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{
    "id": 573944,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/573944/?format=api",
    "text_counter": 73,
    "type": "speech",
    "speaker_name": "Hon. Mbui",
    "speaker_title": "",
    "speaker": {
        "id": 1750,
        "legal_name": "Robert Mbui",
        "slug": "robert-mbui"
    },
    "content": "On the part of incorporation of companies, clauses 5 to 10 provide some of the things that anyone who wants to start a business needs to understand. There are several types of companies that have been provided for in this Bill. The first one is limited company, those that are limited by shares and those limited by guarantee. Companies limited by shares are those where the liability of the members is limited to any amount unpaid on the shares that members are holding. Companies limited by guarantee, first and foremost, are those that do not have share capital and the liability of the members is limited to the amount that the members undertake to contribute at the point when they make a decision to liquidate the company. The other type of company is unlimited companies where there is absolutely no limit to the liability of the members. We also have private companies whose membership is restricted to a maximum of 50 people. The members are also restricted in the transfer of shares. The other type is a public company that allows members to offer their shares for public subscription. Clauses 11 to 15 deal with the formation and registration of companies. The clauses give the ideas and ways by which individuals can come together and set up businesses, which is very important because this is information that is required to be legislated. The clauses indicate that once one or more persons subscribe their names to a Memorandum of Understanding (MoU), they are ready to apply for registration. They simply need to give the name of the business and the location of the registered office. The location of the registered office is, as Kenyans have seen in the past, one of the areas where companies have been cheating the system. I remember at one time when we had the Anglo Leasing scam, the Government tried to find out where the registered offices of some of the companies that were trying to fleece Kenyans of their hard- earned money were. It was found out that the companies’ registered offices were flats in Europe. So, this is an area where we need to be very careful, so that we do not encourage registration of briefcase companies, that is companies that basically exist in the pockets of their owners. 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."
}