Point in Time
Act No: No. 17 of 2015
Act Title: COMPANIES
[ Date of assent: 11th September, 2015. ]
Arrangement of Sections
PART 1 – PRELIMINARY
1.
Short title and commencement
(1)

This Act may be cited as the Companies Act, 2015.

(2)

This section comes into operation on the date on which this Act is published in Gazette.

(3)

The Cabinet Secretary shall, by notice published in the Gazette, bring into operation the remaining provisions of this Act on such date or such different dates as the Cabinet Secretary appoint.

(4)

If the Cabinet Secretary has failed to bring all of the remaining provisions into operation within nine months after the date on which this section has come into operation, the Parliament may, by resolution of each of its Houses, bring into operation such of those provisions as have not yet been commenced.

2.
Objects of this Act

The objects of this Act are to facilitate commerce, industry and other socio-economic activities by enabling one or more natural persons to incorporate as entities with perpetual succession, with or without limited liability, and to provide for the regulation of those entities in the public interest, and in particular in the interests of their members and creditors.

3.
Interpretation of provisions of this Act
(1)

In this Act, unless the context otherwise requires—

“address” includes—

(a)

a fax number, e-mail address or any other electronic address used for the purposes of sending or receiving documents or information by electronic means; and

(b)

a postal and physical address;

"administrator”, in relation to a company, means an administrator appointed under the laws relating to insolvency;

"allotted share capital", in relation to a company, means shares of the company that have been allotted;

"approved securities exchange" means a securities exchange approved by the Capital Markets Authority in accordance with the Capital Markets Act (Cap. 485A);

“articles” means the articles of association of a company;

“associate”

(a)

in relation to a natural person means—

(i)

that person's spouse or child;

(ii)

a body corporate of which that person is a director; and

(iii)

an employee or partner of that person;

(b)

in relation to a body corporate means—

(i)

a body corporate of which that body corporate is a director;

(ii)

a body corporate in the same group as that body; and

(iii)

an employee or partner of that body corporate or of a body corporate in the same group;

(c)

in relation to a partnership that is not a legal person under the law by which it is governed, means any person who is an associate of any of the partners;

“associated company” means—

(a)

a subsidiary of the company;

(b)

a holding company of the company; or

(c)

a subsidiary of such a holding company;

“auditor” means—

(a)

a person or firm appointed as an auditor of a company under Part XXVII; or

(b)

a person or firm appointed as an auditor of a body of a kind prescribed by the regulations for the purposes of this definition;

“authorised signatory” in relation to a company, means a director of the company and also means—

(a)

in the case of a public company, the secretary or a joint secretary of the company; and

(b)

in the case of a private company that has a secretary, the secretary;

“Attorney-General” means the Attorney-General appointed under Article 156 the Constitution;

“beneficial owner” means the natural person who ultimately owns or controls a legal person or arrangements or the natural person on whose behalf a transaction is conducted, and includes those persons who exercise ultimate effective control over a legal person or arrangement;

“body corporate” includes a firm that is a legal person under the law by which it is governed;

"Cabinet Secretary" deleted by Act No. 28 of 2017, s. 2(b);

“called-up share capital" means so much of a company's share capital as equals the aggregate amount of the calls made on its shares, whether or not those calls have been paid, together with—

(a)

any share capital paid up without being called; and

(b)

any share capital to be paid on a specified future date under the articles, the terms of allotment of the relevant shares or any other arrangements for payment of those shares;

“company" means a company formed and registered under this Act or an existing company;

“company limited by guarantee" has the meaning given by section 7;

“company records" (or “records of a company”) means—

(a)

any register, index, accounting records, agreement, memorandum, minutes or other document required by or under this Act to be kept by the company; or

(b)

any register kept by the company of its debenture holders;

"the Court" means (unless some other court is specified) the High Court;

"credit sale agreement" means an agreement for the sale of goods under which payment of the whole or a part of the purchase price is deferred and a security interest in the goods is created or provided for in order to secure the payment of the whole or a part of the purchase price;

"debenture", in relation to a company, includes debenture stock, bonds and any other securities of a company (whether or not constituting a charge on the assets of the company);

"deed" means a legal document that grants a right by transferring the right from one person to another;

"direction" means direction in writing;

“director”, in relation to a body corporate, includes—

(a)

any person occupying the position of a director of the body (by whatever name the person is called); and

(b)

any person in accordance with whose directions or instructions (not being advice given in a professional capacity) the directors of the body are accustomed to act;

“document” means information recorded in any form; and in particular includes a summons, notice, order or other legal process and a register (whether in hard copy or electronic form);

“dormant company” means a company that is dormant during any period in which it has no significant accounting transaction;;

“electronic address” means an address used for the purposes of sending or receiving documents or information by electronic means;

“electronic copy” in relation to a document or information, means a copy of the document or information that is stored or kept in electronic form;

“electronic form” in relation to a document or information, means the storage or keeping of the document or information in the form of data, text or images by means of guided or unguided electromagnetic energy, or both;

“electronic means”, in relation to a document or information, means—

(a)

sending, supplying or delivering the document or information initially, and receiving it at its destination, by means of electronic equipment for the processing (including by digital compression) or storage of data; and

(b)

being entirely transmitted, conveyed and received by wire, radio, optical means or by other electromagnetic means;

“electronic money" means electronically (including magnetically) stored monetary value as represented by a claim on the electronic money issuer that—

(a)

is issued on receipt of funds for the purpose of making payment transactions;

(b)

is accepted by a person other than the electronic money issuer; and

(c)

is not excluded by the regulations;

“electronic money issuer" means a person authorised by the regulations to issue electronic money;

"eligible member", in relation a resolution of a company, means a member who, under the articles of the company, is entitled to vote on the resolution;

"employees’ share scheme" means a scheme for encouraging or facilitating the holding of shares in, or debentures of, a company by or for the benefit of—

(a)

the bona fide employees or former employees of—

(i)

the company;

(ii)

a subsidiary of the company;

(iii)

the company's holding company or a subsidiary of the company's holding company; or

(b)

the spouses, surviving spouses, or minor children or step-children of those employees or former employees;

"equity share capital" means a company's issued share capital excluding any part of that capital that does not confer any right, either with respect to dividends or to capital, to participate beyond a specified amount in a distribution;

“equity securities" means—

(a)

ordinary shares in a company; or

(b)

rights to subscribe for, or to convert securities into ordinary shares in the company;

“excluded from consolidation", in relation to a group financial statement, means that the undertaking concerned is not included or liable to be included in that statement;

“expenses" includes costs; and “expenses” (of an investigation) includes expenses incidental to the investigation;

“expression" includes sign, symbol, logo and mark;

“existing company" means—

(a)

a company formed and registered under the repealed Act; or

(b)

a company that was formed and registered under either of the repealed Ordinances (as defined by that Act);

“firm" means an entity, whether or not a legal person, that is not a natural person; and includes a body corporate, sole proprietorship, partnership or other unincorporated association;

“Foreign Companies Register" means the register kept under section 994;

“foreign company" means a company incorporated outside Kenya;

“foreign companies regulations" means regulations made under section 995 and in force;

“former name" means a name by which a natural person was formerly known for business purposes;

“general meeting" in relation to a company, means a general meeting which may be a physical, virtual or hybrid meeting of the company;

“group", in relation to a body corporate, means the body corporate, any other body corporate that is its holding company or subsidiary and any other body corporate that is a subsidiary of that holding company;

“group undertaking", in relation to an individual undertaking, means an undertaking that is—

(a)

a parent undertaking or subsidiary undertaking of the individual undertaking; or

(b)

a subsidiary undertaking of any parent undertaking of the individual undertaking;

"hard copy form" means a document or information that is sent, supplied or delivered in a paper copy or similar form capable of being read and references to hard copy have a corresponding meaning;

"hire-purchase agreement" means a hire-purchase agreement as defined in section 2(1) of the Hire Purchase Act (Cap. 507);

"holding company" (of another company) means a company of which the other company is a subsidiary company of the company;

"holding company" in relation to another company, means a company that—

(a)

controls the composition of that other company's board of directors;

(b)

controls more than half of the voting rights in that other company;

(c)

holds more than half of that other company's issued share capital; or

(d)

is a holding company of a company that is that other company's holding company;

"hybrid meeting" in relation to a company general meeting, means a meeting where some participants are in the same physical location while other participants join the meeting through electronic means including video conference, audio conference, web conference or such other electronic means;

"in default", in relation to an officer of a company, has the meaning given by section 996;

"in liquidation" has the same meaning as the meaning provided under the laws relating to insolvency;

"intellectual property" means—

(a)

any patent, trade mark, registered design, copyright or design right; or

(b)

any licence under or in respect of a patent, trade mark, registered design, copyright or design right;

"issued share capital", in relation to a company, means shares of the company that have been issued;

"key performance indicators", in relation to a company, means factors by reference to which the development, performance or position of the company's business can be measured effectively;

"liabilities" includes duties;

"limited company" has the meaning given by section 5;

"lodge", in relation to a document or information required or permitted to be registered, includes deliver, file, send, submit the document or information or, in the case of a notice, give the notice;

"member" means a member of a company;

"name", in relation to a natural person, means the person's given name and family name, or if the person is usually known by a title, the person's title, either in addition to or instead of the person's given name or family name, or both;

"notice" means notice in writing;

"notify" means notify in writing;

“net assets", in relation to a company, means the aggregate of the assets less the aggregate of its liabilities, and for the purpose of this definition, "liabilities" includes provisions of any kind;

“officer", in relation to a company or other body corporate, means—

(a)

any director, manager or secretary of the company or body; and

(b)

any other person who is, because of a provision of this Act, to be treated as an officer of the company or body for the purposes of the provision;

"ordinary shares" means shares other than shares that, with respect to dividends and capital, confer a right to participate only up to a specified amount in a distribution;

"parent undertaking" (of another undertaking) means an undertaking

that—

(a)

holds a majority of the voting rights in the other undertaking;

(b)

is a member of the other undertaking and has the right to appoint or remove a majority of its board of directors;

(c)

has the right to exercise a dominant influence over the other undertaking—

(i) because of provisions contained in the other undertaking's articles; or
(ii) because of a control contract;
(d)

has the power to exercise, or actually exercises, dominant influence or control over the other undertaking; or

(e)

is a member of the other undertaking and controls alone, under an agreement with other shareholders or members, a majority of the voting rights in it;

"pension scheme" means a scheme for the provision of benefits consisting of or including a pension, lump sum benefit, gratuity or other similar benefit given or to be given on the retirement or death, or in anticipation of the retirement of employees or former employees or, in connection with the past service of employees or former employees, either after their retirement or death;

"personal injury" includes any disease and any impairment of a person's physical or mental condition;

"printed" includes typewritten or lithographed or produced by any mechanical means;

"private company" has the meaning given by section 9;

“prescribed financial accounting standards” means statements of standard accounting practice issued by the Institute of Certified Public Accountants of Kenya in accordance with the Accountants Act (No. 15 of 2008);

"profit and loss account" includes an income statement or other equivalent financial statement required to be prepared in accordance with the prescribed financial accounting standards;

"property" includes all rights and interests in property;

"public company" has the meaning given by section 10;

“publish", in relation to a document or information, means to issue or circulate the document or information or otherwise make it available for public inspection in a manner calculated to invite members of the public generally, or any class of members of the public, to read it;

“qualified", in relation to an auditor's report (or a statement contained in an auditor's report) on a company's financial statement, means that the report or statement does not state the auditor's unqualified opinion that the financial statement has been properly prepared—

(a)

in accordance with this Act; or

(b)

if an undertaking not required to prepare financial statements in accordance with this Act—in accordance with any corresponding written law under which the undertaking is, or its directors are, required to prepare financial statements or accounts;

“qualifying person” in relation to a meeting of a company means—

(a)

a natural person who is a member of the company;

(b)

a person authorised under section 297 to act as the representative of a corporation in relation to the meeting; or

(c)

a person appointed as proxy of a member of the company in relation to the meeting;

“quoted company” means a company whose equity share capital has been included in the official list on a stock exchange or other regulated market in Kenya;

“register” (when used as a verb) means register under this Act;

“Register” means the Register of Companies kept under this Act, but does not include the Foreign Companies Register;

“registered foreign company” means a foreign company registered, or taken to be registered, in accordance with Part XXXVII;

"the Registrar" means the person for the time being holding office as Registrar of Companies under section 831;

"the regulations" means the companies general regulations made and in force under this Act, but does not, unless expressly provided, include the foreign companies regulations or savings and transitional regulations;

“the repealed Act" means the Companies Act (Cap. 486) repealed by this Act;

“resolution for reducing share capital", in relation to a company that has a share capital, means a special resolution passed by the company in accordance with section 407;

"retention of title agreement" means an agreement for the sale of goods to a company, being an agreement—

(a)

that does not constitute a charge on the goods; but

(b)

under which, if the seller is not paid and the company is wound up, the seller will have priority over all other creditors of the company with respect to the goods or any property representing the goods;

“securities” includes—

(a)

options;

(b)

futures; and

(c)

contracts for differences, and rights or interests in those investments;

“service address”, in relation to a person, means an address at which documents may be effectively served on that person for the purposes of this Act;

“services” means anything other than goods or land;

“shares”

(a)

in relation to an undertaking with a share capital, means shares in the share capital of the undertaking;

(b)

in relation to an undertaking with capital but no share capital, means rights to share in the capital of the undertaking; and

(c)

in relation to an undertaking without capital, means interests—

(i)

conferring a right to share in the profits, or the liability to contribute to the losses, of the undertaking; or

(ii)

giving rise to an obligation to contribute to the debts or expenses of the undertaking in the event of a liquidation;

“sign” includes sign by means of an electronic signature;

"significant accounting transaction", in relation to a dormant company, means a transaction that is required by section 638 to be entered in the company's accounting records;

"subsidiary” means a company of which another company is its holding company;

"subsidiary undertaking” (of another undertaking) means an undertaking of which the other undertaking is its parent;

"traded company", means a company whose securities are admitted to trading on a securities exchange or other regulated market operating in Kenya;

"turnover", in relation to a company, means the amounts derived from the provision of goods or services, or goods and services, in the course of the company ordinary business, after deducting—

(a)

trade discounts;

(b)

value added tax; and

(c)

any other taxes based on the amounts so derived;

“uncalled share capital”, in relation to a company, means so much means so much of the company's share capital as is not called-up share capital of the company;

“under administration" has the same meaning as provided for in the laws related to insolvency;

“undertaking” means—

(a)

a body corporate or partnership; or

(b)

an unincorporated association carrying on a trade or business, with or without a view to profit;

"undistributable reserves" (of a company) means those reserves of the company that comprise—

(a)

its share premium account;

(b)

its capital redemption reserve;

(c)

the amount by which its accumulated, unrealised profits (so far as not previously utilised by capitalisation) exceed its accumulated, unrealised losses (so far as not previously written off in a reduction or reorganisation of capital duly made); and

(d)

any other reserve that the company is prohibited from distributing by its articles;

“unlimited company” has the meaning given by section 8;

"virtual meeting" in relation to a company general meeting, means a meeting where all members join and participate in the meeting through electronic means including video conference, audio conference, web conference or such other electronic means;

“wholly-owned subsidiary company" (of another company) means a company that has no members other than that other company and that other company's wholly owned subsidiaries (or persons acting on behalf of that other company or its wholly-owned subsidiaries;

“working day" means any day between Monday and Friday, but does not include a public holiday.

(2)

In this Act, a reference to a company having a share capital is to a company that has power under its constitution to issue shares.

(3)

In this Act, a reference to issued or allotted shares, or to issued or allotted share capital, includes shares taken on the formation of the company by the subscribers to the company's memorandum.

(4)

For the purposes of this Act, shares in a company are allotted when a person acquires the unconditional right to be included in the company's register of members in respect of the shares.

(5)

In the case of an undertaking not trading for profit, a reference in this Act to a profit and loss account is a reference to an income and expenditure account, and a reference—

(a)

to profit and loss; and

(b)

in relation to a group financial statement—to a consolidated profit and loss account, is to be construed accordingly.

(6)

The reference in paragraph (c) of the definition of "undistributable reserves" in subsection (1) to capitalisation does not include a transfer of profits of the company to its capital redemption reserve.

(7)

In a provision of this Act in which a reference to the laws relating to insolvency occurs, the reference includes, so far as relevant to a matter existing before the commencement of the provision, a reference to the corresponding provision (if any) of the repealed Act.

(8)

The regulations may, for the purposes of this Act, explain and circumscribe the definitions of "parent undertaking" and "subsidiary undertaking" in subsection (1) and otherwise supplement those definitions.

[Act No. 28 of 2017, s. 2, Act No. 1 of 2021, s. 7.]

4.
Provisions supplementing definition of “holding company” in section 3
(1)

For the purposes of paragraph (a) of the definition of "holding company" in section 3(1), a company controls the composition of another company's board of directors if it has power to appoint or remove all, or a majority, of that other company's directors without any other person's consent.

(2)

For the purposes of subsection (1), a company has the power to make such an appointment if—

(a)

without the exercise of the power in a person's favour by the company, the person cannot be appointed as a director of that other company; or

(b)

it necessarily follows from a person being a director or other officer of the company that the person is appointed as a director of that other company.

(3)

In paragraph (c) of that definition, a reference to a company's issued share capital excludes any part of it that carries no right to participate beyond a specified amount in a distribution of profits or capital.

(4)

For the purposes of that definition—

(a)

if any share is held, or any power is exercisable, by a company in a fiduciary capacity, the share or power is to be regarded as not being held or exercisable by the company; and

(b)

subject to subsections (5) and (6), if any share is held, or any power is exercisable, by a subsidiary of a company, or by a person as nominee for a company or such a subsidiary, the share or power is to be regarded as being held or exercisable by the company.

(5)

For the purposes of that definition, any share in another company held, or any power in relation to another company exercisable, by a person by virtue of a debenture of that other company, or of a trust deed for securing an issue of such a debenture, is to be regarded as not being held or exercisable by the person.

(6)

For the purposes of that definition, any share held, or any power exercisable, by a company or a subsidiary of a company, or by a person as nominee for a company or such a subsidiary, is to be regarded as not being held or exercisable by the body corporate or subsidiary if—

(a)

the ordinary business of the company or subsidiary includes the lending of money; and

(b)

the share or power is held or exercisable by way of security only for the purpose of a transaction entered into in the ordinary course of that business.

(7)

In subsection (4)(b), a reference to a company or subsidiary excludes a company or subsidiary that is concerned only in a fiduciary capacity.

PART II – COMPANIES AND COMPANY FORMATION
Division 1 — Types of companies
5.
Limited companies

For the purposes of this Act, a company is a limited company if it is a company limited by shares or by guarantee.

6.
Companies limited by shares
(1)

For the purposes of this Act, a company is a company limited by shares if the liability of its members is limited by the company's articles to any amount unpaid on the shares held by the members.

(2)

For the purposes of subsection (1), the liability of the members of an existing company is taken to be limited by the company's articles to any amount unpaid on the shares held by the members if a condition of the memorandum of association of the company stating that the liability of the members is limited is regarded as a provision of the articles by virtue of section 70.

7.
Companies limited by guarantee
(1)

For the purposes of this Act, a company is a company limited by guarantee if—

(a)

it does not have a share capital;

(b)

the liability of its members is limited by the company's articles to the amount that the members undertake, by those articles, to contribute to the assets of the company in the event of its liquidation; and

(c)

its certificate of incorporate states that it is a company limited by guarantee.

(2)

Subsection (1) does not prohibit a company limited by guarantee from having a share capital if it was formed and registered before the commencement of this section.

8.
Unlimited companies

For the purposes of this Act, a company is an unlimited company if—

(a)

there is no limit on the liability of its members; and

(b)

its certificate of incorporation states that the liability of its members is unlimited.

9.
Private companies
(1)

For the purposes of this Act, a company is a private company if—

(a)

its articles—

(i) restrict a member's right to transfer shares;
(ii) limit the number of members to fifty; and
(iii) prohibit invitations to the public to subscribe for shares or debentures of the company;
(iv) requires the consent of all members to add a new member
(b)

it is not a company limited by guarantee; and

(c)

its certificate of incorporation states that it is a private company.

(2)

In subsection (1)(a)(ii), “member” excludes—

(a)

a member who is an employee of the company; and

(b)

a person who was a member while being an employee of the company and who continues to be a member after ceasing to be such an employee.

(3)

For the purposes of this section, two or more persons who hold shares in a company jointly are taken to be a single member.

[Act No. 12 of 2019, sch.]

10.
Public companies

For the purposes of this Act, a company is a public company if—

(a)

its articles allow its members the right to transfer their shares in the company;

(b)

its articles do not prohibit invitations to the public to subscribe for shares or debentures of the company; and

(c)

its certificate of incorporation states that it is a public company.

11.
Method of forming company
(1)

One or more persons who wish to form a company may—

(a)

subscribe their names to a memorandum of association; and

(b)

comply with the requirements of sections 13 to 16 with respect to registration.

(2)

A company formed for an unlawful purpose may not be registered.

12.
Memorandum of association
(1)

A memorandum of association is a memorandum stating that the subscribers—

(a)

wish to form a company under this Act; and

(b)

agree to become members of the company and, in the case of a company that is to have a share capital, to take at least one share each.

(2)

A company may not be registered unless its memorandum of association is—

(a)

in the form prescribed by the regulations; and

(b)

authenticated by each subscriber.

13.
Registration documents
(1)

A person who wishes to register a company shall lodge with the Registrar—

(a)

an application for registration of the company that complies with subsections (2) and (4);

(b)

a memorandum of association of the company; and

(c)

except as provided by section 21, a copy of the proposed articles of association.

(2)

An application for registration complies with this subsection if it states—

(a)

the proposed name of the company;

(b)

the proposed location of the registered office of the company;

(c)

whether the liability of the members of the company is to be limited, and if so whether it is to be limited by shares or by guarantee; and

(d)

whether the company is to be a private or a public company.

(3)

If the application for registration of a company is submitted by an agent for the subscribers to the memorandum of association, the agent shall include in the application the name and address of the agent.

(4)

An application for registration complies with this subsection if it contains or is accompanied by—

(a)

in the case of a company that is to have a share capital, a statement of capital and initial shareholding in accordance with section 14;

(b)

in the case of a company that is to be limited by guarantee, a statement of guarantee in accordance with section 15; and

(c)

a statement of the company's proposed officers in accordance with section 16.

(5)

In order to be registered, the articles of association of a company are required to—

(a)

be contained in a single document;

(b)

be printed;

(c)

be divided into paragraphs numbered consecutively;

(d)

be dated; and

(e)

be signed by each subscriber to the articles.

(6)

A subscriber's signature is required to be attested by a witness, whose name, occupation and postal address are required to be written or printed below the subscriber's signature.

14.
Statement of capital and initial shareholdings
(1)

If the company is to have a share capital, the applicants for registration shall ensure that the requisite statement of capital and initial shareholding comply with subsections (2) and (3).

(2)

The statement of capital and initial shareholding complies with this subsection if it states—

(a)

the total number of shares of the company to be taken on formation by the subscribers to the memorandum of association;;

(b)

the aggregate nominal value of those shares;

(c)

for each class of shares—

(i) the particulars of the rights attached to the shares prescribed by the regulations for the purposes of this subsection;
(ii) the total number of shares of that class; and
(iii) the aggregate nominal value of shares of that class; and
(d)

the amount to be paid up and the amount (if any) to be unpaid on each share, whether on account of the nominal value of the share or in the form of a premium.

(3)

The statement of capital and initial shareholding complies with this subsection if it—

(a)

contains such information as may be prescribed for the purpose of identifying the subscribers to the memorandum of association; and

(b)

states, with respect to each subscriber to the memorandum—

(i) the number, nominal value of each share and class of shares to be taken by the subscriber on formation; and
(ii) the amount to be paid up and the amount, if any to be unpaid on each share, whether on account of the nominal value of the share or in the form of a premium.
(4)

If a subscriber to the memorandum of association is to take shares of more than one class, the information required under subsection (3)(b)(i) is required for each class.

15.
Statement of guarantee
(1)

The applicant for registration of a company to be limited by guarantee shall ensure that the requisite statement of guarantee contains the prescribed information to enable the subscribers to the memorandum of association to be identified.

(2)

The applicant shall also ensure that the statement of guarantee states that each person who is a member undertakes, if the company is liquidated while the person is a member or within twelve months after the person ceases to be a member, to contribute to the assets of the company such amount as may be required for—

(a)

paying the debts and liabilities of the company contracted before the person ceases to be a member;

(b)

paying the costs, charges and expenses of liquidation; and

(c)

adjusting the rights of the contributories among themselves.

16.
Statement of proposed officers
(1)

The applicant for registration shall ensure that the requisite statement of the company's proposed officers complies with subsections (2) and (4).

(2)

The statement complies with this subsection if it contains the required particulars of—

(a)

the person who is, or persons who are, to be the first director or directors of the company;

(b)

in the case of a company that is to be a public company, the person who is or the persons who are to be the first secretary or joint secretaries of the company; and

(c)

any person who is to be appointed as an authorised signatory of the company.

(3)

The required particulars are the particulars that will be required to be

stated—

(a)

in the case of a director, in the company's register of directors and register of directors' residential addresses;

(b)

in the case of a secretary of a public company, in the company's register of secretaries; and

(c)

in the case of a person appointed as an authorised signatory, in the company's register of authorised signatories.

(4)

The statement of the company's proposed officers complies with this subsection if it contains a consent by each of the persons named as a director, as secretary or as one of joint secretaries or as an authorised signatory, to act in the relevant capacity.

(5)

If all the partners in a firm are to be joint secretaries, consent can be given by one partner on behalf of all the partners.

17.
Registrar to register company if requirements of Act are complied with

If satisfied that an application for registration complies with the requirements of this Act relating to registration, the Registrar shall register the company and allocate to it a unique identifying number.

18.
Registrar to issue company with certificate of incorporation
(1)

On the registration of a company in accordance with section 17, the Registrar shall issue to the company a certificate of incorporation that complies with this section.

(2)

A certificate of incorporation complies with this section if it states—

(a)

the name of the company and its unique identifying number;

(b)

the date of the company's incorporation;

(c)

whether the company's liability is limited or unlimited, and if it is limited, whether it is limited by shares or by guarantee; and

(d)

whether the company a private or a public one.

(3)

The Registrar shall sign the certificate of incorporation and authenticate it with the Registrar's official seal.

(4)

The certificate is conclusive evidence that the requirements of this Act relating to registration have been complied with and that the company is duly registered under this Act.

19.
Effect of registration

From the date of incorporation of a company—

(a)

the subscribers to the memorandum, together with such other persons as may from time to time become members of the company, become a body corporate by the name stated in the certificate of incorporation;

(b)

the company can do all of the things that an incorporated company can do;

(c)

the registered office of the company is as stated in the application for registration;

(d)

the status of the company is as stated in its certificate of incorporation;

(e)

in the case of a company having a share capital, the subscribers to the memorandum of association become holders of the shares specified in the statement of capital and initial shareholdings; and

(f)

the persons named in the statement of proposed officers—

(i) as directors of the company;
(ii) in the case of a public company, as the secretary or as a joint secretary of the company; or
(iii) as an authorised signatory of the company, become holders of those offices.
PART III – A COMPANY'S CONSTITUTION
Division 1 — Articles of Association
20.
Regulation may prescribe model articles
(1)

The regulations may prescribe model articles for companies.

(2)

Different versions of model articles may be prescribed for different descriptions of companies.

(3)

A company may adopt all or any of the provisions of a prescribed version of model articles.

(4)

An amendment to regulations prescribing a version of model articles does not affect a company registered before the amendment took effect.

21.
Default application of model articles
(1)

On the formation of a limited company—

(a)

if its articles are not registered; or

(b)

if its articles are registered, in so far as they do not exclude or modify the relevant model articles, the relevant model articles, so far as applicable, form part of the company's articles in the same manner and to the same extent as if articles in the form of those articles had been duly registered.

(2)

In subsection (1), "relevant model articles" means the model articles prescribed for a company of that kind in force on the date the company is registered.

22.
Amendment of articles

A company may amend its articles only by special resolution.

23.
Effect of amendment of articles on company’s members
(1)

A member of a company is not bound by an amendment to the articles of a company after the date on which the person became a member, if and so far as the amendment—

(a)

requires the person to take or subscribe for more shares than the number held by the person at the date on which the amendment is made; or

(b)

in any way increases the person liability as at that date to contribute to the company's share capital or otherwise to pay money to the company.

(2)

Subsection (1) does not apply if the member agrees in writing, either before or after the amendment is made, to be bound by the amendment.

24.
Amended articles to be sent to Registrar
(1)

If a company amends its articles, the company shall lodge with the Registrar for registration a copy of the articles as amended not later than fourteen days after the resolution containing the amendment is passed.

(2)

This section does not require a company to set out in its articles any provisions of model articles that—

(a)

are applied by the articles; or

(b)

apply because of section 2.

(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.

(4)

If, after a company or any of its officers is convicted of an offence under subsection (3), the company continues to fail to lodge an amended copy of its articles, the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding twenty thousand shillings for each such offence.

25.
Registrar’s notice to comply in case of failure with respect to amended articles
(1)

On being satisfied that a company has failed to comply with any provision requiring it—

(a)

to lodge with the Registrar a document making or evidencing an amendment in the company's articles; or

(b)

to lodge with the Registrar a copy of the company's articles as amended,

the Registrar may give notice to the company requiring it to comply.

(2)

The Registrar shall in such a notice—

(a)

specify the date on which it is issued; and

(b)

require the company to comply with the notice within twenty eight days from that date.

(3)

If a company fails to comply with a notice under subsection (2) within the required period, the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding two hundred thousand shillings.

(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 notice, the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding twenty thousand shillings for each such offence.

26.
Existing companies provisions of memorandum treated as provisions of articles

Provisions that immediately before the commencement of this Part were contained in a company's memorandum of association but are not provisions of the kind referred to in section 12 become provisions of the company's articles on that commencement.

27.
Copies of resolutions or agreements recorded by Registrar
(1)

Within fourteen days after a resolution or agreement to which this section applies is passed or made, the company concerned shall lodge with the Registrar for registration—

(a)

a copy of the resolution or agreement; or

(b)

in the case of a resolution or agreement that is not in writing, a written memorandum setting out the terms of the resolution or agreement.

(2)

This section applies to the following kinds of resolutions and agreements—

(a)

a special resolution;

(b)

a resolution or agreement agreed to by all the members of a company that, if not so agreed to, would not have been effective for its purpose unless passed as a special resolution;

(c)

a resolution or agreement agreed to by all the members of a class of shareholders that, if not so agreed to, would not have been effective for its purpose unless passed by a particular majority or otherwise in a particular manner;

(d)

a resolution or agreement that effectively binds all members of a class of shareholders though not agreed to by all those members;

(e)

a resolution to give, vary, revoke or renew authority for the purposes of section 451;

(f)

a resolution conferring, varying, revoking or renewing authority following market purchase of a company's own shares;

(g)

a resolution for voluntary liquidation;

(h)

a resolution of the director of a private company that the company should be converted into a public company; or

(i)

a resolution passed regarding transfer of securities.

(3)

The Registrar shall record a resolution or agreement lodged under subsection (1).

(4)

If a company fails to comply with subsection (1), the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding two hundred thousand shillings.

(5)

If, after a company or any of its officers is convicted of an offence under subsection (4), the company continues to fail to lodge the relevant copy or written memorandum, the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding twenty thousand shillings for each such offence.

(6)

For the purposes of this section, a liquidator of the company is treated as an officer of the company.

[Act No. 28 of 2017, s. 3.]

28.
Statement of company’s objects
(1)

Unless the articles of a company specifically restrict the objects of the company, its objects are unrestricted.

(2)

If a company amends its articles so as to add, remove or alter a statement of the company's objects—

(a)

it shall lodge with the Registrar for registration a notice giving particulars of the amendment;

(b)

on receipt of the notice, the Registrar shall register it; and

(c)

the amendment is not effective until the notice is recorded on the Register.

(3)

An amendment to the company's objects does not affect rights or obligations of the company or render defective legal proceedings by or against it.

29.
Documents to be provided to members
(1)

A company shall, on being requested to do so by a member of the company, send to the member the following documents—

(a)

an up-to-date copy of the articles of the company;

(b)

a copy of any resolution or agreement relating to the company that has been recorded by the Registrar under section 27;

(c)

a copy of any court order under this Act that alters the company's constitution;

(d)

a copy of any court order under Part XXXIV that sanctions a compromise or arrangement involving the company or facilitating its reconstruction or amalgamation;

(e)

copy of any court order under section 782 that alters the company's constitution;

(f)

copy of the current certificate of incorporation of the company and of any past certificates of incorporation;

(g)

in the case of a company with a share capital, a current statement of the company's capital;

(h)

the case of a company limited by guarantee, a copy of the statement of guarantee.

(2)

The statement of capital of the company required by subsection (1)(g) is a statement of—

(a)

the total number of shares of the company;

(b)

the aggregate nominal value of those shares;

(c)

for each class of shares—

(i) the particulars of the rights attached to the shares prescribed by the regulations for the purposes of this subsection;
(ii) the total number of shares of that class;
(iii) the aggregate nominal value of shares of that class; and
(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.

(3)

A company is not required to comply with a request under subsection (1) unless the member meets the costs of preparing and sending the documents.

(4)

If a company fails to comply with a request made under subsection (1), the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings.

(5)

If, after a company or any of its officers is convicted of an offence under subsection (4), the company continues to fail to comply with the request or a further request made by the member concerned, the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding fifty thousand shillings for each such offence.

30.
Effect of company’s constitution
(1)

A company's constitution binds the company and its members to the same extent as if the company and its members had covenanted agreed with each other to observe the constitution.

(2)

Money payable by a member to the company under its constitution is recoverable in a court of competent jurisdiction as a debt due from the member to the company.

31.
Right to participate is profits otherwise than a member is void

In the case of a company limited by guarantee, a provision in the articles of the company, or in a resolution of the company, purporting to give a person a right to participate in the divisible profits of the company otherwise than as a member is void.

32.
Application to single member companies of enactment and rules of law

Any enactment or rule of law applicable to companies formed by two or more persons or having two or more members applies with any necessary modification in relation to a company formed by one person or having only one person as a member.

PART IV – CAPACITY OF COMPANY
33.
Company’s capacity

The validity of an act or omission of a company may not be called into question on the ground of lack of capacity because of a provision in the constitution of the company.

34.
Power of directors to bind company
(1)

In favour of a person dealing with a company in good faith, the power of the directors to bind the company, or authorise others to do so, is free of any is limitation contained in the company's constitution.

(2)

For purposes of subsection (1)—

(a)

a person deals with a company if the person is a party to a transaction or other act to which the company is a party; and

(b)

a person dealing with a company—

(i) is not bound to enquire as to any limitation on the powers of the directors to bind the company or to authorise others to do so;
(ii) is presumed to have acted in good faith unless the contrary is proved; and
(iii) is not to be regarded as having acted in bad faith only because the person knew that a particular act is beyond the powers of the directors under the constitution of the company.
(3)

The references in subsection (2) to limitations on the directors' powers under the company's constitution include limitations deriving—

(a)

from a resolution of the company or of any class of shareholders of the company; or

(b)

from an agreement between the members of the company or of any class of shareholders of the company.

(4)

This section does not affect a right of a member of the company to bring proceedings to restrain the doing of an act that is beyond the powers of the directors, but no such proceedings lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the company.

(5)

This section does not affect a liability incurred by the directors, or by any other person, because the directors have exceeded their powers.

(6)

This section has effect subject to section 36.

35.
Company contracts
(1)

A contract may be made—

(a)

by a company, in writing; or

(b)

on behalf of a company, by a person acting under its authority, express or implied.

(2)

Any formalities required by law for a contract made by a natural person also apply, unless a contrary intention appears, to a contract made by or on behalf of a company.

[Act No. 1 of 2020, s. 29.]

36.
Constitutional limitations: transactions involving directors or their associates
(1)

This section applies to a transaction if or to the extent that its validity depends on section 34.

(2)

Nothing in this section precludes the operation of any other written law under which the transaction can be questioned or any liability to the company may arise.

(3)

If—

(a)

a company enters into such a transaction; and

(b)

the parties to the transaction include —

(i) a director of the company or of its holding company; or
(ii) a person connected with any such director, the transaction is voidable at the instance of the company.
(4)

Whether or not it is avoided, any such party to the transaction as is referred to in subsection (3)(b)(i) or (ii), and any director of the company who authorised the transaction, is liable—

(a)

to account to the company for any gain the director has made from the transaction (whether directly or indirectly); and

(b)

to indemnify the company for any loss or damage resulting from the transaction.

(5)

The transaction ceases to be voidable if—

(a)

restitution of any money or other asset which was the subject matter of the transaction is no longer possible;

(b)

the company is indemnified for any loss or damage resulting from the transaction;

(c)

rights acquired in good faith for value and without actual notice of the directors' exceeding their powers by a person who is not party to the transaction would be affected by the avoidance; or

(d)

the transaction is affirmed by the company.

(6)

A person other than a director of the company is not liable under subsection (4) if the person shows that, at the time the transaction was entered into, the person did not know that the directors were exceeding their powers.

(7)

Nothing in the preceding provisions of this section affects the rights of any party to the transaction not within subsection (3)(b)(i) or (ii).

(8)

But the Court may, on the application of the company or any such party, make an order affirming, severing or setting aside the transaction on such terms as appear to the Court to be just.

(9)

In this section—

(a)

"transaction" includes any act; and

(b)

the reference to a person connected with a director has the same meaning as in Part IX.

37.
Execution of documents
(1)

deleted by Act No. 1 of 2020, s. 30.

(2)

A document is validly executed by a company if it is signed on behalf of the company—

(a)

by two authorised signatories; or

(b)

by a director of the company in the presence of a witness who attests the signature.

(3)

A document in favour of a purchaser is effectively executed by a company if it purports to be signed in accordance with subsection (2).

(4)

For purpose of subsection (3), "purchaser" means a purchaser in good faith for valuable consideration, and includes a lessee, mortgagee or other person who for valuable consideration acquires an interest in property.

(5)

If a document is to be signed by a person on behalf of more than one company, it is not effective for the purposes of this section unless the person signs it separately in each capacity.

(6)

A reference in this section to a document being, or purporting to be, signed by a director or secretary is, if that office is held by a firm, to be read as a reference to its being, or purporting to be, signed by a natural person authorised by the firm to sign on its behalf.

(7)

This section applies to a document that is, or purports to be, executed by a company in the name of, or on behalf of, another person (whether or not that person is also a company).

[Act No. 1 of 2020, s. 30.]

38.
Deleted

deleted by Act No. 1 of 2020, s. 31.

39.
Execution of deeds by companies
(1)

A document is validly executed by a company as a deed only if the document is—

(a)

duly executed by the company; and

(b)

delivered as a deed.

(2)

For the purposes of subsection (1)(b), a document is presumed to be delivered when it is executed, unless a contrary intention is proved.

40.
Execution of deeds or other documents by attorney
(1)

A company may, in writing, authorise person, either generally or in respect of specified matters, as its attorney to execute deeds or other documents on its behalf.

(2)

A deed or other document executed by a person authorised under subsection (1) has effect as if executed by the company.

41.
Authentication of documents

A document or proceedings requiring authentication by a company is sufficiently authenticated by a signature of a person authorised by the company to act on its behalf.

42.
Deleted

deleted by Act No. 1 of 2020, s. 32.

43.
Deleted

deleted by Act No. 1 of 2020, 33.

44.
Pre-incorporation contracts, deeds and obligations
(1)

A contract that purports to be made by or on behalf of a company at a time when the company has not been formed has effect, subject to any agreement to the contrary, as a contract made with the person purporting to act for the company or as agent for it, and the person is personally liable on the contract accordingly.

(2)

Subsection (1) applies to a deed as it applies to the making of a contract.

45.
Execution of bills of exchange and promissory notes by companies

A bill of exchange or promissory note is binding on a company if made, accepted or endorsed in the name of, by or on behalf or on account, of the company by a person acting under its authority.

46.
Company to have registered office

A company shall at all times ensure that it has a registered office to which all communication and notices registered office may be addressed.

47.
Company to notify change of address of registered office
(1)

A company may change the address of its registered office by lodging with the Registrar for registration a notice of the change.

(2)

The change of address takes effect only when it is registered by the Registrar.

(3)

A person is entitled to serve a document on the company at the previously registered address within fourteen days after the new address is registered by the Registrar.

(4)

In relation to a duty of a company—

(a)

to keep available for inspection at its registered office any records; or

(b)

to state the address of its registered office in any document,

a company that has given notice to the Registrar of a change in the address of its registered office may act on the change as from such date, not more than fourteen days after the company is notified that the Registrar has registered the change.

(5)

A company that unavoidably ceases to keep available for inspection at its registered office any records in circumstances in which it was not practicable to give prior notice to the Registrar of a change in the address of its registered office is not to be regarded as having failed to comply with its duty to keep those records available for inspection at its registered office if it—

(a)

makes the records available at other premises as soon as practicable; and

(b)

gives notice accordingly to the Registrar of the change of the location of its registered office within fourteen days after doing so.

PART V – NAME OF COMPANY
Division 1 —General Requirements
48.
Reservation of name
(1)

The Registrar may, on written application reserve a name pending registration of a company or change of name by a company.

(2)

The reservation of a name under subsection (1) remains in force for a period of thirty days or such extended period, not exceeding sixty days, as the Registrar may, for a special reason, allow, and during that period of thirty days or that period as extended, no other company is entitled to be registered by that name.

49.
Prohibited names
(1)

The Registrar may not register a company by a particular name if—

(a)

the use of the name would constitute an offence;

(b)

the name consists of abbreviations or initials not authorised by or under this Act; or

(c)

the Registrar is, after taking into account the relevant criteria, of the opinion that the name is offensive or undesirable.

(2)

For the purposes of subsection (1)(c), the relevant criteria are the criteria (if any) prescribed by the regulations.

50.
Name suggesting connection with the State or local or public authority

The approval of the Registrar is required for a company to be registered under this Act by a name that would be likely to give the impression that the company is connected with—

(a)

a State organ;

(b)

a county government; or

(c)

any public authority prescribed by the regulations.

51.
Applicant to seek views of specified public officer or body if regulations so require
(1)

If the regulations so require, an applicant for the Registrar's approval for the use of a specified name, or a name of a specified description, shall seek the views of a specified public officer or body.

(2)

If an applicant for the use of a specified name, or a name of a specified description, is required to seek the views of a specified public officer or public body, that officer or body may, in addition to giving those views, veto the use of the name, but only on reasonable grounds and on providing the applicant with a written statement setting out 0 those grounds.

(3)

In subsection (1), "specified" means specified in the regulations.

52.
Regulations may permit or prohibit the use of certain characters, signs or symbols
(1)

The regulations may—

(a)

provide for the letters or other characters, signs or symbols, including accents and other diacritical marks, and punctuation that may be used in the name of a company to be registered under this Act; and

(b)

specify a standard style or format for the name of a company for the purposes of registration.

(2)

The regulations may prohibit the use of specified characters, signs or symbols when appearing in specified positions, in particular, at the beginning of a name.

(3)

The Registrar may not register a company by a 40 name that consists of or includes anything that is not permitted in accordance with the regulations.

53.
Registration of public limited companies

A company that is both a limited company and a public company may only be registered with a name that ends with the words "public limited company" or the abbreviation "plc".

54.
Registration of private limited companies

A company that is both a limited company and private company may be registered only with a name that ends with the word "limited" or the abbreviation "ltd."

55.
Exemption from requirement to use of “limited”

The Cabinet Secretary may, by notice given to the company, exempt a private company from using the word "limited" or "Itd" as required by section 54.

56.
Inappropriate use of company type or legal form
(1)

The regulations may prohibit the use in a company name of specified words, expressions or other indications—

(a)

that are associated with a particular type of company or kind of organisation; or

(b)

that are similar to words, expressions or other indications associated with a particular type of company or kind of organisation.

(2)

The regulations may prohibit the use of words, expressions or other indications—

(a)

in a specified part, or otherwise than in a specified part, of the name of a company; or

(b)

in conjunction with, or otherwise than in conjunction with, such other words or expressions as may be specified.

(3)

The Registrar may not register a company by a name that consists of or includes words or expressions prohibited by the regulations.

57.
Name not to be the same a another in the index
(1)

The Registrar shall not register a company under this Act by a name that is the same as another name appearing in the index of company names.

(2)

The regulations may provide—

(a)

that registration of a company by a name that would otherwise be prohibited under this section be permitted —

(i) in specified circumstances; or
(ii) with a specified consent; and
(b)

that, if those circumstances are existing or that consent is given at the time a company is registered by a name, a subsequent change of circumstances or withdrawal of consent, does not affect the registration.

58.
Power to direct change of name in case of similarity to existing name
(1)

The Registrar may direct a company to change its name if it has been registered by a name that is the same as or, in the opinion of the Registrar, too similar to—

(a)

a name appearing at the time of the registration in the Registrar's index of company names; or

(b)

a name that should have appeared in that index at that time.

(2)

A direction under subsection (1) may be given only within twelve months after the date on which the company concerned was registered or within such extended period as the Registrar may specify in writing in a particular case.

(3)

In giving a direction under subsection (1), the Registrar shall specify the period within which the company is required to comply with the direction.

(4)

The regulations may further provide—

(a)

that no direction is to be given under this section in respect of a name—

(i) in specified circumstances; or
(ii) if specified consent is given; and
(b)

that a subsequent change of circumstances or withdrawal of consent does not give rise to grounds for a direction under this section.

(5)

If the company does not comply with the direction issued under subsection (1) within fourteen days, the Registrar shall publish a notice in the Gazette to strike the name of the company off the Register.

(6)

As soon as practicable after striking the name of the company off the Register, the Registrar shall publish in the Gazette a notice indicating that the name of the company has been struck off the register.

(7)

Upon publication of the notice under subsection (6), the company shall be deemed to have been dissolved.

(8)

Despite subsection (7)—

(a)

the liability, if any, of every officer and member of the company shall continue and may be enforced as if the company had not been dissolved; and

(b)

nothing in this section shall affect the power of the Court to liquidate a company the name of which has been struck off the Register.

[Act No. 28 of 2017, s. 4.]

59.
Power to make regulations for purposes of sections 57 and 58

For the purposes of sections 57 and 58, the regulations may provide for either or both of the following.

(a)

matters that are to be disregarded in deciding whether or not names are the same or are too similar;

(b)

words or expressions that are to be, or are not to be regarded as the same or too similar.

60.
Power of Registrar to direct company to change its name because of misleading information given for registration of company or because its name gives misleading indication of company’s activities
(1)

The Registrar may direct a company to change its name if of the opinion—

(a)

that misleading information has been given for the purposes of a company's registration by a particular name and that an undertaking or assurance has been given for that purpose and has not been fulfilled; or

(b)

that the name by which a company is registered gives an indication of the nature of its activities that is so misleading as to be likely to cause harm to the public.

(2)

Any such direction is ineffective if it—

(a)

is not given within five years after the company's registration by that name; and

(b)

does not specify the period within which the company is to comply with it.

(3)

The Registrar may, by a further direction, extend the period within which the company is required to change its name, but shall ensure that any such direction is given before the end of the period for the time being specified.

(4)

The company shall comply with the direction within twenty-one days after the date of the direction or within such extended period as the Registrar may allow.

(5)

Subsection (4) does not have effect if the outcome of an application made to the Court under subsection is pending.

(6)

If a company fails to comply with a direction given to it under this section, the company, and each officer of the company who is in default, commits an offence and on conviction is liable to a fine not exceeding two hundred thousand shillings.

(7)

If, after a company or any of its officers is convicted of an offence under subsection (6), the company continues to fail to comply with the direction, the company, and each officer of the company who is in default, commit a further offence on each day on which the failure continues and on conviction are each liable to a fine not exceeding twenty thousand shillings for each such offence.

61.
Company may apply to court for order to quash direction under section 60
(1)

A company that is dissatisfied with a direction given to it under section 60 may apply to the Court to quash the direction.

(2)

An application under subsection (1) is ineffective if not made within twenty-one days after the date on which the direction is notified to the company.

(3)

On the hearing of an application made under subsection (1), the Court may either quash the direction or confirm it.

(4)

If the direction is confirmed, the Court shall specify the period within which the company is required to comply with the direction.

62.
Company may change the name

A company may change its name—

(a)

by special resolution or as may be provided for by the articles of the company;

(b)

by resolution of the directors acting in accordance with a direction by the Registrar under section 60;

(c)

on the restoration of the company to the Register in accordance with Part XXXIII; or

(d)

in any other circumstance prescribed by the regulations for the purpose of this subsection.

63.
Change of name by special resolution
(1)

Within fourteen days after a change of name has been agreed to by a company by special resolution, the company shall lodge with the Registrar for registration a notice of change, together with a copy of the resolution.

(2)

If a change of name by special resolution is conditional on the occurrence of an event, the company shall, in the notice of change lodged with the Registrar—

(a)

specify that the change is conditional; and

(b)

state whether the event has occurred.

(3)

If the notice states that the event has not occurred, the Registrar may not register the change of name until the event has occurred.

(4)

Within fourteen days after the event occurs, the company shall lodge with the Registrar for registration a notice stating that it has occurred.

(5)

The Registrar is entitled to rely on the contents of a notice lodged under this section as sufficient evidence of the matters stated in it.

64.
Change of name by means provided for in articles of company
(1)

Within fourteen days after a company changes its name by other means provided for in its articles, it shall lodge with the Registrar for registration notice of the change, together with a statement that the change has been made in accordance with the company's articles.

(2)

The Registrar may rely on the statement as sufficient evidence of the matters stated in it.

65.
Change of name: registration and issue of certificate of change of name
(1)

On receiving a notice of a change of company's name and on being

satisfied—

(a)

that the new name complies with the requirements of this Act; and

(b)

that the requirements of this Act and any relevant requirements of the articles of the company, with respect to a change of name are complied with, the Registrar shall enter the new name on the register in place of the former name.

(2)

As soon as practicable after registering the new name, the Registrar shall issue a certificate of change of name to the company.

66.
Effect of change of name
(1)

A change of a company's name has effect from the date on which the certificate of change of name is issued.

(2)

The change does not affect any rights or obligations of the company or invalidate any legal proceedings by or against it.

(3)

Any legal proceedings that might have been continued or commenced against it by its former name may be continued or started against it by its new name.

67.
Company to display its company name etc
(1)

A company shall—

(a)

display its name and other prescribed information in specified places;

(b)

state prescribed information in prescribed kinds of the company's documents and communications; and

(c)

provide prescribed information on request to those with whom the company deals with in the course of its business.

(2)

The regulations may prescribe the manner in which prescribed information is to be displayed, stated or provided.

(3)

For the purposes of a requirement to disclose the name of a company, any variations between a word or words are to be disregarded.

(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.

(5)

A person who claims to have sustained financial loss as a result of a contravention by a company of subsection (1) may bring civil proceedings against the company and, if in any such proceedings, the person is able to substantiate the claim, the person is entitled to be awarded damages as compensation for the loss.

68.
Minor variations in form of name
(1)

In relation to the name of a company, no account is to be taken of whether—

(a)

upper or lower case characters or a combination of the two are used;

(b)

diacritical marks or punctuation are present or absent; or

(c)

the name is in the same format or style as is specified under section 52(1) for the purposes of registration, so long as there is no real likelihood of names differing only in those respects being taken to be different names.

(2)

This section does not affect the operation of regulations referred to in section 52 (2) prohibiting specified characters, diacritical marks or punctuation.

PART VI – ALTERATION OF STATUS OF COMPANIES
Division 1 — Conversion of companies: overview
69.
How companies may alter their status

A company can, in accordance with this Part, convert itself—

(a)

from being a private company into being a public company;

(b)

from being a public company into being a private company;

(c)

from being a private limited company into being an unlimited company;

(d)

from being an unlimited private company to a limited company; or

(e)

from being a public company into being an unlimited private company.

70.
Conversion of private company to public company
(1)

A private company, whether limited or unlimited, can convert itself into a public company limited by shares if (but only if)—

(a)

it passes a special resolution to that effect;

(b)

the conditions specified in subsection (2) are satisfied; and

(c)

an application for registration of the conversion is lodged with the Registrar in accordance with section 74, together with the documents required by that section.

(2)

The conditions are—

(a)

that the company has a share capital;

(b)

that the requirements of section 71 are satisfied as regards its share capital;

(c)

that the requirements of section 72 are satisfied as regards its net assets;

(d)

if section 73 applies, that the requirements of that section are satisfied;

(e)

that the company has not previously been converted itself into an unlimited company;

(f)

that the company has made such changes to its name and to its articles as are necessary in order for it to become a public company; and

(g)

if the company is unlimited, that it has also made such changes to its articles as are necessary in order for it to become a company limited by shares.

71.
Requirement as to share capital
(1)

A company that has resolved to convert itself into a public company may lodge an application for registration of the conversion only if the following requirements are satisfied—

(a)

the nominal value of the company's allotted share capital are not less than the authorised minimum;

(b)

each of the company's allotted shares is be paid up at least as to one-quarter of the nominal value of that share and the whole of any premium on it;

(c)

if any shares in the company or any premium on them have been fully or partly paid up by an undertaking given by a person that the person or another person should do work or perform services (whether for the company or any other person)—the undertaking has performed or otherwise discharged; and

(d)

if shares have been allotted as fully or partly paid up as to their nominal value or any premium on tem otherwise than in cash, and the consideration for the allotment consists of or includes an undertaking to the company (other than one to which paragraph (c) applies), either—

(i) the undertaking has been performed or otherwise discharged; or
(ii) a contract exists between the company and some other person under which the undertaking is to be performed within five years after the date on which the special resolution is passed.
(2)

For the purpose of determining whether the requirements of subsection (1)(b), (c) and (d) are satisfied, shares allotted in accordance with an employees' share scheme are to be disregarded if they would, but for this subsection, prevent the company from being converted to a public company because the requirement of subsection (1)(b) could not be satisfied.

(3)

Shares disregarded under subsection (2) do not form part of the allotted share capital for the purposes of subsection (1)(a).

(4)

The Registrar may not register the conversion of a private company into a public company if it appears to the Registrar that—

(a)

the company has resolved to reduce its share capital;

(b)

the reduction—

(i) is made under section 407;
(ii) has been confirmed by an order of the Court under section 410; or
(iii) is supported by a solvency statement in accordance with section; and
(c)

the effect of the reduction is, or will be, that the nominal value of the company's allotted share capital is below the authorised minimum.

72.
Requirements as to net assets
(1)

A private company that has resolved to convert itself into a public company may not apply to have the conversion registered unless—

(a)

a balance sheet prepared as at a date not more than seven months before the date on which the application is lodged with the Registrar;

(b)

an unqualified report by the company's auditor on that balance sheet; and

(c)

a written statement by the company's auditor that in the auditor's opinion at the balance sheet date the amount of the company's net assets was not less than the aggregate of its called-up share capital and undistributable reserves.

(2)

The Registrar may refuse the application if, between the balance sheet date and the date on which the application is lodged with the Registrar, the company's financial position is found to have changed so that the amount of the company's net assets has become less than the aggregate of its called-up share capital and undistributable reserves.

(3)

In subsection (1)(b), “unqualified report" means—

(a)

if the balance sheet was prepared for a financial year of the company—a report stating without material qualification the auditor's opinion that the balance sheet has been properly prepared in accordance with the requirements of this Act; or

(b)

if the balance sheet was not prepared for a financial year of the company—a report stating without material qualification the auditor's opinion that the balance sheet has been properly prepared in accordance with the provisions of this Act that would have applied had it been prepared for a financial year of the company.

(4)

For the purposes of an auditor's report on a balance sheet that was not prepared for a financial year of the company, the provisions of this Act apply with such modifications as are necessary because of that fact.

(5)

For the purposes of subsection (3), a qualification is material unless the auditor states in the auditor's report that the matter giving rise to the qualification is not material for the purpose of determining by reference to the company's balance sheet whether at the balance sheet date the amount of the company's net assets was not less than the aggregate of its called-up share capital and undistributable reserves.

73.
Recent allotment of shares for non-cash consideration
(1)

This section applies to shares that are allotted by a company during the period between the date as at which the balance sheet required by section 72 is prepared and the passing of the resolution converting the company into a public company if the shares are allotted as fully or partly paid up as to their nominal value or any premium on them otherwise than in cash.

(2)

The Registrar may not register the conversion of a private company into a public company, unless the application for registration—

(a)

an independent valuation of non-cash consideration has been conducted not more than six months before an allotment of shares; or

(b)

the allotment is in connection with—

(i) a share exchange; or
(ii) a proposed merger with one or more other companies.
(3)

An allotment is in connection with a share exchange for the purpose of subsection (2)(b) if—

(a)

the shares are allotted in connection with an arrangement under which the whole or part of the consideration for the shares allotted is provided by—

(i) the transfer to the company allotting the shares of shares, or shares of a particular class, in another company; or
(ii) the cancellation of shares, or shares of a particular class, in another company; and
(b)

the allotment is open to all the holders of the shares of the other company, or, if the arrangement applies only to shares of a particular class, to all the holders of the company's shares of that class, to take part in the arrangement in connection with which the shares are allotted.

(4)

In determining whether a person is a holder of shares for the purposes of subsection (3), the following are to be disregarded—

(a)