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Penalties and Offences under the new Companies Act, 2015

This is a summary of the penalties and offences that officers of the companies will be liable under the new Kenyan Companies Act 2015. Please note and read carefully.

Section Compliance Requirement Timelines  Penalty on failure to comply
24 Filing a copy of the amended articles of association to be filed to the Registrar from the date of passing the resolution. 14 days the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings

After conviction, if non-compliance persists, company and each officer liable for fine up to twenty thousand shillings

25 Complying with the Registrar’s notice with respect to filing amended articles. 28 days the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings

 

27 Filing copies of resolutions or agreements required to be lodged to the Registrar as per section 27(2)

 

NOTE: In this section, a liquidator is treated as an officer of the company

Within 14 days the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings

 

29 Request by a member for certain documents (having met the costs of preparing and sending the documents to them) Not specified the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings

After conviction, if non-compliance persists, company and each officer liable for fine up to five thousand shillings

38 Company may have common seal for execution of documents – Ensure that its name is engraved on the seal in legible characters N/A A person who uses or authorizes use of seal not engraved in legible letters is in default, and on conviction is liable to a fine not exceeding five hundred thousand shillings

 

60 Compliance with the Registrar’s order directing to direct company to change its name because of misleading information given for registration of company or because its name gives misleading indication of company’s activities. 21 days the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings

 

67 Requirement by the Company to  disclose or display its company name at specified places and documents etc. Not specified the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
79 Requirement of the company to lodge a copy of the order issued by a court in an application by a person(s) to cancel conversion of a public company to a private company. Within 14 days after the Court makes an order or such extended periods as the court may deem fit. the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings
88 Statement of capital required if company

already has share capital (after conversion of an unlimited company into a private limited company)

Within 14 days after registration of conversion the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings
93 Requirement of the company to lodge a copy of register of members with the Registrar or any amendment to the register of members. Company to keep register of members. 14 days of completion of preparation  or of any amendment the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
94 Company keeping the register of members at its registered office. N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
95 companies (that have more than 50 members) to keep index of

members.

Make alteration

Lodge a copy with the Registrar

N/A

 

14 days

28 days

the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
98 Offence to refuse inspection of register of members or to fail to provide copy (rights of persons to inspect register of members and require copies) for public companies as required in section 96 5 working days the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding seven hundred and fifty thousand shillings

After conviction, if non-compliance persists, company and each officer liable for fine up to seventy five thousand shillings

99 Register of members: offences in connection with request for or disclosure of information under sec. 96- ) A person who makes  a request that contains a statement that the person knows, or has reason to suspect, is false or misleading in a material respect commits an offence. N/A A person found guilty I on conviction liable to a fine not exceeding five hundred thousand or imprisonment for a term not exceeding two years or both
100 Company to provide information as to state of register of members and index of members’ names.e.g. recent amendments N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings

 

101 Requirement to only remove entries relating to former members  after 10 years N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings

 

102 Single member companies – incase of Increase and decrease, enter into register of members N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings

 

104 A company shall not enter in its register notice of any Trusts- whether express, implied or constructive N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings

 

130 Registrars Direction requiring company to make appointment –to comply with minimum director requirement and natural person requirement 1 to 3 months the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings

 

134 Company to keep register of directors. N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding one million shillings

 

137 Company to keep register of directors’

residential addresses. – For natural persons

N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings

 

138 Duty of company to notify Registrar of

changes of directors and directors’

addresses.

14 days the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings

 

147 Duty not to accept benefits from third

parties.- if it gives rise to conflict of interest

N/A A person who contravenes the section shall be liable upon conviction to a fine not exceeding one million shillings
151 Duty to declare interest in proposed

or existing transaction or arrangement.

N/A A director who contravenes the section shall be liable upon conviction to a fine not exceeding one million shillings
189 What happens if approval (in relation to Payments for loss of office

180 – 188) is required under more than one provision.

N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings

 

191 Company to keep copy of contract (director’s service contract) or memorandum of terms available for Inspection Retain copy for not less than one year the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings

 

192 Right of member to inspect and to obtain copy of memorandum. 7 days the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings

 

206 Placing the director’s address on the public record (Circumstances in which Registrar may place address on the public record).-Co. to enter address in registers N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings

 

210 Minutes of directors’ meetings – be recorded, kept for at least 10 years 14 days the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings

 

223 Offence for undischarged bankrupts to act as director or secretary of company. N/A A person found guilty I on conviction liable to a fine not exceeding five hundred thousand or imprisonment for a term not exceeding two years or both
245 Direction requiring public company to

appoint secretary.

1 to 3 months the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings

 

246 Qualifications of secretaries of public

Companies i.e member of ICPSK.

N/A A director who contravenes the section shall be liable upon conviction to a fine not exceeding two hundred thousand shillings
248 Duty to keep register of secretaries. N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings

 

249 Duty to notify Registrar of change

of secretary or joint secretary.

14 days the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings

 

252 Offence to include misleading, false or deceptive particulars in register of secretaries or requirement sec 250 or 251. N/A A director who knowingly or recklessly authorizes inclusion of misleading statement shall be liable upon conviction to imprisonment for  term not exceeding two years or a fine not exceeding one million shillings or both

 

253 Offence to fail to keep register of secretaries. N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings
265 Requirements for Circulation of written resolutions proposed by directors. Not specified the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
267 Circulation of written resolution

proposed by members.

Not specified the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
286 Offence for company to fail to comply with section 281(1) or (2), 282, 283(1) or (2), 284(1) or 285.

281 Amount of notice to be given for general meetings.

282 Manner in which notice of general meeting to be given.

283 Publication of notice of general meeting on company’s website.

284 Persons entitled to receive notice of general meetings.

285 Contents of notices of general meetings.

N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
290 Duty of company to circulate members’ statements-of not more than 1000 words for proposed resolution N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings
299 Notice of general meeting to contain

statement of rights of members to

appoint proxies.

N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
310 Every public company shall hold a general meeting as its annual general meeting within six months from and including the day following its accounting reference date in each year, whether or not it holds other meetings during that period. N/A The public company, and each officer of the company in default, on conviction are each liable to a fine not exceeding one million shillings
311 Public companies: notice of annual

general meeting.

N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
312 Public companies: members’ power to require circulation of resolutions for annual general meeting. 6 weeks before AGM the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
316 Quoted companies to have information on website N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
317 Records of resolutions, decisions and

minutes, etc. – for at least 10 years from the dates of relevant passage

N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
319 Records of decisions by sole

Member shall be in written resolution

N/A A member of the company to which the section applies in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
320 Inspection of records of resolutions and meetings – member requests under section 317 7 days the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
324 Nominal value of shares – fixed value, denominated in shillings N/A If the company purports to allot shares in contravention, the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
325 Shares to be numbered – if they are not fully paid up and rank equally for all purposes 6 weeks before AGM the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
330 General prohibition of commissions,

discounts and allowances.

N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
332 Registration of allotment as soon as practicable, within2 months after date of allotment the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
348 Disapplication of pre-emption rights

by special resolution.

N/A The directors of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
399 Notice of name or other designation of

class of shares.

14 days the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings
400 Notice of particulars of variation of rights

attached to shares to be lodged with

Registrar.

14 days the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings
401 Notice of new class of members to be

lodged with Registrar.

14 days the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings
402 Notice of name or other designation of class of members to be lodged with Registrar. 14 days the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings
403 Notice of particulars of variation of class rights. 14 days the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings
406 Notice to Registrar of sub-division or consolidation. One month the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred and fifty  thousand shillings
414 Offence to conceal name of creditor, etc. N/A An officer of the company in default, on conviction are each liable to a fine not exceeding five hundred  thousand shillings or two years imprisonment or both
416 Public companies: duty of directors to

convene a meeting on loss of capital.

Not later than 28 days from the day

on which a director of the company first became aware of

that fact (and not more than 56 days)

A director of the company in default, on conviction are each liable to a fine not exceeding five hundred  thousand shillings
421 Registration of resolution and supporting

Documents in relation to reduction of share capital

14 days If the company lodges a solvency statement not provided to members, the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
424 General rule against limited company acquiring its own shares. – for valuable consideration. N/A the company found guilty shall be liable to a fine not exceeding  one million shillings , and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred  thousand shillings
428 Notice of cancellation of shares. (Duty to cancel shares in public company held by or for the company.) One month the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
432 Offence to fail to cancel shares or apply for registration of company’s conversion into private company. 1 to 3 years depending the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
441 Assistance by public company for acquisition of shares in its private holding company. N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding one million shillings
473 Directors’ statement and auditor´s report – Directors’ statement: offence if no reasonable grounds for opinion. N/A The directors of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings or twelve months imprisonment or both
478 Company to make directors’ statement and auditor´s report to be available for inspection. N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
486 Distributions to be made only out of profits available for the purpose. N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding one million shillings
496 Duty of company as to issue of certificates etc on allotment. N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
498 Procedure on transfer being lodged. Not later than two month the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
503 Duty of company as to issue of certificates etc on transfer. Two month the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
519 Consequences of doing business etc without a trading certificate (which is issued by Registrar for minimum share capital-6,750,000/-). Not specified the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding one million shillings
525 Notice to Registrar of redemption. 1 month after a company has

redeemed

the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings
629 Offence for company to fail to keep proper accounting records. N/A Each of the directors in contravention shall be liable upon conviction to a fine not exceeding five hundred thousand
631 Offences relating to company’s failure to preserve its records.(7 years) N/A Aperson found liable, if body corporate shall be liable upon conviction to a fine not exceeding two million; if natural person one million or two years imprisonment or both
632 How company’s financial year is to be determined – for parent Co’s coinciding with subsidiary’s N/A Each of the directors in contravention shall be liable upon conviction to a fine not exceeding five hundred thousand
860 Registrar´s notice to resolve inconsistency on the Register. 14 days the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings
872 Offence to lodge false or misleading documents or to make false or misleading statements to Registrar. N/A A person in default, on conviction are each liable to a fine not exceeding one million  shillings or imprisonment term  up to two years
974 When foreign company may carry on business in Kenya Until it is registered the foreign company, and each officer of the company in default, on conviction are each liable to a fine not exceeding five hundred thousand shillings
979 Foreign company required to have local representative. 21 days the company continues to carry on business in Kenya without having a local representative, the company, and each officer of the company who is in default, commit a further offence on each day on which the contravention continues and on conviction are each liable to a fine not exceeding fifty thousand shillings for each such offence.
980 Appointment and termination of appointment of local Representative, or they change their registered office One month the  company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings
991 Local representative of registered foreign company to notify Registrar of certain events affecting the company. One month A person who fails to comply , on conviction are each liable to a fine not exceeding two hundred thousand shillings
1006 Form of company records. N/A the company, and each officer of the company in default, on conviction are each liable to a fine not exceeding two hundred thousand shillings