Kenyan legislation

The Companies (General) Regulations

Edition: 2022-12-31 · In force

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Part I – PRELIMINARY PROVISIONS

1. Citation and commencement

(1)These regulations may be cited as the Companies (General) Regulations.

(2)Except as provided by subsection (3), these regulations come into operation on the fourteenth day after their publication in the Gazette.

(3)Those provisions of these regulations that relate to provisions of the Act that have not come into operation by the day specified in paragraph (2) come into operation on the day on which those provisions of the Act come into operation.

2. Definition of "the Act" for the purposes of these regulations

In these regulations—“the Act” means the Companies Act (Cap. 486).

3. Prescribed forms

The forms set out in the First Schedule are the forms that are prescribed for use under the provisions of the Act specified in the forms.

4. Provisions supplementing definitions of "parent undertaking" and "subsidiary undertaking"

(1)For the purposes of the definition of "parent undertaking" in section 3(1) of the Act, an undertaking is also a parent undertaking of another undertaking if—

(a)it has the power to exercise, or actually exercises, dominant influence or control over it; or

(b)it and the subsidiary undertaking are managed on a unified basis.

(2)An undertaking is also a subsidiary undertaking of another undertaking if, because of paragraph (1), the other undertaking is the parent of the undertaking.

(3)A parent undertaking is taken to be the parent undertaking of undertakings in relation to which any of its subsidiary undertakings are, or are taken to be, parent undertakings; and references to its subsidiary undertakings are to be interpreted accordingly.

(4)The Second Schedule contains provisions explaining the definition of "parent undertaking" and "subsidiary undertaking" as used in the Act and otherwise supplementing those definitions.

(5)In this paragraph and the Second Schedule, references to shares (of an undertaking) are to allotted shares.

Part II – COMPANIES AND COMPANY FORMATION

5. Additional documents to accompany application for registration of a company

In addition to the registration documents required by section 13 of the Act, the following documents are required to be attached to an application for the registration of a company—

(a)in the case of a Kenyan citizen or resident—

(i)a copy of their identity card or passport;

(ii)a copy of their personal identification number certificate; and

(iii)their passport size photograph;

(b)in the case of a non-Kenyan citizen or non-resident—

(i)a copy of their passport; and

(ii)their passport size photograph.

[L.N. 19/2017, r. 2.]

6. Statement of capital and initial shareholdings

(1)For the purposes of section 14(2)(c) of the Act, the following particulars of the rights attached to the shares are prescribed:

(a)voting rights that attach to the shares (including voting rights that arise only in certain circumstances);

(b)rights to dividends or distributions attached to the shares;

(c)any right to participate in a return of capital (including on the liquidation of the company);

(d)whether the shares will be redeemed or may be redeemed at the option of the company or the shareholder;

(e)any terms or conditions relating to redemption of the shares.

(2)For the purposes of section 14(3) of the Act, the statement of capital and initial shareholdings is required to include the name and address of each subscriber to the memorandum of association.

7. Statement of guarantee

For the purposes of section 15(1) of the Act, the statement of guarantee is required to specify the name and address of each subscriber to the memorandum of association.

8. Model articles for companies

(1)The articles prescribed by the Third Schedule are model articles that are applicable to a public company.

(2)The articles prescribed by the Fourth Schedule are model articles that are applicable to a private company.

(3)The articles prescribed by the Fifth Schedule are model articles that are applicable to a company limited by guarantee.

Part III – COMPANY NAMES

9. Names that indicate connection with public authorities

(1)If an application for the approval by the Registrar of a name for a proposed company could in the Registrar's opinion give the impression that the company would, if registered with that name, be connected with a public authority, the Registrar shall require the applicant to request the authority to give its view on the matter.

(2)On being required by the Registrar to do so under paragraph (1), the applicant shall request the authority to give its view as to—

(a)whether it considers that the name, if approved, would give the impression referred to in paragraph (1); and

(b)if the authority considers that the name would have that effect, whether it would object or not object to the name being approved for the company by the Registrar.

(3)As soon as practicable after receiving a request under paragraph (2), the public authority shall—

(a)give its view on the proposed name of the company; and

(b)if it considers that that name would give the impression that the company is, if registered under that name, connected with that authority, state whether it objects or does not object to the approval by the Registrar of the name for the company.

10. Characters permitted to be used in company's name

(1)For the purposes of section 52 of the Act, the characters, signs, symbols (including accents and other diacritical marks) and punctuation set out Part 1 of the Sixth Schedule can be used in the name of a company registered or to be registered under the Act.

(2)The following characters can be used in any part of a company name:

(a)any character that has an accent or other diacritical mark, sign or symbol set out in Part 1 of the Sixth Schedule;

(b)0, 1, 2, 3, 4, 5, 6, 7, 8 or 9;

(c)a full stop, comma, colon, semi-colon or hyphen;

(d)any other punctuation referred to in column 1 of Part 2 of the Sixth Schedule but only in one of the forms set out opposite that punctuation in column 2 of that Part.

(3)The signs and symbols set out in Part 3 of the Sixth Schedule are characters that can be used but not if they are one of the first three characters of a company's name.

(4)The name of a company may not consist of more than 160 permitted characters.

11. Circumstances in which a company name will not be registered

A company name may not be registered if—

(a)it is the same as a name appearing in the Registrar's Index of Company Names, Business Names, Limited Liability Partnerships or Partnerships;

(b)it has a close phonetic resemblance to the name of company, business name, limited liability partnership or partnership that is already registered;

(c)it differs from the name of another company, business name, limited liability partnership or partnership that is already registered only by the addition of the name of a place, locality or region within Kenya;

(d)it is identical to, or closely resembles, that of a name that has been reserved by the Registrar for use in connection with a proposed company, business name, limited liability partnership or partnership;

(e)it is identical to or closely resembles, the name of a company or limited liability partnership that has been dissolved, or has been struck off the register of companies or register of limited liability partnerships, or the entry of a business in the register of business names or partnerships kept under the Registration of Business Names Act, 2015 has been cancelled;

(f)it is the same as a name of a body corporate or established under a written law;

(g)the Registrar believes on reasonable grounds that its use would involve the commission of a criminal offence; or

(h)the Registrar believes on reasonable grounds that it is offensive or undesirable or contrary to public interest.

12. Criteria for determining offensive or undesirable names

The Registrar is required to apply the following criteria in determining whether a particular name is offensive or undesirable or contrary to the public interest—

(a)the name includes "co-operative", "society" or "trade union "or any variant or synonym of those words;

(b)the name suggests an association with, or the patronage of, the State or any of its agencies, unless there are circumstances that justify its use;

(c)the name suggests an association with, or the patronage of, a foreign government or an embassy, high commission or consulate representing such a government in Kenya;

(d)the name suggests an association with, or the patronage of, a county government;

(e)the name comprises an acronym that will render its use vague or uncertain;

(f)the name includes a name that is identical or confusingly similar to a registered trade mark unless a document signed by the owner of the trade mark and indicating consent to its use is provided;

(g)the name is such that the Registrar believes on reasonable grounds that there is reasonable possibility that it could offend members of a particular community or ethnic or racial group.

[L.N. 19/2017, r. 3.]

13. Consent to registration of a name which is the same as another in the Registrar's index of company names

(1)In this regulation—“existing corporation” means a body corporate whose name already appears in the Registrar's index of company names.

(2)For purposes of section 57(2) of the Act, a company (the applicant company) may be registered Act by a proposed name that is the same as, or similar to—

(a)the name of an existing company; or

(b)a name already reserved for a proposed company that is proposed to be registered,

if the conditions specified in paragraph (3) are satisfied.

(3)The conditions are as follows:

(a)the existing company consents, or the promoters of the proposed company, consent, to the proposed name being the name of the applicant company;

(b)the applicant company forms, or is to form, part of the same group as the existing company or the proposed company;

(c)the applicant company provides the Registrar with a copy of a statement made by that corporation specifying—

(i)the consent of the existing company or the promoters of the proposed company as referred to in subparagraph (a); and

(ii)that the applicant company forms, or is to form, part of the same group as the existing company.

(4)The Registrar may accept the statement referred to in paragraph (3)(c) as sufficient evidence that the conditions referred to in paragraph (3)(a) and (b) have been satisfied.

(5)If the consent referred to in paragraph (3)(a) is given by the existing company or by the promoters of a proposed company, a subsequent withdrawal of the consent does not affect the registration of the applicant company by the proposed same name.

Part IV – DISPLAY OF COMPANY NAMES AND OTHER INFORMATION

14. Interpretation: Part IV

(1)In this Part—“business venue” in relation to a company, means an office or a place, other than its registered office—

(a)where it carries on its business; and

(b)that is open to the public;

“communication document”, in relation to a company, means any business letter, notice or other official publication of the company;“registered name”, in relation to a company, means the name by which the company is registered under the Act;“transaction instrument”, in relation to a company, means—

(a)any contract or deed purporting to be signed by or on behalf of the company;

(b)any bill of exchange, promissory note or endorsement purporting to be signed by or on behalf of the company;

(c)any cheque or order for money or goods purporting to be signed by or on behalf of the company; or

(d)any consignment note, invoice, receipt or letter of credit of the company.

(2)In this Part, a reference to a communication document or transaction instrument is a reference to it in hard copy form, electronic form or any other form.

(3)In this Part, a reference to the website of a company includes any part of a website relating to the company which the company has caused or authorised to appear.[L.N. 19/2017, r. 4.]

15. Display of registered name at registered office, etc

(1)A company shall display continuously its registered name in legible characters at—

(a)its registered office; and

(b)every business venue of the company.

(2)A company shall also ensure that its registered name is positioned so that it can be easily seen by any visitor to the office or business venue.

(3)If a location is the registered office or a business venue of more than six companies, and any of the companies, in purported compliance with paragraphs (1) and (2), displays its registered name through an electronic device, the registered name is taken to be displayed continuously for the purposes of those paragraphs if—

(a)the registered name is displayed for at least fifteen continuous seconds at least once in every four minutes; or

(b)the registered name is capable of being displayed within four minutes after a request to make the display is made through the electronic device.

(4)Paragraphs (1), (2) and (3) do not apply to a company that has had no accounting transaction at any time since its incorporation.

(5)If—

(a)a liquidator or administrator of a company has been appointed; and

(b)the registered office or any business venue of the company is also a place where the business of the liquidator, receiver or manager is carried on,

paragraphs (1), (2) and (3) do not apply to that registered office or business venue.

16. Registered name to appear in communication documents, etc

A company shall state its registered name in legible characters—

(a)in any communication document of the company;

(b)in any transaction instrument of the company; and

(c)on any website of the company.

17. Adequacy of certain descriptions of companies

The description of a company is not inadequate or incorrect only because the company—

(a)uses the abbreviation "Co." or "Coy." instead of the word "Company" contained in the name of the company;

(b)uses the abbreviation "Ltd." instead of the word "Limited" contained in the name of the company;

(c)uses the symbol "&" instead of the word "and" contained in the name of the company;

(d)uses any of those words instead of the corresponding abbreviation or symbol contained in the name of the company; or

(e)uses any type or case of letters, spaces between letters, accents or punctuation marks that are not the same as those appearing in the name of the company; or

(f)inserts uses or omits the word "The" or "the" as the first word in its name.

18. Offences under this Part

(1)If a company contravenes regulation 15(1) or (2) or 16 the company, and each officer of the company who is in default, commit an offence and, on conviction, each of them is liable to a fine not exceeding two hundred thousand shillings.

(2)If, on behalf of a company, a person other than an officer of the company—

(a)issues or authorises the issue of any communication document of the company in respect of which regulation 16 is contravened;

(b)signs or authorises to be signed on behalf of the company any contract, deed, bill of exchange, promissory note, endorsement, cheque or order for money or goods in respect of which regulation 16(b) is contravened;

(c)issues or authorises the issue of any consignment note, invoice, receipt or letter of credit of the company in respect of which regulation 16(b) is contravened; or

(d)causes or authorises the appearance of a website of the company in respect of which regulation 16(c) is contravened,

the person commits an offence and is liable on conviction to a fine not exceeding two hundred thousand shillings.

Part V – PROVISIONS RELATING TO DIRECTORS

Division 1 — Introductory provisions

19. Provisions for interpreting this Part

(1)In this Part—

(a)a reference to a director, in relation to an undertaking that is not a company, is a reference to the person holding an office in that undertaking corresponding to that of a director of a company; and

(b)a reference to a connected entity, in relation to a director, is a reference to a body corporate connected with the director within the meaning of the First Schedule to the Act.

(2)For the purposes of this Part, a body corporate is controlled by a director if—

(a)the director is entitled to exercise, or control the exercise of, more than 50 per cent of the voting power at any general meeting of the body; or

(b)the directors, or a majority of the directors, of the body are accustomed to act in accordance with the directions or instructions of the director.

(3)In paragraph (2), a reference to voting power the exercise of which is controlled by a director includes voting power the exercise of which is controlled by another body corporate if the director is entitled to exercise, or control the exercise of, more than 50 per cent of the voting power at any general meeting of that other body corporate.

Division 2 — Disclosure of directors’ remuneration and other benefits payable for directors’ services

20. Interpretation of Division 2

(1)In this Division—“contributions” in relation to a retirement benefits scheme means the payments (including insurance premiums) made under the scheme by or in respect of persons rendering services in respect of which retirement benefits are payable under the scheme; but does not include payments made in respect of two or more such persons if the amount of the payments made in respect of each of those persons cannot be ascertained;“qualifying services”, in relation to a person, means—

(a)the person's services as a director of the company concerned; or

(b)while the person is a director of the company—

(i)the person's services as a director of a subsidiary undertaking of the company; or

(ii)the person's other services in connection with the management of the affairs of the company or a subsidiary undertaking of the company;

“retirement benefits”, in relation to a person, includes any lump sum, allowance, gratuity, periodical payment or other like benefit, any other property, or any other benefit whether in cash or otherwise—

(a)given or to be given on or after the retirement or death of the person (including any annuity or other benefit paid or payable under any insurance policy on or after the retirement or death of the person);

(b)given or to be given in anticipation of the retirement of the person; or

(c)given or to be given in connection with the person's service rendered before the retirement or death of the person;

but does not include—

(d)any benefit which has been or is to be afforded solely because of the person's personal injury (including any incapacity or death caused by that injury) by accident arising out of and in the course of employment; and

(e)any retirement gift of a value (or, in the case of a retirement gift made otherwise than in cash, an estimated money value) not exceeding KSh500,000;

“retirement benefits scheme” means a scheme for the provision of insurance coverage—

(a)on or after the retirement or death of a person; or

(b)in connection with a person's service rendered before the retirement or death of the person,

but does not include a scheme for the provision of insurance coverage for a person's personal injury (including any incapacity or death caused by that injury) by accident arising out of and in the course of employment.

(2)In this Part, a reference to a director includes a former director;

(3)In this Division, a reference to a subsidiary undertaking of a company—

(a)in relation to a person who, while a director of the company, is or was also a director of any other undertaking by virtue of the company's nomination (whether direct or indirect), includes that other undertaking, whether or not that other undertaking is or was in fact a subsidiary undertaking of the company;

(b)for the purposes of regulation 24, is a reference to a subsidiary undertaking of the company at the time the qualifying services of the person concerned are or were rendered; and

(c)in subparagraph (b) of the definition of "qualifying services" in paragraph (1)—

(i)for the purposes of regulations 21, 22 and 24, is a reference to a subsidiary undertaking of the company at the time the qualifying services of the person concerned are or were rendered; and

(ii)for the purposes of regulation 23, is a reference to a subsidiary undertaking of the company immediately before the loss of office as a director of the company.

21. Information about directors' remuneration to be included in notes to financial statements

(1)The information about directors' remuneration prescribed by paragraph (2) is information required to be included in the notes to the financial statements of a company for a financial year.

(2)The information referred to in paragraph (1) is—

(a)the aggregate amount of the remuneration paid to or receivable by the directors of the company in respect of their qualifying services; and

(b)if any such remuneration consist of a benefit otherwise than in cash, the nature of that benefit.

(3)The information is required to distinguish between—

(a)the remuneration paid or receivable in respect of a person's services as a director, whether of the company or its subsidiary undertaking; and

(b)the remuneration paid or receivable in respect of that person's other services in connection with the management of the affairs of the company or its subsidiary undertaking.

(4)Any remuneration paid or receivable in respect of a person accepting office as a director are to be treated as remuneration paid or receivable in respect of that person's services as a director.

(5)For the purposes of this regulation, if any remuneration consisting of a benefit otherwise than in cash, to that extent, a reference to the amount of the remuneration is a reference to the estimated money value of that benefit.

(6)In this regulation—“remuneration”, in relation to a director includes—

(a)the director's fees, percentages, salaries and bonuses;

(b)any sums paid to the director by way of expenses allowance less the amounts actually spent on the expenses for which the allowance was made;

(c)any contributions paid under a retirement benefits scheme, by any person other than the director, in respect of the director; and

(d)any other benefits received by the director, whether in cash or otherwise,

but does not include any retirement benefits to which the director is entitled under any retirement benefits scheme.

22. Information about directors' retirement benefits to be included in notes to financial statements

(1)The information about directors' retirement benefits prescribed by paragraph (2) is information required to be included in the notes to the financial statements of a company for a financial year.

(2)The information referred to in paragraph (1) is—

(a)the aggregate amount of the retirement benefits paid to or receivable by the directors of the company in respect of their qualifying services; and

(b)if any such retirement benefits consist of a benefit otherwise than in cash, the nature of that benefit.

(3)The information is required to distinguish between—

(a)the retirement benefits paid or receivable in respect of a person's services as a director, whether of the company or its subsidiary undertaking; and

(b)the retirement benefits paid or receivable in respect of that person's other services in connection with the management of the affairs of the company or its subsidiary undertaking.

(4)For the purposes of paragraphs (2) and (3), any amount of the retirement benefits paid or receivable under a retirement benefits scheme is to be disregarded if the contributions made under the scheme are substantially adequate for the maintenance of the scheme.

(5)For the purposes of this regulation, if any retirement benefits consist of a benefit otherwise than in cash, to that extent, a reference to the amount of the retirement benefits is a reference to the estimated money value of that benefit.

23. Information about payments made or benefit provided in respect of termination of directors' services

(1)The information prescribed by paragraph (2) about payments made, or benefits provided, in respect of the termination of the services of directors (whether in the capacity of directors or in any other capacity while directors) is information required to be included in the notes to the financial statements of a company for a financial year.

(2)The information referred to in paragraph (1) is—

(a)the aggregate amount of the payments for loss of office (as defined by section 180 of the Act) made to or receivable by the directors of the company, whether in cash or otherwise, in respect of the termination of the qualifying services of the directors; and

(b)if any such payments for loss of office consist of a benefit otherwise than in cash, the nature of that benefit.

(3)The information is required to distinguish between—

(a)the payments made to or receivable by a person for the loss of office as a director, whether of the company or its subsidiary undertaking; and

(b)the payments made to or receivable by that person for the loss of any other office in connection with the management of the affairs of the company or its subsidiary undertaking.

(4)The information is also required to distinguish between—

(a)the amounts paid by or receivable from the company;

(b)the amounts paid by or receivable from the subsidiary undertakings of the company; and

(c)the amounts paid by or receivable from any other person.

(5)For the purposes of this regulation, if any payments for loss of office consist of a benefit otherwise than in cash, to that extent, a reference to the amount of the payments is a reference to the estimated money value of that benefit.

24. Information about consideration provided to or receivable by third parties for making available directors' services

(1)The information prescribed by paragraph (2) about consideration provided to or receivable by any third party for making available the services of a person as a director of a company, or in any other capacity while a director, is information required to be included in the notes to the financial statements of a company for a financial year.

(2)The information referred to in paragraph (1) is—

(a)the aggregate amount of the consideration provided to or receivable by the third party, whether in cash or otherwise, for making available the qualifying services of such a person; and

(b)if any such consideration consists of a benefit otherwise than in cash—the nature of that benefit.

(3)In this regulation, a reference to any third party is a reference to any person other than—

(a)the director;

(b)a connected entity of the director;

(c)the company; or

(d)a subsidiary undertaking of the company.

(4)For the purposes of this regulation, if any consideration consists of a benefit otherwise than in cash, to that extent, a reference to the amount of the consideration is a reference to the estimated money value of that benefit.

25. Only information included in company's records required to be given

This Division requires information to be given by a company only in so far as—

(a)the information is included in the company's records; or

(b)the company has the right to obtain it from the persons concerned.

26. Amounts paid or receivable in which period to be shown

(1)For the purposes of this Division, an amount shown in the notes to the financial statements for a financial year is required to be the amount of—

(a)all relevant sums receivable in respect of that year (whenever paid); or

(b)in the case of sums not receivable in respect of a period, the sums paid during that year.

(2)If an amount is shown for a financial year in the notes to the financial statements for that year in relation to the information prescribed by this Division, the corresponding amount for the immediately preceding financial year must also be shown in the notes.

27. Payments made by or to which person to be shown

(1)For the purposes of this Division, an amount shown in the notes to the financial statements of a company in relation to the information prescribed by this Part is to include all relevant sums, whether paid by or receivable from the company or its subsidiary undertaking or any other person.

(2)In this Division, a reference to a payment to or receivable by a director includes—

(a)a payment to or receivable by a connected entity of the director; and

(b)a payment to a person made or to be made at the direction of, or for the benefit of, the director or a connected entity of the director.

(3)In this Division, a reference to a payment by a person includes a payment by another person made at the direction of, or on behalf of, the person.

28. Payments accounted for not to be included until liability released or not enforced

(1)For the purposes of this Division, an amount shown in the notes to the financial statements of a company is not to include the amount of a payment—

(a)that is to be accounted for to the company or any subsidiary undertaking of the company; or

(b)that is to be accounted for under section 187 of the Act (Payments made without approval: civil consequences) – to those who have sold their shares as a result of a takeover offer (within the meaning of section 584 of the Act) made.

(2)If—

(a)the amount of any payment received in a financial year is not shown in the notes to the financial statements for that year on the ground that the person receiving the payment is liable to account for it; and

(b)the liability is, wholly or partly, released subsequently or is not enforced within 2 years after the date on which the payment is received by the person,

the amount of the payment must (to the extent that the liability is so released or not enforced) be shown in the notes to the first financial statements in which it is practicable to show it, and is required to be distinguished from the amounts to be shown apart from this provision.

29. How to distinguish between different payments

Subject to any express provision to the contrary, if any distinction is required to be made in any information to be shown in accordance with this Part, the directors may, for the purpose of complying with the requirement, apportion any payment between the matters in respect of which the payment is made or receivable in the manner that the directors think fit.

Division 3 — Disclosure of loans, quasi-loans and other dealings in favour of directors

30. Interpretation of Division 3

(1)In this Division—“bank” means a bank to which the Banking Act (Cap. 488) applies;“credit transaction” has the meaning given by section 155 of the Act for the purposes of Division 5 of Part IX of the Act;“guarantee” includes indemnity;“holding company” includes a parent undertaking that is a company;“quasi-loan” has the meaning given by section 156 of the Act;“specified company” means—

(a)a public company; or

(b)a private company or company limited by guarantee that is a subsidiary of a public company;

“transaction” means—

(a)any loan, quasi-loan or credit transaction; or

(b)any guarantee or security in connection with any loan, quasi-loan or credit transaction.

(2)In this Division, a reference to a subsidiary undertaking of a company, in relation to a transaction, is a reference to such an undertaking at the end of the company's financial year, whether or not it was in fact a subsidiary undertaking of the company on the date of the transaction.

(3)In this Division, a reference to a loan, quasi-loan or credit transaction, or a guarantee or security in connection with a loan, quasi-loan or credit transaction, includes—

(a)any arrangement under which the loan or quasi-loan is made or the credit transaction is entered into, or under which the guarantee is given or security is provided; and

(b)any arrangement for an assignment or assumption of any rights, obligations or liabilities under the loan, quasi-loan or credit transaction or under the guarantee or security.

(4)In this Division, a reference to a person for whom a transaction is entered into is a reference to a director, a body corporate controlled by a director, or an entity connected with a director, for whom a transaction is entered into—

(a)in the case of a loan or quasi-loan, or a guarantee or security in connection with a loan or quasi-loan, is a reference to the director, controlled body corporate or connected entity to whom the loan or quasi-loan is made; or

(b)in the case of a credit transaction, or a guarantee or security in connection with a credit transaction, is a reference to the director or connected entity to whom goods, land or services are supplied, sold, leased, hired or otherwise disposed of under the credit transaction.

31. Application of Division 3

(1)This Division applies to a transaction that—

(a)was entered into during a particular financial year; or

(b)subsisted at any time during that year.

(2)This Division applies whether or not the transaction is prohibited under Division 5 of Part IX of the Act.

32. Information to be included in notes to company's financial statements

(1)The information about loans, quasi-loans and other dealings in favour of directors, their controlled bodies corporate and their connected entities prescribed by paragraph (2) is required to be included in the notes to the financial statements of a company for a financial year.

(2)The information referred to in paragraph (1) is—

(a)the particulars of any transaction entered into by the company for a person who at any time during the financial year was—

(i)a director of the company or of its holding company;

(ii)a controlled body corporate of such a director; or

(iii)in the case of a specified company, a connected entity of such a director; and

(b)the particulars of any transaction entered into by a subsidiary undertaking of the company for a person who at any time during the financial year was a director of the company.

(3)The particulars referred to in paragraph (2)(a) and (b) are—

(a)the name of the person for whom the transaction was entered into, and—

(i)if the person was a controlled body corporate of a director of the company or of its holding company, the name of that director; or

(ii)if the person was a connected entity of a director of the company or of its holding company, the name of that director and the nature of the connection;

(b)if the transaction consists of a loan, quasi-loan or credit transaction—

(i)the principal terms of the loan, quasi-loan or credit transaction, including the amount payable under it (whether in a lump sum or by instalments, or by way of periodical payments or otherwise), the rate of interest (if any) and the security for it (if any);

(ii)the amount outstanding on the loan, quasi-loan or credit transaction, in respect of the principal and interest or otherwise, at the beginning of the financial year;

(iii)the amount so outstanding at the end of the financial year;

(iv)if, at different times during the financial year, the amounts so outstanding are different, the greater of those amounts;

(v)the amount (if any) that, having fallen due, has not been paid; and

(vi)the amount of any provision made in respect of any failure or anticipated failure to repay the whole or part of the loan, quasi-loan or credit transaction, or to pay the whole or part of any interest or otherwise on the loan, quasi-loan or credit transaction; and

(c)if the transaction consists of a guarantee or security in connection with a loan, quasi-loan or credit transaction—

(i)the amount representing the maximum liability that may be incurred under the guarantee or security at the beginning of the financial year;

(ii)the amount representing the maximum liability that may be so incurred at the end of the financial year;

(iii)(if, at different times during the financial year, the amounts representing the maximum liability that may be so incurred are different) the greatest of those amounts; and

(iv)the amount paid and the amount of any liability incurred during the financial year for the purpose of fulfilling the guarantee or discharging the security, including any loss incurred by reason of the enforcement of the guarantee or security.

33. Provisions for statement instead of information prescribed by regulation 32

(1)If the requirement prescribed by paragraph (2) is complied with, the financial statements for a financial year do not need to include—

(a)the particulars specified in regulation 32(3)(b) in respect of a quasi-loan or credit transaction; and

(b)the particulars specified in regulation 32(3)(c) in respect of a guarantee or security in connection with a quasi-loan or credit transaction.

(2)The requirement referred to in paragraph (1) is that the notes to the financial statements for the financial year must contain a statement showing, in respect of each person named in the notes under regulation 32(3)(a), the following information—

(a)in relation to all quasi-loans made to, and all credit transactions entered into for, each such person—

(i)the aggregate of the amounts outstanding referred to in regulation 32(3)(b)(ii) on those quasi-loans and credit transactions;

(ii)the aggregate of the amounts outstanding referred to in regulation 32(3)(b)(iii) on those quasi-loans and credit transactions;

(iii)the aggregate of the amounts referred to in regulation 32(3)(b)(v) in respect of those quasi-loans and credit transactions; and

(iv)the aggregate of the amounts of provision referred to in regulation 32(3)(b)(vi) in respect of those quasi-loans and credit transactions; and

(b)in relation to all guarantees and security in connection with all quasi-loans made to, and all credit transactions entered into for, each such person—

(i)the aggregate of the amounts representing the maximum liability referred to in regulation 32(3)(c)(i) that may be incurred under those guarantees and security;

(ii)the aggregate of the amounts representing the maximum liability referred to in regulation 32(3)(c)(ii) that may be incurred under those guarantees and security; and

(iii)the aggregate of the amounts referred to in regulation 32(3)(c)(iv) in respect of those guarantees and security.

34. Provisions applicable to company that is, or if its subsidiary undertaking, is a bank

(1)If a company is a bank, the notes to the financial statement of the company for a financial year are required to include a statement showing the amounts calculated in accordance with paragraph (2).

(2)The amounts referred in paragraph (1) are to be calculated by adding together the following amounts at the end of the company's financial year:

(a)the amount outstanding, in respect of the principal and interest or otherwise, on all loans and quasi-loans made by the company to, and all credit transactions entered into by the company as a creditor for, persons each of whom was, at any time during the financial year—

(i)a director of the company or of its holding company;

(ii)a controlled body corporate of such a director; or

(iii)in the case of a specified company, a connected entity of such a director; and

(b)the amount representing the maximum liability that may be incurred under all guarantees given, and all security provided, by the company in connection with all loans and quasi-loans made to and all credit transactions entered into for, the persons referred to in subparagraph (a).

(3)If, at different times during the financial year, the aggregates of the amounts referred to in paragraph (2)(a) and (b) are different), the amount to be shown in the notes to the company's statement is the greater of those aggregates.

(4)If a subsidiary undertaking of a company is a bank the notes to the financial statements of the company for a financial year are required to contain a statement showing the amount calculated in accordance with paragraph (5).

(5)For the purposes of paragraph (4), the amount is to be calculated by adding together the aggregate of the following amounts at the end of the financial year:

(a)the amount outstanding, in respect of the principal and interest or otherwise, on all loans and quasi-loans made by the bank to, and all credit transactions entered into by the bank as a creditor for, persons each of whom was, at any time during the financial year, a director of the company; and

(b)the amount representing the maximum liability that may be incurred under all guarantees given, and all security provided, by the bank in connection with all loans and quasi-loans made to, and all credit transactions entered into for, the persons referred to in subparapraph (a).

(6)If, at different times during the financial year, the aggregates of the amounts referred to in paragraph (5)(a) and (b) are different) the amount to be shown in the statement is the greater of those aggregates.

(7)In the case of a transaction entered into for any person by a company that is, or a company's subsidiary undertaking that is, a bank, the information prescribed by regulation 32 does not need to be included in the financial statements of the company for a financial year if—

(a)the value of the transaction is not greater, and the terms of it are not more favourable, than what is reasonable to expect the bank to have offered to a person of the same financial standing but unconnected with the bank; or

(b)in any other case, the aggregate of the amounts specified in paragraph (8) does not exceed KSh 100,000,000 or an amount equivalent to 10 per cent of the paid up capital and reserves of the bank, whichever is the lower.

(8)The following are the amounts referred to in paragraph (8)(b):

(a)the amount outstanding, in respect of the principal and interest or otherwise, during the financial year on all loans and quasi-loans (except those falling within paragraph (7)(a)) made by the bank to, and all credit transactions (except those falling within that paragraph) entered into by the bank as a creditor for, that person or, if, at different times during the financial year, the amounts so outstanding are different, the greater of those amounts; and

(b)the amount representing the maximum liability that may be incurred during the financial year under all guarantees (except those falling within paragraph (7)(a)) given, and all security (except those falling within that paragraph) provided, by the bank in connection with all loans and quasi-loans made to, and all credit transactions entered into for, that person or, if, at different times during the financial year, the amounts representing the maximum liability that may be so incurred are different, the greater of those amounts.

35. Exemption for employee

This Division does not apply to a loan or quasi-loan made by a company to an employee of the company or by a subsidiary undertaking of the company to an employee of the subsidiary undertaking, or a credit transaction entered into by a company as a creditor for an employee of the company or by a subsidiary undertaking of the company as a creditor for an employee of the subsidiary undertaking, if—

(a)the value of the loan, quasi-loan or credit transaction does not exceed KSh 1,000,000;

(b)the loan or quasi-loan is certified by the directors of the company or the subsidiary undertaking to have been made, or the credit transaction is so certified to have been entered into, in accordance with the relevant practice adopted or about to be adopted by the company or the subsidiary undertaking;

(c)the loan or quasi-loan is not made, or the credit transaction is not entered into, by the company under a guarantee given, or security provided, by a subsidiary undertaking of the company; and

(d)the loan or quasi-loan is not made, or the credit transaction is not entered into, by the subsidiary undertaking under a guarantee given, or security provided, by the company or any other subsidiary undertaking of the company.

36. How to determine value of transaction

For the purposes of this Division, Part XVI of the Act (General provisions relating to independent valuation and report) applies in determining the value of a transaction.

Division 4 — Disclosure of directors' material interests in transactions, arrangements or contracts

37. Application of Division 4

This Division applies to a transaction, arrangement or contract that—

(a)was entered into during a particular financial year; or

(b)subsisted at any time during that year.

38. Information about material interests of directors in transactions, arrangements or contracts

(1)The information prescribed by paragraph (2) about material interests of directors in transactions, arrangements or contracts entered into by a company is information required to be included in the notes to the financial statement of the company for a financial year.

(2)The information referred to in paragraph (1) is the particulars of any transaction, arrangement or contract—

(a)entered into by the company; and

(b)in which a person who at any time during the financial year was a director of the company had, directly or indirectly, a material interest.

(3)The particulars referred to in paragraph (2) are—

(a)the principal terms of the transaction, arrangement or contract;

(b)a statement of the fact that the transaction, arrangement or contract was entered into or subsisted during the financial year;

(c)the names of the parties to the transaction, arrangement or contract;

(d)the name of the director having the material interest and the nature of that interest; and

(e)if that director is treated as having the material interest because of paragraph (4), the name of the director's connected entity and the nature of the connection.

(4)For the purposes of this regulation, a director of a public company is treated as having a material interest in a transaction, arrangement or contract entered into by the public company if a connected entity of that director has a material interest in that transaction, arrangement or contract.

(5)In this regulation, a reference to a transaction, arrangement or contract is a reference to a transaction, arrangement or contract that is significant in relation to the company's business.

(6)For the purposes of paragraph (5), a transaction, arrangement or contract is not significant in relation to the company's business if, after consideration, the directors of the company are of the opinion that it is not significant in relation to the company's business.

(7)For the purposes of this regulation, an interest that a director of a company has in a transaction, arrangement or contract is not material if, after consideration, the directors of the company are of the opinion that it is not material.

39. Exemption under Division 4

This Division does not apply to—(a)a transaction, arrangement or contract between the company and another undertaking in which a director of the company has an interest only because the director is also a director of that other undertaking; or(b)a director's contract of service.

Division 5 — Directors’ liability

40. Provisions protecting directors from liability

A non-contractual document to which a company is a party is a document prescribed for the purpose of section 194(1)(c) of the Act if it contains provisions purporting to exempt a director of the company from any liability that would otherwise attach to the director in connection with any negligence, default, breach of duty or breach of trust in relation to the company.

Part VI – FURTHER REQUIREMENTS FOR DIRECTORS' REPORTS

41. Interpretation: Part VI

In this Part—“directors’ report” means the report required to be prepared under section 653 of the Act;"parent company” means a parent undertaking that is a company;"specified undertaking", in relation to a company, means—

(a)a parent company of the company;

(b)a subsidiary undertaking of the company; or

(c)a subsidiary undertaking of the company's parent company.

42. Directors' report to include details of directors' interests

(1)A directors' report for a financial year is required to include a statement that complies with paragraph (3) if, at the end of the financial year, there exist arrangements—

(a)to which the company or a specified undertaking of the company is a party; and

(b)whose objects are, or one of whose objects is, to enable directors of the company to acquire benefits by means of the acquisition of shares in, or debentures of, the company or any other body corporate.

(2)A directors' report for a financial year is required to include a statement that complies with paragraph (3) if at any time in the financial year there existed arrangements—

(a)to which the company or a specified undertaking of the company was a party; and

(b)whose objects were, or one of whose objects was, to enable directors of the company to acquire benefits by means of the acquisition of shares in, or debentures of, the company or any other body corporate.

(3)The statement is required—

(a)to explain the effect of the arrangements referred to in paragraph (1) or (2); and

(b)to give the names of the persons who at any time in that financial year were directors of the company and held, or whose nominees held, shares or debentures acquired under the arrangements.

(4)Paragraphs (1) and (2) do not apply in respect of a company that falls within the reporting exemption for the financial year.

43. Directors' report to give details of certain donations made by company

(1)If a company (not being the wholly owned subsidiary of a company incorporated in Kenya)—

(a)has no subsidiary undertakings; and

(b)has in a financial year made donations for charitable or other purposes to a total amount of not less than KSh100,000,

a directors' report for the financial year is required to state the total amount of those donations.

(2)If—

(a)a company (not being the wholly owned subsidiary of a company incorporated in Kenya) has subsidiary undertakings; and

(b)the company has in a financial year made donations (whether on its own or by its subsidiary undertakings) for charitable or other purposes to a total amount of not less than KSh100,000,

a directors' report for the financial year is required to state the total amount of those donations.

(3)Paragraphs (1) and (2) do not apply in respect of a company that falls within the reporting exemption for the financial year.

(4)For the purposes of paragraphs (1) and (2), a body corporate is a wholly owned subsidiary of another body corporate if it has only the following as members:

(a)that other body corporate;

(b)a wholly owned subsidiary of that other body corporate;

(c)a nominee of that other body corporate or such a wholly owned subsidiary.

44. Shares issued by company during financial year

If, in any financial year of a company, the company has issued any shares, a directors' report for the financial year is required to state—

(a)the reason for making the issue;

(b)the classes of shares issued; and

(c)for each class of shares, the number of shares issued and the consideration received by the company for the issue.

45. Debentures issued by company during financial year

If, in any financial year of a company, the company has issued any debentures, a directors' report for the financial year is required to state —

(a)the reason for making the issue;

(b)the classes of debentures issued; and

(c)for each class of debentures, the amount issued and the consideration received by the company for the issue.

46. Equity-linked agreements

(1)If, in any financial year of a company, the company has entered into an equity-linked agreement, a directors' report for the financial year is required to state—

(a)the reason for entering into the agreement;

(b)the nature and terms of the agreement including, if applicable—

(i)the conditions that are required to be met before the company issues any shares;

(ii)the conditions that is required to be met before a third party may require the company to issue any shares; and

(iii)any monetary or other consideration that the company has received or will receive under the agreement;

(c)the classes of shares issued under the agreement; and

(d)for each class of shares, the number of shares that have been issued under the agreement.

(2)If, at the end of a financial year of a company, there exists an equity-linked agreement entered into by the company, a directors' report for the financial year is required to state—

(a)the classes of shares that may be issued under the agreement;

(b)for each class of shares, the number of shares that may be issued under the agreement;

(c)any monetary or other consideration that the company has received or will receive under the agreement; and

(d)any other conditions or terms that remain to be met before the shares are issued.

(3)In this regulation, "equity-linked agreement"—

(a)means—

(i)an agreement that will or may result in the company issuing shares; or

(ii)an agreement requiring the company to enter into the agreement specified in sub-subparagraph (i); and

(b)includes—

(i)an option to subscribe for shares;

(ii)an agreement for the issue of securities that are convertible into, or entitle the holder to subscribe for, shares in the company;

(iii)an employee share scheme; and

(iv)a share option scheme; but

(c)does not include—

(i)an agreement to subscribe for shares in a company that is entered into pursuant to the company's offer of its shares to the public; and

(ii)an agreement to subscribe for shares in a company that is entered into pursuant to an offer made to the members of the company in proportion to their shareholdings;

“offer” includes an invitation to the public to subscribe for shares in a company.

47. Dividend recommended by directors

A directors' report for a financial year is required to state the amount (if any) that the directors of the company recommend should be paid by way of dividend for the financial year.

48. Directors' report to include reasons for resignation of director, etc

(1)This regulation applies if—

(a)a director of a company has in a financial year resigned from the office or has refused to stand for re-election to the office; and

(b)the company has received a notice in writing from the director specifying that the resignation or refusal is due to reasons relating to the affairs of the company (whether or not other reasons are specified).

(2)A directors' report for the financial year is required to include a summary of the reasons for the director's resignation or refusal to stand for re-election in so far it relates to the affairs of the company.

(3)This regulation does not apply to a company that is exempt from the audit requirements of Part XXVII of the Act.

49. Details of permitted indemnity provision to be included in directors' report

(1)If, when a directors' report prepared by the directors of a company is approved in a financial year of the company in accordance with section 658 of the Act (Directors to approve and sign directors' report), a permitted indemnity provision (whether made by the company or otherwise) is in force for the benefit of one or more directors of the company, or of any associated company, the directors' report for the financial year is required to include a statement that the permitted indemnity provision is in effect as provided by section 197 of the Act (Directors to disclose qualifying indemnity provision in directors' report).

(2)If, at any time in the financial year to which a directors' report prepared by the directors of a company relates, a permitted indemnity provision (whether made by the company or otherwise) was in force for the benefit of one or more persons who were then directors of the company, or of an associated company, the directors' report for the financial year is required to include a statement that the permitted indemnity provision was in effect as provided by section 197(2) of the Act.

(3)In this regulation—“permitted indemnity provision”, in relation to a company, means a provision that—

(a)provides for indemnity against liability incurred by a director of the company to a third party; and

(b)has effect as provided by section 197(2) of the Act;

“third party”, in relation to a company, means a person other than the company or an associated company.

50. Details of material interests in transaction, arrangement or contract to be included in directors' report

(1)A directors' report for a financial year of a company is required to state the particulars of any transaction, arrangement or contract—

(a)entered into by a specified undertaking of the company; and

(b)in which a person who at any time in the financial year of the company was a director of the company had, directly or indirectly, a material interest.

(2)The particulars referred to in paragraph (1) are—

(a)the principal terms of the transaction, arrangement or contract;

(b)the fact that the transaction, arrangement or contract was entered into or existed in the financial year;

(c)the names of the parties to the transaction, arrangement or contract;

(d)the name of the director having the material interest and the nature of that interest; and

(e)if the director is treated as having the material interest because of paragraph (3), the name of the director's connected entity and the nature of the connection.

(3)For the purposes of this regulation, a director of a public company is treated as having a material interest in a transaction, arrangement or contract entered into by a specified undertaking of the company if a connected entity of that director has a material interest in that transaction, arrangement or contract.

(4)In this regulation, a reference to a transaction, arrangement or contract is a reference to a transaction, arrangement or contract that is significant in relation to the company's business.

(5)For the purposes of paragraph (4), a transaction, arrangement or contract is not significant in relation to the company's business if, after consideration, the directors of the company are of the opinion that it is not significant in relation to the company's business.

(6)For the purposes of this regulation, an interest that a director of a company has in a transaction, arrangement or contract is not material if, after consideration, the directors of the company are of the opinion that it is not material.

(7)This regulation does not apply in respect of—

(a)a company that falls within the reporting exemption for the financial year;

(b)a transaction, arrangement or contract unless it was entered into in the financial year or existed at any time in that year;

(c)a transaction, arrangement or contract between the company and its specified undertaking in which a director of the company has a material interest; or

(d)a director's contract of service.

(8)In this regulation—

(a)a reference to a director includes a shadow director; and

(b)a reference to a connected entity, in relation to a director, is a reference to a body corporate connected with the director (within the meaning of the First Schedule to the Act).

50A. Directors of a quoted company remuneration report

The directors of a quoted company shall prepare a directors' remuneration report for each financial year as prescribed in the Tenth Schedule.[L.N. 240/2017, r. 2.]

Part VII – DISQUALIFICATION OF DIRECTORS

51. Additional statement to be lodged with Registrar in relation to persons disqualified from being directors

(1)If the statement of proposed officers lodged with the Registrar under section 16 of the Act relates (wholly or partly) to a person who is a person subject to a disqualification order or a disqualification undertaking disqualifying the person from being a director or secretary of a company, the applicant for registration of the company shall attach to, or enclose with, the statement an additional statement giving such information about that person as referred to in section 230(2) of the Act.

(2)If the statement or notice lodged by a company with the Registrar under section 138 or 249 of the Act relates (wholly or partly) to a person who is a person subject to a disqualification order or disqualification undertaking from being a director or secretary of a company, the company shall attach to, or enclose with, the statement or notice an additional statement giving the information about that person as referred to in section 230(2) of the Act.

(3)If a person who applies for registration of a company fails to comply with paragraph (2), the person commits an offence and on conviction is liable to a fine not exceeding two hundred thousand shillings.

(4)If, after a person is convicted of an offence under paragraph (3), the person continues to fail to comply with the relevant requirement, the person commits a further offence on each day on which the failure continues and on conviction is liable to a fine not exceeding twenty thousand shillings for each such offence.

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

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

Part VIII – SHARE CAPITAL OF COMPANY

52. Returns of allotment by limited companies

The information required to be included in a return of an allotment of shares required to be lodged with the Registrar under section 333 of the Act is as follows:

(a)the number of shares allotted;

(b)the amount paid up and the amount (if any) unpaid on each allotted share (whether on account of the nominal value of the share or by way of premium);

(c)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, the consideration for the allotment.

53. Communication of pre-emption offers to shareholders.

For purposes of section 339 of the Act, a pre-emption offer made under section 338 of the Act is effective if accepted within a period of twenty eight days after the date on which the offer is made and section 339(3) of the Act is modified accordingly.

54. Meaning of payment in cash for purposes of section 359(2)(e) of Act

For purposes of section 359(2)(e) of the Act, cash consideration includes—

(a)the creation of an obligation on the part of a settlement bank to make a relevant payment in respect of the allotment of a share to a system-member by means of a relevant system;

(b)the creation of an obligation on the part of a settlement bank to make a relevant payment in respect of the payment up of a share by a system-member by means of a relevant system; and

(c)the creation of an obligation on the part of a settlement bank to make a relevant payment in respect of the transfer by a company to a system-member, by means of a relevant system, of a share held by the company as a treasury share.

55. [Deleted by L.N. 63/2021, r. 2.]

Part IX – CONTENTS OF ANNUAL RETURNS AND DOCUMENTS REQUIRED TO ACCOMPANY ANNUAL RETURNS

56. Additional information to be included in company's annual return

(1)In addition to the contents specified in section 706 of the Act, an annual return of a company is required to include the following information in respect of the company:

(a)the company name, its registered number and business name (if any);

(b)the date to which the company makes up the return;

(c)particulars of the total amount of the indebtedness of the company in respect of all mortgages and charges that are required to be registered with the Registrar under the Act;

(d)in the case of a company having a share capital, particulars relating to members and share capital of the company;

(e)in the case of a company not having a share capital (except for a company registered with an unlimited number of members)—the number of members of the company;

(f)particulars with respect to—

(i)any person who at the date of the return is a director or alternate director of the company; and

(ii)any person who at that date is a company secretary of the company,

that by the Act are required to be contained with respect to them in the register of directors and register of company secretaries of a company.

(2)In the case of a listed company, the particulars relating to members as required under paragraph (1)(d)(i) are limited to those relating to members who held 5 per cent or more of the issued shares in any class of the company's shares as at the date of the return.

(3)If a director or alternate director is a natural person, the particulars as required under paragraph (1)(g) do not include—

(a)an address contained in the register of directors as the usual residential address of the director or alternate director; and

(b)the full number of the identity card or passport of the director or alternate director.

(4)If a company secretary is a natural person, the particulars as required under paragraph (1)(g) do not include the full number of the identity card or passport of the company secretary.

57. Additional information to be included in annual return of private company

An annual return required to be lodged with the Registrar under section 705 of the Act in respect of a private company is also required to include the following information:

(a)a statement that the company has not—

(i)since the date of the last return; or

(ii)in the case of a first return, since the date of the incorporation of the company,issued any invitation to the public to subscribe for any shares or debentures of the company; and

(b)if the annual return discloses the fact that the number of members of the company exceeds 50 — a statement that the excess consists wholly of persons who, under section 9(2) of the Act, are excluded in the calculation of the number of members of the company.

58. Documents to accompany annual return of public company or company limited by guarantee

An annual return for a public company or a company limited by guarantee is required to be accompanied by—

(a)copies of the documents required to be sent to every member of the company under section 666 of the Act (Duty of company to send financial statements and reports to persons entitled) — certified by a director or company secretary of the company to be true copies; and

(b)if any of the documents mentioned in paragraph (a) is in a language other than English, a certified translation (to be annexed to that document) in English of the document.

Part X – COMPANY CHARGES

59. Particulars of charges newly created charges

For purposes of section 878(1) of the Act (Charges created by a company), the particulars of a charge required to be registered with the Registrar are as follows:

(a)the date of creation of the charge;

(b)the amount secured by the charge;

(c)the person entitled to the charge;

(d)in the case of a floating charge — a statement of any of the provisions of the charge, and of any instrument relating to it, that—

(i)prohibit or restrict or regulate the company's power to grant further securities ranking in priority to, or equally with, the floating charge; or

(ii)vary or otherwise regulate the order of ranking of the floating charge in relation to other subsisting securities.

60. Particulars of charges over existing property acquired by company

For purposes of section 879(2) of the Act, the particulars of a charge required to be registered with the Registrar are as follows–

(a)the date on which the company acquired property that is already subject to a charge;

(b)the amount secured by the charge;

(c)the person entitled to the charge;

(d)in, the case of a floating charge – a statement of any of the provisions of the charge, and of any instrument relating to it, that—

(i)prohibit or restrict or regulate the company's power to grant further securities ranking in priority to, or equally with, the floating charge; or

(ii)vary or otherwise regulate the order of ranking of the floating charge in relation to other subsisting securities.

[L.N. 19/2017, r. 5.]

Part XI – COMPANY COMMUNICATIONS PROVISIONS

61. Effect of this Part and Seventh and Eighth Schedules

(1)This Part and the Seventh and Eighth Schedules have effect for the purposes of any provision of the Act that requires or permits documents or information to be sent or supplied by or to a company.

(2)The company communications provisions have effect subject to any requirements imposed, or contrary provision made, by or under any other enactment.

(3)For the purpose of paragraph (2), a provision is not contrary to the company communications provisions only because it expressly permits a document or information to be sent or supplied in a hard copy form or in an electronic form or by being published on a website.

62. Sending or supplying documents or information by companies

Documents or information required or permitted to be sent or supplied to a company are to be sent or supplied in accordance with the Seventh Schedule.

63. Sending or supplying documents or information to companies

Documents or information required or permitted to be sent or supplied by a company are to be sent or supplied in accordance with the Eighth Schedule.

64. Sending or supplying documents or information to companies

The Eighth Schedule applies (and the Seventh Schedule does not apply) in relation to documents or information that are required or permitted to be sent or supplied by one company to another.

65. Right to require company to provide hard copy version of company document or information

(1)A member of a company, or a holder of a company's debentures, who has received a document or information from the company otherwise than in hard copy form is entitled to require the company to send to the member or debenture holder a version of the document or information in hard copy form.

(2)The company shall send the document or information in hard copy form within twenty-one days after being requested to do so by the member or debenture holder.

(3)The company may not impose or attempt to impose a charge for providing the document or information in that form.

(4)If a company fails to comply with this paragraph (2), or contravenes paragraph (3), the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding fifty thousand shillings.

(5)If, after a company or officer is convicted of an offence under paragraph (4) in relation to a failure to send a document or information in hard form, the company continues to fail to send the document or information, 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 five thousand shillings for each such offence.

66. Requirements for authentication of documents and information

(1)A document or information sent or supplied to a company in hard copy form is sufficiently authenticated if it is signed by the person sending or supplying it.

(2)A document or information sent or supplied in electronic form is sufficiently authenticated—

(a)if the identity of the sender is confirmed in a manner specified by the company; or

(b)when no such manner has been specified by the company–if the communication contains, or is accompanied by, a statement of the identity of the sender and the company has no reason to doubt the truth of the statement.

(3)If a document or information is sent or supplied by a person on behalf of another, nothing in this paragraph affects a provision of the company's articles under which the company may require reasonable evidence of the authority of the person to act on behalf of the other.

67. When documents and information are taken to have been sent or supplied by company

(1)This paragraph applies in relation to documents and information sent or supplied by a company.

(2)If—

(a)a document or information is sent by post (whether in hard copy or electronic form) to an address in Kenya; and

(b)the company is able to establish that it was properly addressed, prepaid and posted,

the document or information is taken to have been received by the intended recipient forty-eight hours after it was posted.

(3)If—

(a)the document or information is sent or supplied by electronic means; and

(b)the company is able to show that it was properly addressed,

it is taken to have been received by the intended recipient forty-eight hours after it was sent or supplied.

(4)If the document or information is sent or supplied by publishing it on a website, it is taken to have been received by the intended recipient—

(a)when the material was first made available on the website; or

(b)if later, when the recipient received (or is taken to have received) notice that the material was available on the website.

(5)In calculating a period of hours for the purposes of this paragraph, any part of a day that is not a working day is to be disregarded.

(6)This paragraph has effect subject—

(a)in its application to documents or information sent or supplied by a company to its members–to any contrary provision of the company's articles;

(b)in its application to documents or information sent or supplied by a company to its debentures holders—to any contrary provision in the document constituting the debentures; and

(c)in its application to documents or information sent or supplied by a company to a person otherwise than in the person's capacity as a member or debenture holder—to any contrary provision in an agreement between the company and that person.

Part XII – FEES PRESCRIBED FOR THE PURPOSES OF THE ACT

68. Fees payable in relation to registration of companies or documents relating to companies

(1)A fee specified in column 3 of Part 1 of the Ninth Schedule is payable to the Registrar in respect of the matter described, opposite the fee, in column 2 of that Part in relation to the registration of a company having a share capital or for the registration of a document lodged to the Registrar in respect of such a company.

(2)A fee specified in column 3 of Part 2 of the Ninth Schedule is payable to the Registrar in respect of the matter described, opposite the fee, in column 2 of that Part in relation to the registration of a company limited by guarantee or for the registration of a document lodged to the Registrar in respect of such a company.

(3)A fee specified in column 3 of Part 3 of the Ninth Schedule is payable to the Registrar in respect of the matter described, opposite the fee, in column 2 of that Part in relation to the registration of a company limited by guarantee or for the registration of a document lodged to the Registrar in respect of such a company.

(4)The fee specified in column 3 of Part 4 of the Ninth Schedule is payable to the Registrar in respect of the matter described, opposite the fee, in column 2 of that Part in relation to the registration of an unlimited company that has no share capital.

69. Fees payable to Registrar for inspecting documents or obtaining documents or information

A fee specified in column 3 of Part 5 of the Ninth Schedule is payable to the Registrar in respect of the matter described, opposite the fee, in column 2 of that Part.

70. Miscellaneous fees payable under the Act

A fee specified in column 3 of Part 6 of the Ninth Schedule is payable to the Registrar in respect of the matter described, opposite the fee, in column 2 of that Part.

71. Fees payable to High Court or Attorney General under the Act

A fee specified in column 3 of Part 7 of the Ninth Schedule is payable to the Court or the Attorney General in respect of the matter described, opposite the fee, in column 2 of that Part.

72. Fees payable to companies under the Act

A fee specified in column 3 of Part 7 of the Ninth Schedule is payable to a company in respect of the matter described, opposite the fee, in column 2 of that Part. [L.N. 19/2017, r. 6.]

Source: Kenya Law · Imported 4 October 2026