Here are the frequently asked questions
CHANGE OF COMPANY NAME
The company management may be desirous to change the name of the company for various reasons. Such reasons include mergers & Acquisitions, change of ownership, on consolidation of various companies into one, making a name shorter for marketing and many other reasons. The Registrar of Companies may also compulsorily require change of name in case the company was inadvertently registered by a name which, in the opinion of the registrar, is too like the name by which a company in existence is previously registered.
The following steps are taken to effect change of company name:
- The Directors would recommend change of name to the shareholders’ at an extra-ordinary General Meeting or General Meeting.
- A normal name search is done and reservation of the ‘new’ company name.
- Upon shareholders resolution with special majority, a special resolution together with Notice shall be filed with the registrar for approval within 14 days.
- Upon receipt of the notice, the registrar shall:-
- Enter the name on the register in place of the former.
- Issue to the company a certificate of change of name.
- Publish the change of name in the Kenya Gazette
- ALTERATION OF COMPANY OBJECTS
Section 8 of the Act provides that a company may, by special resolution, alter the provisions of its memorandum with respect to its objects if the alteration would enable the company: –
(a) To carry on its business more economically or more effectively.
(b) To attain its main purpose by new or improved means.
(c) To enlarge or change the local area of its operations.
(d) To carry on some business which under existing circumstances may conveniently or advantageously be combined with the business of the company.
(e) To restrict or abandon any of the objects specified in the memorandum.
(f) To sell or dispose of the undertaking of the company.
(g) To amalgamate with any other company or body of persons.
In order to effect the proposed alterations the company’s directors would have to convene an extraordinary general meeting of the company in order to consider and if approved, pass a resolution that the company’s objects be altered as proposed.
The resolution would be effective immediately it is passed if it was voted for by a special majority of the shareholders in the company. When the objects are altered, a printed copy of the special resolution and a copy of amended Memorandum and Articles of Association must be delivered to the registrar within 14 days.
What is a CR 12 and how can it be obtained. What are the per-requisites before it can be issued?
A CR12 is an official search report issued by the Registrar of Companies showing the directors and shareholders of the company. The search report also reveals the authorized share capital, the registered office of the company, debentures or any encumbrances registered with the Company. Any person may apply for the CR12 report.
To obtain a CR12 report one would draft a letter to the Registrar of Companies requesting the details be provided to them with regards to a particular company. A fee of Kshs 600 is charged for each application received and report generated.
Removal of a Director (Section 185 of Companies Act)
The Articles of Association usually prescribe circumstances when a Director would be removed from directorship. Apart from the voluntary resignation, a director may be removed from office at any time before their term expires or notwithstanding the provisions in the Articles of Association.
The following steps are followed:
- The Company by ordinary resolution in an Annual general meeting or an extra ordinary General meeting can remove a director.
- Special Notice about the resolution to remove a director or to appoint somebody instead of a director so removed at the meeting at which he is removed shall be issued to the members.
- A copy of the said notice to be send to the director to be removed also.
- The director shall be given an opportunity of being heard in the meeting.
- If the director gives any written representation to the notice, then the said representation shall be given to all members unless they are received too late.
- If the representation could not be given to all members, then the Director can request the said representation to be read out in the meeting.
- The members can pass an ordinary resolution, by simple majority and remove the director.
- The Company shall within 14 days from the removal of a director file Form 203A and a copy of the resolution with the Registrar of Companies
A vacancy created by the removal of a director under the section, if not filled at the meeting at which he is removed, may be filled as a casual vacancy. A removed director may claim compensation for the loss of office.
NOTE: The subsection does not in the case of a private company authorize the removal of a director holding office for life at the commencement of Companies Act, whether or not subject to retirement under an age-limit by virtue of the articles or otherwise.
Calculation of Stamp Duty
Stamp Duty is paid to the Kenya Revenue Authority. As you register your company, you need to complete a form (SD1) from the Kenya Revenue Authority. The original copy of the payment form will be retained by the person paying for presentation as evidence of payment to the Registrar for the purpose of processing the documents, but will be authenticated by the triplicate copy (green) copy.
As an administrative requirement, the KRA now requires the personal identification numbers (PINs) of all parties on whose behalf duty-stamped documents are submitted. Documents must be first assessed by the Stamp Duty Office before payment can be processed by the KRA-designated banks.
The amount payable is prescribed by the Cabinet Secretary responsible for Lands and Housing from time to time. At the moment, a stamp duty of 1% is payable upon the creation and increase of the authorized share capital. However, the amount is subject to bank charges and fixed charges.
If the company has an authorized share capital of Kshs 100,000, the stamp duty is calculated as:
1% of nominal capital as declared in your Memorandum and Articles of Association.
+ KSh 2,040 + Bank Charges (currently 110)
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