases the rights and preferences of any class of shares having rights and preferences subordinate to those of such class if such an increase would then make them substantially equal or superior to those of such class; Section 308(8)(f) limits or denies the existing pre-emptive rights of the shares of such class; Section 308(8)(g) cancels or otherwise affects accumulated dividends on the shares of such class; Section 308(8)(h) limits or denies the voting rights of such class; or Section 308(8)(i) otherwise changes the rights or preferences of the shares held by such class so as to affect them adversely. [Act No. 28 of 2017 , s. 21.]
  56. 309

    RESOLUTIONS AND MEETINGS - 309. Application of Division to meetings of classes of members of company having no share capital

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    Division 3 applies, with necessary modifications, to meetings of a class of members of a company with no share capital, subject to specified exclusions; specific quorum rules apply; any member present may demand a poll; amendments to articles varying class rights count as variations.

    Section 309. Application of Division to meetings of classes of members of company having no share capital Section 309(1) Subject to subsection (2) and (3) , Division 3 applies, with necessary modifications, to a meeting of holders of a class of members of a company having no share capital as it applies to a general meeting of the company. Section 309(2) Sections 277 to 280 do not apply to a meeting of class of members of a company having no share capital. Section 309(3) In addition to the sections specified in subsection (2) , sections 292 and 295 do not apply to a meeting convened to pass a resolution to vary rights of a class of members of a company having no share capital. Section 309(4)(a) for a meeting other than an adjourned meeting, at least two members of the class present in person or by proxy who together represent at least one-third of the voting rights of the class; and Section 309(4)(b) for an adjourned meeting, one member ("a member of a company;") of the class present in person or by proxy. Section 309(5) At such a meeting, any member ("a member of a company;") present in person or by proxy may demand a poll. Section 309(6)(a) any amendment of a provision contained in a company's articles for the variation of the rights of a class of members, or the insertion of any such provision into the articles , is itself taken to be a variation of those rights; and Section 309(6)(b) a reference to the variation of rights of a class of members includes a reference to the abrogation of those rights.
  57. 310

    RESOLUTIONS AND MEETINGS - 310. Public companies: annual general meeting

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    Every public company must hold an annual general meeting within six months after its accounting reference date each year.

    Section 310. Public companies: annual general meeting Section 310(1) Every public company shall hold a general meeting as its annual general meeting within six months from and including the day following its accounting reference date in each year, whether or not it holds other meetings during that period. Section 310(2)(a) specifying a new accounting reference date; and Section 310(2)(b) stating that the current accounting reference period or the previous accounting reference period is to be shortened, Section 310(3) If a public 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 one million shillings. Section 310(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 requirement to hold its annual general meeting, 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.
  58. 311

    RESOLUTIONS AND MEETINGS - 311. Public companies:noticeof annual general meeting

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    Public companies must state in the written notice convening an annual general meeting that the meeting is an annual general meeting.

    Section 311. Public companies:noticeof annual general meeting Section 311(1) A public company shall state in the notice ("notice in writing;") convening an annual general meeting of the company ("the company whose shares are the subject of a takeover offer;") that the meeting is an annual general meeting. Section 311(2) An annual general meeting may be convened by shorter notice ("notice in writing;") than that required by section 281 (2) or by the company's articles, if all the members entitled to attend and vote at the meeting agree to the shorter notice. Section 311(3) If a public 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 five hundred thousand shillings.
  59. 312

    RESOLUTIONS AND MEETINGS - 312. Public companies: members’ power to require circulation of resolutions for annual general meeting

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    Members of a public company may require the company to circulate to entitled members a notice of a resolution for the next annual general meeting; failure to comply with subsection (3) makes the company and defaulting officers commit an offence punishable on conviction by a fine not exceeding five hundred thousand shillings.

    Section 312. Public companies: members’ power to require circulation of resolutions for annual general meeting Section 312(1) The members of a public company may require the company ("the company whose shares are the subject of a takeover offer;") to give to members of the company ("the company whose shares are the subject of a takeover offer;") who are entitled to receive notice ("notice in writing;") of the next annual general meeting a notice ("notice in writing;") of a resolution that is proposed to be moved at that meeting. Section 312(2)(a) it would, if passed, be void (whether because of inconsistency with this Act or any other written law or the company ("the company whose shares are the subject of a takeover offer;") 's constitution or otherwise); Section 312(2)(b) it defames a person; or Section 312(2)(c) it is frivolous or vexatious. Section 312(3)(a) members representing at least five percent of the total voting rights of all the members who have a right to vote on the resolution at the annual general meeting to which the requests relate; or Section 312(3)(b) at least one hundred members who have a right to vote on the resolution at the annual general meeting to which the requests relate and hold shares in the company ("the company whose shares are the subject of a takeover offer;") on which there has been paid up an average sum, per member ("a member of a company;") , of at least ten thousand shillings. Section 312(4)(a) it is 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 in electronic form ; Section 312(4)(b) identifies the resolution of which notice ("notice in writing;") is to be given; Section 312(4)(c) is authenticated by the person or persons making it; and Section 312(4)(d) six weeks before the annual general meeting to which the request relate; or Section 312(4)(d)(i) six weeks before the annual general meeting to which the request relate; or Section 312(4)(d)(ii) if later, the time at which notice ("notice in writing;") is given of that meeting. Section 312(5) If a public company fails to comply with subsection (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.
  60. 313

    RESOLUTIONS AND MEETINGS - 313. Public companies; company’s duty to circulate members’ resolutions for annual general meetings

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    Public companies must circulate members’ resolutions for annual general meetings as provided in section 313(1); failure by the company or any officer in default is an offence punishable by a fine not exceeding five hundred thousand shillings.

    Section 313. Public companies; company’s duty to circulate members’ resolutions for annual general meetings Section 313(1)(a) in the same manner as notice ("notice in writing;") of the meeting; and Section 313(1)(b) at the same time as, or as soon as reasonably practicable after, it gives notice ("notice in writing;") of the meeting. Section 313(2) Subsection (1) has effect subject to section 314 (2). Section 313(3) The business which may be dealt with at an annual general meeting includes a resolution of which notice ("notice in writing;") is given in accordance with this section. Section 313(4) If a public 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 five hundred thousand shillings.
  61. 314

    RESOLUTIONS AND MEETINGS - 314. Public companies: expenses of circulating members’ resolutions for annual general meeting

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    Members who requested circulation of a resolution are exempt from paying company expenses if sufficient requests arrive before the end of the preceding financial year; otherwise, unless the company resolves otherwise, those members must pay the company's expenses and must deposit an amount reasonably sufficient to meet those expenses six weeks before the meeting or, if later, when the written notice of the meeting is given.

    Section 314. Public companies: expenses of circulating members’ resolutions for annual general meeting Section 314(1) The members who requested the circulation of the resolution need not pay the expenses of the company ("the company whose shares are the subject of a takeover offer;") in complying with section 313 if requests sufficient to require the company to circulate it are received before the end of the financial year preceding the meeting. Section 314(2)(a) unless the company ("the company whose shares are the subject of a takeover offer;") otherwise resolves, the members who requested the circulation of the resolution shall pay the expenses of the company ("the company whose shares are the subject of a takeover offer;") in complying with section 313 ; and Section 314(2)(b) six weeks before the annual general meeting to which the request relates; or Section 314(2)(b)(i) six weeks before the annual general meeting to which the request relates; or Section 314(2)(b)(ii) if later, the time at which the notice ("notice in writing;") is given of that meeting, an amount reasonably sufficient to meet its expenses in complying with that section is deposited with or tendered to it.
  62. 315

    RESOLUTIONS AND MEETINGS - 315. Results of poll to be made available on website

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    Quoted companies must publish poll results on their website, including meeting date, resolution text or subject, and vote counts for and against; failure is an offence punishable by a fine up to five hundred thousand shillings.

    Section 315. Results of poll to be made available on website Section 315(1)(a) the date of the meeting; Section 315(1)(b) the text of the resolution or a description of the subject matter of the poll; Section 315(1)(c) the number of votes cast in favour of the resolution; Section 315(1)(d) the number of votes cast against the resolution. Section 315(2) Section 316 applies to this section. Section 315(3)(a) the poll; or Section 315(3)(b) the resolution or other business (if passed or agreed to) to which the poll relates. Section 315(4) If a quoted 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 five hundred thousand shillings.
  63. 316

    RESOLUTIONS AND MEETINGS - 316. Requirements as to website availability

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    Requires a quoted company to make meeting-related information available on a website, not condition access on payment or other requirements, keep it available for at least two years, and creates offences with fines for non‑compliance.

    Section 316. Requirements as to website availability Section 316(1)(a) is maintained by or on behalf of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 316(1)(b) identifies the company ("the company whose shares are the subject of a takeover offer;") . Section 316(2) The company shall not make access to the information on the website, and the ability to obtain a hard copy of the information from the website, conditional on the payment of a fee or compliance with any other requirement. Section 316(3)(a) made available as soon as reasonably practicable after the date of the meeting at which the poll was taken; and Section 316(3)(b) kept continuously available on a website that complies with subsection (1) for not less than two years from and including the date on which it is first made available on the website. Section 316(4)(a) the information is made available on the website for part of that period; and Section 316(4)(b) the failure is wholly attributable to circumstances that it would not be reasonable to expect the company ("the company whose shares are the subject of a takeover offer;") to have prevented or avoided. Section 316(5) If a quoted 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 five hundred thousand shillings. Section 316(6) If, after a quoted company or any of its officers is convicted of an offence under subsection (5) , the company continues to fail to comply with the requirement 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.
  64. 317

    RESOLUTIONS AND MEETINGS - 317. Records of resolutions and meetings,etc.

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    Companies must keep records of resolutions, meeting minutes and takeover-related details for at least ten years; failure by the company or defaulting officers is an offence punishable by fines.

    Section 317. Records of resolutions and meetings,etc. Section 317(1)(a) copies of all resolutions of members passed otherwise than at general meetings; Section 317(1)(b) minutes of all proceedings of general meetings; and Section 317(1)(c) details provided to the company ("the company whose shares are the subject of a takeover offer;") in accordance with section 319 . Section 317(2) The company shall keep the records for at least ten years from the date of the relevant resolution, meeting or decision. Section 317(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 five hundred thousand shillings. Section 317(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 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.
  65. 318

    RESOLUTIONS AND MEETINGS - 318. Records as evidence of resolutions,etc.

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    Records kept under section 317 and records or minutes signed as described in this section are evidence of resolutions and of meeting proceedings; written-resolution formalities for private companies are presumed complied with unless the contrary is proved; meetings, proceedings and appointments at meetings are presumed valid as stated.

    Section 318. Records as evidence of resolutions,etc. Section 318(1) This section applies to the records kept in accordance with section 317 . Section 318(2) The record of a resolution passed otherwise than at a general meeting, if purporting to be signed by a director ("a former director;") of the company ("the company whose shares are the subject of a takeover offer;") or by the company ("the company whose shares are the subject of a takeover offer;") secretary, is evidence of the passing of the resolution. Section 318(3) If a record of a written resolution of a private company exists, the requirements of this Act with respect to the passing of the resolution are presumed to be complied with unless the contrary is proved. Section 318(4) The minutes of proceedings of a general meeting, if purporting to be signed by the person presiding at that meeting or by the person presiding at the next general meeting, are evidence of the proceedings at the meeting. Section 318(5)(a) the meeting is presumed to have been duly held and convened; Section 318(5)(b) all proceedings at the meeting are presumed to have duly taken place; and Section 318(5)(c) all appointments at the meeting are presumed to be valid.
  66. 319

    RESOLUTIONS AND MEETINGS - 319. Records of decisions by solemember

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    If a company limited by shares or guarantee has only one member, that member must provide the company with details of decisions taken (unless the decision is by written resolution).

    Section 319. Records of decisions by solemember Section 319(1) This section applies to a company that is limited by shares or by guarantee and has only one member ("a member of a company;") . Section 319(2)(a) can be taken by the company ("the company whose shares are the subject of a takeover offer;") at a general meeting; and Section 319(2)(b) has effect as if agreed by the company ("the company whose shares are the subject of a takeover offer;") at a general meeting, the member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") shall, unless the decision is in the form of a written resolution, provide the company ("the company whose shares are the subject of a takeover offer;") with details of the decision. Section 319(3) Failure to comply with this section does not affect the validity of a decision referred to in subsection (2) . Section 319(4) A member ("a member of a company;") of a company to which this section applies who, without reasonable excuse, fails to comply with subsection (2) commits an offence and on conviction is liable to a fine not exceeding five hundred thousand shillings.
  67. 320

    RESOLUTIONS AND MEETINGS - 320. Inspection of records of resolutions and meetings

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    Companies must keep records available for inspection at their registered office; members may inspect records without charge and may request copies, which companies must provide within seven days on payment of any prescribed fee; offences attract fines up to 500,000 shillings and daily fines of up to 50,000 shillings for continued non-compliance.

    Section 320. Inspection of records of resolutions and meetings Section 320(1)(a) to a company that is required to keep records in accordance with section 317 ; and Section 320(1)(b) to those records. Section 320(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, a company to which this section applies shall keep its records available for inspection at its registered office. Section 320(3) The company 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 records available for inspection by the member ("a member of a company;") without charge. Section 320(4) If a member ("a member of a company;") of the company ("the company whose shares are the subject of a takeover offer;") requests the company ("the company whose shares are the subject of a takeover offer;") to provide the member ("a member of a company;") with a specified record, the company ("the company whose shares are the subject of a takeover offer;") shall comply with the request within seven days after receiving the request, subject to payment of the prescribed fee (if any). Section 320(5)(a) subsection (2) ; or Section 320(5)(b) a request made under 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 320(6) If, after a company or any of its officers is convicted of an offence under subsection (5) , the company continues to fail to comply with subsection (2) , or 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 320(7) If a company refuses to allow an inspection as requested under subsection (3) , or to provide a copy of a record requested under subsection (4) , 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 records, or to provide that person with a copy of the requested record.
  68. 321

    RESOLUTIONS AND MEETINGS - 321. Records of resolutions and meetings of class of members

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    Records of resolutions and meetings of class of members

    Section 321. Records of resolutions and meetings of class of members Section holders of a class of shares ; and

Part XIV

SHARE CAPITAL OF COMPANY

  1. 322

    SHARE CAPITAL OF COMPANY - 322. Shares no longer capable of being converted into stock

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    Shares of a company may not be converted into stock.

    Section 322. Shares no longer capable of being converted into stock Section 322(1) The shares of a company may not be converted into stock. Section 322(2) An attempt to convert a company's shares into stock has no effect.
  2. 323

    SHARE CAPITAL OF COMPANY - 323. Nature ofshares

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    Shares or other interests of a member in a company are personal property and are not real estate.

    Section 323. Nature ofshares Section The shares or other interest of a member ("a member of a company;") in a company are personal property ("all rights and interests in property;") and are not in the nature of real estate.
  3. 324

    SHARE CAPITAL OF COMPANY - 324. Nominal value ofshares

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    Shares in a limited company with a share capital must each have a fixed nominal value and must be denominated in shillings; allotments not complying are void; companies and defaulting officers who purport to allot in contravention commit an offence and on conviction are liable to a fine not exceeding five hundred thousand shillings.

    Section 324. Nominal value ofshares Section 324(1) Shares in a limited company having a share capital are each required to have a fixed nominal value. Section 324(2) Shares in a limited company having a share capital are required to be denominated in shillings. Section 324(3) An allotment of shares that does not comply with subsection (1) or (2) is void. Section 324(4) If, at the commencement of this section, an existing company's capital consists of stock, the amount of stock is converted to shares of one shilling each. Section 324(5) If a company purports to allot shares in contravention 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 five hundred thousand shillings.
  4. 325

    SHARE CAPITAL OF COMPANY - 325. Shares to be numbered

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    Companies with a share capital must number each share unless subsections (2) or (3) apply; if shares are allotted without numbers, the company and any defaulting officer commit an offence and are liable to a fine up to five hundred thousand shillings.

    Section 325. Shares to be numbered Section 325(1) Except as provided by subsections (2) and (3) , a company that has a share capital shall ensure that each of its shares is distinguished by an appropriate distinguishing number. Section 325(2) If all of the issued shares in a company are fully paid up and rank equally for all purposes, they do not require distinguishing numbers so long as they remain fully paid up. Section 325(3) If all of the issued shares of a particular class in a company are fully paid up and rank equally for all purposes, those shares do not require distinguishing numbers so long as they remain fully paid up and rank equally for all purposes with all other shares of the same class that are currently issued and fully paid up. Section 325(4) If a company allots shares that do not 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 five hundred thousand shillings.
  5. 326

    SHARE CAPITAL OF COMPANY - 326. Transferability ofshares

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    Transferability of shares

    Section 326. Transferability ofshares
  6. 327

    SHARE CAPITAL OF COMPANY - 327. Exercise by directors of power to allotshares,etc.

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    Section 327 concerns the exercise by directors of the power to allot shares and to grant rights to subscribe for or convert securities into shares, and creates an offence with a fine for knowingly participating in or authorising contraventions of subsection (1).

    Section 327. Exercise by directors of power to allotshares,etc. Section 327(1)(a) to allot shares in the company ("the company whose shares are the subject of a takeover offer;") ; or Section 327(1)(b) to grant rights to subscribe for, or to convert any security into, shares in the company ("the company whose shares are the subject of a takeover offer;") , except in accordance with section 328 or 329 . Section 327(2)(a) to the allotment of shares under a share scheme of an employee; or Section 327(2)(b) to the grant of a right to subscribe for, or to convert any security into, shares so allotted. Section 327(3) If this section applies in relation to the grant of a right to subscribe for, or to convert a security into, shares , it does not apply in relation to the allotment of shares in accordance with that right. Section 327(4)(a) is knowingly a party to a contravention of subsection (1) ; or Section 327(4)(b) authorises a contravention of that subsection, commits an offence and on conviction is liable to a fine not exceeding five hundred thousand shillings. Section 327(5) Nothing in this section affects the validity of an allotment or other transaction.
  7. 328

    SHARE CAPITAL OF COMPANY - 328. Power of directors to allotsharesetc:private companywith only one class ofshares

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    Directors have the power to allot shares of that class.

    Section 328. Power of directors to allotsharesetc:private companywith only one class ofshares Section to allot shares of that class; or
  8. 329

    SHARE CAPITAL OF COMPANY - 329. Power of directors to allotsharesetc: authorisation by company

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    Directors may not allot shares or grant subscription/conversion rights unless authorised by the company; the company may give, renew, vary or revoke such authorisations (ordinary resolution), but a resolution that amends the articles is effective only if it is a special resolution.

    Section 329. Power of directors to allotsharesetc: authorisation by company Section 329(1)(a) allot shares in the company ("the company whose shares are the subject of a takeover offer;") ; or Section 329(1)(b) grant rights to subscribe for or to convert any security into shares in the company ("the company whose shares are the subject of a takeover offer;") , only if Section 329(2) An authorisation under subsection (1) may be given for a particular exercise of the power or for its exercise generally. Section 329(3)(a) states the maximum amount of shares that may be allotted under it; and Section 329(3)(b) in the case of authorisation contained in the company ("the company whose shares are the subject of a takeover offer;") 's articles at the time of its original incorporation, the date of that incorporation; or Section 329(3)(b)(i) in the case of authorisation contained in the company ("the company whose shares are the subject of a takeover offer;") 's articles at the time of its original incorporation, the date of that incorporation; or Section 329(3)(b)(ii) in any other case, the date on which the authorising resolution is passed. Section 329(4)(a) be renewed or further renewed by resolution of the company ("the company whose shares are the subject of a takeover offer;") for a further period not exceeding five years; and Section 329(4)(b) be revoked or varied at any time by resolution of the company ("the company whose shares are the subject of a takeover offer;") . Section 329(5)(a) states or restates the maximum amount of shares that may be allotted under the authorisation or, the amount remaining to be allotted under it; and Section 329(5)(b) specifies the date on which the renewed authorisation will expire. Section 329(6) In relation to rights to subscribe for or to convert a security into shares in the company ("the company whose shares are the subject of a takeover offer;") , a reference in this section to the maximum amount of shares that may be allotted under the authorisation is to the maximum number of shares that may be allotted under the rights. Section 329(7)(a) the shares are allotted, or the rights are granted, in accordance with an offer or agreement made by the company ("the company whose shares are the subject of a takeover offer;") before the authorisation expired; and Section 329(7)(b) the authorisation allowed the company ("the company whose shares are the subject of a takeover offer;") to make an offer or agreement that would or might require shares to be allotted, or rights to be granted, after the authorisation had expired. Section 329(8) A resolution of a company to give, vary, revoke or renew an authorisation may be by an ordinary resolution. Section 329(9) If a resolution under subsection (8) purports to amend the articles of a company, the resolution is effective only if it is a special resolution. [Act No. 28 of 2017 , s. 23, Act No. 12 of 2019 , Sch.]
  9. 330

    SHARE CAPITAL OF COMPANY - 330. General prohibition of commissions, discounts and allowances

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    Companies and their defaulting officers must not subscribe, agree to subscribe, procure or agree to procure subscriptions for shares in the company that are the subject of a takeover offer; contravention is an offence punishable (on conviction) by a fine not exceeding five hundred thousand shillings.

    Section 330. General prohibition of commissions, discounts and allowances Section 330(1)(a) subscribing or agreeing to subscribe, whether absolutely or conditionally, for shares in the company ("the company whose shares are the subject of a takeover offer;") ; or Section 330(1)(b) procuring or agreeing to procure subscriptions, whether absolutely or conditional, for shares in the company ("the company whose shares are the subject of a takeover offer;") . Section 330(2) For the purpose of subsection (1) , it is does not matter how the shares or money are so applied. Section 330(3) Nothing in this section affects the payment of brokerage the payment of which was previously lawful. Section 330(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 330(5) An application of shares or capital money in contravention of subsection (1) is void.
  10. 331

    SHARE CAPITAL OF COMPANY - 331. Permitted commission

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    Permitted commission: subscribing or agreeing to subscribe, whether absolutely or conditionally, for shares in the company.

    Section 331. Permitted commission Section subscribing or agreeing to subscribe whether 40 absolutely or conditionally for shares in the company ("the company whose shares are the subject of a takeover offer;") ; or
  11. 332

    SHARE CAPITAL OF COMPANY - 332. Registration of allotment

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    Companies must register any allotment of shares as soon as practicable and in any event within two months after the allotment; failure exposes the company and defaulting officers to fines.

    Section 332. Registration of allotment Section 332(1) A company shall register an allotment of shares as soon as practicable and in any event within two months after the date of the allotment. Section 332(2) 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 five hundred thousand shillings. Section 332(3) If, after a company or any of its officers is convicted of an offence under subsection (2) , the company continues to fail to register the allotment of shares, 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.
  12. 333

    SHARE CAPITAL OF COMPANY - 333. Return of allotment bylimited company

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    A limited company must, within one month after allotting shares, lodge with the Registrar for registration a return of the allotment.

    Section 333. Return of allotment bylimited company Section 333(1) Within one month after making an allotment of shares , a limited company shall lodge with the Registrar ("the person for the time being holding office as Registrar of Companies under;") for registration a return of the allotment. Section 333(2)(a) contains the information 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 333(2)(b) is accompanied by a statement of capital. Section 333(3)(a) the total number of shares of the company ("the company whose shares are the subject of a takeover offer;") ; Section 333(3)(b) the aggregate nominal value of those shares ; Section 333(3)(c) the particulars 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;") of the rights attached to the shares ; Section 333(3)(c)(i) the particulars 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;") of the rights attached to the shares ; Section 333(3)(c)(ii) the total number of shares of that class; and Section 333(3)(c)(iii) the aggregate nominal value of shares of that class; and Section 333(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).
  13. 334

    SHARE CAPITAL OF COMPANY - 334. Return of allotment byunlimited companyallotting new class ofshares

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    When an unlimited company allots shares of a class whose rights are not uniform with previously allotted shares, the company must lodge a return of that allotment with the Registrar within one month of the allotment.

    Section 334. Return of allotment byunlimited companyallotting new class ofshares Section 334(1) An unlimited company that allots shares of a class with rights that are not in all respects uniform with shares previously allotted shall, within one month after making such an allotment, lodge with the Registrar ("the person for the time being holding office as Registrar of Companies under;") for registration a return of the allotment. Section 334(2) The company shall ensure that the return specifies 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 334(3) For the purposes of this section, shares are not to be regarded as different from previously allotted shares only because they do not carry the same rights to dividends as the previously allotted shares so long as they were allotted during the twelve months immediately following the allotment of the previously issued shares .
  14. 335

    SHARE CAPITAL OF COMPANY - 335. Offence for company to fail tolodgereturn of allotment for registration

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    Failure by a company or an officer in default to lodge the required return of allotment is an offence punishable on conviction by fines (up to 200,000 shillings; and thereafter up to 20,000 shillings for each day the failure continues).

    Section 335. Offence for company to fail tolodgereturn of allotment for registration Section 335(1) If a company fails to lodge a return of allotment as required by section 333 or 334 , 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 335(2) If, after a company or any of its officers is convicted of an offence under subsection (1) , the company continues to fail to lodge the relevant return for registration, 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.
  15. 336

    SHARE CAPITAL OF COMPANY - 336. Provisions about allotment not applicable tosharestaken on formation

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    Provisions about allotment do not apply to shares taken on formation.

    Section 336. Provisions about allotment not applicable tosharestaken on formation
  16. 337

    SHARE CAPITAL OF COMPANY - 337. Interpretation: Division 3

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    Section 337 concerns interpretation and refers to a grant of a right to subscribe for, or to convert securities into, ordinary shares of the company.

    Section 337. Interpretation: Division 3 Section the grant of a right to subscribe for, or to convert any 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;") ; and
  17. 338

    SHARE CAPITAL OF COMPANY - 338. Existing shareholders’ right of pre-emption

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    When a company subject to a takeover offer issues new securities, it must offer to allot to each holder of ordinary shares a proportion of those securities on the same or more favourable terms equal (as nearly as practicable) to their existing proportion of ordinary share capital, and that offer can only be accepted within the offer period or after written notices of acceptance/refusal have been received.

    Section 338. Existing shareholders’ right of pre-emption Section 338(1)(a) the company ("the company whose shares are the subject of a takeover offer;") has made an offer to each person who holds 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;") to allot to the person on the same or more favourable terms, a proportion of those securities that is as nearly as practicable equal to the proportion in nominal value held by the person of the ordinary share capital of the company ("the company whose shares are the subject of a takeover offer;") ; and Section 338(1)(b) the period during which any such offer may be accepted has expired or the company ("the company whose shares are the subject of a takeover offer;") has received notice ("notice in writing;") of the acceptance or refusal of every offer so made. Section 338(2) If a company has offered to allot securities to a holder of 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;") , the conditions specified in subsection (1)(b) is not contravened by the allotment of the securities to that holder or to anyone in whose favour that holder has renounced the right to their allotment. Section 338(3) If subsection (1) applies in relation to the grant of such a right, it does not apply in relation to the allotment of shares under that right. Section 338(4)(a) the company ("the company whose shares are the subject of a takeover offer;") is not treated as a person who holds 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;") ; and Section 338(4)(b) the shares are not treated as forming part of the ordinary share capital of the company ("the company whose shares are the subject of a takeover offer;") . Section 338(5) This section is subject to sections 341 to 344, 345, 346 to 348 and section 353 .
  18. 339

    SHARE CAPITAL OF COMPANY - 339. Communication of pre-emption offers to shareholders

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    Offers under section 338 must state an acceptance period of not less than twenty-one days and that the offer will not be withdrawn before the end of that period.

    Section 339. Communication of pre-emption offers to shareholders Section 339(1) This section has effect as to the manner in which offers required by section 338 are to be made to holders of the shares of a company. Section 339(2) An offer made under section 338 may be made in hard copy or electronic form. Section 339(3) The offer is effective only if it states that the offer may be accepted within a period of not less than twenty-one days and that the offer will not be withdrawn before the end of that period. Section 339(4)(a) in the case of an offer made 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;") , with the date on which the offer is sent or supplied; Section 339(4)(b) in the case of an offer made in electronic form , with the date on which the offer is sent; or Section 339(4)(c) in the case of an offer made by publication in the Gazette , with the date of publication. Section 339(5)(a) reduce the period specified in subsection (4) , but not to less than fourteen days; or Section 339(5)(b) increase that period.
  19. 340

    SHARE CAPITAL OF COMPANY - 340. Liability of company and officers in case of contravention

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    If a company contravenes section 338 or 339, the company and each officer in default are jointly and severally liable to compensate any person to whom an offer should have been made for loss, damage or expenses caused by the contravention.

    Section 340. Liability of company and officers in case of contravention Section 340(1) If a company contravenes section 338 or 339 , the company and each officer of the company who is in default, are jointly and severally liable to compensate any person to whom an offer should have been made in accordance with those sections for any loss, damage or expenses that the person has sustained or incurred because of the contravention. Section 340(2)(a) from the date on which the return of allotment was lodged with the Registrar ("the person for the time being holding office as Registrar of Companies under;") for registration; or Section 340(2)(b) if equity securities other than shares are granted, from the date of the grant.
  20. 341

    SHARE CAPITAL OF COMPANY - 341. Exception to pre-emption right; issue for non-cash consideration

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    Section 338(l) does not apply in relation to the allotment of bonus shares (exception to pre-emption right).

    Section 341. Exception to pre-emption right; issue for non-cash consideration Section Section 338 (l) does not apply in relation to the allotment of bonus shares.
  21. 342

    SHARE CAPITAL OF COMPANY - 342. Exception to preemption right:securitiesheld under employees' share scheme

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    Section 338(1) does not apply to an allotment of equity securities if they are, or will be, wholly or partly paid up otherwise than in cash.

    Section 342. Exception to preemption right:securitiesheld under employees' share scheme Section Section 338 (1) does not apply to a particular allotment of equity securities if these are, or are to be, wholly or partly paid up otherwise than in cash
  22. 343

    SHARE CAPITAL OF COMPANY - 343. Exception to preemption right:securitiesheld under employees' share scheme

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    Section 338 does not apply to allotments of securities that would be held under an employees' share scheme (apart from any renunciation or assignment of the allotment right).

    Section 343. Exception to preemption right:securitiesheld under employees' share scheme Section Section 338 does not apply to the allotment of securities that would, apart from any renunciation or assignment of the right to their allotment, be held under an employees' share scheme.
  23. 344

    SHARE CAPITAL OF COMPANY - 344.[Repealed by ActNo. 28 of 2017, s. 24.]

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    Section 344. Repealed by ActNo. 28 of 2017, s. 24.

    Section 344.[Repealed by ActNo. 28 of 2017, s. 24.]
  24. 345

    SHARE CAPITAL OF COMPANY - 345. Exclusion of pre-emption right:articlesconferring corresponding right

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    Articles that prohibit allotment of ordinary shares require an offer to holders under section 338(1); if complied with, section 338 does not apply and the company may allot; contraventions make the company and culpable officers jointly liable to compensate.

    Section 345. Exclusion of pre-emption right:articlesconferring corresponding right Section 345(1)(a) a company's articles contain provision prohibiting the company ("the company whose shares are the subject of a takeover offer;") from allotting 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;") of a particular class unless it has complied with the condition that it makes such an offer as is described in section 338 (1) to each person who holds ordinary shares of that class; and Section 345(1)(b) the company ("the company whose shares are the subject of a takeover offer;") makes an offer to allot shares to such a holder; and Section 345(1)(b)(i) the company ("the company whose shares are the subject of a takeover offer;") makes an offer to allot shares to such a holder; and Section 345(1)(b)(ii) the holder, or anyone in whose favour the holder has renounced the right to their allotment, accepts the offer. Section 345(2) In that case, section 338 does not apply to the allotment of those shares and the company may allot them accordingly. Section 345(3) Section 339 applies in relation to offers made in accordance with the pre-emption provision of the company's articles, subject to section 344 . Section 345(4) If there is a contravention of the pre-emption provision of the company ("the company whose shares are the subject of a takeover offer;") 's articles , the company ("the company whose shares are the subject of a takeover offer;") , and every officer of it who knowingly authorised or permitted the contravention, are jointly and severally liable to compensate any person to whom an offer should have been made under the provision for any loss, damage, costs or expenses which the person has sustained or incurred because of the contravention. Section 345(5)(a) from the lodgement with the Registrar ("the person for the time being holding office as Registrar of Companies under;") of the return of allotment; or Section 345(5)(b) if equity securities other than shares are granted, from the date of the grant of the securities .
  25. 346

    SHARE CAPITAL OF COMPANY - 346. Disapplication of pre-emption rights:private companywith only one class ofshares

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    Directors may determine modifications to the way subsection 346(1)(b) applies to an allotment.

    Section 346. Disapplication of pre-emption rights:private companywith only one class ofshares Section 346(1)(a) did not apply to the allotment; or Section 346(1)(b) applied to the allotment with such modifications as the directors may determine. Section 346(2) If the directors make an allotment under subsection (1) , the provisions of this Part relating to existing shareholders' pre-emption rights have effect accordingly.
  26. 347

    SHARE CAPITAL OF COMPANY - 347. Disapplication of pre-emption rights: directors acting under general authorisation

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    Directors may allot shares under a general authorisation (including with modifications they determine), the company may renew the power by special resolution when the authorisation is renewed, and directors may complete previously made offers even after the power has expired.

    Section 347. Disapplication of pre-emption rights: directors acting under general authorisation Section 347(1)(a) did not apply to the allotment; or Section 347(1)(b) applied to the allotment with such modifications as the directors may determine. Section 347(2) If the directors make an allotment under this section, this Division has effect accordingly. Section 347(3)(a) is revoked; or Section 347(3)(b) would if not renewed expire. Section 347(4) If the authorisation is renewed the power may also be renewed, for a period not longer than that for which the authorisation is renewed, by a special resolution of the company ("the company whose shares are the subject of a takeover offer;") . Section 347(5) Even though the power conferred by this section has expired, the directors may allot equity securities in accordance with an offer or agreement previously made by the company ("the company whose shares are the subject of a takeover offer;") if the power enabled the company ("the company whose shares are the subject of a takeover offer;") to make an offer or agreement that would or might require equity securities to be allotted after it expired.
  27. 348

    SHARE CAPITAL OF COMPANY - 348. Disapplication of pre-emption rights by special resolution

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    Section 348 allows special resolutions to disapply pre-emption rights for specified allotments and sets conditions on directors' recommendation, notification, and consequences for non-compliance.

    Section 348. Disapplication of pre-emption rights by special resolution Section 348(1)(a) does not apply to a specified allotment of equity securities to be made in accordance with that authorisation; or Section 348(1)(b) applies to such an allotment with such modifications as may be specified in the resolution. Section 348(2) If such a resolution is passed, this section has effect accordingly. Section 348(3)(a) is revoked; or Section 348(3)(b) would if not renewed expire. Section 348(4) However, if the authorisation is renewed, the resolution may also be renewed by a special resolution of the company ("the company whose shares are the subject of a takeover offer;") for a period not longer than that for which the authorisation is renewed. Section 348(5) The directors may, even though such a resolution has expired, allot equity securities in accordance with an offer or agreement previously made by the company ("the company whose shares are the subject of a takeover offer;") if the resolution enabled the company ("the company whose shares are the subject of a takeover offer;") to make an offer or agreement that would or might require equity securities to be allotted after it expired. Section 348(6)(a) it is recommended by the directors; and Section 348(6)(b) the directors have complied with the following provisions. Section 348(7)(a) their reasons for making the recommendation; Section 348(7)(b) the amount to be paid to the company ("the company whose shares are the subject of a takeover offer;") in respect of the equity securities to be allotted; and Section 348(7)(c) the directors' justification of that amount. Section 348(8)(a) if the resolution is proposed as a written resolution, sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to him; or Section 348(8)(b) if the resolution is proposed at a general meeting, circulated to the members entitled to notice ("notice in writing;") of the meeting with that notice ("notice in writing;") . Section 348(9) If the directors fail to comply with subsection (7) or (8) , each of the directors who is in default commits and offence and on conviction is liable to a fine not exceeding five hundred thousand shillings.
  28. 349

    SHARE CAPITAL OF COMPANY - 349. Disqualification of pre-emption rights: sale of treasuryshares

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    This section governs when pre-emption rights are disqualified for a sale of treasury shares that is treated as an allotment of equity securities under section 337(b), and applies related subsections of sections 347 and 348 with any stated modifications.

    Section 349. Disqualification of pre-emption rights: sale of treasuryshares Section 349(1) This section applies in relation to a sale of shares that is an allotment of equity securities because of section 337 (b). Section 349(2)(a) did not apply to the allotment; or Section 349(2)(b) applied to the allotment with such modifications as the directors may determine. Section 349(3) Subsections (2) and (5) of section 347 apply in that case as they apply to a case to which subsection (1) of that section applies. Section 349(4)(a) do not apply to a specified allotment of securities ; or Section 349(4)(b) apply to the allotment with such modifications as may be specified in the resolution. Section 349(5) Subsections (2) and (4) to (8) of section 348 apply in that case as they apply to a case to which subsection (1) of that section applies.
  29. 350

    SHARE CAPITAL OF COMPANY - 350. References toholder of sharesin relation to offer

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    For an offer to allot securities, 'holder of shares' means whoever held those shares at close of business on the date specified in the offer; that specified date is only effective if it falls within 28 days before the offer.

    Section 350. References toholder of sharesin relation to offer Section 350(1) In relation to an offer to allot securities required by section 338 , a reference, however expressed, to the holder of shares of any description is to whoever was the holder of shares of that description at the close of business on a date to be specified in the offer. Section 350(2) A specified date is not effective unless it is within the period of twenty-eight days immediately before the date of the offer .
  30. 351

    SHARE CAPITAL OF COMPANY - 351. Provisions about pre-emption not applicable tosharestaken on formation

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    Shareholders' pre-emption rights do not apply to shares taken by the subscribers to the memorandum on the formation of the company.

    Section 351. Provisions about pre-emption not applicable tosharestaken on formation Section The provisions of this Division relating to shareholders’ pre-emption rights do not apply to the taking of shares by the subscribers to the memorandum on the formation of the company ("the company whose shares are the subject of a takeover offer;") .
  31. 352

    SHARE CAPITAL OF COMPANY - 352. Saving for other restrictions on offer or allotment

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    This Division does not limit other written laws that prohibit a company from offering or allotting equity securities to a person.

    Section 352. Saving for other restrictions on offer or allotment Section 352(1) This Division does not limit the application of any other written law under which a company is prohibited (whether generally or in specified circumstances) from offering or allotting equity securities to a person. Section 352(2)(a) the person is not taken to be a person who holds 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;") ; and Section 352(2)(b) the shares are not to be regarded as forming part of the ordinary share capital of the company ("the company whose shares are the subject of a takeover offer;") .
  32. 353

    SHARE CAPITAL OF COMPANY - 353. Saving for certain older pre-emption requirements

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    Division does not apply to allotments of equity securities of a public company that were subject to a pre-emption requirement under the repealed Act immediately before this Division began; older pre-emption requirements that applied to a private company immediately before the Division continue to have effect as if included in that private company’s articles.

    Section 353. Saving for certain older pre-emption requirements Section 353(1) This Division does not apply to an allotment of equity securities of a public company that are subject to a pre-emption requirement in relation to which the repealed Act applied immediately before the commencement of this Division. Section 353(2) A pre-emption requirement to which the repealed Act applied in respect of a private company immediately before the commencement of this Division has effect, so long as the company ("the company whose shares are the subject of a takeover offer;") remains a private company , as if it were contained in the company ("the company whose shares are the subject of a takeover offer;") 's articles . Section 353(3) A pre-emption requirement to which the repealed Act applied immediately before the commencement of this Division is, for the purposes of this Division, taken to be included in the company ("the company whose shares are the subject of a takeover offer;") 's articles .
  33. 354

    SHARE CAPITAL OF COMPANY - 354. Public companies: allotment if issue not fully subscribed

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    If shares cannot be allotted and 40 days have passed since the offer, the company must repay applicants without delay and without interest; if repayment is not made within 48 days, the directors are jointly and severally liable to repay with interest, though a director who proves the default was not due to their misconduct or negligence is not liable.

    Section 354. Public companies: allotment if issue not fully subscribed Section 354(1)(a) the issue is subscribed for in full; or Section 354(1)(b) in any event; or Section 354(1)(b)(i) in any event; or Section 354(1)(b)(ii) if specified conditions are made and those conditions are satisfied. Section 354(2) If shares are prohibited from being allotted by subsection (1) and forty days have elapsed since the offer was first made, the company shall, without delay but without interest, repay all money received from applicants for shares. Section 354(3) If any of the money is not repaid within forty-eight days after the offer was first made, the directors of the company ("the company whose shares are the subject of a takeover offer;") are jointly and severally liable to repay it, with interest at the prescribed rate from the end of the forty-eighth day. Section 354(4) A director ("a former director;") who proves that the default in the repayment of the money was not due to the director ("a former director;") 's misconduct or negligence is not liable under subsection (3) . Section 354(5)(a) a reference in subsection (1) to subscription is modified accordingly; Section 354(5)(b) the return of any other consideration so received (including, if the case so requires, the release of the applicant from any undertaking ); or Section 354(5)(b)(i) the return of any other consideration so received (including, if the case so requires, the release of the applicant from any undertaking ); or Section 354(5)(b)(ii) if it is not reasonably practicable to return the consideration, payment of money equal to its value at the time it was so received; and Section 354(5)(c) a reference to interest applies accordingly. Section 354(6) Any condition requiring or binding an applicant for shares to waive compliance with any requirement of this section is void.
  34. 355

    SHARE CAPITAL OF COMPANY - 355. Public companies: effect of irregular allotment if issue not fully subscribed

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    Section 355 gives the applicant a one-month right to avoid an allotment made in contravention of section 354; makes voidability explicit for allotments contravening section 356; makes defaulting directors liable to compensate the company and allottee for losses; and bars proceedings to recover such losses brought more than three years after the allotment.

    Section 355. Public companies: effect of irregular allotment if issue not fully subscribed Section 355(1) If an allotment of shares is made to an applicant in contravention of section 354 , the applicant has a right to avoid the allotment at any time within one month after the date of the allotment, but not later. Section 355(2) An allotment made in contravention of section 356 is voidable even if the company is in liquidation or under administration. Section 355(3) If section 354 is contravened with respect to an allotment, each director of the company who is in default is liable to compensate the company and the allottee respectively for any loss, damages or expenses that the company or allottee may have sustained or incurred because of the contravention. Section 355(4) Proceedings to recover any such loss, damages or expenses may not be brought more than three years after the date of the allotment.
  35. 356

    SHARE CAPITAL OF COMPANY - 356. Shares not to be allotted at a discount

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    A company must not allot its shares at a discount; if shares are allotted in contravention, the allottee must pay the amount of the discount with interest.

    Section 356. Shares not to be allotted at a discount Section 356(1) A company shall not allot its shares at a discount. Section 356(2) If shares are allotted in contravention of subsection (1) , the allottee is liable to pay the company an amount equal to the amount of the discount, with interest at the appropriate rate.
  36. 357

    SHARE CAPITAL OF COMPANY - 357. Provision for different amounts to be paid onshares

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    A company may, if authorised by its articles, pay dividends in proportion to the amount paid up on each share.

    Section 357. Provision for different amounts to be paid onshares Section A company may, if authorised to do so by its articles , pay dividends in proportion to the amount paid up on each share.
  37. 358

    SHARE CAPITAL OF COMPANY - 358. General rule as to means of payment

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    Shares allotted by a company, and any premium on them, may be paid up in money or in money's worth (including goodwill and know-how).

    Section 358. General rule as to means of payment Section Shares allotted by a company, and any premium on them, may be paid up in money or in money's worth (including goodwill and know-how).
  38. 359

    SHARE CAPITAL OF COMPANY - 359. Meaning of payment in cash

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    Section 359 defines what counts as a payment in cash for the purposes of the Part: it lists cash received by the company, certain cheques, release of liabilities, undertakings to pay, other means giving entitlement to payment or credit equivalent to cash, notes that regulations may include further means, states payments to persons other than the company count as consideration other than cash (with an exception), and says cash includes foreign currency.

    Section 359. Meaning of payment in cash Section 359(2)(a) cash received by the company ("the company whose shares are the subject of a takeover offer;") ; Section 359(2)(b) a cheque received by the company ("the company whose shares are the subject of a takeover offer;") in good faith that the directors have no reason for suspecting will not be paid; Section 359(2)(c) a release of a liability of the company ("the company whose shares are the subject of a takeover offer;") for a liquidated sum; Section 359(2)(d) an undertaking to pay cash to the company ("the company whose shares are the subject of a takeover offer;") at a future date; or Section 359(2)(e) payment by any other means giving rise to a present or future entitlement of the company ("the company whose shares are the subject of a takeover offer;") or a person acting on the company ("the company whose shares are the subject of a takeover offer;") 's behalf to a payment, or credit equivalent to payment, in cash. Section 359(3) The regulations may provide that particular means of payment specified in 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;") are to be 40 regarded as being included in subsection (2)(e) . Section 359(4)(a) the payment of cash to a person other than the company ("the company whose shares are the subject of a takeover offer;") ; or Section 359(4)(b) an undertaking to pay cash to a person other than the company ("the company whose shares are the subject of a takeover offer;") , counts as consideration other than cash. Section 359(5) Subsection (4) does not apply to or in relation to those sections of this Part relating to the allotment of equity securities and to the existing shareholders' right of preemption. Section 359(6) For the purpose of determining whether a share is or is to be allotted for cash, or paid up in cash, cash includes foreign currency.
  39. 360

    SHARE CAPITAL OF COMPANY - 360. Public companies:sharestaken by subscribers of memorandum

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    A subscriber to the memorandum of a public company who takes shares because of an undertaking in the memorandum must pay for the shares and any premium in cash.

    Section 360. Public companies:sharestaken by subscribers of memorandum Section 360(1) A subscriber to the memorandum of a public company who takes shares of the company ("the company whose shares are the subject of a takeover offer;") as a result of an undertaking given in the memorandum shall pay for the shares , and any premium on the shares , in cash. Section 360(2) A subscriber to the memorandum of a public company who fails to pay for shares of the company ("the company whose shares are the subject of a takeover offer;") , or any premium on the shares , otherwise than in accordance with subsection (1) , commits an offence and on conviction is liable to a fine not exceeding two hundred thousand shillings.
  40. 361

    SHARE CAPITAL OF COMPANY - 361. Public companies: not to acceptundertakingfor work orservices

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    A public company must not accept an undertaking to work or perform services as payment for shares or any premium; a person giving such an undertaking must pay amounts due, pay interest, and either be registered or have a transfer executed.

    Section 361. Public companies: not to acceptundertakingfor work orservices Section 361(1) A public company shall not accept at any time, in payment up of its shares or any premium on them, an undertaking given by a person that the person or another person should work or perform services ("anything other than goods or land") for the company ("the company whose shares are the subject of a takeover offer;") or any other person. Section 361(2)(a) to pay the company ("the company whose shares are the subject of a takeover offer;") in respect of those shares an amount equal to their nominal value, together with the whole of any premium or, if the case so requires, such proportion of that amount as is, treated as paid up by the undertaking ; and Section 361(2)(b) to pay interest at the appropriate rate on the amount payable under paragraph (a) . Section 361(3)(a) to be included in the company ("the company whose shares are the subject of a takeover offer;") 's register of members in respect of those shares ; or Section 361(3)(b) to have a document of transfer of them executed in the person's favour.
  41. 362

    SHARE CAPITAL OF COMPANY - 362. Public companies:sharesto be at least one quarter paid up

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    A public company must not allot a share unless at least one-quarter of its nominal value and any premium are paid; allottees who receive shares in breach must pay the shortfall with interest; employee share-scheme allotments are exempt; bonus shares are exempt from subsection (3) unless the allottee knew or ought to have known of the contravention.

    Section 362. Public companies:sharesto be at least one quarter paid up Section 362(1) A public company shall not allot a share except as paid up at least as to one-quarter of its nominal value and the whole of any premium on it. Section 362(2) Subsection (1) does not apply to shares allotted under share scheme of an employee. Section 362(3)(a) the share is to be treated as if one-quarter of its nominal value, together with the whole of any premium on it, had been received; and Section 362(3)(b) the allottee is liable to pay the company ("the company whose shares are the subject of a takeover offer;") the minimum amount that should have been received in respect of the share under subsection (1) (less the value of any consideration actually applied in payment up, to any extent, of the share and any premium on it), with interest at the appropriate rate. Section 362(4) Subsection (3) does not apply to the allotment of bonus shares, unless the allottee knew or ought to have known the shares were allotted in contravention of this section.
  42. 363

    SHARE CAPITAL OF COMPANY - 363. Public companies: payment by long-termundertaking

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    Public companies must not allot shares as (fully or partly) paid otherwise than in cash when the consideration includes an undertaking to be performed more than five years after allotment; where that rule is breached the allottee must pay the company the nominal value and any premium (with interest).

    Section 363. Public companies: payment by long-termundertaking Section 363(1) A public company shall not allot shares as fully or partly paid up as to their nominal value or any premium on them otherwise than in cash if the consideration for the allotment is or includes an undertaking that is to be, or could be, performed more than five years after the date of the allotment. Section 363(2) If a company allots shares in contravention of subsection (1) , the allottee is liable to pay the company an amount equal to the aggregate of their nominal value and the whole of any premium or (if the case so requires) so much of that aggregate as is treated as paid up by the 40 undertaking, with interest at the appropriate rate. Section 363(3) Even if a contract for the allotment of shares does not contravene subsection (1) , a variation of the contract is void if it has the effect that the contract would have contravened that subsection if the terms of the contract as varied had been its original terms. If in the case of a company that has converted itself into a public company, this subsection applies also to the variation by the company of the terms of a contract entered into before' the registration of the conversion by the Registrar. Section 363(4)(a) a public company allots shares for a consideration which consists of or includes in accordance with subsection (1) an undertaking that is to be performed within five years of the allotment; and Section 363(4)(b) the undertaking is not performed within the period allowed by the contract for the allotment of the shares , the allottee is liable to pay the company ("the company whose shares are the subject of a takeover offer;") , at the end of the period so allowed, an amount equal to the aggregate of the nominal value of the shares and the whole of any premium or, if the case so requires, so much of that aggregate as is treated as paid up by the undertaking , together with interest at the appropriate rate. Section 363(5) A reference in this section to a contract for the allotment of shares includes an ancillary contract relating to payment in respect of the shares .
  43. 364

    SHARE CAPITAL OF COMPANY - 364. Liability of subsequent holders ofshares

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    If a contravention of this Division causes someone to be liable to pay under the contravened provision, a subsequent holder described as "another person" is also jointly and severally liable to pay that amount.

    Section 364. Liability of subsequent holders ofshares Section 364(1)(a) there has been a contravention of a provision of this Division; and Section 364(1)(b) because of that contravention another person is liable to pay an amount under the provision contravened, is also liable to pay the amount (jointly and severally with the other person so liable). Section 364(2)(a) was, at the time of the purchase of the shares , a purchaser for value who did not have actual notice ("notice in writing;") of the contravention; or Section 364(2)(b) derived title to the shares (directly or indirectly) from a person who became a holder of them after the contravention and was not liable under subsection (1) . Section 364(3)(a) to be included in the company ("the company whose shares are the subject of a takeover offer;") 's register of members in respect of those shares ; or Section 364(3)(b) to have a document of transfer of the shares executed in the person's favour. Section 364(4) This section applies in relation to a failure to carry out a term of a contract as referred to in section 363 (4) as it applies in relation to a contravention of a provision of this Division.
  44. 365

    SHARE CAPITAL OF COMPANY - 365. Power ofthe Courtto grant relief

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    An applicant may apply to the Court to be exempted in whole or in part from liability arising under specified sections; the Court may exempt a person or order contributions.

    Section 365. Power ofthe Courtto grant relief Section 365(1) This section applies in relation to liability under section 360 (2), 362 (3) or (4) or 366 as it applies in relation to a contravention of those sections. Section 365(2)(a) is subject to any such liability to a company in relation to payment in respect of shares in the company ("the company whose shares are the subject of a takeover offer;") ; or Section 365(2)(b) is subject to any such liability to a company because of an undertaking given to it in, or in connection with, payment for shares in the company ("the company whose shares are the subject of a takeover offer;") , may apply to the Court ("(unless some other court is specified) the High Court;") to be exempted in whole or in part from the liability. Section 365(3)(a) any other liability arising in relation to those shares under any provision of this Division or Division 6; or Section 365(3)(a)(i) any other liability arising in relation to those shares under any provision of this Division or Division 6; or Section 365(3)(a)(ii) any liability arising because of any undertaking given in or in connection with payment for those shares ; Section 365(3)(b) whether any person other than the applicant has paid or is likely to pay, whether in accordance with any order of the Court ("(unless some other court is specified) the High Court;") or otherwise, any such amount; Section 365(3)(c) has performed in whole or in part, or is likely so to perform any such undertaking ; or Section 365(3)(c)(i) has performed in whole or in part, or is likely so to perform any such undertaking ; or Section 365(3)(c)(ii) has done or is likely to do any other thing in payment or part payment for the shares . Section 365(4)(a) whether the applicant has paid or is liable to pay any amount in respect of liability arising in relation to the shares under any provision of this Division or Division 6; Section 365(4)(b) whether any person other than the applicant has paid or is likely to pay (whether in accordance with any order of the Court ("(unless some other court is specified) the High Court;") or otherwise) any such amount. Section 365(5)(a) a company that has allotted shares should receive money or money's worth at least equal in value to the aggregate of the nominal value of those shares and the whole of any premium or, if the case so requires, so much of that aggregate as is treated as paid up; Section 365(5)(b) subject to paragraph (a) , if a company would, if the Court did not grant the exemption, have more than one remedy against a particular person, it should be for the company to decide which remedy it wishes to pursue. Section 365(6)(a) exempt the other person wholly or partly from liability to make such a contribution; or Section 365(6)(b) order the other person to make a larger contribution than that which, but for this subsection, that person would be liable to make.
  45. 366

    SHARE CAPITAL OF COMPANY - 366. Offences involving contravention of section358,363,364and365

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    If a company contravenes certain sections, the company and each officer in default commit an offence and on conviction are liable to a fine up to one million shillings.

    Section 366. Offences involving contravention of section358,363,364and365 Section If a company contravenes a provision of section 356 , 361 , 362 or 362 , the company, and each officer of the company who is in default, commits an offence and on conviction are each liable to a fine not exceeding one million shillings.
  46. 367

    SHARE CAPITAL OF COMPANY - 367. Meaning of “appropriate rate of interest” for purpose of this Division

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    The “appropriate rate of interest” is five percent unless another rate is fixed under subsection (2); the Cabinet Secretary may vary that rate by order published in the Gazette.

    Section 367. Meaning of “appropriate rate of interest” for purpose of this Division Section 367(1)(a) five percent; or Section 367(1)(b) if some other rate is fixed under subsection (2) , that rate of interest. Section 367(2) The Cabinet Secretary may, by order published in the Gazette , vary the rate specified in subsection (1)(a) or fixed under subsection (1)(b) .
  47. 368

    SHARE CAPITAL OF COMPANY - 368. Restrictions onpublic companyallocatingsharesfor non-cash consideration

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    Section 368 imposes requirements on allotments of shares for non-cash consideration, including that a valuer's report be made to the company within six months before allotment and that an allottee who has not received the report (or knew of certain contraventions) is liable to pay the company specified amounts with interest.

    Section 368. Restrictions onpublic companyallocatingsharesfor non-cash consideration Section 368(1)(a) the consideration for the allotment has been independently valued in accordance with the provisions of this Division; Section 368(1)(b) the valuer's report has been made to the company ("the company whose shares are the subject of a takeover offer;") during the six months immediately preceding the allotment of the shares ; and Section 368(1)(c) a copy of the report has been sent to the proposed allottee. Section 368(2)(a) any of a company's reserve accounts; or Section 368(2)(b) 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;") , in paying up (to any extent) shares allotted to members of the company ("the company whose shares are the subject of a takeover offer;") ; or premiums on shares so allotted, does not count as consideration for the allotment, and that subsection does not apply in that case. Section 368(3)(a) the allottee has not received the valuer's report required to be sent to the allottee; or Section 368(3)(b) there has been some other contravention of the requirements of this section or section 371 that the allottee knew or ought to have known amounted to a contravention, the allottee is liable to pay the company an amount equal to the aggregate of the nominal value of the shares and the whole of any premium (or, if the case so requires, so much of that aggregate as is treated as paid up by the consideration), with interest at the appropriate rate. Section 368(4) This section has effect subject to sections 369 and 370 .
  48. 369

    SHARE CAPITAL OF COMPANY - 369. Exception to valuation requirement:arrangementwith another company

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    Creates an exception to the valuation requirement for an arrangement with another company.

    Section 369. Exception to valuation requirement:arrangementwith another company Section 369(1)(a) by the transfer to the company ("the company whose shares are the subject of a takeover offer;") ; or Section 369(1)(b) by the cancellation, of all or some of the shares (or of all or some of the shares of a particular class) in another company. Section 369(2) It does not matter whether the arrangement provides for the issue to the allotting company of shares (or shares of a particular class) in the other company. Section 369(3)(a) all the holders of the shares in the other company; or Section 369(3)(b) if the arrangement applies only to shares of a particular class, all the holders of shares of that class, can take part in the arrangement . Section 369(4)(a) shares held by or by a nominee of the allotting company; Section 369(4)(b) shares held by or by a nominee of a company that is related to that company; Section 369(4)(c) shares held as treasury shares by the other company. Section 369(5)(a) Part XXXIV; or Section 369(5)(a)(i) Part XXXIV; or Section 369(5)(a)(ii) a prescribed provision of laws relating to insolvency; and Section 369(5)(b) "company", except in relation to the allotting, includes a body corporate of any kind.
  49. 370

    SHARE CAPITAL OF COMPANY - 370. Exception to valuation requirement:merger

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    Section 368 does not apply to a company's allotment of shares made in connection with a proposed merger with another company.

    Section 370. Exception to valuation requirement:merger Section 370(1) Section 368 does not apply to the allotment of shares by a company in connection with a proposed merger with another company. Section 370(2) For the purpose of subsection (1) , a proposed merger exists when one company proposes to acquire all the assets and liabilities of another company in exchange for the issue of shares or other securities of the acquiring company to shareholders of the other company (with or without any cash payment to those shareholders). Section 370(3) In this section, "another company" or "other company" includes a body corporate of any kind.
  50. 371

    SHARE CAPITAL OF COMPANY - 371. Non-cash consideration forshares: requirements as to valuation and report

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    Requires a valuer to include specified statements in a valuation report and to carry out or arrange further valuations and prepare a report of valuations and reasons.

    Section 371. Non-cash consideration forshares: requirements as to valuation and report Section 371(1) Part XLI applies to the valuation and report required by section 368 . Section 371(2)(a) the nominal value of the shares to be wholly or partly paid for by the relevant consideration; Section 371(2)(b) the amount of any premium that is payable on the shares ; Section 371(2)(c) a description of that part of the consideration; Section 371(2)(c)(i) a description of that part of the consideration; Section 371(2)(c)(ii) the method used to value it; and Section 371(2)(c)(iii) the date of the valuation; and Section 371(2)(d) by the consideration; and Section 371(2)(d)(i) by the consideration; and Section 371(2)(d)(ii) in cash. Section 371(3)(a) in the case of a valuation made by a person other than personally, that it appeared to the valuer reasonable to arrange for it to be so made or to accept a valuation so made; Section 371(3)(b) whoever made the valuation, that the method of valuation was reasonable in all the circumstances; Section 371(3)(c) that it appears to the valuer that there has been no material change in the value of the relevant consideration since the valuation; and Section 371(3)(d) that, on the basis of the valuation, the value of that consideration, together with any cash by which the nominal value of the shares or any premium payable on them is to be paid up, is not less than so much of the aggregate of the nominal value and the whole of any such premium as is treated as paid up by the consideration and any such cash. Section 371(4) If the consideration to be valued is accepted partly in payment up of the nominal value of the shares and any premium and partly for some other consideration given by the company ("the company whose shares are the subject of a takeover offer;") , section 368 and subsections (1) to (3) of this section apply as if references to the consideration accepted by the company included the proportion of that consideration that is properly attributable to the payment up of that value and any premium. Section 371(5)(a) the valuer shall carry out, or arrange for, such other valuations as will enable the valuer to determine that proportion; and Section 371(5)(b) the valuer shall prepare a report that states what valuations have been made under this subsection and also the reason for; and method and date of, any such valuation and any other matters that could be relevant to that determination.
  51. 372

    SHARE CAPITAL OF COMPANY - 372. Copy of report to be lodged with Registrar

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    A company receiving a valuation report under section 368 must lodge a copy of that report with the Registrar (at the same time as lodging the allotment return); failure is an offence punishable by fines, and the company or officers may apply to Court for relief.

    Section 372. Copy of report to be lodged with Registrar Section 372(1) A company to which a report is made under section 368 as to the value of any consideration for which, or partly for which, it proposes to allot shares shall lodge a copy of the report to the Registrar for registration. Section 372(2) The company shall lodge the copy at the same time as it lodges the return of the allotment of those shares under section 333 . Section 372(3) If a company fails to lodge a copy of a report with the Registrar ("the person for the time being holding office as Registrar of Companies under;") as required by subsections (1) and (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 372(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 the requisite copy of the report, 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 372(5) If a company has failed to lodge with the Registrar ("the person for the time being holding office as Registrar of Companies under;") a copy of a report as required by subsections (1) and (2) , the company or any of its officers may apply to the Court for relief. Section 372(6)(a) that the omission to lodge the copy was accidental or due to inadvertence; or Section 372(6)(b) that it is just and equitable to grant relief, it may make an order extending the time for delivery of the copy for such period as it considers appropriate.
  52. 373

    SHARE CAPITAL OF COMPANY - 373. Public company: agreement for transfer of non-cash asset in initial period

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    Section sets conditions when a public company may enter into an agreement to transfer a non-cash asset in its initial two-year period, including that the counterparty may be a subscriber and that the consideration equals one-tenth or more of issued share capital; the section excludes agreements entered under Court supervision.

    Section 373. Public company: agreement for transfer of non-cash asset in initial period Section 373(1)(a) with a person who is a subscriber to the company ("the company whose shares are the subject of a takeover offer;") 's memorandum; Section 373(1)(b) for the transfer by the person to the company ("the company whose shares are the subject of a takeover offer;") or another, before the end of the company ("the company whose shares are the subject of a takeover offer;") 's initial period; and Section 373(1)(c) under which the consideration for the transfer to be given by the company ("the company whose shares are the subject of a takeover offer;") is at the time of the agreement equal in value to one-tenth or more of the company ("the company whose shares are the subject of a takeover offer;") 's issued share capital , Section 373(2) For the purpose of subsection (1) , a company's initial period is the period of two years from and including the date on which the company is issued with a certificate under section 516 . Section 373(3) For the purpose of subsection (1) , the conditions are those specified in sections 374 and 376 . Section 373(4)(a) it is part of the company ("the company whose shares are the subject of a takeover offer;") 's ordinary business to acquire; or arrange for other persons to acquire, assets of a particular description; and Section 373(4)(b) the agreement is entered into by the company ("the company whose shares are the subject of a takeover offer;") in the ordinary course of that business. Section 373(5) This section does not apply to an agreement entered into by the company ("the company whose shares are the subject of a takeover offer;") under the supervision of the Court ("(unless some other court is specified) the High Court;") or of an officer authorised by the Court ("(unless some other court is specified) the High Court;") for the purpose.
  53. 374

    SHARE CAPITAL OF COMPANY - 374. Agreement for transfer of non-cash asset: requirement of independent valuation

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    Section 374 requires an independent valuation and related reporting and circulation steps for agreements transferring non-cash assets, and provides that a person who already received the valuer's report as a member need not be sent another copy.

    Section 374. Agreement for transfer of non-cash asset: requirement of independent valuation Section 374(1)(a) that the consideration to be received by the company ("the company whose shares are the subject of a takeover offer;") , and any consideration other than cash to be given by the company ("the company whose shares are the subject of a takeover offer;") , has been independently valued in accordance with this Division; Section 374(1)(b) that the valuer's report has been made to the company ("the company whose shares are the subject of a takeover offer;") during the six months immediately preceding the date of the agreement; Section 374(1)(c) that a copy of the report has been sent to the other party to the proposed agreement not later than the date on which copies are required to be circulated to members under section 376 (3). Section 374(2)(a) to the company ("the company whose shares are the subject of a takeover offer;") ; or Section 374(2)(b) to another person in circumstances that are beneficial to the company ("the company whose shares are the subject of a takeover offer;") . Section 374(3) The reference in subsection (1)(c) to the other party to the proposed agreement is to the person referred to in section 374 (1)(a). Section 374(4) If the person has received a copy of the report under section 377 in the person's capacity as a member of the company, it is not necessary to send another copy under this section. Section 374(5) This section does not affect a requirement to value any consideration for purposes of section 368 .
  54. 375

    SHARE CAPITAL OF COMPANY - 375. Agreement for transfer of non-cash asset: requirements as to valuation and report

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    Requirements for valuation reports when a company transfers a non-cash asset: the valuer must include specified notes and statements and carry out or arrange supporting valuations.

    Section 375. Agreement for transfer of non-cash asset: requirements as to valuation and report Section 375(1) Part XLI applies to the valuation and report required by section 374 . Section 375(2)(a) the consideration to be received by the company ("the company whose shares are the subject of a takeover offer;") , describing the relevant asset (specifying the amount to be received in cash) and the consideration to be given by the company ("the company whose shares are the subject of a takeover offer;") (specifying the amount to be given in cash); and Section 375(2)(b) the method and date of valuation. Section 375(3) If the valuation was made by a person other than the valuer, the valuer shall include in or attach to the report a note that it appeared to the valuer reasonable to arrange for the report to be so made or to accept a valuation made by that person. Section 375(4) Irrespective of whether the report was made by the valuer or by some other person, the valuer shall include in, or attach to, the report a statement to the effect that the method of valuation was reasonable in all the circumstances. Section 375(5)(a) a statement that it appears to the valuer that there has been no material change in the value of the relevant consideration since the valuation; and Section 375(5)(b) a statement that, on the basis of the valuation, the value of the consideration to be received by the company ("the company whose shares are the subject of a takeover offer;") is not less than the value of the consideration to be given by it. Section 375(6) A reference in section 374 or this section to consideration given for the transfer of an asset includes consideration given partly for its transfer. Section 375(7)(a) the value of any consideration partly so given is to be taken as the proportion of the consideration properly attributable to its transfer; Section 375(7)(b) the valuer shall carry out, or arrange to be carried out, such valuations of any other thing that will enable the valuer to determine that proportion; and Section 375(7)(c) the valuer shall state in the report what valuations have been made for that purpose and also the reason for, and method and date of, any such valuation and any other matters that may be relevant to that determination.
  55. 376

    SHARE CAPITAL OF COMPANY - 376. Agreement for transfer of non-cash asset: requirement of approval by members

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    The company must have the terms of an agreement for transfer of a non-cash asset approved by an ordinary resolution.

    Section 376. Agreement for transfer of non-cash asset: requirement of approval by members Section 376(1)(a) that the terms of the agreement have been approved by an ordinary resolution of the company ("the company whose shares are the subject of a takeover offer;") ; Section 376(1)(b) that the requirements of subsection (3) relating to the circulation to members of copies of the valuer's report under section 377 have been complied with; Section 376(1)(c) that a copy of the proposed resolution has been sent to the other party to the proposed agreement. Section 376(2) The reference in subsection (1)(c) to the other party to the proposed agreement is to the person referred to in section 374 (1)(a). Section 376(3)(a) if the resolution was proposed as a written resolution, that copies of the valuer's report have been sent or submitted to every eligible member at or before the time at which the proposed resolution was sent or submitted to the member ("a member of a company;") ; Section 376(3)(b) if the resolution was proposed at a general meeting, that copies of the valuer's report have been circulated to the members entitled to notice ("notice in writing;") of the meeting not later than the date on which notice ("notice in writing;") of the meeting was given.
  56. 377

    SHARE CAPITAL OF COMPANY - 377. Copy of resolution to be lodged with Registrar

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    A company must, within fourteen days after passing a resolution about transferring a non-cash asset, lodge with the Registrar a copy of the resolution and the valuer’s report.

    Section 377. Copy of resolution to be lodged with Registrar Section 377(1) Within fourteen days after a company passes a resolution with respect to the transfer of a non-cash asset, 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 resolution, together with a copy of the relevant valuer’s report. Section 377(2) 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 377(3) If, after the company ("the company whose shares are the subject of a takeover offer;") or any of its officers is convicted of an offence under subsection (1) , the company continues to fail to lodge with the Registrar the documents referred to in that section, the company, and each officer of the company who is in default, commit a further office 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.
  57. 378

    SHARE CAPITAL OF COMPANY - 378. Modification of provisions in relation to company whose conversion into apublic companyhas been registered

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    The reference in section 373(1)(a) to a subscriber to the company's memorandum means a person who is a member of the company on the date of registration.

    Section 378. Modification of provisions in relation to company whose conversion into apublic companyhas been registered Section the reference in section 373 (1)(a) to a person who is a subscriber to the company's memorandum is a reference to a person who is a member of the company on the date of registration;
  58. 379

    SHARE CAPITAL OF COMPANY - 379. Agreement for transfer of non-cash inset; effect of contravention

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    If an agreement contravenes the Division's requirements, the company whose shares are subject to a takeover offer may recover consideration given (or its value); unperformed parts of such an agreement are void; and where it concerns an allotment the allottee must pay the company the nominal value plus any premium with interest.

    Section 379. Agreement for transfer of non-cash inset; effect of contravention Section 379(1)(a) the other party to the agreement has not received the valuer's report required to be sent to that party; or Section 379(1)(b) there has been some other contravention of the requirements of this Division that the other party to the agreement knew or ought to have known amounted to a contravention. the company ("the company whose shares are the subject of a takeover offer;") is entitled to recover from that person any consideration given by it under the agreement; or an amount equal to the value of the consideration at the time of the agreement. Section 379(2) Such an agreement, to the extent that it is not carried out, is void. Section 379(3)(a) whether or not the agreement also contravenes section 368 , this section does not apply to it in so far as it is for the allotment of shares; and Section 379(3)(b) the allottee is liable to pay the company ("the company whose shares are the subject of a takeover offer;") an amount equal to the aggregate of the nominal value of the shares and the whole of any premium (or, if the case so requires, so much of that aggregate as is treated as paid up by the consideration), with interest at the appropriate rate.
  59. 380

    SHARE CAPITAL OF COMPANY - 380. Liability of subsequent holders ofshares

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    Persons who become liable under section 368 or because of certain share allotment agreements are also jointly and severally liable to pay the amount due, unless exempted under subsection (4).

    Section 380. Liability of subsequent holders ofshares Section 380(1)(a) section 368 has been contravened; and Section 380(1)(b) because of that contravention another person is liable to pay an amount under the provision contravened, that person is also liable to pay that amount (jointly and severally with any other person so liable), unless the person is exempted from liability under subsection (4) . Section 380(2)(a) the agreement is or includes an agreement for the allotment of shares in the company ("the company whose shares are the subject of a takeover offer;") ; Section 380(2)(b) a person becomes a holder of shares allotted under the agreement; and Section 380(2)(c) because of the agreement and the allotment under it, another person is liable to pay an amount under section 380 (1), the person who becomes the holder of the shares is also liable to pay that amount (jointly and severally with any other person so liable), unless the person is exempted from liability under subsection (4) . Section 380(3) Subsection (2) applies whether or not the agreement also contravenes section 368 . Section 380(4)(a) the person is a purchaser for value and, at the time of the purchase, the person did not have actual notice ("notice in writing;") of the contravention concerned; or Section 380(4)(b) the person derived title to the shares (directly or indirectly) from a person who became a holder of them after the contravention and was not liable under subsection (1) or (2) . Section 380(5)(a) to be included in the company ("the company whose shares are the subject of a takeover offer;") 's register of members in respect of those shares ; or Section 380(5)(b) to have a transfer of the shares executed in the person's favour.
  60. 381

    SHARE CAPITAL OF COMPANY - 381. Power of Court to grant relief

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    The Court may exempt a person (on application) from liability arising under provisions of this Division or Division 5, wholly or partly, if it appears just and equitable.

    Section 381. Power of Court to grant relief Section 381(1)(a) is liable to a company under a provision of this Division make a payment for shares in the company ("the company whose shares are the subject of a takeover offer;") ; or Section 381(1)(b) is liable to a company because of an undertaking given to it in; or in connection with, a payment for shares in the company ("the company whose shares are the subject of a takeover offer;") , may apply to the Court ("(unless some other court is specified) the High Court;") to be exempted from the liability (either wholly or in part). Section 381(2)(a) any other liability arising in relation to those shares under a provision of this Division or Division 5; or Section 381(2)(a)(i) any other liability arising in relation to those shares under a provision of this Division or Division 5; or Section 381(2)(a)(ii) any liability arising because of any undertaking given in or in connection with payment for those shares ; Section 381(2)(b) whether any person other than the applicant has paid or is likely to pay (whether in accordance with an order of the Court ("(unless some other court is specified) the High Court;") or otherwise) any such amount; Section 381(2)(c) has performed, or is likely so to perform, any such undertaking in whole or in part; or Section 381(2)(c)(i) has performed, or is likely so to perform, any such undertaking in whole or in part; or Section 381(2)(c)(ii) has done or is likely to do any other thing in payment or part payment for the shares . Section 381(3)(a) whether the applicant has paid or is liable to pay any amount in respect of liability arising in relation to the shares under a provision of this Division or Division 5; and Section 381(3)(b) whether any person other than the applicant has paid or is likely to pay (whether in accordance with any order of the Court ("(unless some other court is specified) the High Court;") or otherwise) any such amount. Section 381(4)(a) that a company that has allotted shares should receive money or money’s worth at least equal in value to the aggregate of the nominal value of those shares and the whole of any premium or, if the case so requires, so much of that aggregate as is treated as paid up; Section 381(4)(b) subject to paragraph (a) , that if such a company would, if the Court did not grant the exemption, have more than one remedy against a particular person, it should be for the company to decide which remedy it should remain entitled to pursue. Section 381(5)(a) a person brings proceedings against another person for a contribution in respect of liability to a company arising under a provision of this Division or Division 5; and Section 381(5)(b) it appears to the Court ("(unless some other court is specified) the High Court;") that the contributor is liable to make such a contribution. Section 381(6)(a) exempt the contributor in whole or in part from liability to make such a contribution; or Section 381(6)(b) order the contributor to make a larger contribution than, but for this subsection, the person would be liable to make. Section 381(7) If a person is liable to a company under section 380 (1), the Court may, on application, exempt the person in whole or in part from that liability if and to the extent that it appears to the Court to be just and equitable to do so having regard to any benefit accruing to the company because of anything done by the person towards the carrying out of the agreement mentioned in that subsection.
  61. 382

    SHARE CAPITAL OF COMPANY - 382. Offence to contravene section368or373

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    A company that contravenes section 368 or 373, and any officer of the company in default, commits an offence and on conviction each is liable to a fine not exceeding five hundred thousand shillings.

    Section 382. Offence to contravene section368or373 Section If a company contravenes section 368 or 373 , 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.
  62. 383

    SHARE CAPITAL OF COMPANY - 383. Enforceability of undertakings to do work,etc.

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    A company may enforce an undertaking given by any person in connection with payment for its shares even if a provision of this Division or Division 5 has been contravened.

    Section 383. Enforceability of undertakings to do work,etc. Section 383(1) An undertaking given by any person, in or in connection with payment for shares in a company, to do work or perform services ("anything other than goods or land") or to do any other thing, if it is enforceable by the company ("the company whose shares are the subject of a takeover offer;") apart from this Division, is so enforceable by the company ("the company whose shares are the subject of a takeover offer;") apart from this Division, is so enforceable even though a provision of this Division or Division 5 has been contravened in relation to it. Section 383(2) Subsection (1) does not prevent the Court from granting relief under section 381 .
  63. 384

    SHARE CAPITAL OF COMPANY - 384. What is the appropriate rate of interest for the purposes of this Division?

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    The rate of interest for this Division is five percent per year unless the Cabinet Secretary specifies another rate by order.

    Section 384. What is the appropriate rate of interest for the purposes of this Division? Section 384(1)(a) five percent per year; or Section 384(1)(b) if some other rate is specified by order made under subsection (2) , that other rate. Section 384(2) The Cabinet Secretary may, by order published in the Gazette , specify a rate for the purpose of subsection (1)(b) and may from to time, by a similar order so published, substitute another rate for the rate currently specified.
  64. 385

    SHARE CAPITAL OF COMPANY - 385. Interpretation: Division 7

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    Section 385 provides definitions used in Division 7 (arrangement, company, equity/non-equity shares, holding company, issuing company, share premium account, transferor company) and states that references to acquisition, issue or transfer of shares by a company include actions by a nominee and that transfer of shares includes transfer of a right to be included in the register.

    Section 385. Interpretation: Division 7 Section 385(1) In this Division— “arrangement” includes any agreement or scheme, and in particular includes an arrangement approved in accordance with— (a) Part XXXIV; or (b) any provision of laws relating to insolvency 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 Division; “company", except in relation to an issuing company, includes any kind of body corporate ; “equity shares ", means shares comprised in a company's 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;") ; and "non-equity shares " means shares (of any class) that are not so comprised; “ holding company ", in relation to an issuing company, the company ("the company whose shares are the subject of a takeover offer;") of which the issuing company is a subsidiary; “issuing company", means a company that issues shares as referred to in section 387 (1); “share premium account", in relation to a company, means the account established by the company ("the company whose shares are the subject of a takeover offer;") under section 386 ; “transferor company", in relation to an issuing company, means the company ("the company whose shares are the subject of a takeover offer;") whose non-cash assets are transferred to the issuing company as referred to in section 387 (1). Section 385(2)(a) a reference (however expressed) to the acquisition by a company of shares in another company includes the acquisition of shares by a nominee of that company; Section 385(2)(b) a reference to the issue or allotment of shares to, or the transfer of shares to or by, a company, includes the issue or allotment or transfer of shares to or by, a nominee of that company; and Section 385(2)(c) a reference to the transfer of shares in a company includes the transfer of a 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 those shares .
  65. 386

    SHARE CAPITAL OF COMPANY - 386. Company’s share premium account and application of share premiums

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    Companies must establish a 'share premium account' and transfer share premiums into it; the company may use that account to pay up bonus shares; failure to comply with subsection (1) is an offence attracting a fine not exceeding five hundred thousand shillings.

    Section 386. Company’s share premium account and application of share premiums Section 386(1)(a) if it has not already done so, establish an account to be called the share premium account; and Section 386(1)(b) transfer to that account an amount equal to the aggregate amount or value of the premiums on those shares . Section 386(2)(a) the expenses of the issue of those shares ; and Section 386(2)(b) any commission paid on the issue of those shares . Section 386(3) The company may use its share premium account to pay up new shares that are to be allotted to members as fully paid bonus shares . Section 386(4) Subject to subsections (2) and (3) , the provisions of this Act relating to the reduction of a company's share capital apply as if the company's share premium account were part of its paid up share capital. Section 386(5) This section has effect subject to sections 387 , 388 and 390 . Section 386(6) 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 five hundred thousand shillings.
  66. 387

    SHARE CAPITAL OF COMPANY - 387. Relief from requirements as to share premiums: Group reconstruction relief

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    If shares issued in consideration for a transfer are issued at a premium, the issuing company is not required by section 386 to transfer any amount in excess of the minimum premium value to the share premium account.

    Section 387. Relief from requirements as to share premiums: Group reconstruction relief Section 387(1)(a) to the holding company ; or Section 387(1)(b) to another wholly-owned subsidiary of the holding company , Section 387(2) If the shares in the issuing company allotted in consideration for the transfer are issued at a premium, the issuing company is not required by section 386 to transfer any amount in excess of the minimum premium value to the share premium account. Section 387(3) For the purpose of (2), the minimum premium value is the amount (if any) by which the base value of the consideration for the shares allotted exceeds the aggregate nominal value of the shares . Section 387(4) The base value of the consideration for the shares allotted is the amount by which the base value of the assets transferred exceeds the base value of any liabilities ("duties;") of the transferor company assumed by the issuing company as."^ part of the consideration for the assets transferred. Section 387(5)(a) the cost of those assets to the transferor company; or Section 387(5)(a)(i) the cost of those assets to the transferor company; or Section 387(5)(a)(ii) if less, the amount at which those assets are stated in the transferor company's accounting records immediately before the transfer; and Section 387(5)(b) the base value of the liabilities ("duties;") assumed is taken to be the amount at which those liabilities ("duties;") are stated in the transferor company's accounting records immediately before the transfer.
  67. 388

    SHARE CAPITAL OF COMPANY - 388. Merger relief

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    Merger relief under section 388 may be effected by issue or transfer to the issuing company of equity or non-equity shares in the other company, or by cancellation of such shares not held by the issuing company; if shares allotted in consideration are issued at a premium, section 386 does not apply to those premiums; section 388 does not apply where section 387 applies.

    Section 388. Merger relief Section 388(1)(a) by the issue or transfer to the issuing company of equity shares in the other company; or Section 388(1)(b) by the cancellation of any such shares not held by the issuing company. Section 388(2) If, in a case to which this section applies, the equity shares in the issuing company allotted under the arrangement in consideration for the acquisition or cancellation of equity shares in the other company are issued at a premium, section 386 does not apply to the premiums on those shares. Section 388(3)(a) by the issue or transfer to the issuing company of non-equity shares in the other company; or Section 388(3)(b) by the cancellation of any such shares not held by the issuing company, Section 388(4) This section does not apply to a case to which section 387 applies.
  68. 389

    SHARE CAPITAL OF COMPANY - 389. Merger relief: meaning of ninety percent equity holding

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    Defines when a company is treated as having acquired at least a ninety percent equity holding in another company for merger relief purposes.

    Section 389. Merger relief: meaning of ninety percent equity holding Section 389(1) This section applies for the purpose of determining whether a company has, for the purposes of section 388 , acquired at least a ninety percent equity holding in another company under an arrangement referred to in subsection (1) of that section. Section 389(2) For the purpose referred to in subsection (1) , a company acquires at least a ninety percent equity holding in another company if, as a result of an acquisition or a cancellation of equity shares in another company (under an arrangement referred to in section 388 (1), it holds equity shares in the other company of an aggregate amount equal to ninety percent or more of the nominal value of the other company's equity share capital. Section 389(3)(a) it does not matter whether any of the shares were acquired under the arrangement ; and Section 389(3)(b) shares in the other company held by the acquiring company as treasury shares are to be disregarded in determining the nominal value of the other company's share capital. Section 389(4) If 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 other company is divided into different classes of shares , the acquiring company is taken to have acquired at least a ninety percent equity holding in the other company only if the requirements of subsection (2) are satisfied in relation to each of those classes of shares taken separately. Section 389(5)(a) a company that is the acquiring company's holding company or subsidiary; Section 389(5)(b) a subsidiary of the acquiring company’s holding company ; or Section 389(5)(c) its or their nominees,
  69. 390

    SHARE CAPITAL OF COMPANY - 390. Power to make further provision by regulations for the purposes of this Division

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    Power to make regulations to relieve companies from the requirements of section 386 in relation to premiums other than cash premiums.

    Section 390. Power to make further provision by regulations for the purposes of this Division Section for relieving companies from the requirements of section 386 in relation to premiums other than cash premiums;
  70. 391

    SHARE CAPITAL OF COMPANY - 391. Relief may be reflected in company’s balance sheet

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    Relief may be reflected in company’s balance sheet.

    Section 391. Relief may be reflected in company’s balance sheet
  71. 392

    SHARE CAPITAL OF COMPANY - 392. Classes ofshares

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    Shares are of one class if the rights attached to them are in all respects uniform.

    Section 392. Classes ofshares Section 392(1) For the purposes of this Act, shares are of one class if the rights attached to them are in all respects uniform. Section 392(2) For purposes of subsection (1) , the rights attached to shares are not to be regarded as different only because they do not carry the same rights to dividends during the twelve months immediately following their allotment.
  72. 393

    SHARE CAPITAL OF COMPANY - 393. Variation of class rights: companies having a share capital

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    Sets how rights attached to a class of shares may be varied by either written consent of at least three-quarters in nominal value of issued shares of that class or by a special resolution at a separate meeting of those holders.

    Section 393. Variation of class rights: companies having a share capital Section 393(1) This section is concerned with the variation of the rights attached to a class of shares in a company having a share capital. Section 393(2)(a) deleted by ActNo. 28 of 2017, s. 25(a); Section 393(2)(b) if the holders of shares of that class consent to the variation in accordance with this section. Section 393(3) Subsection (2) does not affect any other restrictions varying the rights. Section 393(4)(a) consent in writing from the holders o at least three-quarters in nominal value of the issued shares of that class (excluding any shares held as treasury shares ); or Section 393(4)(b) a special resolution passed at a separate general meeting of the holders of that classes sanctioning the variation. Section 393(5) An amendment of a provision contained in a company's articles for the variation of the rights attached to a class of shares , or the insertion of any such provision into the articles , is itself a variation of those rights for the purpose of this section. Section 393(6) In this section, and (except when the context otherwise requires) in any provision of a company’s articles for the variation of the rights attached to a class of shares , a reference to the variation of those rights includes a reference to their abrogation. [Act No. 28 of 2017 , s. 25.]
  73. 394

    SHARE CAPITAL OF COMPANY - 394. Variation of class rights: companies without a share capital

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    Rules for varying the rights of a class of members in a company that has no share capital, including consent or special resolution requirements and recognition of articles.

    Section 394. Variation of class rights: companies without a share capital Section 394(1) This section is concerned with the variation of the rights of a class of members of a company that does not have a share capital. Section 394(2)(a) in accordance with the provisions of the company ("the company whose shares are the subject of a takeover offer;") 's articles providing for the variation of those rights; or Section 394(2)(b) where the company ("the company whose shares are the subject of a takeover offer;") 's articles contain no such provision, if the members of that class consent to the variation in accordance with this section. Section 394(3) Subsection (2) does not affect any other restriction varying the rights. Section 394(4)(a) consent in writing from at least three-quarters of the members of the class; or Section 394(4)(b) a special resolution passed at a separate general meeting of the members of that class sanctioning the variation. Section 394(5) An amendment of a provision contained in a company's articles for the variation of the rights of a class of members, or the insertion of any such provision into the articles , is itself a variation of those rights for the purposes of this section. Section 394(6) In this section, and (except when the context otherwise requires) in any provision in a company's articles for the variation of the rights of a class of members, a reference to the variation of those rights includes a reference to their abrogation.

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