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{
    "id": 570536,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/570536/?format=api",
    "text_counter": 216,
    "type": "speech",
    "speaker_name": "Hon. Wetangula",
    "speaker_title": "",
    "speaker": {
        "id": 3036,
        "legal_name": "Timothy Wanyonyi Wetangula",
        "slug": "timothy-wanyonyi-wetangula"
    },
    "content": "industry and socio-economic activities by enabling one or more natural persons to incorporate a company in this country. This Bill aims at developing a modern company law to support a competitive economy in coherence and in simple form, taking into consideration the current trends in the regional integration, with particular reference to the East African Community. It aims at reflecting the present day circumstances of carrying on business, including modern patterns of regulation and ownership. Previous speakers have talked about a one-man company. This is an area that this Bill has captured very well. It has been very difficult for people to form companies. Now this Bill allows a single person to set up a private limited liability company and a minimum of two people to set up a public company; this is something that is going to help many people to incorporate companies and enter into a business. This is captured in Clauses 11 and 102 of the Bill. This simplifies matters regarding registration and running of companies. Clauses 128, 129 and 131 require that private companies have at least one director whereas public companies must have at least two directors. It will now be easier and simpler for a person to register and run a company than under the current law which said that at least seven people can form a public company and at least two people can from a private company. The Bill states that the directors must be natural persons and must be over 18 years, raising questions as to whether corporate entities should no longer be directors of companies. The current law, Cap 486, requires that every company shall have a secretary who is qualified in accordance with Section 20 of the Certified Public Secretaries Act 1988. Under Clause 244, this Bill provides that private companies are not required to have a company secretary unless they have paid up capital of Kshs5 million or more. Instead, an authorised person may fulfil the duties of a company secretary. Hon. Temporary Deputy Speaker, when you look at Clause 3 of this Bill, it provides that the contract can be entered into on behalf of a company by a person acting under its authority; expressed or implied. In as much as this makes doing business easier, it may also end up binding companies to contracts they have never intended to enter into. This may complicate some of issues because when we talk of lifting a corporate veil, it means you have to identify the owners of companies. This one is exposing the directors of the companies, and we must be very careful when we are doing some businesses. Clause 35 provides that it is not a must for a company to have a common seal. This is a departure from Cap. 486 of the Laws of Kenya, which required companies to have a common seal. If this clause is adopted, it will not be a must for a company to execute documents using a common seal. The indoor management under clauses 34 and 134 of the Bill codifies common law principles. In particular, the indoor management rule under company law and duties of directors provides that acts of directors are valid even if it is later discovered that the appointment of the director was defective, and that the director had ceased to hold office or was not entitled to a vote on relevant matters. This Bill also modernises company law by recognising electronic communication. An earlier speaker talked about digital platform and introducing digital platform in the company management, and also the use of website in companies communication. In the current company law, it requires this communication through a registered postal address, publicising in the media and all that. Now, it requires that even through the social media, the company can communicate its mandate. The Bill also comes with a greater sting on penalties and fines for offenses are significantly increased. The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}