ADVOKS GLOBAL · KENYA
Companies Act
71. Requirement as to share capital
Edition: 2024-12-27 · In force
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—(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.