The Companies (General) Regulations

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

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Jurisdiction: Kenya
Instrument: Notice
Citation: Legal Notice 239 of 2015
Version: Undated source snapshot
Language: en

Source attribution: Source: Kenya Law

Statute overview

About this statute

These regulations may be cited as the Companies (General) Regulations. "the Act" is defined to mean the Companies Act (Cap. 486). The forms listed in the First Schedule are the prescribed forms for use under the specified provisions of the Act. Section 4 defines when one undertaking is a parent undertaking or subsidiary: (1)(a) where it can or does exercise dominant influence or control; (1)(b) where they are managed on a unified basis; (2) an undertaking is a subsidiary of another if paragraph (1) makes the other its parent; (3) parenthood extends via its subsidiaries; (4) the Second Schedule supplements these definitions; (5) references to shares mean allotted shares. An application for registration of a company must be accompanied by a copy of their identity card or passport.

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Provisions of The Companies (General) Regulations

Showing 73 of 73

Part I

PRELIMINARY PROVISIONS

1
PRELIMINARY PROVISIONS - 1. Citation and commencement

AI-assisted research summary: These regulations may be cited as the Companies (General) Regulations.

Section 1. Citation and commencement Section 1(1) These regulations may be cited as the Companies (General) Regulations. Section 1(2) Except as provided by subsection (3), these regulations come into operation on the fourteenth day after their publication in the Gazette. Section 1(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.
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PRELIMINARY PROVISIONS - 2. Definition of "the Act" for the purposes of these regulations

AI-assisted research summary: "the Act" is defined to mean the Companies Act (Cap. 486).

Section 2. Definition of "the Act" for the purposes of these regulations Section In these regulations— “the Act” means the Companies Act (Cap. 486).
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PRELIMINARY PROVISIONS - 3. Prescribed forms

AI-assisted research summary: The forms listed in the First Schedule are the prescribed forms for use under the specified provisions of the Act.

Section 3. Prescribed forms Section 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.
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PRELIMINARY PROVISIONS - 4. Provisions supplementing definitions of "parent undertaking" and "subsidiary undertaking"

AI-assisted research summary: Section 4 defines when one undertaking is a parent undertaking or subsidiary: (1)(a) where it can or does exercise dominant influence or control; (1)(b) where they are managed on a unified basis; (2) an undertaking is a subsidiary of another if paragraph (1) makes the other its parent; (3) parenthood extends via its subsidiaries; (4) the Second Schedule supplements these definitions; (5) references to shares mean allotted shares.

Section 4. Provisions supplementing definitions of "parent undertaking" and "subsidiary undertaking" Section 4(1)(a) it has the power to exercise, or actually exercises, dominant influence or control over it; or Section 4(1)(b) it and the subsidiary undertaking are managed on a unified basis. Section 4(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. Section 4(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. Section 4(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. Section 4(5) In this paragraph and the Second Schedule, references to shares (of an undertaking) are to allotted shares.

Part II

COMPANIES AND COMPANY FORMATION

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COMPANIES AND COMPANY FORMATION - 5. Additional documents to accompany application for registration of a company

AI-assisted research summary: An application for registration of a company must be accompanied by a copy of their identity card or passport.

Section 5. Additional documents to accompany application for registration of a company Section a copy of their identity card or passport;
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COMPANIES AND COMPANY FORMATION - 6. Statement of capital and initial shareholdings

AI-assisted research summary: The statement of capital and initial shareholdings must list each share class’s voting rights, dividend/distribution rights, rights to return of capital, redemption terms, and include the name and address of each subscriber to the memorandum.

Section 6. Statement of capital and initial shareholdings Section 6(1)(a) voting rights that attach to the shares (including voting rights that arise only in certain circumstances); Section 6(1)(b) rights to dividends or distributions attached to the shares; Section 6(1)(c) any right to participate in a return of capital (including on the liquidation of the company); Section 6(1)(d) whether the shares will be redeemed or may be redeemed at the option of the company or the shareholder; Section 6(1)(e) any terms or conditions relating to redemption of the shares. Section 6(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.
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COMPANIES AND COMPANY FORMATION - 7. Statement of guarantee

AI-assisted research summary: The statement of guarantee must specify the name and address of each subscriber to the memorandum of association.

Section 7. Statement of guarantee Section 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.
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COMPANIES AND COMPANY FORMATION - 8. Model articles for companies

AI-assisted research summary: Model articles in the Third, Fourth and Fifth Schedules apply to public, private and guarantee companies respectively.

Section 8. Model articles for companies Section 8(1) The articles prescribed by the Third Schedule are model articles that are applicable to a public company. Section 8(2) The articles prescribed by the Fourth Schedule are model articles that are applicable to a private company. Section 8(3) The articles prescribed by the Fifth Schedule are model articles that are applicable to a company limited by guarantee.

Part III

COMPANY NAMES

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

AI-assisted research summary: Specifies which characters, signs, symbols and punctuation may be used in a company's name, restricts use of certain Part 3 symbols as the first three characters, and limits company names to 160 permitted characters.

Section 10. Characters permitted to be used in company's name Section 10(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. Section 10(2)(a) any character that has an accent or other diacritical mark, sign or symbol set out in Part 1 of the Sixth Schedule; Section 10(2)(b) 0, 1, 2, 3, 4, 5, 6, 7, 8 or 9; Section 10(2)(c) a full stop, comma, colon, semi-colon or hyphen; Section 10(2)(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. Section 10(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. Section 10(4) The name of a company may not consist of more than 160 permitted characters.
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COMPANY NAMES - 11. Circumstances in which a company name will not be registered

AI-assisted research summary: A company name will not be registered if it is the same as a name appearing in the Registrar's Index of Company Names, Business Names, Limited Liability Partnerships or Partnerships.

Section 11. Circumstances in which a company name will not be registered Section it is the same as a name appearing in the Registrar's Index of Company Names, Business Names, Limited Liability Partnerships or Partnerships;
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COMPANY NAMES - 12. Criteria for determining offensive or undesirable names

AI-assisted research summary: A name is treated as offensive or undesirable if it includes "co-operative", "society" or "trade union" or any variant or synonym of those words.

Section 12. Criteria for determining offensive or undesirable names Section the name includes "co-operative", "society" or "trade union "or any variant or synonym of those words;
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COMPANY NAMES - 13. Consent to registration of a name which is the same as another in the Registrar's index of company names

AI-assisted research summary: The Registrar may accept a stated declaration as sufficient evidence that the conditions in paragraph (3)(a) and (b) are satisfied.

Section 13. Consent to registration of a name which is the same as another in the Registrar's index of company names Section 13(1) In this regulation— “existing corporation” means a body corporate whose name already appears in the Registrar's index of company names. Section 13(2)(a) the name of an existing company; or Section 13(2)(b) a name already reserved for a proposed company that is proposed to be registered, Section 13(3)(a) the existing company consents, or the promoters of the proposed company, consent, to the proposed name being the name of the applicant company; Section 13(3)(b) the applicant company forms, or is to form, part of the same group as the existing company or the proposed company; Section 13(3)(c) the consent of the existing company or the promoters of the proposed company as referred to in subparagraph (a); and Section 13(3)(c)(i) the consent of the existing company or the promoters of the proposed company as referred to in subparagraph (a); and Section 13(3)(c)(ii) that the applicant company forms, or is to form, part of the same group as the existing company. Section 13(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. Section 13(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.
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COMPANY NAMES - 9. Names that indicate connection with public authorities

AI-assisted research summary: If a proposed company name could give the impression of a connection to a public authority, the Registrar must require the applicant to ask that authority for its view; the authority must give its view and state whether it objects or does not object.

Section 9. Names that indicate connection with public authorities Section 9(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. Section 9(2)(a) whether it considers that the name, if approved, would give the impression referred to in paragraph (1); and Section 9(2)(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. Section 9(3)(a) give its view on the proposed name of the company; and Section 9(3)(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.

Part IV

DISPLAY OF COMPANY NAMES AND OTHER INFORMATION

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DISPLAY OF COMPANY NAMES AND OTHER INFORMATION - 14. Interpretation: Part IV

AI-assisted research summary: Defines 'communication document or transaction instrument' to include hard copy, electronic or any other form; defines a company's website to include parts authorised or caused by the company.

Section 14. Interpretation: Part IV Section 14(1)(a) where it carries on its business; and Section 14(1)(b) that is open to the public; Section 14(1)(a) any contract or deed purporting to be signed by or on behalf of the company; Section 14(1)(b) any bill of exchange, promissory note or endorsement purporting to be signed by or on behalf of the company; Section 14(1)(c) any cheque or order for money or goods purporting to be signed by or on behalf of the company; or Section 14(1)(d) any consignment note, invoice, receipt or letter of credit of the company. Section 14(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. Section 14(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.]
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DISPLAY OF COMPANY NAMES AND OTHER INFORMATION - 15. Display of registered name at registered office, etc

AI-assisted research summary: Companies must display their registered name at their registered office and every business venue; ensure the name is placed to be easily seen; where electronic displays are used, the name must appear for at least fifteen continuous seconds at least once every four minutes or be displayable within four minutes on request. Paragraphs (1)–(3) do not apply to companies with no accounting transactions since incorporation; additional conditions reference liquidation/administration.

Section 15. Display of registered name at registered office, etc Section 15(1)(a) its registered office; and Section 15(1)(b) every business venue of the company. Section 15(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. Section 15(3)(a) the registered name is displayed for at least fifteen continuous seconds at least once in every four minutes; or Section 15(3)(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. Section 15(4) Paragraphs (1), (2) and (3) do not apply to a company that has had no accounting transaction at any time since its incorporation. Section 15(5)(a) a liquidator or administrator of a company has been appointed; and Section 15(5)(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,
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DISPLAY OF COMPANY NAMES AND OTHER INFORMATION - 16. Registered name to appear in communication documents, etc

AI-assisted research summary: A company must display its registered name in any communication document of the company.

Section 16. Registered name to appear in communication documents, etc Section in any communication document of the company;
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DISPLAY OF COMPANY NAMES AND OTHER INFORMATION - 17. Adequacy of certain descriptions of companies

AI-assisted research summary: Addresses adequacy when a company name uses the abbreviation "Co." or "Coy." instead of the word "Company".

Section 17. Adequacy of certain descriptions of companies Section uses the abbreviation "Co." or "Coy." instead of the word "Company" contained in the name of the company;
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DISPLAY OF COMPANY NAMES AND OTHER INFORMATION - 18. Offences under this Part

AI-assisted research summary: If a company contravenes regulation 15(1) or (2) or 16, the company and each officer in default commit an offence and are liable to a fine not exceeding two hundred thousand shillings.

Section 18. Offences under this Part Section 18(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. Section 18(2)(a) issues or authorises the issue of any communication document of the company in respect of which regulation 16 is contravened; Section 18(2)(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; Section 18(2)(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 Section 18(2)(d) causes or authorises the appearance of a website of the company in respect of which regulation 16(c) is contravened,

Part IX

CONTENTS OF ANNUAL RETURNS AND DOCUMENTS REQUIRED TO ACCOMPANY ANNUAL RETURNS

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CONTENTS OF ANNUAL RETURNS AND DOCUMENTS REQUIRED TO ACCOMPANY ANNUAL RETURNS - 56. Additional information to be included in company's annual return

AI-assisted research summary: Section 56 lists additional information to be included in a company's annual return.

Section 56. Additional information to be included in company's annual return Section 56(1)(a) the company name, its registered number and business name (if any); Section 56(1)(b) the date to which the company makes up the return; Section 56(1)(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; Section 56(1)(d) in the case of a company having a share capital, particulars relating to members and share capital of the company; Section 56(1)(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; Section 56(1)(f) any person who at the date of the return is a director or alternate director of the company; and Section 56(1)(f)(i) any person who at the date of the return is a director or alternate director of the company; and Section 56(1)(f)(ii) any person who at that date is a company secretary of the company, Section 56(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. Section 56(3)(a) an address contained in the register of directors as the usual residential address of the director or alternate director; and Section 56(3)(b) the full number of the identity card or passport of the director or alternate director. Section 56(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.
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CONTENTS OF ANNUAL RETURNS AND DOCUMENTS REQUIRED TO ACCOMPANY ANNUAL RETURNS - 57. Additional information to be included in annual return of private company

AI-assisted research summary: Additional information to be included in annual return of private company

Section 57. Additional information to be included in annual return of private company Section since the date of the last return; or
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CONTENTS OF ANNUAL RETURNS AND DOCUMENTS REQUIRED TO ACCOMPANY ANNUAL RETURNS - 58. Documents to accompany annual return of public company or company limited by guarantee

AI-assisted research summary: A director or the company secretary must certify that the copies of documents required under section 666 to be sent to every member are true copies.

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

Part V

PROVISIONS RELATING TO DIRECTORS

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PROVISIONS RELATING TO DIRECTORS - 19. Provisions for interpreting this Part

AI-assisted research summary: Defines who counts as a director for non-company undertakings; defines connected entity for a director; and sets two alternative tests for connection: control of more than 50 per cent voting power, or directors who habitually follow the director's directions.

Section 19. Provisions for interpreting this Part Section 19(1)(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 Section 19(1)(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. Section 19(2)(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 Section 19(2)(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. Section 19(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.
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PROVISIONS RELATING TO DIRECTORS - 20. Interpretation of Division 2

AI-assisted research summary: Section 20. Interpretation of Division 2 Section 20(1)(a) the person's services as a director of the company concerned; or Section 20(1)(b) the person's services as a director of a subsidiary undertaking of the company; or Section

Section 20. Interpretation of Division 2 Section 20(1)(a) the person's services as a director of the company concerned; or Section 20(1)(b) the person's services as a director of a subsidiary undertaking of the company; or Section 20(1)(b)(i) the person's services as a director of a subsidiary undertaking of the company; or Section 20(1)(b)(ii) the person's other services in connection with the management of the affairs of the company or a subsidiary undertaking of the company; Section 20(1)(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); Section 20(1)(b) given or to be given in anticipation of the retirement of the person; or Section 20(1)(c) given or to be given in connection with the person's service rendered before the retirement or death of the person; Section 20(1)(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 Section 20(1)(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; Section 20(1)(a) on or after the retirement or death of a person; or Section 20(1)(b) in connection with a person's service rendered before the retirement or death of the person, Section 20(2) In this Part, a reference to a director includes a former director; Section 20(3)(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; Section 20(3)(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 Section 20(3)(c) 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 Section 20(3)(c)(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 Section 20(3)(c)(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.
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PROVISIONS RELATING TO DIRECTORS - 21. Information about directors' remuneration to be included in notes to financial statements

AI-assisted research summary: Companies must include prescribed information about directors' remuneration in the notes to their financial statements for a financial year, including aggregate amounts, non-cash benefits (with their nature), amounts relating to services as director or other management services, estimation rule for non-cash benefits, and categories such as fees, allowances, retirement contributions and other benefits.

Section 21. Information about directors' remuneration to be included in notes to financial statements Section 21(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. Section 21(2)(a) the aggregate amount of the remuneration paid to or receivable by the directors of the company in respect of their qualifying services; and Section 21(2)(b) if any such remuneration consist of a benefit otherwise than in cash, the nature of that benefit. Section 21(3)(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 Section 21(3)(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. Section 21(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. Section 21(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. Section 21(6)(a) the director's fees, percentages, salaries and bonuses; Section 21(6)(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; Section 21(6)(c) any contributions paid under a retirement benefits scheme, by any person other than the director, in respect of the director; and Section 21(6)(d) any other benefits received by the director, whether in cash or otherwise,
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PROVISIONS RELATING TO DIRECTORS - 22. Information about directors' retirement benefits to be included in notes to financial statements

AI-assisted research summary: Companies must include specified information about directors' retirement benefits in the notes to their financial statements for a financial year.

Section 22. Information about directors' retirement benefits to be included in notes to financial statements Section 22(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. Section 22(2)(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 Section 22(2)(b) if any such retirement benefits consist of a benefit otherwise than in cash, the nature of that benefit. Section 22(3)(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 Section 22(3)(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. Section 22(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. Section 22(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.
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PROVISIONS RELATING TO DIRECTORS - 23. Information about payments made or benefit provided in respect of termination of directors' services

AI-assisted research summary: Companies must include in the notes to their financial statements prescribed information about payments made, or benefits provided, on termination of directors' services.

Section 23. Information about payments made or benefit provided in respect of termination of directors' services Section 23(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. Section 23(2)(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 Section 23(2)(b) if any such payments for loss of office consist of a benefit otherwise than in cash, the nature of that benefit. Section 23(3)(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 Section 23(3)(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. Section 23(4)(a) the amounts paid by or receivable from the company; Section 23(4)(b) the amounts paid by or receivable from the subsidiary undertakings of the company; and Section 23(4)(c) the amounts paid by or receivable from any other person. Section 23(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.
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PROVISIONS RELATING TO DIRECTORS - 24. Information about consideration provided to or receivable by third parties for making available directors' services

AI-assisted research summary: A company must include, in the notes to its financial statements for a financial year, specified information about consideration provided to or receivable by third parties for making available a person’s services as a director (including the aggregate amount and, if non‑cash, the nature of the benefit).

Section 24. Information about consideration provided to or receivable by third parties for making available directors' services Section 24(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. Section 24(2)(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 Section 24(2)(b) if any such consideration consists of a benefit otherwise than in cash—the nature of that benefit. Section 24(3)(a) the director; Section 24(3)(b) a connected entity of the director; Section 24(3)(c) the company; or Section 24(3)(d) a subsidiary undertaking of the company. Section 24(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.
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PROVISIONS RELATING TO DIRECTORS - 25. Only information included in company's records required to be given

AI-assisted research summary: Only information included in company's records required to be given

Section 25. Only information included in company's records required to be given Section the information is included in the company's records; or
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PROVISIONS RELATING TO DIRECTORS - 26. Amounts paid or receivable in which period to be shown

AI-assisted research summary: If an amount is shown for a financial year in the notes to the financial statements under this Division, the corresponding amount for the immediately preceding financial year must also be shown in the notes.

Section 26. Amounts paid or receivable in which period to be shown Section 26(1)(a) all relevant sums receivable in respect of that year (whenever paid); or Section 26(1)(b) in the case of sums not receivable in respect of a period, the sums paid during that year. Section 26(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.
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PROVISIONS RELATING TO DIRECTORS - 27. Payments made by or to which person to be shown

AI-assisted research summary: Amounts shown in the notes to a company's financial statements must include all relevant sums, whether paid by or receivable from the company, its subsidiary undertaking, or any other person; the section also lists payments involving connected entities and payments made at a director's direction or benefit.

Section 27. Payments made by or to which person to be shown Section 27(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. Section 27(2)(a) a payment to or receivable by a connected entity of the director; and Section 27(2)(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. Section 27(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.
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PROVISIONS RELATING TO DIRECTORS - 28. Payments accounted for not to be included until liability released or not enforced

AI-assisted research summary: Payments that are to be accounted for are not included in the notes to financial statements until the liability is released or not enforced within two years.

Section 28. Payments accounted for not to be included until liability released or not enforced Section 28(1)(a) that is to be accounted for to the company or any subsidiary undertaking of the company; or Section 28(1)(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. Section 28(2)(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 Section 28(2)(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,
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PROVISIONS RELATING TO DIRECTORS - 29. How to distinguish between different payments

AI-assisted research summary: Section 29: How to distinguish between different payments

Section 29. How to distinguish between different payments
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PROVISIONS RELATING TO DIRECTORS - 30. Interpretation of Division 3

AI-assisted research summary: A reference to a subsidiary undertaking of a company, in relation to a transaction, means such an undertaking at the end of the company's financial year, even if it was not a subsidiary on the date of the transaction.

Section 30. Interpretation of Division 3 Section 30(1)(a) a public company; or Section 30(1)(b) a private company or company limited by guarantee that is a subsidiary of a public company; Section 30(1)(a) any loan, quasi-loan or credit transaction; or Section 30(1)(b) any guarantee or security in connection with any loan, quasi-loan or credit transaction. Section 30(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. Section 30(3)(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 Section 30(3)(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. Section 30(4)(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 Section 30(4)(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.
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PROVISIONS RELATING TO DIRECTORS - 31. Application of Division 3

AI-assisted research summary: This Division applies whether or not the transaction is prohibited under Division 5 of Part IX of the Act, and covers transactions entered into or subsisting during a particular financial year.

Section 31. Application of Division 3 Section 31(1)(a) was entered into during a particular financial year; or Section 31(1)(b) subsisted at any time during that year. Section 31(2) This Division applies whether or not the transaction is prohibited under Division 5 of Part IX of the Act.
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PROVISIONS RELATING TO DIRECTORS - 32. Information to be included in notes to company's financial statements

AI-assisted research summary: 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.

Section 32. Information to be included in notes to company's financial statements Section 32(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. Section 32(2)(a) a director of the company or of its holding company; Section 32(2)(a)(i) a director of the company or of its holding company; Section 32(2)(a)(ii) a controlled body corporate of such a director; or Section 32(2)(a)(iii) in the case of a specified company, a connected entity of such a director; and Section 32(2)(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. Section 32(3)(a) 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 Section 32(3)(a)(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 Section 32(3)(a)(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; Section 32(3)(b) 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); Section 32(3)(b)(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); Section 32(3)(b)(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; Section 32(3)(b)(iii) the amount so outstanding at the end of the financial year; Section 32(3)(b)(iv) if, at different times during the financial year, the amounts so outstanding are different, the greater of those amounts; Section 32(3)(b)(v) the amount (if any) that, having fallen due, has not been paid; and Section 32(3)(b)(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 Section 32(3)(c) the amount representing the maximum liability that may be incurred under the guarantee or security at the beginning of the financial year; Section 32(3)(c)(i) the amount representing the maximum liability that may be incurred under the guarantee or security at the beginning of the financial year; Section 32(3)(c)(ii) the amount representing the maximum liability that may be so incurred at the end of the financial year; Section 32(3)(c)(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 Section 32(3)(c)(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.
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PROVISIONS RELATING TO DIRECTORS - 33. Provisions for statement instead of information prescribed by regulation 32

AI-assisted research summary: Lists particulars and aggregates to be stated instead of the information prescribed by regulation 32 for specified quasi-loans, credit transactions, guarantees and securities.

Section 33. Provisions for statement instead of information prescribed by regulation 32 Section 33(1)(a) the particulars specified in regulation 32(3)(b) in respect of a quasi-loan or credit transaction; and Section 33(1)(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. Section 33(2)(a) the aggregate of the amounts outstanding referred to in regulation 32(3)(b)(ii) on those quasi-loans and credit transactions; Section 33(2)(a)(i) the aggregate of the amounts outstanding referred to in regulation 32(3)(b)(ii) on those quasi-loans and credit transactions; Section 33(2)(a)(ii) the aggregate of the amounts outstanding referred to in regulation 32(3)(b)(iii) on those quasi-loans and credit transactions; Section 33(2)(a)(iii) the aggregate of the amounts referred to in regulation 32(3)(b)(v) in respect of those quasi-loans and credit transactions; and Section 33(2)(a)(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 Section 33(2)(b) 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; Section 33(2)(b)(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; Section 33(2)(b)(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 Section 33(2)(b)(iii) the aggregate of the amounts referred to in regulation 32(3)(c)(iv) in respect of those guarantees and security.
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PROVISIONS RELATING TO DIRECTORS - 34. Provisions applicable to company that is, or if its subsidiary undertaking, is a bank

AI-assisted research summary: Companies that are banks (or whose subsidiary is a bank) must include specified statements in their notes to the financial statements showing related lending and guarantee amounts and, where aggregates differ during the year, show the greater aggregate; there are quantitative limits described in paragraph (7)(b).

Section 34. Provisions applicable to company that is, or if its subsidiary undertaking, is a bank Section 34(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). Section 34(2)(a) a director of the company or of its holding company; Section 34(2)(a)(i) a director of the company or of its holding company; Section 34(2)(a)(ii) a controlled body corporate of such a director; or Section 34(2)(a)(iii) in the case of a specified company, a connected entity of such a director; and Section 34(2)(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). Section 34(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. Section 34(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). Section 34(5)(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 Section 34(5)(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). Section 34(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. Section 34(7)(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 Section 34(7)(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. Section 34(8)(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 Section 34(8)(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.
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PROVISIONS RELATING TO DIRECTORS - 35. Exemption for employee

AI-assisted research summary: An employee is exempt where the value of the loan, quasi-loan or credit transaction does not exceed KSh 1,000,000.

Section 35. Exemption for employee Section the value of the loan, quasi-loan or credit transaction does not exceed KSh 1,000,000;
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PROVISIONS RELATING TO DIRECTORS - 36. How to determine value of transaction

AI-assisted research summary: Section 36. How to determine value of transaction

Section 36. How to determine value of transaction
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PROVISIONS RELATING TO DIRECTORS - 37. Application of Division 4

AI-assisted research summary: Applies Division 4 when a section was entered into during a particular financial year.

Section 37. Application of Division 4 Section was entered into during a particular financial year; or
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PROVISIONS RELATING TO DIRECTORS - 38. Information about material interests of directors in transactions, arrangements or contracts

AI-assisted research summary: Companies must include specified information about directors' material interests in transactions, arrangements or contracts in the notes to the company's financial statements for a financial year.

Section 38. Information about material interests of directors in transactions, arrangements or contracts Section 38(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. Section 38(2)(a) entered into by the company; and Section 38(2)(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. Section 38(3)(a) the principal terms of the transaction, arrangement or contract; Section 38(3)(b) a statement of the fact that the transaction, arrangement or contract was entered into or subsisted during the financial year; Section 38(3)(c) the names of the parties to the transaction, arrangement or contract; Section 38(3)(d) the name of the director having the material interest and the nature of that interest; and Section 38(3)(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. Section 38(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. Section 38(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. Section 38(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. Section 38(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.
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PROVISIONS RELATING TO DIRECTORS - 39. Exemption under Division 4

AI-assisted research summary: Exemption under Division 4.

Section 39. Exemption under Division 4
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PROVISIONS RELATING TO DIRECTORS - 40. Provisions protecting directors from liability

AI-assisted research summary: A non-contractual document to which a company is party counts as a prescribed document under section 194(1)(c) of the Act if it contains provisions that purport to exempt a company director from liability for negligence, default, breach of duty or breach of trust in relation to the company.

Section 40. Provisions protecting directors from liability Section 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

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FURTHER REQUIREMENTS FOR DIRECTORS' REPORTS - 41. Interpretation: Part VI

AI-assisted research summary: Defines "a parent company of the company."

Section 41. Interpretation: Part VI Section a parent company of the company;
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FURTHER REQUIREMENTS FOR DIRECTORS' REPORTS - 42. Directors' report to include details of directors' interests

AI-assisted research summary: Requires that the directors' report include details of directors' interests as set out in the listed paragraphs.

Section 42. Directors' report to include details of directors' interests Section 42(1)(a) to which the company or a specified undertaking of the company is a party; and Section 42(1)(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. Section 42(2)(a) to which the company or a specified undertaking of the company was a party; and Section 42(2)(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. Section 42(3)(a) to explain the effect of the arrangements referred to in paragraph (1) or (2); and Section 42(3)(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. Section 42(4) Paragraphs (1) and (2) do not apply in respect of a company that falls within the reporting exemption for the financial year.
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FURTHER REQUIREMENTS FOR DIRECTORS' REPORTS - 43. Directors' report to give details of certain donations made by company

AI-assisted research summary: Directors' report must give details of certain donations made by the company where specified donation thresholds or subsidiary conditions are met.

Section 43. Directors' report to give details of certain donations made by company Section 43(1)(a) has no subsidiary undertakings; and Section 43(1)(b) has in a financial year made donations for charitable or other purposes to a total amount of not less than KSh100,000, Section 43(2)(a) a company (not being the wholly owned subsidiary of a company incorporated in Kenya) has subsidiary undertakings; and Section 43(2)(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, Section 43(3) Paragraphs (1) and (2) do not apply in respect of a company that falls within the reporting exemption for the financial year. Section 43(4)(a) that other body corporate; Section 43(4)(b) a wholly owned subsidiary of that other body corporate; Section 43(4)(c) a nominee of that other body corporate or such a wholly owned subsidiary.
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FURTHER REQUIREMENTS FOR DIRECTORS' REPORTS - 44. Shares issued by company during financial year

AI-assisted research summary: Heading concerns shares issued by a company during the financial year and refers to "the reason for making the issue."

Section 44. Shares issued by company during financial year Section the reason for making the issue;
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FURTHER REQUIREMENTS FOR DIRECTORS' REPORTS - 45. Debentures issued by company during financial year

AI-assisted research summary: When a company issues debentures during a financial year, the section requires stating the reason for making the issue.

Section 45. Debentures issued by company during financial year Section the reason for making the issue;
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FURTHER REQUIREMENTS FOR DIRECTORS' REPORTS - 46. Equity-linked agreements

AI-assisted research summary: Section 46 enumerates specific information to be disclosed about equity-linked agreements, including reasons for entering, conditions for issuing shares, consideration received, classes and numbers of shares issued or issuable, and types of covered agreements and options.

Section 46. Equity-linked agreements Section 46(1)(a) the reason for entering into the agreement; Section 46(1)(b) the conditions that are required to be met before the company issues any shares; Section 46(1)(b)(i) the conditions that are required to be met before the company issues any shares; Section 46(1)(b)(ii) the conditions that is required to be met before a third party may require the company to issue any shares; and Section 46(1)(b)(iii) any monetary or other consideration that the company has received or will receive under the agreement; Section 46(1)(c) the classes of shares issued under the agreement; and Section 46(1)(d) for each class of shares, the number of shares that have been issued under the agreement. Section 46(2)(a) the classes of shares that may be issued under the agreement; Section 46(2)(b) for each class of shares, the number of shares that may be issued under the agreement; Section 46(2)(c) any monetary or other consideration that the company has received or will receive under the agreement; and Section 46(2)(d) any other conditions or terms that remain to be met before the shares are issued. Section 46(3)(a) an agreement that will or may result in the company issuing shares; or Section 46(3)(a)(i) an agreement that will or may result in the company issuing shares; or Section 46(3)(a)(ii) an agreement requiring the company to enter into the agreement specified in sub-subparagraph (i); and Section 46(3)(b) an option to subscribe for shares; Section 46(3)(b)(i) an option to subscribe for shares; Section 46(3)(b)(ii) an agreement for the issue of securities that are convertible into, or entitle the holder to subscribe for, shares in the company; Section 46(3)(b)(iii) an employee share scheme; and Section 46(3)(b)(iv) a share option scheme; but Section 46(3)(c) 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 Section 46(3)(c)(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 Section 46(3)(c)(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;
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FURTHER REQUIREMENTS FOR DIRECTORS' REPORTS - 47. Dividend recommended by directors

AI-assisted research summary: Directors must state in the directors' report the amount (if any) they recommend be paid as a dividend for the financial year.

Section 47. Dividend recommended by directors Section 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.
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FURTHER REQUIREMENTS FOR DIRECTORS' REPORTS - 48. Directors' report to include reasons for resignation of director, etc

AI-assisted research summary: A directors' report for the financial year must include a summary of the reasons for a director's resignation or refusal to stand for re-election insofar as those reasons relate to the affairs of the company.

Section 48. Directors' report to include reasons for resignation of director, etc Section 48(1)(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 Section 48(1)(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). Section 48(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. Section 48(3) This regulation does not apply to a company that is exempt from the audit requirements of Part XXVII of the Act.
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FURTHER REQUIREMENTS FOR DIRECTORS' REPORTS - 49. Details of permitted indemnity provision to be included in directors' report

AI-assisted research summary: When a directors' report is approved for a financial year and a permitted indemnity provision is in force for directors (or associated company directors), the directors must include a statement in the report that the permitted indemnity provision is (or was) in effect.

Section 49. Details of permitted indemnity provision to be included in directors' report Section 49(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). Section 49(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. Section 49(3)(a) provides for indemnity against liability incurred by a director of the company to a third party; and Section 49(3)(b) has effect as provided by section 197(2) of the Act;
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FURTHER REQUIREMENTS FOR DIRECTORS' REPORTS - 50. Details of material interests in transaction, arrangement or contract to be included in directors' report

AI-assisted research summary: Directors' reports must include details of material interests in significant transactions, arrangements or contracts involving the company or its specified undertakings, including principal terms, parties, whether they occurred in the financial year, the director with the material interest and the nature of that interest; directors of a public company are treated as having a material interest if a connected entity has such an interest; certain matters are excluded from this requirement.

Section 50. Details of material interests in transaction, arrangement or contract to be included in directors' report Section 50(1)(a) entered into by a specified undertaking of the company; and Section 50(1)(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. Section 50(2)(a) the principal terms of the transaction, arrangement or contract; Section 50(2)(b) the fact that the transaction, arrangement or contract was entered into or existed in the financial year; Section 50(2)(c) the names of the parties to the transaction, arrangement or contract; Section 50(2)(d) the name of the director having the material interest and the nature of that interest; and Section 50(2)(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. Section 50(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. Section 50(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. Section 50(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. Section 50(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. Section 50(7)(a) a company that falls within the reporting exemption for the financial year; Section 50(7)(b) a transaction, arrangement or contract unless it was entered into in the financial year or existed at any time in that year; Section 50(7)(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 Section 50(7)(d) a director's contract of service. Section 50(8)(a) a reference to a director includes a shadow director; and Section 50(8)(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
FURTHER REQUIREMENTS FOR DIRECTORS' REPORTS - 50A. Directors of a quoted company remuneration report

AI-assisted research summary: Directors of a quoted company must prepare a directors' remuneration report for each financial year as prescribed in the Tenth Schedule.

Section 50A. Directors of a quoted company remuneration report Section 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

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

AI-assisted research summary: Applicants and companies must provide an additional statement with certain Registrar filings when those filings relate to persons disqualified from being directors or secretaries; failure attracts fines.

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

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SHARE CAPITAL OF COMPANY - 52. Returns of allotment by limited companies

AI-assisted research summary: Returns of allotment by limited companies: the number of shares allotted.

Section 52. Returns of allotment by limited companies Section the number of shares allotted;
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SHARE CAPITAL OF COMPANY - 53. Communication of pre-emption offers to shareholders.

AI-assisted research summary: 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.

Section 53. Communication of pre-emption offers to shareholders. Section 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.
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SHARE CAPITAL OF COMPANY - 54. Meaning of payment in cash for purposes of section 359(2)(e) of Act

AI-assisted research summary: Defines 'payment in cash' for section 359(2)(e) as creating an obligation on a settlement bank to make a relevant payment related to an allotment of a share to a system-member via a relevant system.

Section 54. Meaning of payment in cash for purposes of section 359(2)(e) of Act Section 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;
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SHARE CAPITAL OF COMPANY - 55.[Deleted by L.N. 63/2021, r. 2.]

AI-assisted research summary: Section 55 has been deleted.

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

Part X

COMPANY CHARGES

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COMPANY CHARGES - 59. Particulars of charges newly created charges

AI-assisted research summary: Requires particulars of newly created charges including the date of creation of the charge.

Section 59. Particulars of charges newly created charges Section the date of creation of the charge;
60
COMPANY CHARGES - 60. Particulars of charges over existing property acquired by company

AI-assisted research summary: Specifies the date on which the company acquired property that was already subject to a charge.

Section 60. Particulars of charges over existing property acquired by company Section the date on which the company acquired property that is already subject to a charge;

Part XI

COMPANY COMMUNICATIONS PROVISIONS

61
COMPANY COMMUNICATIONS PROVISIONS - 61. Effect of this Part and Seventh and Eighth Schedules

AI-assisted research summary: This Part and the Seventh and Eighth Schedules apply where an Act provision requires or permits documents or information to be sent or supplied by or to a company.

Section 61. Effect of this Part and Seventh and Eighth Schedules Section 61(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. Section 61(2) The company communications provisions have effect subject to any requirements imposed, or contrary provision made, by or under any other enactment. Section 61(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.
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COMPANY COMMUNICATIONS PROVISIONS - 62. Sending or supplying documents or information by companies

AI-assisted research summary: Companies must send or supply documents or information to a company in accordance with the Seventh Schedule.

Section 62. Sending or supplying documents or information by companies Section 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
COMPANY COMMUNICATIONS PROVISIONS - 63. Sending or supplying documents or information to companies

AI-assisted research summary: Companies must send or supply documents or information in accordance with the Eighth Schedule.

Section 63. Sending or supplying documents or information to companies Section 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
COMPANY COMMUNICATIONS PROVISIONS - 64. Sending or supplying documents or information to companies

AI-assisted research summary: The Eighth Schedule applies to documents or information required or permitted to be sent or supplied by one company to another.

Section 64. Sending or supplying documents or information to companies Section 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
COMPANY COMMUNICATIONS PROVISIONS - 65. Right to require company to provide hard copy version of company document or information

AI-assisted research summary: Members or debenture holders who received documents not in hard copy may require the company to send a hard copy; the company must send it within 21 days, may not charge for it, and failure or charging is an offence punishable by fines.

Section 65. Right to require company to provide hard copy version of company document or information Section 65(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. Section 65(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. Section 65(3) The company may not impose or attempt to impose a charge for providing the document or information in that form. Section 65(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. Section 65(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
COMPANY COMMUNICATIONS PROVISIONS - 66. Requirements for authentication of documents and information

AI-assisted research summary: Section 66 sets when documents or information sent or supplied to a company are treated as authenticated: a hard-copy document is authenticated if signed by the sender; identity confirmation in a company-specified manner also suffices; if no manner is specified a statement of identity suffices provided the company has no reason to doubt it; the company's articles may require evidence of authority when someone acts for another.

Section 66. Requirements for authentication of documents and information Section 66(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. Section 66(2)(a) if the identity of the sender is confirmed in a manner specified by the company; or Section 66(2)(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. Section 66(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
COMPANY COMMUNICATIONS PROVISIONS - 67. When documents and information are taken to have been sent or supplied by company

AI-assisted research summary: Sets rules for when documents and information sent or supplied by a company are treated as having been sent or supplied, covering post, electronic means, website availability, calculation of hours excluding non-working days, and exceptions for members, debenture holders and other persons where contrary provisions exist.

Section 67. When documents and information are taken to have been sent or supplied by company Section 67(1) This paragraph applies in relation to documents and information sent or supplied by a company. Section 67(2)(a) a document or information is sent by post (whether in hard copy or electronic form) to an address in Kenya; and Section 67(2)(b) the company is able to establish that it was properly addressed, prepaid and posted, Section 67(3)(a) the document or information is sent or supplied by electronic means; and Section 67(3)(b) the company is able to show that it was properly addressed, Section 67(4)(a) when the material was first made available on the website; or Section 67(4)(b) if later, when the recipient received (or is taken to have received) notice that the material was available on the website. Section 67(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. Section 67(6)(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; Section 67(6)(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 Section 67(6)(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 PRESCRIBED FOR THE PURPOSES OF THE ACT - 68. Fees payable in relation to registration of companies or documents relating to companies

AI-assisted research summary: Fees specified in the Ninth Schedule (various Parts) are payable to the Registrar for registration matters described opposite each fee.

Section 68. Fees payable in relation to registration of companies or documents relating to companies Section 68(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. Section 68(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. Section 68(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. Section 68(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 PRESCRIBED FOR THE PURPOSES OF THE ACT - 69. Fees payable to Registrar for inspecting documents or obtaining documents or information

AI-assisted research summary: 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.

Section 69. Fees payable to Registrar for inspecting documents or obtaining documents or information Section 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
FEES PRESCRIBED FOR THE PURPOSES OF THE ACT - 70. Miscellaneous fees payable under the Act

AI-assisted research summary: Fees listed in column 3 of Part 6 of the Ninth Schedule are payable to the Registrar for the matters listed opposite them in column 2 of that Part.

Section 70. Miscellaneous fees payable under the Act Section 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.
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FEES PRESCRIBED FOR THE PURPOSES OF THE ACT - 71. Fees payable to High Court or Attorney General under the Act

AI-assisted research summary: A fee listed in column 3 of Part 7 of the Ninth Schedule must be paid to the Court or the Attorney General for the matter shown opposite in column 2 of that Part.

Section 71. Fees payable to High Court or Attorney General under the Act Section 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.
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FEES PRESCRIBED FOR THE PURPOSES OF THE ACT - 72. Fees payable to companies under the Act

AI-assisted research summary: A fee listed in column 3 of Part 7 of the Ninth Schedule is payable to a company for the matter described opposite it in column 2 of that Part.

Section 72. Fees payable to companies under the Act Section 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.]

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