FORMATION OF A LIMITED COMPANY

 This is by registration under the Companies Act

In order to incorporate themselves into a company, those people wishing to trade through the medium of a limited liability company must first prepare and register certain documents. These are as follows

a. Memorandum of Association: this is the document in which they express inter alia their desire to be formed into a company with a specific name and objects. The Memorandum of Association of a company is its primary document which sets up its constitution and objects;

b. Articles of Association; whereas the memorandum of association of a company sets out its objectives and constitution the articles of association contain the rules and regulations by which its internal affairs are governed dealing with such matters as shares, share capital, company’s meetings and directors among others;



Both the Memorandum and Articles of Associations must each be signed by seven persons in the case of a public company or two persons if it is intended to form a private company. These signatures must be attested by a witness. If the company has a share capital each subscriber to the share capital must write opposite his name the number of shares he takes and he must not take less than one share.

c. Statement of Nominal Capital – this is only required if the company has a share capital. It simply states that the company’s nominal capital shall be xxx amount of shillings. The fees that one pays on registration will be determined by the share capital that the company has stated. The higher Page 21 of 231 the share capital, the more that the company will pay in terms of stamp duty.

d. Declaration of Compliance: this is a statutory declaration made either by the advocates engaged in the formation of the company or by the person named in the articles as the director or secretary to the effect that all the requirements of the companies Act have been complied with. Where it is intended to register a public company, Section 184 (4) of the Companies Act also requires the registration of a list of persons who have agreed to become directors and Section 182 (1) requires the written consents of the Directors.



These are the only documents which must be registered in order to secure the incorporation of the company. In practice however two other documents which would be filed within a short time of incorporation are also handed in at the same time. These are:

1. Notice of the situation of the Registered Office which under Section 108(1) of the statute should be filed within 14 days of incorporation;

2. Particulars of Directors and Secretary which under Section 201 of the statute are normally required within 14 days of the appointment of the directors and secretary. The documents are then lodged with the registrar of companies and if they are in order then they are registered and the registrar thereupon grants a certificate of incorporation and the company is thereby formed. Section 16(2) of the Act provides that from the dates mentioned in a certificate of incorporation the subscribers to the Memorandum of Association become a body corporate by the name mentioned in the Memorandum capable of exercising all the functions of an incorporated company. It should be noted that the registered company is the most important corporation.

POWERS OF ATTORNEY AND THEIR REQUIREMENTS

 Power of Attorney (POA) is a formal instrument by which one person empowers another to represent him or act on his behalf for specific purposes. The power may be limited and may refer to particular/specific acts, or it may be unlimited and general in its form. 

Requirements 

1. The full names and addresses of the donor (the person giving the POA) and the appointed Attorney must be stated in the POA. 

2. The POA must be executed per the requirements of the law. The donor must sign it, and the signature must be witnessed by an individual who is not a party to the power of Attorney. If the donor/grantor is a corporate entity, the power must be executed under Seal. 

3. Powers of Attorney (POA) must be stamped (payment of stamp duty) and registered in Kenya in the Register of Powers of Attorney under the Registration of Documents Act. 

4. A power of Attorney can be given to a company, i.e., a company can be appointed as an attorney and requisite powers donated to it. 

5. Several persons may appoint the same attorney/s jointly or separately, and several parties may join in one power appointing an attorney for their joint or separate purposes. 

6. If a company has issued the POA, a copy of the Memorandum and Articles of Association of the company and a company resolution authorizing the POA must be presented

Processes of starting the companies

 Processes of starting the companies

1. Log onto eCitizen account and do a name search; if name is approved you can start registration process
2. Fill company registration form CR1.
3. Fill details of directors and shareholders and upload scanned copies of I.D. card/passport, KRA PIN certificate and recent coloured passport photograph. Directors/shareholders have to be registered on the iTax platform.
4. Fill shareholding details.
5. Fill a notification of directors’ residential address – Form CR8.
6. Fill the statement of nominal capital.
7. Pay requisite prescribed fee
8. Submit to Registrar for approval

THE RULE OF LAW

  It is a cardinal principle in the operation of AL. It provides that matters of governance should be based on the established laws and principles but not on the personal whims of the governors. It provides the starndards against which official action is accessed. It has its origin in the french phrase la principe de legalite. This refers to governance based on law and not of men. Lord Edward Coke is said to be the orinator in concept when he declared that the king must be under God and Law. The classic exposition of the principle of rule of law is to be found in the work of A.V Dicey the title ”introduction to the study of the law of the constitution”. Although the principle has different meaning, it is mainly understood to refer to 3 things in public administration that is:

1. •         Legality
2. •         Judicial independence
3. •         Fairness.

 

a)      legality

This aspect of the rule of law requires that everything must be done according to the law. In relation to administrative law every gvt authority which does some act that adversely affects the rights of a person must be able to justify that action as authorised by law. This authorisation could either be express or discretionary. Every gvt action must be legally sanctioned and any person aggrieved by such action must have the right to go to court and have such action or ommission invalidated if not in line with the laws. It requires gvt action to be conducted within a framework of recognised rules and principles and abhors(discourages) unlimited discretion. It would apply in cases where the legislature appears to have given overwhelming discretionary powers to a public authority. Rule of law seeks to strike a balance between the need of fair and efficient administration and the need to protect citizens from oppressive government.

The principle of legality is also applicable to criminal procedure and imposes a number of obligations including the requirement that no one should be punished except for some legally defined crime and the prohibition gainst retrospective application of legislation. This principle prevents Government authorities or those in Government from acting ultra vires.

 

b)     Judicial independence

Disputes about the legality of gvt actions are to be decided by judges who are independent of the executive. In the common law set up, dispute between citizens and the gvt are resolved by ordinary courts.

c)      Fairness

The rule of law requires that the law should be even handed between the citizens and the government. It denies the government unnecessary privileges or excemptions from ordinary law.

Incorporation of the Rule of Law by the Constitution

Express references in the constitution as regard the rule of law. The constitution requires respect for the rule of law in numerous aspects in its preamble. It requires respect for rule of law in numerous aspects in its preamble it recognises the aspirations of all Kenyans for a government based on the rule of law:

• Under Article 10 which provides for national values and principles which are supposed to bind all state officers, public officers and all persons also recognises the rule of law.

• In Article 91, an obligation is imposed on all political parties to promote the rule of law.

• Article 131(2)(e) requires the president to ensure the protection of the rule of law.

• Article 156(4)(a) and Art 156(6) requires the attorney general as the principle legal advisor to the government to promote, protect and uphold the rule of law.

• Article 238(2)(b) requires that national security be promoted and guaranteed in accordance with utmost respect for the rule of law.

• Article 259(1)(b) requires interpretation of the constitution to be in manner that promotes rule of law.

 

Natural justice require that procedure should not be secondary to the substance of a decision. Its logic is that as government powers and actions become more drastic and invasive, fair procedure would make them more tolerable. In origin and character, rules of natural justice are largely common law, though continually embraced by legislation. Courts play a critical role in ensuring that rules of justice do not run amok....the rules protect citizens from unfair actions while protecting public officials from unwarranted accusations. Decisions made without bias are not only more acceptable but also of better quality because they are consultative and avoid further friction in their enforcement

ICJ rules on ocean row/International Court of Justice (ICJ) sides with Somalia in sea border dispute with Kenya/ICJ rules in favor of Somalia over Kenya in long-running maritime dispute

 

The International Court of Justice (ICJ) ruled that Somalia, not Kenya, should control most of the triangle of water in the Indian Ocean over which Kenya has maintained sovereignty since 1979.




The area, measuring about 39,000 square miles, is believed to contain deposits of oil and gas and has been a source of tension between the two countries for years.








In her ruling, Judge Joan E. Donoghue, the ICJ president, dismissed Kenya’s argument that Somalia had already agreed to the maritime boundary claimed by Kenya.




Donoghue said the court determined that the boundary should run largely in the same direction as Somalia’s land border, with a slight adjustment, and rejected Kenya’s position that it should be along the latitudinal line at the border.




The ruling is legally binding, though the court has no enforcement powers.