Registering a Company in Kenya Companies Act 2015

Company Registration in Kenya: The new Companies Act 2015 has been
commenced. This is the primary legislation that deals with registering a company in
Kenya and applies to companies directly. A number of the processes involved in the
registration and running a company in Kenya have been simplified.
This write-up provides basic information on what the users of the Companies
Registry need to know about the Companies Act 2015 with regard to incorporation
of a new company.
Company Registration in Kenya
A person wishing to incorporate a company in Kenya should lodge with the Registrar
the following documents:
1. Application and reservation of name. The name search and reservation
process can be done at any of the Huduma Centres countrywide, online using
the E-Citizen platform and on a Safaricom mobile phone by dialing *271#.
2. Form CR 1) Application to register a company containing the proposed
name (as reserved), the registered office, liability of members (whether
limited by shares or by guarantee), the nature of the company (if private or
public) and the name, consent of the initial director and secretary of the
company and address of the agent if an agent is used to make the
application. The form combines the application for company registration, KRA
PIN, NHIF, and NSSF registration.
3. (Form CR 2) Model memorandum for a company limited by shares or (Form
CR 3) Model memorandum for a company limited by guarantee or (Form CR
4) Model memorandum for a company whose liability is unlimited.
4. Statement of Nominal Share Capital form.
5. Notification of directors residential address. (Form CR8)
6. Articles of Association (if those provided in the Regulations have not been
adopted).
7. Applicants should attach copies of identification documents.
For Kenyan Citizens attach copies of:
Category: Company Registration in Kenya

Identification Card (ID)

Personal Identification Number certificate (PIN)

Passport size photo (coloured)

For Non Kenyans (Foreigners) attach copies of:

Passport pages with bio data

Passport size photo (coloured )

Do I need to pay Stamp Duty?

Category: Company Registration in Kenya
No. Company registration documents have been exempted from stamp duty
eliminating the requirement for stamp duty assessment and franking.
Do I need to pay any registration fees?
Category: Company Registration in Kenya
Yes. The registration fee is ksh.10,000 for all companies regardless of the Nominal
Share Capital.
Does my company have to file Articles of association?
Category: Registering a Company in Kenya
The Companies (General) Regulations, 2015 provide in schedule 3, 4 and 5 model
Articles which companies may adopt. Where applicants adopt the model Articles
they do not need to supply them during registration. If the applicants do not adopt
such Articles, then they have to provide their own Articles.
Directors
Is there a minimum age for directors?
Category: Registering a Company in Kenya
Yes. All directors must be over the age of eighteen. Section 131 applies.
Can a company have only one director?
Category: Registering a Company in Kenya
Yes. Section 128 of the Companies Act provides that a private company is required
to have at least one director.

A public company is required to have at least two directors.

A company is required to have at least one director who is a natural person.

Can a company have only one shareholder?

Category: Registering a Company in Kenya
Yes. One or more persons who wish to form a company may subscribe their names
to the Memorandum of Association.
Do I need to have a secretary?
Category: Registering a Company in Kenya
Private companies with a share capital of less than 5 million shillings are not
required to have a secretary. However all public companies must have a secretary.

Other Legislation
Have there been any changes to the Business Names Registration or
Limited Liability Partnerships Acts?
Category: Registering a Company in Kenya
No. The registration of Business Names and Limited Partnerships is determined by
separate legislation, principally, the Registration of Business Names Act (Cap 499)
and the Limited Liability Partnerships Act. As a result there is no change to the
processes. Only companies are affected by enactment of the Companies Act 2015.
Online Business Registration in Kenya Online Company Registration in
Kenya
Business Name Registration in Kenya
Business name registration can now be done online as follows:
Online Business Name registration in Kenya Through M-Pesa
HOW TO SEARCH FOR A BUSINESS NAME
1. Pay Kshs.1oo to *Pay Bill945050.Account number is NS. Wait for Confirmation
from State Law Office
2. Then Dial *271#, select The Companies Registry then select Name Search.
Type the name you want to search
3. You will receive a notification on availability from State Law Office. If
available, It is reserved for 30 days
4. If name not available repeat above steps (Note: Each name search is
Kshs.100)
Online Business Registration in Kenya
1. Download, print
general.go.ke

and

fill

in

an

application

form

from www.attorney-

2. Visit the Company Registry at the Attorney General Chambers

your Nearest Huduma Center to submit your application forms

or

3. Pay Kshs.800 via Playbill number is945050, Account number isBN2. (Note:
Only the business owner should pay for registration so payment Details
coincide with business owner details)
4. Once you pay, you will be issued with a tracking number. Dial *271#
and Enter the tracking number to find out the status of your application
Online Company Registration in Kenya How To Pay Via Pay Bill
1. Select Lipa na M-PESA on M-PESA Menu
2. Select Pay Bill

3. Enter Business Number 945050

4. Enter Account Name as BN2
5. Enter the amount you wish to pay (Kshs 100 or 800)
6. Enter your M-PESA PIN number
7. Confirm that all details are correct and press OK
8. You will receive a confirmation SMS from M-PESA
Should you have any questions, you can call our call center for
assistance On 0701 155 955
Paybill Is a chargeable M-PESA service
If you do not have Lipa na M.PESA on your menu go to M-PESA select My Account
and Update Menu
Registering a Company in Kenya Old Way
Company registration in Kenya is a bit of a hustle and involve a few steps that are
time consuming. This makes majority of entrepreneurs opt to go for partnership or
sole-proprietorship type of business as these takes less time and less money and
can change the model of registration while they have been in operation and
understand the market.
Company Registration in Kenya Registering a Company in Kenya
How to Register a Company in Kenya
Proposed company name must be reserved pending registration (Name can only be
reserved for thirty days). Application for reservation should be made in writing and
be accompanied with the requisite fee.
1. Documents for incorporation of company (i.e. memorandum and ) should be
drawn by a lawyer, who should submit the Articles of Association to the
Registry together with the prescribed forms and fees. These forms are
obtainable at the Registry.
2. All companies must appoint a qualified certified public secretary as company
secretary
3. Certificate of Incorporation is processed within 7(seven) days of presentation
of PROPERLY completed forms.
4. Refusal of registration is communicated in writing to the applicant.
NOTE: A registered company MUST forthwith comply with the requirements of the
Companies Act, e.g. filing of Annual Returns.
Company Registration Forms in Kenya
Company Registration in Kenya Private Companies

Particulars of Directors and Secretaries.

Notice of situation of Registered Office.

Declaration Of compliance.

Statement of Nominal Share Capital form.

Company Registration in Kenya Public Companies

In addition to the above Forms, Public Companies must also submit

Consent to act as Director of a company.

List of persons who have consented to act as directors.

Declaration that the provisions of sec. 111(2) b have been complied with
Statement in lieu of prospectus.

Company Registration in Kenya Foreign Companies

Registering a Company in Kenya Required Documents

Certified copies of foreign companies memorandum and Articles of

Association and Certificate of Incorporation duly certified by a Notary Public.

List of documents delivered for registration by a company incorporated

outside Kenya.

List and particulars of the directors and secretary of a company incorporated

outside Kenya.

List of names and addresses of the persons resident in Kenya authorized to

receive service on behalf of a company incorporated outside Kenya.

Notice of situation of registered or principal office or change therein of a

company incorporated outside Kenya.

How to Register a Company in Kenya Registration of Companies in Kenya

Registering a limited liability company in Kenya involves the following
steps and fees
State registration of legal entity, statistical, and tax registration with the
Center for Public Registration
The company name reservation lasts 30 days but can be renewed for a similar
period.
Duration

Fees KES 100 per name reservation

Stamp the memorandum and articles and a statement of the nominal capital

days

Effective January 1, 2005, the Kenya Revenue Authority (KRA) took over stamp duty
collection from the Ministry of Lands and Housing. As an administrative
requirement, the KRA now requires the personal identification numbers (PINs) of all
parties on whose behalf duty-stamped documents are submitted. Documents must
be first assessed by the Stamp Duty Office before payment can be processed by the
KRA-designated banks. The process has lengthened initially to about 2 weeks
because the Stamp Duty Office waited to receive confirmation of bank payment
after clearance of funds. However, the time has reduced in 2008 as a result of
better communication between the Ministry of Lands and housing and Kenya
Revenue Authority (KRA) to 5-10 days. Bank handling charges of KES 100 for each
transaction are also due.
Duration

5
days
Fees 1% of nominal capital + KES 2,020, stamp duty on Memorandum and
Articles of Association
Pay stamp duty at bank
Duration

1
day
(included
Fees KES 100 bank commission

in

the

previous

procedure)

Declaration of compliance (Form 208) is signed before a Commissioner of

Oaths /notary public
According to the Companies Act (Cap. 486), An advocate engaged in the formation
of the company or a director or company secretary named in the Articles must sign
Form 208, the declaration of compliance, which accompanies the registration
documents to be submitted to the Registrar of Companies. (Simuletanous with
procedure 2)
Duration
Fees KES 200

day

File deed and details with the Registrar of Companies at the Attorney
Generals Chambers in Nairobi
The founder must file the incorporation deed and the required documents and forms
(listed below) with the Registrar of Companies, which includes:
1. Stamped memorandum and articles of association.

Company Registration in Kenya

2. Statement of capital.
3. Form 201, Notice of Situation of Registered Office.
4. Form 203, Particulars of Directors and Secretary.
5. Form 208, Declaration of compliance with the Companies Act.
6. Copy of the company name approval
Fee schedule for registration:
1. For the first KES 100,000: KES 2,800.
2. For every KES 20,000 after the first KES 100,000: KES 120, subject to a
maximum of KES 60,000.
3. Filing fee for three forms: KES 600.
Duration: 7Fees: KES 6360

14

days

Register with the Tax Department for a PIN and VAT online
Registration for a personal and a company identification number (PIN) is required to
register for the VAT (PIN certificates of at least two directors or 2 shareholders or a
director and the secretary are required), the local service tax, and the pay-as-youearn (PAYE) tax. The founder must file the certificate of registration and a copy of
the memorandum and articles of association. IDue to new online reforms, the
application for a PIN and VAT registration can now be done concurrently on-line.
Unless the KRA has already received confirmation of incorporation of the company

from the Companies Registry, one must still submit the Certificate of Incorporation
and receive log-in details from the KRA for the purpose of applying for a PIN and VAT
registration.
Duration:
Fees: No Charge

days

Apply for a business permit

The fee to apply for a business permit varies by type of business, number of
employees, and size of the companys premises. The fee is payable to the Nairobi
City Council , Licensing Department. The City Council will issue a business permit.
Fee schedule for business permit:
1. Medium trader, shop, or retail service from 5 to 20 employees and/or
premises 50300 sq. m. (fair location): KES 5,000.
2. Mid-size business of 50 employees and premises 300 sq. m.: about KES
20,000 to KES 50,000, depending on the nature of the business.
The Licensing Laws (Repeals and Amendments) Act , 2006 (enacted in December of
2006 and came into effect on May, first, 2007), amends the Local Government Act
(Cap. 265) by reducing the number of business permits required for a distributor of
goods or provider of services to carry on its business activities. Applicants having
obtained a business permit to operate from one local authority will not be required
to obtain another business permit in another local authority. In addition, business
permit applicants will have an opportunity to elect whether to apply for a 1- or 2year permit. The 2006 law also eliminated the requirement to obtain a trading
license in addition to the permit.
Duration:
Fees: KES 5,000

days

Register with the National Social Security Fund (NSSF)

The National Social Security Fund provides the employee with a lump-sum
retirement benefit. Historically, the rate of return paid by the state is considerably
less than that achieved by private schemes, but participation is mandatory. The
employer pays a standard contribution of about 1% of salary, subject to a maximum
of KES 400 per month. Half the contribution is deductible from the employees
salary. The precise amount of the contribution (where less than the maximum) is
determined by reference to salary bands.
Duration:
Charges: No Charge

day

Register with the National Hospital Insurance Fund (NHIF)

The employee contributes a fixed sum to the National Hospital Insurance Fund
(NHIF), which must be deducted by the employer from the employees salary. The
maximum contribution is KES 320 per month. The contributions are used to offset

the costs of medical treatment, but they only cover a fraction of actual costs.
Hence, most companies provide employees with medical insurance.
Duration:
Charges: No Charge

day

day

Register for PAYE

Duration:
Charges: No Charge

Make a company seal after a certificate of incorporation has been issued

Seals are made by private entities who require sight of a copy of the certificate of
incorporation.
Business Registration in Kenya Video
How To Register A Business in Kenya Sole Proprietorship / Partnership
The procedure to register a sole proprietorship / partnership in Kenya is pretty easy
and should not cost more than Kshs 900/-. Here is what you need to do:
1. Pick out a business name that you wish to register. Write a simple
letter addressed to the Registrar General. This letter need only ask the
registrar to confirm if your chosen business name is available for registration.
2. Make your way over to Sheria House, and to the Registrar of Companies
within the Sheria House compound.
3. Go over to counter No 1 and hand in your letter(s). You will need to pay
Kshs 100 for every name that you wish to register. This is what is called
business name search. The process takes three days to a week, max
(usually). You will receive a blue receipt.
4. Three days after handing in your letter, go back to Sheria House and
show the attendant your receipt. If your chosen name is available for
registration, you will receive a letter from the registrar of companies that,
basically, tells you your name search was successful. You will also receive a
form, Form BN/2.
5. What you need to do is fill out Form BN/2 as completely as possible.
If you are registering a sole proprietorship, the part where it says Particulars
of proprietor or partners will bear only one name, otherwise you can put in
up to 20 partners (for a partnership).
6. Go back to Sheria House and hand in your completed Form BN/2. You
will need to pay Kshs 800/-. After a week or so, you will have to go back to
Sheria House to collect your business registration certificate. Congratulations,
you shall then have registered a new business!
Business Registration in Kenya About Partnership

The process of registering a sole-proprietorship and partnership is the same at

Sheria house.
However, because of the unique nature of partnerships (the fact that one partners
actions can make other partners equally liable) it is recommended that one also
registers a partnership deed that clearly defines rights, duties and obligations of all
partners.
A partnership deed once drawn up is supposed to be registered as a public
document at the Ministry of Lands.

Company registration in Kenya

When handling the company registration in Kenya process, like in many other
functional jurisdictions and economies worldwide, the Kenyan business environment
is defined by a set of legal regulations. The set of regulations required by registrar
of companies for company incorporation in Kenya or in other words Company
formation in Kenya for Public, Private and Foreign Company Registration in Kenya
and Sole proprietorship be legally registered are contained in the New Companies
Act 2015 of the laws of Kenya. The ACT also provides on how to register a sole
proprietor company in Kenya.
Company Registration in Kenya Procedure
How the limited company registration in Kenya works
1. Business Name Search
With our help the applicant shall be required to search the desired name at the
Registrar of Companies in Kenya. The Registrar will issue the applicant with a letter
confirming that the name is available for registration. Business registration search
in Kenya usually takes about 2 days but at Briantony International Consultancy we
avail
the
approved
Business
name
search
results
instantly.
2.
Memorandum
and
Articles
of
Association
The applicant will be required to engage a company secretary to draft the
Memorandum and Articles of Association which will set out the objects of the
company and the internal constitution of the company. Briantony International
Consultants will prepare Memorandum and Articles of Association documentation for
you
3.
Stamp
duty
Payment
Once the Memorandum & Articles of Association are prepared, we will lodge the
documents with the registrar of companies Kenya . There is no payment of stamp

duty
under
the
new
companies
ACT
2015.
4.
Company
Registration
Forms in
Kenya
We will forward the documents to the Registrar of companies in Kenya together with
these company registration forms.
o

Form CR 1- Company registration form is signed under the guidance

of our firm registering your company. Application to register a company
including the proposed name (as reserved), the registered office,
liability of members (whether limited by shares or by guarantee), the
type of the company (if private or public) and the name, consent of the
initial director and secretary of the company and address of the agent
if an agent is used to make the application. The form combines the
application for company registration, KRA PIN, NHIF, and NSSF
registration.

Form CR 2 Model of Memorandum for Company with share capital.

Form CR 6 covers the particulars of the company director

Form CR 8 Notice of residential address of Director or change of

Address of Director of Company

Form CR 10 Notice of appointment of Secretary or Secretarys

particulars. This only applies to Companies with more than 5 million
Kenya shilling in Nominal share capital.

Statement of Nominal Share capital form.

A certificate of registration or Certificate of incorporation will be issued.

Company registration requirements in Kenya
How to register a company in Kenya 2015?

Proposed names for business name search and reservation

Address of the proposed L.L.C including LR Number

What the company will be doing and main objectives of the Company

If any of the directors are foreigners then a Kenyan director and shareholder
is needed. We can also act as their Kenyan nominee director at a fee.

Copies of Identification cards of all the Directors or passports in case of

foreign directors

PIN, Certificate copies of all the Directors

Passport size photographs of all local Directors. This is not applicable to

foreign directors

Percentage of the shareholding for each director

The registration process or Company formation process in another name also

applies to Private and Public Limited Liability Companies.
registration services include private company registration, public limited company
registration, foreign company/business registration, Company registration in Kenya
for foreigners, Foreign Company formation in Kenya, Business name Search and
Reservation, Business Name registration, company registration search Kenya, how
to start a company in Kenya, how to register a sole proprietor company in Kenya,
changes within the Business names, Special Resolution, online company/business
registration in Kenya, Form CR 8 Notice of residential address of Director or
change of Address of Director of Company, Form CR 7 Notice of change of
directors particulars, increase of Nominal Capital, List of directors CR 12, CR12
document Kenya, Search registered companies in Kenya and Huduma Center
services in Kenya.
Briantony International Consultants also offers Company Pin registration and other
services offered by Kenya Revenue Authority (K.R.A)
COMPANIES ACT 2015 AND ITS IMPLICATIONS ON HOW TO REGISTER A
COMPANY IN KENYA
The new Companies Act under a Section 28 stipulates that unless the articles of a
company specifically restrict the objects of the company, its objects are
unrestricted. Therefore, under this Act a company has the power to pursue any
object unless it is expressly disallowed under its Memorandum of Association. This
clause greatly expands the scope of business that may be conducted by companies
in Kenya. Furthermore, the provision will alleviate the rigorousness involved in
drafting the Memorandum and the detailed nature of the objects clause.
Notably, section 33 of the Act further stipulates that the validity of an act or
omission of a company may not be questioned on the ground of lack of capacity as
to a provision in the constitution of the company.
In accordance with that provision , the conduct by a company of an object barred
under the Memorandum of Association would be lawful.
Company limited by guarantee
According to section 9 (1) (b) of the Companies Act 2015, a company limited by
guarantee cannot be a private company. Further, under section 7 (1) (a) of the Act
such a company cannot have a share capital. This contrasts with the position under
the repealed Companies Act which allowed a private company to be limited by
guarantee and further to have a share capital. However it is worth noting that,
under the new Companies Act, a company registered before commencement of the
Act as a company limited by guarantee but having a share capital is not prohibited.
Duties of Directors
Under the former Company Law, the fiduciary duties of directors were solely
prescribed under the common law of England as adopted in Kenya under section 3
(1) of the Judicature Act. However, with increasing awareness of corporate

governance principles, the Companies Act 2015 has adopted these duties into its
statutory provisions and therefore prescribes Directors duties as follows:

To promote the success and growth of the company;

To exercise independent judgment at all times;

To exercise reasonable care, skill and diligence;

To avoid conflicts of interest totally

Not to accept benefits and gains from third parties

These duties are enforceable in the same manner as any other fiduciary duty
bestowed to a company by its directors.
Company secretary
According to the old Companies Act, every company was required by Law to have a
company secretary. However, the Companies Act 2015 only makes it mandatory for
public companies to appoint a company secretary. Private company is not required
to have a company secretary unless it has a paid up capital of five million Kenya
shillings or greater.
Written Company Resolutions
Under the old Companies Act, it was a mandatory provision for the resolutions of the
Company to be ratified at the general meeting of members. However, section 255
(1) of the Companies Act 2015 allows a private company to pass a resolution as a
written resolution instead of passing it at a meeting of the members. Alternatively,
copies of the written resolution will be delivered to the members together with a
statement informing the members on how to signify agreement to the resolution
and suggesting the date by which the resolution is required to be passed.
Written resolutions are very efficient and cost effective as they do away with the
requirement for private companies to issue notices for meetings. Further, they
negate the need for physical presence by member at the meetings. Members are
able to pass resolutions without necessarily attending companys general meetings.
There will also be lesser need for appointment of proxies by absentee members to
to attend the general meetings and vote on their behalf because the voting can be
conducted anywhere.
Conversion of Shares to Stock and vice versa
Under the old repealed Companies Act, a company could by ordinary resolution
convert any of its paid-up shares into stock and reconvert any stock into paid-up
shares of any denomination. However, the Companies Act, bars the conversion of
the shares of a company into stock.
Issuance of Share Warrants Prohibition
In accordance with the repealed Companies Act, companies limited by shares either
public or private could issue share warrants. Share warrants are instruments and

documents that give a right, option and privilege to the holder to acquire shares
within a specified period time and at a specified price. The share warrants entitles
the bearer to the shares specified. Share warrants are transferable by delivery and
are thus negotiable instruments.
In view of the foregoing, section 504 (1) of the Companies Act 2015 prohibits the
issuance of share warrants. A share warrant issued in contravention with the Act
shall be void.
or those of its holding company. The Companies Act 2015 adopts a different
approach. Under section 424 (1) thereof, a limited company is generally prohibited
from acquiring its own shares, whether by purchase, subscription or otherwise.
However, under sub-section 2 a limited company having a share capital is allowed
to purchase its own shares in accordance with the provisions of the Act. Further,
section 449 allows a private limited company to purchase its own shares out of its
capital. Shares that have been purchased or acquired by the company out of
distributed profits and thus are part of its assets are known as treasury shares.
Electronic lodging of documents
The Companies Act 2015 has empowered the Registrar of Companies to formulate
regulations that allow documents or documents of a specified class to be filed with
the Registrar for registration purposes by electronic mode. These regulations once
enacted will finally approve the adoption of an electronic Company registry where
business and payments can be efficiently conducted electronically.
Exemption from Audit Requirements
The Companies Act 2015, Section 711 (1) exempts small companies from the audit
requirements. . The law stipulates that a small company is the one whose turnover
is not more than 50 million Kenya shillings and the value of its assets is not more
than 20 million Kenya shillings and has less than 50 employees.
Age requirement for directors
The repealed Companies Act, had the minimum age for qualification for
appointment as a director as 21 years of age. The Companies Act 2015 has reduced
the minimum age qualification for directors to 18 years.
Winding up or Liquidation of companies
The law on winding up and liquidation of all types of companies in Kenya is
governed under the new Companies ACT and Insolvency Law Act 2015 as below:

Voluntarily

By the Court

Subject to supervision of the Court

Winding up by Court (compulsory winding up)

It is winding up following an order of the High Court to that effect. The New
Companies Act, section 218 gives the High Court jurisdiction to wind up any
company registered in Kenya. Please note that such winding up may only take place
under these conditions set by section 219 of the new Act,
1. The company by special resolution has resolved to be wound up by court;
2. Where default is made by the company in lodging to the registrar the statutory
report
or
on
holding
the
statutory
meeting;
3. When the company does not start business within one year of registration or
suspends
its
business
for
more
than
one
year;
4. Where the company is unable to pay its debts and thereby insolvent
5.Where the court is of the opinion that it is just and equitable to wind up the
company;
6. In the case of a company registered outside Kenya and carrying on business in
Kenya, the court will make an order that the company be wound up if winding up
proceedings have been instituted against the company in the country where it is
incorporated or in any other country where it has established business.

SUMMARY OF THE PROVISIONS OF THE COMPANIES ACT, 2015 THAT

CAME INTO OPERATION ON 6TH DECEMBER 2015
The Companies Act, 2015 was assented by the President on 11 th September 2015
with only Section 2 of the Act coming into operation on the date of gazettement on
15th September 2015. All other parts and sections were to come into operation upon
a gazette notice by the Cabinet Secretary responsible for company matters, the
Attorney General. In exercising such powers, the Attorney General has opted for a
phased/ staggered approach in operationalizing the laws. The first phase of
implementation of the laws was published in Gazette Notice 233 of 2015 where the
following parts are now operational; Parts 1 to 14, Part 23, Part 31, Part 32,
Part 38, Part 40, Part 42 and the First, Second and Sixth Schedules of the
Act.
The AG has indicated that the second phase of implementation which includes the
following Parts of the Act: Parts 15-22, Part 24-28, Part 30, Part 33-37, Part 39, and
Part 41. The commencement date for this phase will be by notice.
The Attorney General has also published the Companies (General) Regulations,
2015 which prescribes additional requirements as required by the Act, the
necessary forms and the fees for the services offered by the Companies Registry.

The summary below highlights the parts that are now operational under the Act:PART I (Sections 1-4) deals with preliminary matters. In addition to providing for
the commencement of the sections provisions, the Part specifies the objects of the
Act and defines various terms used in it, including subsidiary, holding company,
undertaking, parent undertaking, subsidiary undertaking, and dormant
company.
PART II (Sections 5-19) outlines the types of companies that can be formed and
deals with their formation and registration. Companies can either be limited by
shares or by guarantee or have unlimited liability. Companies limited by shares can
either be public companies (which are generally large corporations) or private
companies (which are generally small proprietary companies including sole
companies).
The Part also provides for the formation of companies. A company limited by shares
is required to have a memorandum of association and articles of association, which
together form the companys constitution. Such a company is also required to have
a statement of capital and initial shareholdings. A company limited by guarantee is
required to register a statement of guarantee. A company may also be registered as
an unlimited company, in which case the liability of its members on liquidation of
the company is unlimited.
On registration of the required documents as provided under the Companies
(General) Regulations, 2015, the Registrar of Companies is required to issue the
company with certificate of incorporation.
Companies registered under the Companies Act (Cap 486) will continue under the
Act. When registered, a company will have perpetual succession irrespective of its
membership.
PART III (Sections 20-32) this part makes further provision for a companys
constitution (i.e. the memorandum and articles of association). Among other things
it provides for application of model Articles as prescribed in the Regulations already
published, procedures to enable amendment of the Articles of Association of a
company;
Other provisions specify the requirements on the objects of a company and the
effect of a constitution of a company. It should be noted that the memorandum of
association for the existing companies shall be treated/construed as provisions of
the Articles of Association.
PART IV (Sections 33-47) this part deals with the capacity of a company to do
certain acts such as powers to enter into binding contracts and powers of directors
binding on the company.
Provision is also made for a company to have a common seal(but a company is not
obliged to have one) and provides for its use for the authentication of documents. A
further provision is made that will now enable a company to have an official seal for
use outside Kenya.

The Companies are also required to compulsorily have a registered office and would
notify the Registrar of change of the registered office.
PART V (Sections 49 68) this part deals with the names of Companies. The
provisions in this part restrict the use of names that suggest a connection with the
Government, offensive names. The Companies (General) Regulations, 2015
prescribe under Regulations 8 12 which such names indicate connection with
public authorities, characters now permitted to be used in Companys name and the
circumstances in which a company name will not be registered. A public company
name must end with public limited company or plc.
Other provisions in this part allow a company to change its name by a special
resolution or by means provided for in the articles of association whereafter a new
certificate of incorporation would be issued. The provisions also specify the effect of
a change of companys name and disclosure requirements on its documents and
publications.
PART VI (Sections 69 91) this part deals with alteration of company status
enabling conversion to another kind of company. In particular:1. a private company will be able to convert itself into a public company;
2. a public company will be able to be convert itself into a private limited
company;

a private limited company will be able to convert itself into an unlimited

company;

1. an unlimited company will be able to convert itself into a limited company;

and
2. a public company will be able to be able to convert itself into a company that
is both private and unlimited.
Another provision will require the Registrar of Companies not to process an
application for the registration of a conversion of a company into another kind of
company unless the application complies with prescribed requirements. A further
provision will require the Registrar to issue a certificate of incorporation to the
company on registration of the conversion.
PART VII (sections 92-113) deals with the membership of a company. In
particular, the Part relates to members of companies and, in particular, prescribes
how persons become members of a company. Among other things, the Part will
require a company to keep a register of members and to keep the register available
for inspection at its registered office.
Other provisions will require certain companies to keep an index of its members;
and specify the rights of persons to inspect a companys register of members and
require copies. Further provisions will enable the High Court to rectify companys
register of members and prohibit a company from entering notices of trusts on its
register of members. The provisions under this Part also prohibit a subsidiary from

being a member of its holding company: and prescribes other provisions relating to
subsidiaries of a company. A provision of the Part also allows a private company to
have only one member.
PART VIII (Sections 114-l2l) provides for the exercise of rights of the members of
a company. In particular, the Part specifies the effect of provisions of articles on the
enjoyment or exercise of rights of members. Other provisions enable certain
persons to have information rights relating to traded companies (i.e. companies
whose shares are traded on an authorized stock exchange) and confer other rights
to information about companies and enable the rights of members to be exercised
by others in certain circumstances.
PART IX (Sections 122-212) this part deals with Company Directors. It provides
for the appointment and removal of directors of a company. In particular, the Part
will require a company to have directors. Companies are required to have at least
one natural person to hold office as a director. Other provisions prescribe the
qualifications required for appointment as a director of a company; require a
company to keep a register of its directors; and prescribe the particulars of directors
that are to be recorded in the register. The minimum age for one to be a director is
now eighteen(18) years.
Another provision requires a company to notify appointments of directors and of
their addresses to the Registrar of Companies and also when directors cease to hold
office as such or any changes relating to them occur. Another provision provides for
directors to be removed from office by resolution of the members. Further provisions
prescribe directors rights and duties of office. These include-.
1. a directors right to protest against removal;
2. the duty of a director to act within power;

the duty of a director to promote the success of the company;

1. the duty of a director to exercise independent judgment;

2. the duty of a director to exercise reasonable care, skill and diligence;
3. the duty of a director to avoid conflicts of interest; and

the duty of a director not to accept benefits from third parties.

A further provision specifies the civil consequences of a breach by a director of

these duties. Yet other provisions require a director to declare an interest in a
proposed or existing transaction or arrangement and provide that certain
transactions involving directors require the approval of the members of the
company. These transactions include:-directors long-term service contracts;
substantial property transactions; loans and quasi-loans to directors and to persons
connected with directors; and certain credit transactions. Further provisions deal
with payments to directors for loss of office. Such payments will require approval by
members of the company.

Further provisions provide for the ratification of acts of directors of a company and
confer power to make provision for the employees of a company when it ceases
business or its business is transferred. A company will be required to keep minutes
of directors meetings for at least ten (10) years from the date of the meeting.
Those minutes are to be evidence of proceedings at meeting of company until the
contrary is proved.
Further provisions on directors are also contained in Part V of the Companies
(General) Regulations, 2015
PART X (sections 213-237) specifies the circumstances under which directors of a
company can be disqualified from holding office as such. In particular, a court is
empowered to disqualify a persons being convicted for certain specified offences;
for fraud or breach of duty committed while company in liquidation or under
administration; or on being conviction of offence involving failure to lodge returns or
other Registrar.
Courts are now required to disqualify unfit directors of insolvent companies from
acting as company directors. In certain circumstances a person will now able to
enter into a disqualification undertaking instead of being made subject to a
disqualification order. Persons are also now liable to disqualification after a company
has been investigated under Part XXX of the Act.
It is an offence for a person to act as a company director while they are
undischarged bankrupts. A person disqualified will now be personally liable for a
companys debts if the person acts while disqualified.
The Part also requires a register of disqualification orders to be kept and provides
for the disqualification of persons who are subject to foreign restrictions. Such
persons will also be personally liable for a companys debts if the person acts as a
director while disqualified.
PART XI (sections 239-242) deals with derivative actions. In particular, it provides
for proceedings by members of a company in respect of a cause of action vested in
the company and will enable them to seek relief on behalf of the company.
PART XII (Sections 243-254) deals with Company Secretaries. Every public
company will be required to have a company secretary, but a private company will
not be required to have a secretary unless it has a paid up capital of Kshs. 5 million
and above.
Other provisions in this part prescribe their qualifications, duties and the records to
be kept by companies with respect to their secretaries.
PART XIII (Sections 255-321) deals with resolutions and meetings of members of
companies. In particular, the part sets out requirements for passing ordinary
resolutions and special resolutions. A provision is also made in relation to private
companies for written resolutions. Members have a right to require directors to
convene general meetings in some circumstances at the expense of the company.

Further, the provisions prescribe the procedure for the conduct of general meetings
of companies.
The Part also applies the earlier provisions of the Part to meetings of holders of
classes of shares and sets out additional requirement for general meetings of public
companies. Members of a public company will have power to require the circulation
of resolutions for an annual general meeting at the expense of the company.
PART XIV (Sections 322 403) this part deals with shares of a company and
share capital of a company limited by shares. In particular, share capital will now no
longer be possible to convert into stock. It also provides description of nature of
shares and their transferability; allotment of shares; payment of allotment and
registration of shares of a company.
Further provisions impose restrictions on public companies that wish to allot shares
for non-cash consideration. Companies that issue shares at a premium are now
required to establish a share premium account and provide for the application of
share premiums.
PART XXIII (Sections 570 -582) deals with debentures issued by a company. In
particular, the part makes provision for perpetual debentures, enforcement of
contracts to subscribe for debentures; keeping companys register of debentures
and rights of debenture holders to inspect the register.
PART XXXI (sections 829-876) continues the offices of the Registrar of
Companies, Deputy and Assistant Registrar of Companies and specifies the
functions and powers of those officers under require the Registrar to have an official
seal; provide for its use; provide for the recording in the Register of Companies of
documents lodged with the Registrar for registration; empower the Registrar to
impose requirements with respect to lodgement of documents; provide for fees to
be paid to the Registrar for the registration of documents; require the Registrar to
give public notice of the issue of certificates of incorporation; confer a right to
obtain a certificate of incorporation in specified circumstances; will require the
Registrar to allocate a unique identifying number to each company; provide for the
recording of registered numbers of branches of foreign companies.
Normally documents will be required to be lodged in the English language, but in
certain circumstances documents may be lodged with the Registrar in a language
other than English subject to the lodgement of a version of the document translated
into English.
Other provisions make it an offence to lodge false or misleading documents, or to
make false or misleading statements to the Registrar; provide for the enforcement
of a companys lodgement obligations; provide for electronic communications and
the publishing of notices by alternative means; and empower the Registrar to make
Registrars Rules.
Part XXXII (sections 877-892) deals with charges created by a company; charges
existing on property acquired by a company, and charges in a series of debentures.
In particular, the Part imposes an additional registration requirement for

commission, allowance or discount in relation to debentures will now require a

certificate of registration to be endorsed on debentures; provides for charges
created in, or over property located outside Kenya; requires the Registrar of
Companies to keep a register of charges created by or in relation to companies;
prescribes a deadline for lodging a charge with the Registrar for registration(30 days
from the creation of the charge); will require the holder of a floating charge to lodge
with Registrar notice of appointment and cessation of appointment of an
administrator of the company to which the charge relates.
PART XXXVIII (Sections 996-1005) contains provisions that specifically relate to
offences and legal proceedings involving companies. The Part includes-. a provision
that prescribes and defines the liability of officers of companies who are in default
under the various provisions that create offences under the Act; a provision
applying that provision to apply to bodies other than companies; a provision
enabling proceedings to be taken against unincorporated bodies; and a provision
providing for legal professional privilege involving company communications.
Other provisions confer powers to require a company to produce documents for
inspection if it is suspected of being involved in the commission of an offence and to
obtain a warrant for the search of premises of such a company. Another provision
creates the offence of fraudulent trading;
Other provisions will empower the High Court to prohibit payment or transfer of
money, financial products or other property; and to grant injunctions in specified
circumstances.
A further provision empowers a court to grant relief in certain specified
circumstances (where, for example, a company or director acted innocently in
relation to a particular matter).
PART XL (sections 1010-1016) provides for the service of documents on a
company and on directors, secretaries and others and for addresses for the service
of documents. In particular, the Part provides for the making of regulations relating
to:-sending or supplying documents or information by a company; and sending or
supplying documents or information to a company.
Members of companies and others who provided with an electronic version of a
document by a company will be entitled to be provided with a hard copy version.
Other provisions of the Part provide for the authentication of documents sent or
supplied by a company and determine when documents and information are taken
to have been sent or supplied by a company.
Further provisions are made in Companies (General) Regulations 2015 regarding
this part.
PART XLII (clauses 1023-1021) contains supplementary provisions. The Part
empowers the Cabinet Secretary (in this case the Attorney General) to make
regulations (already made) for purposes of the Act; provides for the repeal of the
existing Companies Act and for the revocation of subsidiary legislation made under

it; provides for the continuity of the law relating to companies; and empowers the
Cabinet Secretary to make savings and transitional regulations consequent on the
Act;
The First Schedule prescribes the rules that are to apply for the purpose of
determining when a director is connected with a body corporate for purposes of Part
IX of the Act.
The Second Schedule contains matters for determining whether a person is fit to
be a director of a company.
The Sixth Schedule contains savings and transitional provisions consequent on
the repeal of the Companies Act (Cap. 486).