Micro and Small Enterprises Act

Section 1. Short title Section This Act may be cited as the Micro and Small Enterprises Act.

Section 2. Interpretation Section whose annual turnover does not exceed five hundred thousand shillings;

Section 3. Object and purpose of the Act Section providing an enabling business environment;

Section 4.Registrarof micro and small enterprises Section 4(1) There shall be an office of the Registrar of Micro and Small Enterprises which shall be an office in the public service. Section 4(2) The office of Registrar shall be headed by an officer who shall be designated the Registrar of Micro and Small Enterprises. Section 4(3) The Registrar shall be responsible for the registration of micro and small enterprises in accordance with the provisions of this Act.

Section 5. Application for registration Section 5(1) Every association or umbrella organization which intends to be registered under this Act shall, within twenty-eight days after its formation, make an application to the Registrar for registration under this Act. Section 5(2)(a) a copy of the constitution or other constitutive document of the applicant; Section 5(2)(b) names and addresses of the founders of the association or umbrella organization ; Section 5(2)(c) the postal and physical address of the principal place of doing business of the applicant; Section 5(2)(d) the prescribed fee, if any; and Section 5(2)(e) such other particulars or information as may be required by the Registrar in order to assist the Registrar to determine whether or not the organisation meets the requirements for registration under this Act.

Section 6. Consideration of application Section consider the application and any further information provided by the applicant; and

Section 7. Certificate of registration Section Upon registering an association or umbrella organisation, the Registrar shall issue a certificate of registration in the prescribed form.

Section 8. Refusal of registration Section the Registrar is satisfied that such association or umbrella organization is a branch of, or is affiliated to or connected with, any organization or association of a political nature;

Section 9. Cancellation of registration Section 9(1)(a) the association or umbrella organization has, among its objects, or is likely to pursue, or to be used for, any unlawful purpose or any purpose prejudicial to or incompatible with peace, welfare or good order in Kenya; Section 9(1)(b) the interests of peace, welfare, or good order in Kenya would likely be prejudiced by the continued registration of the association or umbrella organization ; Section 9(1)(c) the constitution or rules of the association or umbrella organization are repugnant to or inconsistent with any written law; Section 9(1)(d) the association or umbrella organization has wilfully, and after notice from the Registrar , contravened any of the provisions of its constitution or rules, or the provisions of this Act; Section 9(1)(e) the association or umbrella organization has failed to comply, within the time allowed for compliance, with an order made under this Act; Section 9(1)(f) the association or umbrella organization has dissolved itself; Section 9(1)(g) the management body of the association or umbrella organization is constituted otherwise than in conformity with its constitution or rules; Section 9(1)(h)...

Section 10. Cessation of existence of anassociation, etc. Section 10(1) If the Registrar has reason to believe that any registered association or umbrella organization has ceased to exist, the Registrar may publish in the Gazette a notice calling upon such association or umbrella organization to furnish the Registrar , within a period of three months from the date of the notice, with proof of its continued existence. Section 10(2) If at the expiration of such period the Registrar is satisfied that the association or umbrella organization has ceased to exist, the Registrar shall cancel the registration of the association or umbrella organization , and shall thereupon publish in the Gazette notice of such cancellation. Section 10(3) If the Registrar is satisfied beyond doubt that a registered association or umbrella organization has ceased to exist, the Registrar may immediately proceed under subsection (2) without having previously published a notice in the Gazette , and the remaining provisions of that subsection shall apply accordingly.

Section 11. Appeal from order of refusal, cancellation or suspension Section 11(1) Any association or umbrella organization aggrieved by the Registrar ’s refusal to register it, or by the cancellation or suspension of its registration under section 9 of this Act may, in the case of any other association or umbrella organization, appeal to the Tribunal within thirty days of such refusal, cancellation or suspension. Section 11(2) An association or umbrella organization aggrieved by the decision of the Tribunal under subsection (1) may appeal to the High Court within thirty days on points of law.

Section 12. Office and postal address Section 12(1) Every registered association or umbrella organization shall have an office and a postal address, and notice of the situation of the office and of the postal address shall be given to the Registrar in the prescribed form on application for registration. Section 12(2) All communications and notices required or authorized to be sent under, or for purposes of this Act or regulations made thereunder may be sent by post addressed to the postal address of the association or umbrella organization . Section 12(3) A notice in the prescribed form of any change of the situation of the office, or of the postal address, of a registered association or umbrella organization shall be given to the Registrar within fourteen days of the change, and the notice shall be signed by three of the registered officers of the association or umbrella organization . Section 12(4)(a) operates without having an office, or without having a postal address, or without having given notice of the situation of its office or of its postal address as required by subsection (1); Section 12(4)(b) operates at any place to which its office may have been removed without havin...

Section 13. Change of officers or title of office Section 13(1) A notice in the prescribed form of any change of officers, or of the title of any office, of a registered association or umbrella organization shall be given to the Registrar within fourteen days of the change, and the notice shall be signed by three of the registered officers of the association or umbrella organization . Section 13(2) Any registered association or umbrella organization which fails to give notice as required under subsection (1) commits an offence.

Section 14. Disputes as to officers Section 14(1) If the Registrar is of the opinion that a dispute has occurred among the members or officers of a registered association or umbrella organization as a result of which the Registrar is not satisfied as to the identity of the persons who have been properly constituted as officers of the association or umbrella organization , the Registrar may, by order in writing, require the association or umbrella organization to produce to him or her, within thirty days of the service of the order, evidence of the settlement of the dispute and of the proper appointment of the lawful officers of the association or umbrella organization or of the institution of proceedings for the settlement of such dispute. Section 14(2) If an order under subsection (1) is not complied with to the satisfaction of the Registrar within the period set out in the order or such other longer period as the Registrar may determine, the Registrar may cancel the registration of the association or umbrella organization . Section 14(3) An association or umbrella organization aggrieved by the cancellation of its registration under subsection (2) may appeal to the Tribunal within...

Section 15. Contents of constitution or rules Section 15(1) The constitution or rules of every registered association or umbrella organization , formed after the commencement of this Act shall provide, to the satisfaction of the Registrar , for all the matters specified in the First Schedule to this Act and shall not be amended so that it ceases so to provide. Section 15(2) The Registrar may, by order in writing, require any association or umbrella organization which, at the commencement of this Act, is registered to amend its constitution or rules within three months from the date of the order, to provide for all or any of the matters specified in the First Schedule to this Act, and, notwithstanding its constitution or rules, the association or umbrella organization , for the purpose of complying with the order, shall convene a meeting of the same kind as is required by its constitution or rules for amending its constitution or rules, or if the constitution or rules make no provision for such amendment, the association or umbrella organization shall convene a general meeting of members for the purpose. Section 15(3) If a registered association or umbrella organization contravenes...

Section 16. Consent ofRegistrarbefore amending name, constitution, etc. Section 16(1)(a) amend its name, or its constitution or rules; Section 16(1)(b) become a branch of, or affiliated to or connected with, any organization or group of a political nature; Section 16(1)(c) dissolve itself, Section 16(2) An application by an association or umbrella organization to do any of the things specified in subsection (1) shall be accompanied by a copy of the minutes of the meeting at which the resolution to do that thing was passed, certified as a true copy by three officers of the association or umbrella organization , and the application shall be delivered to the Registrar within fourteen days from the date on which the resolution was passed. Section 16(3) A registered association or umbrella organization which contravenes this section commits an offence.

Section 17. Restriction of appointment of certain officers, etc. Section 17(1)(a) to the office of treasurer, deputy treasurer or assistant treasurer of a registered association or umbrella organization ; Section 17(1)(b) to any other office in such an association or umbrella organization the holder of which is responsible for the collection, disbursement, custody or control of the funds of the association or umbrella organization or for its accounts; or Section 17(1)(c) to be trustee or auditor of such an association or umbrella organization . Section 17(2) An officer of a registered association or umbrella organization shall not be appointed as an auditor of that association or organization.

Section 18. Purporting to act as officer Section acts or purports to act as an officer of a registered association or umbrella organization , and who has not been duly appointed or elected as an officer of that association or umbrella organization ; or

Section 19. Register of members Section 19(1) Every registered association or umbrella organization shall keep a register of its members in such form as the Registrar may specify or as may be prescribed, and shall cause to be entered therein the name and address of each member, the date of his or her admission to membership and the date on which he or she ceases to be a member. Section 19(2) A registered association or umbrella organization which contravenes subsection (1), and its officers, commits an offence, and the association or umbrella organization shall be liable on conviction to a fine not exceeding one hundred thousand shillings, and every officer shall be liable to a fine not exceeding one hundred thousand shillings or to imprisonment for a term not exceeding one year, or to both. Section 19(3) An officer shall not be convicted of an offence under subsection (2) if the officer establishes to the satisfaction of the court that he or she exercised due diligence to prevent its commission and that the offence occurred by reason of matters beyond his or her control.

Section 20. Books of account Section 20(1) Every registered association or umbrella organization shall keep one or more books of account, and shall cause to be entered therein details of all moneys received and payments made by the association or umbrella organization . Section 20(2) A registered association or umbrella organization which contravenes subsection (1) commits an offence.

Section 21. Treasurer to render accounts Section 21(1)(a) at least once in every year at such time as may be specified in the constitution or rules of the association or umbrella organization ; Section 21(1)(b) at any other times at which he or she may be required to do so by a resolution of the members of the association or umbrella organization or by the rules thereof; and Section 21(1)(c) upon resigning or otherwise vacating his or her office, Section 21(2) After account has been rendered under subsection (1), the treasurer or other officer shall, if he or she is resigning or vacating his or her office or if required to do so, forthwith hand over to the succeeding treasurer or officer, as the case may be, such moneys as appear to be due from him or her, and all bonds, securities, effects, books, papers and property of the association or umbrella organization in his or her hands or otherwise under his or her control. Section 21(3) A treasurer or other officer referred to in subsection (1) who contravenes this section commits an offence and shall be liable, on conviction, to a fine not exceeding one hundred thousand shillings or to imprisonment for a term not exceeding one year, o...

Section 22. Inspection of accounts and documents Section 22(1)(a) any officer or member of the association or umbrella organization at such place and at such times as may be provided for in the constitution or rules of the association or umbrella organization ; or Section 22(1)(b) the Registrar , or by any person authorized by him or her in writing in that behalf, at the office of the Registrar at any reasonable time specified by him or her, if so required in writing by the Registrar . Section 22(2) A registered association or umbrella organization which fails to make available to the Registrar , at his or her office and at the specified time, any books of account, documents or lists of members which he or she has been required under subsection (1) to make so available commits an offence. Section 22(3) A person who obstructs the Registrar or any such authorized person in the carrying out of an inspection under subsection (1) commits an offence and shall be liable, on conviction, to a fine not exceeding twenty thousand shillings or to imprisonment for a term not exceeding six months, or to both.

Section 23. Meetings of anassociationorumbrella organization Section 23(1)(a) render a full and true account of the moneys received and paid by the association or umbrella organization , such account being audited in accordance with the rules of the association or umbrella organization ; and Section 23(1)(b) cause to be elected or appointed all such officers, trustees and auditors and, where applicable, such committees as are required in accordance with the constitution and rules of the association or umbrella organization . Section 23(2) A registered association or umbrella organization which contravenes subsection (1) commits an offence.

Section 24. Annual returns Section 24(1) Every registered association or umbrella organization shall furnish annually to the Registrar , on or before the prescribed date, such returns, accounts and other documents as may be prescribed. Section 24(2) If any return, account or other document furnished under subsection (1) is incomplete in any material particulars, it shall be taken not to have been furnished for the purposes of subsection (1). Section 24(3) A registered association or umbrella organization which contravenes subsection (1) commits an offence. Section 24(4) A person who wilfully makes or orders or causes or procures to be made any false entry in or omission from any return, account or other document furnished under this section commits an offence and shall be liable, on conviction, to a fine not exceeding one hundred thousand shillings, or to imprisonment for a term not exceeding one year, or to both.

Section 25. Registrar to call for information and accounts Section 25(1)(a) a true and complete copy of its constitution or rules; Section 25(1)(b) a true and complete list of its officers and members; Section 25(1)(c) a true and complete copy of the minutes of any meeting held by the association or umbrella organization at which officers of the association or umbrella organization were elected or appointed or are ostensibly appointed or elected; Section 25(1)(d) a true and complete return of the number of meetings held by the association or umbrella organization during such period as the Registrar may determine, stating the place or places at which such meetings were held; Section 25(1)(e) the audited accounts of the association or umbrella organization covering such period as the Registrar deems necessary for the purpose for which the order is made; and Section 25(1)(f) such other accounts, returns and other information as may be prescribed. Section 25(2) An order given under subsection (1) shall require compliance therewith within such period as may be specified in the order, which shall not be less than twenty-one days in respect of the documents specified in subsection (1)(a),...

Section 26. Discretion to publish certain information Section The Registrar may, where it appears to him or her to be in the interests of the members of any association or umbrella organization , publish in the Gazette , or by advertisement in any newspaper or in any other manner he or she may deem necessary, any information received by him or her under section 43 or 53 of this Act.

Section 27. Power to investigate Section 27(1) The Registrar or any administrative officer or any police officer of or above the rank of Senior Sergeant (in this section referred to as the requiring officer) may, in writing, require any person who he or she has reason to believe is able to give any information as to the existence or operation of any unlawful association or umbrella organization, or suspected unlawful association or umbrella organization, or as to the operations of any registered association or umbrella organization, or as to the operations or property of a association or umbrella organization which has been dissolved or has otherwise ceased to exist, to attend before him or her at a specified time, and such attendance may be required at any police station or police office situated within the district in which that person resides, or for the time being is or is found, or at the office of any administrative officer within such district, or at the office of the Registrar. Section 27(2) Any person who, without reasonable cause, fails to comply with a requirement made under subsection (1) or, having attended in compliance therewith, refuses or fails to give his or her c...

Section 28. Determination of micro and small enterprises Section 28(1)(a) determining categories of micro and small enterprises to be assisted subject to section 31 of this Act; Section 28(1)(b) determining the kind of assistance to be rendered. Section 28(2) In determining the categories of micro and small enterprises to be assisted, the Cabinet Secretary shall consider the potential and viability of the enterprise .

Section 29. Establishment of theAuthority Section 29(1) There is established an authority to be known as the Micro and Small Enterprises Authority . Section 29(2)(a) suing and being sued; Section 29(2)(b) taking, purchasing or otherwise acquiring, holding, charging or disposing of movable and immovable property; Section 29(2)(c) borrowing money or making investments; Section 29(2)(d) entering into contracts; and Section 29(2)(e) doing or performing all other acts or things for the proper performance of its functions under this Act which may lawfully be done or performed by a body corporate.

Section 30. Composition of the Authority Section 30(1)(a) a non-executive Chairperson, who shall be a person with knowledge, and at least ten years experience, in business and entrepreneurship development or a related field, appointed by the President; Section 30(1)(b) the Principal Secretary of the Ministry for the time being responsible for matters relating to micro and small enterprises development or his or her representative appointed in writing; Section 30(1)(c) the Principal Secretary of the Ministry for the time being responsible for finance or his or her representative appointed in writing; Section 30(1)(d) the Principal Secretary of the Ministry for the time being responsible for matters relating to industrialization or his or her representative appointed in writing; Section 30(1)(e) the Principal Secretary of the Ministry for the time being responsible for matters relating to trade or his or her representative appointed in writing; Section 30(1)(f) the Principal Secretary of the Ministry for the time being responsible for matters relating to the youth or his or her representative appointed in writing; Section 30(1)(g) manufacturing; Section 30(1)(g)(i) manufacturing; Sec...

Section 31. Functions of theAuthority Section formulate and review policies and programs for micro and small enterprises;

Section 32. Powers of theAuthority Section enter into contracts;

Section 33. Conduct of business and affairs of theAuthority Section 33(1) The conduct and regulation of the business and affairs of the Authority shall be as provided in the Second Schedule. Section 33(2) Except as provided in the Second Schedule, the Authority may regulate its own procedure.

Section 34. Delegation by theAuthority Section The Authority may, by resolution either generally or in any particular case, delegate to any committee or to any member, officer, employee or agent of the Authority , the exercise of any of the powers or the performance of any of the functions or duties of the Authority under this Act or under any other written law.

Section 35. Chief Executive Officer Section 35(1) There shall be a Chief Executive Officer of the Authority who shall be appointed by the Authority through a competitive process. Section 35(2) The Chief Executive Officer shall hold office for a period of five years, on such terms and conditions of employment as the Authority may determine, and shall be eligible for re-appointment for a further and final term of five years. Section 35(3) The Chief Executive Officer shall be an ex officio member of the Authority but shall have no right to vote at any meeting of the Authority . Section 35(4)(a) subject to the direction of the Authority , be responsible for the day-to- day management of the Authority ; Section 35(4)(b) in consultation with the Authority , be responsible for the direction of the affairs and transactions of the Authority , the exercise, discharge and performance of its objectives, functions and duties, and the general administration of the Authority ; Section 35(4)(c) be the Secretary of the Authority .

Section 36. Qualifications for appointment as Chief Executive officer Section experience in micro and small enterprise development and entrepreneurship;

Section 37. Staff Section The Authority may appoint such officers, agents and other staff as are necessary for the proper and efficient discharge of the functions of the Authority under this Act, upon such terms and conditions of service as the Authority may determine.

Section 38. Common seal Section 38(1) The common seal of the Authority shall be kept in the custody of the Chief Executive officer or of such other person as the Authority may direct, and shall not be used except upon the order of the Authority . Section 38(2) The common seal of the Authority , when affixed to a document and duly authenticated, shall be judicially and officially noticed, and unless the contrary is proved, any necessary order or authorisation by the Authority under this section shall be presumed to have been duly given. Section 38(3) The common seal of the Authority shall be authenticated by the signature of the chairperson of the Authority and the Chief Executive officer, but the Authority shall, in the absence of either the chairperson or the Chief Executive officer, in any particular matter, nominate one member of the Authority to authenticate the seal of the Authority on behalf of either the chairperson or the Chief Executive officer.

Section 39. Protection from personal liability Section 39(1) No matter or thing done by a member of the Authority or by any officer, member of staff, or agent of the Authority shall, if the matter or thing is done bona fide for executing the functions, powers or duties of the Authority under this Act, render the member, officer, employee or agent or any person acting on their directions personally liable to any action, claim or demand whatsoever. Section 39(2) Any expenses incurred by any person in any suit or prosecution brought against him in any court, in respect of any act which is done or purported to be done by him under the direction of the Authority , shall, if the court holds that such act was done bona fide , be paid out of the general funds of the Authority , unless such expenses are recovered by him in such suit or prosecution.

Section 40. Liability for damages Section The provisions of section 39 shall not relieve the Authority of the liability to pay compensation or damages to any person for any injury to him, his property or any of his interests caused by the exercise of any power conferred by this Act or any other written law or by the failure, wholly or partially, of any works.

Section 41. Funds of theAuthority Section 41(1)(a) such monies or assets as may accrue to or vest in the Authority in the course of the exercise of its powers or the performance of its functions under this Act; Section 41(1)(b) such moneys as may be payable to the Authority pursuant to this Act or any other written law; Section 41(1)(c) such gifts as may be given to the Authority ; and Section 41(1)(d) all moneys from any other source provided, donated or lent to the Authority . Section 41(2) All the funds of the Authority and the balance at the end of each financial year shall be retained for the purposes for which the Authority is established and shall, for that purpose, establish a reserve account.

Section 42. Financial year Section The financial year of the Authority shall be the period of twelve months ending on the thirtieth June in each year.

Section 43. Annual estimates Section 43(1) At least three months before the commencement of each financial year, the Authority shall cause to be prepared estimates of its revenue and expenditure for that year. Section 43(2)(a) payment of the salaries, allowances and other charges in respect of members and staff of the Authority; Section 43(2)(b) payment of pensions, gratuities and other charges in respect of members and staff of the Authority; Section 43(2)(c) proper maintenance of the buildings and grounds of the Authority; Section 43(2)(d) maintenance, repair and replacement of the equipment and other property of the Authority; and Section 43(2)(e) creation of such reserve funds to meet future or contingent liabilities in respect of retirement benefits, insurance or replacement of buildings or equipment, or in respect of such other matter as the Authority may deem appropriate. Section 43(3) The annual estimates shall be approved by the Authority before the commencement of the financial year to which they relate and, once approved, the sum provided in the estimates shall be submitted to the Cabinet Secretary for approval. Section 43(4) No expenditure shall be incurred for the purp...

Section 44. Accounts and audit Section 44(1) The Authority shall cause to be kept proper books and records of accounts of its income, expenditure and assets. Section 44(2)(a) a statement of the income and expenditure of the Authority during that year; and Section 44(2)(b) a balance sheet of the Authority on the last day of that year. Section 44(3) The accounts of the Authority shall be audited and reported upon in accordance with the provisions of the Public Audit Act (Cap. 412B).

Section 45. Investment of funds Section 45(1) The Authority may invest any of its funds in securities in which for the time being trustees may by law invest trust funds, or in any other securities or banks which the Treasury may, from time to time, approve for that purpose. Section 45(2) The Authority may place on deposit, with such bank or banks as it may determine, any moneys not immediately required for the purpose of the Authority .

Section 46.Authorityto advise on zoning, etc, of land Section The Authority shall advise and liaise with the relevant authorities for the earmarking and zoning out of land for the development of micro and small enterprises.

Section 47. Development of infrastructure Section The Authority shall advise and facilitate the relevant Government Ministries and other agencies in developing worksite management policy, provide suitable infrastructure, including worksites, social amenities, business information centres, model centres of excellence, common usage facilities and other facilities necessary for development of micro and small enterprises.

Section 48. Capacity building programmes for micro and small enterprises Section develop and administer certified demand-driven capacity building and entrepreneurship programmes;

Section 49. Development of markets and provision of marketing services Section provide technical assistance in the development of products;

Section 50. Technology transfer, acquisition, etc. Section mobilise funds and resources for the development of appropriate technology in relevant research institutions and enterprises that develop technology for the micro and small enterprises sector;