Frequently Asked Questions

What does it mean if shares are registered?

A registered share is a stock that is registered to the name of the exact owner. If the owner of such a share sells their share, the new owner must register with their name and other personal information such as address and birthdate

When is a Board resolution required?

In most organizations or corporations, resolutions are typically required for actions with significant financial ramifications, a change in procedures, or a change in governance authority.

What is Corporate Governance Audit?

Corporate Governance Audit is an effective way to ensure that the company has complied with all the laws applicable and effective internal control systems, policies, procedures are implemented well to serve needs of all the stakeholders.

What is a BN 2 form?

An application for Registration of a Business Name by a firm or partnership.

Can foreign companies be registered in Kenya?

Yes. A foreign company may be registered in Kenya if it has at least one local representative. A local representative may be any person of the company’s choice but must be a resident in Kenya.

What is the need for Corporate Governance?

Corporate governance provides for preparing a code of conduct for an organization which will help the company in showcasing the commitment of the company to work ethically on the ethical stance and to maintain a good image in market both domestic and global market.

What is Share Registration in Kenya?

Public companies are required to appoint an independent Share Registrar to maintain the register, process share transfers and any actions as may be required by the Company. The appointment of an independent Share Registrar is imperative since the shareholding information and records should be maintained objectively and the same should not be interfered by any party.

The share registrars are also responsible for distribution of dividends and maintaining the dividend records, registration of members during general meetings, communication of key information to shareholders, allotment of shares, issue of bonus shares, filing share registration reports with the regulators (if any) and the Company, shareholder relations and dispute resolution, among other roles.

Some public companies have put in place an internal share registrar to maintain the shareholder records. This may however impact shareholder confidence since management should be distinct from the ownership of the Company. For this reason, it is recommended that both public and private companies should appoint external independent share registrars.

How do companies pass special resolutions?

A special resolution is passed by not less than 75% of members present and voting the resolution at a general meeting. Voting at a general meeting may be;

1. By show of hands, one member has one vote, or

2. By poll, weighted by the number of votes a member holds in the company.

How do Companies pass Ordinary Resolutions?

An ordinary resolution is passed when a simple majority of those present and voting at a meeting (above 50%) casts their vote in support of a resolution. If the necessary simple majority is not obtained, then the proposed resolution fails.

What is a Special Resolution?

A resolution is an agreement or decision made by members, a class of members, or the Directors of a company. This could include resolving to change the name of the company, to alter its share capital, to change its articles, or any other matter relating to the Company operations.

What should I do if my company has fully satisfied its debt?

It is recommended that the company obtain a discharge after it has fully satisfied its debt, but it is not mandatory to notify the Registrar. However, it is in the company’s best interests that potential investors and lenders are aware that it has satisfied all or part of the debt. If you wish to notify the registrar, deliver Form CR28 for registration.

Who are Certified Public Secretaries?

Certified Secretaries are expert practitioners in governance, governance audits and compliance, corporate secretarial practice, corporate law, consultancy and business management and administration.

What is Board Evaluation?

A board evaluation is a method for a board of directors to verify members are meeting expectations, making progress toward goals, following bylaws, and a chance to gather feedback on the board’s health.

Official searches are made primarily for two reasons:

  • where the land in question is already registered, to obtain up-to-date information as to the state of the register, so as to supplement the title information already held by the applicant;
  • to ascertain what, if any, applications may be pending in relation to the titles in respect of which the search is made and which the applicant will need to take into account in dealing with the registered estate

Who is exempt from stamp duty in Kenya?

Stamp Duty exemption may be obtained for transactions, including but not limited to: Transfer of land to charitable organizations as gifts. Transfer of property between spouses. Transfer of family property to the members on demise of a family member in whose name the property was registered.

What is the time limit for issue of a share certificate?

After the incorporation of the company, the company needs to issue the share certificates within two months from the incorporation date. Where additional shares are allotted to the new or existing shareholders, the share certificates should be issued within two months from the allotment date.

How do I remove a company director in Kenya?

A director can be removed in Kenya by way of a Special General Meeting. This involves calling a Special General Meeting with Special Notice (28 days). The Notice must be issued to all the Shareholders and Directors. The meeting will then pass a Special Resolution for the removal of the director.

Can foreign companies be registered in Kenya?

Yes. A foreign company may not be registered in Kenya if it has at least one local representative. A local representative may be any person of the company’s choice but must be resident in Kenya.

In what instances does a Director cease from holding office?

  • Resignation from office 
  • Removal
  • Rotation
  • Retirement
  • Lack of capacity

What is a payroll service?

A payroll service is a third-party company or organization that assists with payroll processing. They simplify many things associated with timely and accurate payment, such as: Employee time and attendance or Workers’ compensation

What happens at an annual general meeting?

During an AGM, a company’s performance is analyzed and its future strategy is discussed. This is an opportunity for shareholders to question the board, get answers for unsatisfactory performance and challenge them on the direction of the company.

What is the purpose of board meetings?

The purpose of board meetings is for the directors to talk about any issues that the company is facing, review the company’s performance and discuss new policies to be enacted.

What is the company Act 2015?

The Companies Act 2015 (the Act) is amongst a suite of new laws intended to streamline business in Kenya, by making it easier for entities to establish a presence and operate. Although quite voluminous, the Act takes into consideration, developments in technology and procedure, to boost the ease of doing business.

What does Company Policy mean?

Company policies are set in place to establish the rules of conduct within an organization, outlining the responsibilities of both employees and employers. The management of company policy and procedures aim to protect the rights of workers as well as the business interests of employers.

What is eCitizen?

Official Digital payments platform that enables Kenyan citizens, residents and visitors access and pay for government services online

Linking a business is a requirement by the company registrar where companies align their manual (physical file at the company registrar’s office) file details to their e-citizen (digital) account. The process takes approximately 14 to 21 days excluding holidays and weekends.

Who is a promoter of a Company?

Someone who undertakes to form a company with reference to a given project a and to set it going and who takes the necessary steps to accomplish that purpose.

Why a company name might be rejected by the Registrar?

i) It is too like the name of an existing company.

ii) It is misleading, for example, if the name of a company likely to have small resources suggests that it is going to trade on a great scale over a wide field.

What is the reason for stating capital in a Company’s Memorandum of Association?

So that the company’s potential creditors may read the memorandum in order to ascertain the amount of the capital as stated therein. Having ascertained the amount they could then decide on the amount to lend to the company.

What are the rights attached to shares?

Right to attend general meetings and vote, right to shares of the Company’s profits, and right to a final distribution on winding up.

What is a Central Depository System?

A central depository means a company approved by the Authority (Capital Markets Authority) to establish and operate a system for the central system of handling of securities which permit or facilitate the settlement or registration of securities transactions or dealing in securities without the physical necessity of certificates.

 What is a prospectus?

This is a document which invites the members of public to subscribe to the shares or debenture of a public company and it sets out the advantages to accrue from investing in the company.

What is Investor Compensation Fund?

Investor Compensation Fund is a fund where the investor who suffers pecuniary loss resulting from failure of a licensed stock broker or dealer to meet his contractual obligations may claim to be paid or compensated.

What is an Internal audit charter?

It is a formal document that writes details about the main purpose of internal audit, rights, obligation, reporting line, authority and code of ethics that internal auditor should have. This document is approved by the audit committee and board directors.

What is Risk Appetite?

Risk Appetite is the amount of risk, at a broad level, that an organization is willing to accept in pursuit of its strategic objectives.

What is the E-Board platform/tool? 

The platform is a digital solution that heralds a shift from using paper questionnaires while conducting board evaluations, to ensure more efficient virtual surveys that improve Board performance and effectiveness. The Virtual Board evaluation is characterized by a 360-degree evaluation which generates a valuable report and an in-depth analysis highlighting areas of improvement. The board evaluation examines the board’s processes, composition, outputs, and group behaviors.

What are the benefits of the E-Board platform?

It simplifies the board evaluation process by allowing Board members to evaluate others using industry informed templates that can be tailor made for each specific board. The evaluation tool can be used on all devices ; phones, laptops, desktops etc. The platform presents flexibility by allowing ease of access at any time in whatever location with utmost confidentiality.

Who is the target market for the E-Board platform?

The target market for the Virtual Board Evaluation Platform are ALL entities with Board of Directors.

Why should you digitalize your Board Evaluation Process?

The typical board evaluation process requires months of planning and execution that consists of phone calls, in-person meetings, presentations, interviews, etc. Not only is it time-consuming, but it costs companies an arm and a leg to organize the evaluations. Digitalizing the process gives companies better control over time and saves them money.

Is the E-Board platform conscious about the Data Privacy Policy?

It goes without saying that information revolving around the board of directors is considered private and confidential. With that in mind the system is set in a way that the information is stored securely with a two-step access requirement. The reviews done during the board evaluations are also private for each reviewer with the aspect of anonymity to ensure transparency.

What is dematerialization of Securities?

This means a book entry of a security which has been prescribed by the central depository whereby the underlying physical certificate is no longer recognized as prima facie evidence of share ownership under the Companies Act from the dematerialization date.

What is immobilization of Securities?

This refers to a security where the underlying physical certificate has been deposited with and is being held by a central depository from the immobilization date. Immobilization date means the date specified in the notice given by a securities exchange as being the last day on which the eligible security may be traded on the securities exchange unless such security has been deposited with the central depository.

What is a void allotment?

An allotment is rendered void if it was made to a body corporate which is not a registered company without the prior written consent of the treasury and also if it was made before applying for, or obtaining, stock exchange permission for the company’s shares to be dealt in on the stock exchange.

What is forfeiture of shares?

Forfeiture of shares means the confiscation of the shares of a shareholder by way of penalty for non-payment of any call made in respect thereof.

What are the effects of forfeiture of shares?

a) The defaulting member ceases to be a member of the company and his name is removed from the register.

b) He loses his claim to the paid up amount on his shares.

c) He remains a contributory as a past member.

Who is an underwriter?

An underwriter is a person (or finance house) which, on a public issue of shares, agrees to purchase those shares which are not taken up by the public.

What is a charge?

A ‘charge’ on a property is created when it is made liable for the payment of money.

What is a proxy?

A proxy can be defined as follows;

i. A proxy means member’s authorized agent for purpose of voting.

ii. It also means the instrument by which the appointment is made.

iii. It also means the power of the person so appointed to vote

Why is a Board Evaluation necessary?

A board evaluation is necessary to assess the effectiveness and performance of the board of directors in fulfilling their duties and responsibilities, identify areas for improvement, and ensure good corporate governance practices are maintained.

What does ESG and sustainability consulting entail?

ESG (Environmental, Social, and Governance) and sustainability consulting involve providing guidance and support to businesses on integrating environmental, social, and governance factors into their strategies, operations, and decision-making processes to enhance long-term value creation and sustainability.

Am I required to pay stamp duty when transferring my shares?

Yes, you are required to pay a stamp duty of 1% of the total value of the shares being transferred, unless you fall under exempted categories.

Does Scribe Services provide trademark services?

Yes, Scribe Services offers trademark services, and we collaborate with the Kenyan Intellectual Property Institute (KIPI) to ensure a smooth process for trademark registration and protection.