Resignation and Removal of a director in Kenya

Resignation and Removal of a Director in Kenya

In Kenya, a company director can cease holding office through various means. These include voluntary resignation, removal at an Annual General Meeting (AGM), removal by special notice, or death. This article provides an in-depth look at the processes involved, the documents required, and the legal framework that governs the resignation or removal of a director in Kenya.

Ways a Director Can Cease Holding Office

1. Through the Articles of Association: The company’s Articles of Association may stipulate conditions under which a director’s office is vacated.
2. Through Voluntary Resignation: A director can choose to step down by submitting a resignation letter.
3. Through Removal by Special Notice: A director may be removed by shareholders at a general meeting following special notice.
4. Through Death: Upon the death of a director, specific legal procedures must be followed.

Let’s explore these processes in greater detail.

Voluntary Resignation of a Director in Kenya

A director may voluntarily resign by submitting a formal resignation letter to the company. This resignation must be communicated to the Registrar of Companies within 14 days.

Required Documents:

• Resignation letter from the director.
• Affidavit of resignation: This is a sworn statement confirming the resignation.
• Minutes from the Board of Directors meeting: These minutes must reflect the acknowledgment of the resignation.

Upon receiving these documents, the company must update its records with the Registrar of Companies to ensure legal compliance.

Removal of a Director in Kenya

A director can be removed by shareholders or other directors through a Special General Meeting. The following steps outline the process for removing a director:

1. Special General Meeting: A special meeting must be called, providing at least 21 days’ special notice to all shareholders and directors.
2. Service of Notice: The director in question must receive a copy of the notice, which can be sent via registered post or email as recorded with the Business Registration Service (BRS).
3. Special Resolution: A special resolution is passed at the meeting to remove the director. The director may attend the meeting and make representations.

Required Documents for Director Removal:

• Special notice of the meeting: This must be issued at least 21 days before the meeting.
• Proof of Service: Evidence that the notice was served to the director, providing at least 21 days’ notice.
• Meeting minutes: These minutes must reflect the director’s removal and the passing of the resolution.
• Form CR19: This form confirms the removal of the director.
• Form CR9: This form is used to file a Notice of cessation of office of the director.

Death of a Director in Kenya

When a director passes away, the company must notify the Registrar of Companies and provide the necessary documentation such as a Certified Death Certificate by the Registrar of Births and Deaths. This process ensures that the company’s records are updated and compliant with legal requirements.

Required Documents:

• Meeting minutes: These minutes must document the director’s death.
• Certified copy of the death certificate: The certificate must be issued by the Registrar of Births and Deaths.

Removal or Retirement of a Director at the AGM

During an Annual General Meeting, a director may be removed or may choose not to seek re-election. There are two scenarios under which this can happen:

1. Voluntary retirement: The director voluntarily retires and does not seek re-election.
2. Not re-elected by shareholders: The shareholders may choose not to re-elect a director who wishes to continue serving.

Required Documents:

• Resignation letter: If the director voluntarily retires.
• Affidavit of resignation 
• Meeting minutes: These minutes must reflect the decision taken at the AGM.
• Form CR9: Notice of cessation of office of director.

Director Cessation Due to Incapacity

Directors may also cease holding office due to incapacitating events such as death, insanity, or bankruptcy. The company must file specific documents depending on the nature of the cessation:

• Death: A certified death certificate and Form CR9 must be submitted.
• Insanity: A report under the Mental Health Act must be filed along with Form CR9.
• Bankruptcy: A bankruptcy order under the Insolvency Act must accompany Form CR9.

Additional Considerations for Director Removal

Before initiating the removal of a director, it is essential to ensure that the company’s records are up to date. Key considerations include:

• E-Citizen Registration: Ensure that the company is linked to the Ecitizen portal.
• Beneficial Ownership Information: Update the company’s beneficial ownership records.
• Annual Returns: Confirm that the company’s annual returns have been filed and are up to date.

Processing Time for Removal or Resignation of a director in Kenya

The resignation or removal of a director takes approximately 90 to 120 days for approval by the Registrar of Companies. It is important to note that the final decision for removal rests solely with the Registrar of Companies.

How We Can Help

Navigating the resignation or removal of a director in Kenya can be a complex process, requiring compliance with legal and procedural requirements. At Capita Registrars Limited, we offer expert guidance to ensure that your company follows the correct procedures and remains compliant with the Companies Act.

For assistance, contact us at info@capitaregistrars.co.ke.