The President of Kenya signed into law the Business Laws (Amendment) Act, 2021 on March 30, 2021, with an aim of facilitating the ease of doing business in Kenya.
The following Acts have been changed by this Act: the Companies Act, 2015, the Law of Contract Act, the Small Claims Court Act (Act No. 2 of 2016), the National Social Security Fund Act (Act No. 45 of 2013), the Stamp Duty Act (Cap 480), the Industrial Training Act (Cap 237), the National Hospital Insurance Fund Act (Act No.9 of 1998) and the Insolvency Act (Act No.18 of 2015) This article highlights the changes made in the aforementioned laws.
Due to the ongoing COVID-19 pandemic, many companies have been forced to conduct their meetings virtually, while some companies have elected to continue having physical meetings and others having hybrid ones. The new amendment in the Companies Act has expanded the meaning of a “general meeting” to include that such a meeting can take place physically, virtually or as a hybrid meeting. Additionally, the Act provides that a notice of a general meeting must, in addition to all previous requirements, specify the means of joining and participating in the meeting. Lastly, the Amendment Act repeals the requirement of companies to use common seals to execute documents.
The meaning of “signing” in the Law of Contract Act has been expanded to include the fact that contracts that are entered into by companies should be executed as per Section 37 of the Companies Act. The contracts should be executed by two authorised signatories, a director of a company in the presence of a witness who attests the director’s signature, or by a duly appointed attorney.
The Small Claims Court Act has been amended to provide that all proceedings before the court must be heard and determined on the same day or, if heard on a day-to-day basis, must be finalised within 60 days from the date of filing the claim.
The National Social Security Fund Act now requires employers to pay their employees’ contribution to NSSF on the 9th day of each month, or on such later date as the Board may, in consultation with the Cabinet Secretary, prescribe. Moreover, the 5% penalty that used to be given after one month for late payments is now repealed, meaning that the penalty will now apply from the date the payment is due. In a similar fashion, the National Hospital Insurance Fund Act has been amended to require that a person shall pay the contribution to the Board on the 9th day of each month.
The Stamp Duty Act has been amended to include contracts that are chargeable as conveyances on sale that attract a fixed duty of KES 100 as the documents that are exempt from paying stamp duty.
The Industrial Training Act now stipulates a period within which businesses that pay the training levy should now remit the levy to the National Industrial Training Authority, at the end of the financial year of the business, but not later than the 9th day of the month following the end of the financial year.
Under the newly amended Insolvency Act, in order to get a moratorium, the company directors have to prepare a document setting out the terms of the proposal and a statement of the company’s financial position containing such particulars of its creditors and of its debts and other liabilities and of its assets. This moratorium now ends after 30 days from and including the day on which it takes effect, unless the moratorium period is extended. The Act now introduces a monitor who replaces the provisional supervisor, and is tasked with reviewing the proposed voluntary arrangement for the moratorium.