The Business Laws (Amendment) (No.2) Act of 2021 (the Act) came into force on 31 March 2021 seeking to facilitate ease of doing business in Kenya. In this first part of the series, we highlight the key changes to the laws listed below. The second part will address the effect of the Act on the Insolvency Act, 2015.
The meaning of “signing” as defined under the LCA has been expanded to clarify that contracts entered into by companies should be executed according to the Companies Act. Recently, the Companies Act was amended to delete the use of a common seal as means through which a company signs contracts. Therefore, contracts entered into by companies should be executed (i) by two authorised signatories, (ii) by a director of a company in the presence of a witness who attests the director’s signature, or (iii) by a duly appointed attorney.
The Act amends the NSSF Act to:
In light of the COVID-19 pandemic, various government agencies including the Business Registration Service and the Capital Markets Authority (among other institutions) issued guidelines on the conduct of hybrid and virtual general meetings by companies.
The Act now seeks to incorporate such guidelines into law as follows:
Apart from the provisions relating to general meetings, the Act repeals the provisions which gave effect to common seals of companies that existed before the enactment of the Companies Act. The intention is to make it clear that companies are no longer required to use common seals to execute documents.
The Stamp Duty Act, among other things, lists the documents and transactions that are exempt from stamp duty. The Act amends the Stamp Duty Act to include contracts, chargeable as conveyances on sale and that attract a fixed duty of KES 100, to the list of documents that are exempt from stamp duty.
The Act prescribes the period within which businesses that pay the training levy must remit the levy to the National Industrial Training Authority. They must remit the training levy 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.
The Act amends the SCCA to provide that all proceedings before the small claims 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. This now clarifies the maximum period for finalisation of matters before the small claims court.
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