KENYA’S OPERATIVE SOCIETIES ACT, 1997: A REVIEW OF LEGAL PERSONS IN KENYA

Introduction

In Kenya, understanding the legal framework governing operational societies is crucial for businesses and individuals alike. This article delves into the various types of legal persons registered under the Companies Act, 2015, their characteristics, and their distribution in Kenya.

Definition of Legal Persons

According to the Financial Action Task Force (FATF) Standards, legal persons are entities that can establish a permanent customer relationship with a financial institution or own property. This includes companies, bodies corporate, foundations, anstalt, partnerships, and associations among others.

Distribution of Legal Persons in Kenya

The article highlights the distribution of legal persons in Kenya, noting that private limited companies dominate the landscape, accounting for 690,222 registered entities as at December 2022. Public limited companies, on the other hand, accounted for only 4,423 registrations during the same period.

Types of Companies under the Companies Act, 2015

The Companies Act, 2015 provides for three types of companies:

• Private Limited Companies: These are characterized by restrictions on share transfer and a limit of 50 members.
• Public Limited Companies: These have no restrictions on share transfer and can issue shares to an unlimited number of people.
• Unlimited Companies: These have no liability cap for their members.

Foreign Companies in Kenya

Foreign companies, which account for 5,343 registered entities, are those that have been registered in a foreign country and have applied to be registered under the Companies Act, 2015. Having a local representative is important for foreign companies, who must file various lodgements with the Registrar.

Conclusion

In conclusion, this review of legal persons in Kenya under the Companies Act, 2015 provides an overview of the different types of companies registered in the country and their characteristics. The findings highlight the dominance of private limited companies and the relatively low number of public limited companies, unlimited companies, and foreign companies.

Key Takeaways:

• Private limited companies dominate the landscape in Kenya.
• Public limited companies have no restrictions on share transfer.
• Unlimited companies have no liability cap for their members.
• Foreign companies must have a local representative to file lodgements with the Registrar.