Section 3 of The Companies Act No. 17 of 2015: Interpretation of provisions of this Act

(1) In this Act, unless the context otherwise requires—
“address” includes—
(a) a fax number, e-mail address or any other electronic address used
for the purposes of sending or receiving documents or information
by electronic means; and
(b) a postal and physical address;
"administrator”, in relation to a company, means an administrator
appointed under the laws relating to insolvency;
"allotted share capital", in relation to a company, means shares of the
company that have been allotted;
"approved securities exchange" means a securities exchange approved
by the Capital Markets Authority in accordance with the Capital Markets Act
(Cap. 485A);
“articles” means the articles of association of a company;
“associate”—
(a) in relation to a natural person means—
(i) that person's spouse or child;
(ii) a body corporate of which that person is a director; and
(iii) an employee or partner of that person;
(b) in relation to a body corporate means—
(i) a body corporate of which that body corporate is a director;
(ii) a body corporate in the same group as that body; and
(iii) an employee or partner of that body corporate or of a body
corporate in the same group;
(c) in relation to a partnership that is not a legal person under the law
by which it is governed, means any person who is an associate of
any of the partners;
“associated company” means—
(a) a subsidiary of the company;
(b) a holding company of the company; or
(c) a subsidiary of such a holding company;
“auditor” means—
(a) a person or firm appointed as an auditor of a company under Part
XXVII; or
(b) a person or firm appointed as an auditor of a body of a kind
prescribed by the regulations for the purposes of this definition;
“authorised signatory” in relation to a company, means a director of the
company and also means—
(a) in the case of a public company, the secretary or a joint secretary
of the company; and
(b) in the case of a private company that has a secretary, the
secretary;
“Attorney-General” means the Attorney-General appointed under Article
156 the Constitution;
“beneficial owner” means the natural person who ultimately owns or
controls a legal person or arrangements or the natural person on whose behalf
a transaction is conducted, and includes those persons who exercise ultimate
effective control over a legal person or arrangement;
“body corporate” includes a firm that is a legal person under the law by
which it is governed;
"Cabinet Secretary"deleted by Act No. 28 of 2017, s. 2(b);
“called-up share capital" means so much of a company's share capital as
equals the aggregate amount of the calls made on its shares, whether or not
those calls have been paid, together with—
(a) any share capital paid up without being called; and
(b) any share capital to be paid on a specified future date under the
articles, the terms of allotment of the relevant shares or any other
arrangements for payment of those shares;
“company" means a company formed and registered under this Act or an
existing company;
“company limited by guarantee" has the meaning given by section 7;
“company records" (or “records of a company”) means—
(a) any register, index, accounting records, agreement,
memorandum, minutes or other document required by or under
this Act to be kept by the company; or
(b) any register kept by the company of its debenture holders;
"the Court" means (unless some other court is specified) the High Court;
"credit sale agreement" means an agreement for the sale of goods under
which payment of the whole or a part of the purchase price is deferred and a
security interest in the goods is created or provided for in order to secure the
payment of the whole or a part of the purchase price;
"debenture", in relation to a company, includes debenture stock, bonds and
any other securities of a company (whether or not constituting a charge on the
assets of the company);
"deed" means a legal document that grants a right by transferring the right
from one person to another;
"direction" means direction in writing;
“director”, in relation to a body corporate, includes—
(a) any person occupying the position of a director of the body (by
whatever name the person is called); and
(b) any person in accordance with whose directions or instructions
(not being advice given in a professional capacity) the directors of
the body are accustomed to act;
“document” means information recorded in any form; and in particular
includes a summons, notice, order or other legal process and a register
(whether in hard copy or electronic form);
“dormant company” means a company that is dormant during any period
in which it has no significant accounting transaction;;
“electronic address” means an address used for the purposes of sending
or receiving documents or information by electronic means;
“electronic copy” in relation to a document or information, means a copy
of the document or information that is stored or kept in electronic form;
“electronic form” in relation to a document or information, means the
storage or keeping of the document or information in the form of data, text or
images by means of guided or unguided electromagnetic energy, or both;
“electronic means”, in relation to a document or information, means—
(a) sending, supplying or delivering the document or information
initially, and receiving it at its destination, by means of electronic
equipment for the processing (including by digital compression) or
storage of data; and
(b) being entirely transmitted, conveyed and received by wire, radio,
optical means or by other electromagnetic means;
“electronic money" means electronically (including magnetically) stored
monetary value as represented by a claim on the electronic money issuer that—
(a) is issued on receipt of funds for the purpose of making payment
transactions;
(b) is accepted by a person other than the electronic money issuer;
and
(c) is not excluded by the regulations;
“electronic money issuer" means a person authorised by the regulations
to issue electronic money;
"eligible member", in relation a resolution of a company, means a member
who, under the articles of the company, is entitled to vote on the resolution;
"employees’ share scheme" means a scheme for encouraging or
facilitating the holding of shares in, or debentures of, a company by or for the
benefit of—
(a) the bona fide employees or former employees of—
(i) the company;
(ii) a subsidiary of the company;
(iii) the company's holding company or a subsidiary of the
company's holding company; or
(b) the spouses, surviving spouses, or minor children or step-children
of those employees or former employees;
"equity share capital" means a company's issued share capital excluding
any part of that capital that does not confer any right, either with respect to
dividends or to capital, to participate beyond a specified amount in a distribution;
“equity securities" means—
(a) ordinary shares in a company; or
(b) rights to subscribe for, or to convert securities into ordinary shares
in the company;
“excluded from consolidation", in relation to a group financial statement,
means that the undertaking concerned is not included or liable to be included
in that statement;
“expenses" includes costs; and “expenses” (of an investigation) includes
expenses incidental to the investigation;
“expression" includes sign, symbol, logo and mark;
“existing company" means—
(a) a company formed and registered under the repealed Act; or
(b) a company that was formed and registered under either of the
repealed Ordinances (as defined by that Act);
“firm" means an entity, whether or not a legal person, that is not a natural
person; and includes a body corporate, sole proprietorship, partnership or other
unincorporated association;
“Foreign Companies Register" means the register kept under section 994;
“foreign company" means a company incorporated outside Kenya;
“foreign companies regulations" means regulations made under section
995 and in force;
“former name" means a name by which a natural person was formerly
known for business purposes;
“general meeting" in relation to a company, means a general meeting
which may be a physical, virtual or hybrid meeting of the company;
“group", in relation to a body corporate, means the body corporate, any
other body corporate that is its holding company or subsidiary and any other
body corporate that is a subsidiary of that holding company;
“group undertaking", in relation to an individual undertaking, means an
undertaking that is—
(a) a parent undertaking or subsidiary undertaking of the individual
undertaking; or
(b) a subsidiary undertaking of any parent undertaking of the
individual undertaking;
"hard copy form" means a document or information that is sent, supplied or
delivered in a paper copy or similar form capable of being read and references
to hard copy have a corresponding meaning;
"hire-purchase agreement" means a hire-purchase agreement as defined
in section 2(1) of the Hire Purchase Act (Cap. 507);
"holding company" (of another company) means a company of which the
other company is a subsidiary company of the company;
"holding company" in relation to another company, means a company that
—
(a) controls the composition of that other company's board of
directors;
(b) controls more than half of the voting rights in that other company;
(c) holds more than half of that other company's issued share capital;
or
(d) is a holding company of a company that is that other company's
holding company;
"hybrid meeting" in relation to a company general meeting, means a
meeting where some participants are in the same physical location while
other participants join the meeting through electronic means including video
conference, audio conference, web conference or such other electronic means;
"in default", in relation to an officer of a company, has the meaning given
by section 996;
"in liquidation" has the same meaning as the meaning provided under the
laws relating to insolvency;
"intellectual property" means—
(a) any patent, trade mark, registered design, copyright or design
right; or
(b) any licence under or in respect of a patent, trade mark, registered
design, copyright or design right;
"issued share capital", in relation to a company, means shares of the
company that have been issued;
"key performance indicators", in relation to a company, means factors by
reference to which the development, performance or position of the company's
business can be measured effectively;
"liabilities" includes duties;
"limited company" has the meaning given by section 5;
"lodge", in relation to a document or information required or permitted to be
registered, includes deliver, file, send, submit the document or information or,
in the case of a notice, give the notice;
"member" means a member of a company;
"name", in relation to a natural person, means the person's given name and
family name, or if the person is usually known by a title, the person's title, either
in addition to or instead of the person's given name or family name, or both;
"notice" means notice in writing;
"notify" means notify in writing;
“net assets", in relation to a company, means the aggregate of the assets
less the aggregate of its liabilities, and for the purpose of this definition,
"liabilities" includes provisions of any kind;
“officer", in relation to a company or other body corporate, means—
(a) any director, manager or secretary of the company or body; and
(b) any other person who is, because of a provision of this Act, to be
treated as an officer of the company or body for the purposes of
the provision;
"ordinary shares" means shares other than shares that, with respect to
dividends and capital, confer a right to participate only up to a specified amount
in a distribution;
"parent undertaking" (of another undertaking) means an undertaking
that—
(a) holds a majority of the voting rights in the other undertaking;
(b) is a member of the other undertaking and has the right to appoint or
remove a majority of its board of directors;
(c) has the right to exercise a dominant influence over the other
undertaking—
(i) because of provisions contained in the other undertaking's
articles; or
(ii) because of a control contract;
(d) has the power to exercise, or actually exercises, dominant influence
or control over the other undertaking; or
(e) is a member of the other undertaking and controls alone, under an
agreement with other shareholders or members, a majority of the
voting rights in it;
"pension scheme" means a scheme for the provision of benefits consisting
of or including a pension, lump sum benefit, gratuity or other similar benefit given
or to be given on the retirement or death, or in anticipation of the retirement
of employees or former employees or, in connection with the past service of
employees or former employees, either after their retirement or death;
"personal injury" includes any disease and any impairment of a person's
physical or mental condition;
"printed" includes typewritten or lithographed or produced by any
mechanical means;
"private company" has the meaning given by section 9;
“prescribed financial accounting standards” means statements of
standard accounting practice issued by the Institute of Certified Public
Accountants of Kenya in accordance with the Accountants Act (No. 15 of 2008);
"profit and loss account" includes an income statement or other equivalent
financial statement required to be prepared in accordance with the prescribed
financial accounting standards;
"property" includes all rights and interests in property;
"public company" has the meaning given by section 10;
“publish", in relation to a document or information, means to issue or
circulate the document or information or otherwise make it available for public inspection in a manner calculated to invite members of the public generally, or
any class of members of the public, to read it;
“qualified", in relation to an auditor's report (or a statement contained in
an auditor's report) on a company's financial statement, means that the report
or statement does not state the auditor's unqualified opinion that the financial
statement has been properly prepared—
(a) in accordance with this Act; or
(b) if an undertaking not required to prepare financial statements in
accordance with this Act—in accordance with any corresponding
written law under which the undertaking is, or its directors are,
required to prepare financial statements or accounts;
“qualifying person” in relation to a meeting of a company means—
(a) a natural person who is a member of the company;
(b) a person authorised under section 297 to act as the representative
of a corporation in relation to the meeting; or
(c) a person appointed as proxy of a member of the company in
relation to the meeting;
“quoted company” means a company whose equity share capital has been
included in the official list on a stock exchange or other regulated market in
Kenya;
“register” (when used as a verb) means register under this Act;
“Register” means the Register of Companies kept under this Act, but does
not include the Foreign Companies Register;
“registered foreign company” means a foreign company registered, or
taken to be registered, in accordance with Part XXXVII;
"the Registrar" means the person for the time being holding office as
Registrar of Companies under section 831;
"the regulations" means the companies general regulations made and in
force under this Act, but does not, unless expressly provided, include the foreign
companies regulations or savings and transitional regulations;
“the repealed Act" means the Companies Act (Cap. 486) repealed by this
Act;
“resolution for reducing share capital", in relation to a company that has a
share capital, means a special resolution passed by the company in accordance
with section 407;
"retention of title agreement" means an agreement for the sale of goods
to a company, being an agreement—
(a) that does not constitute a charge on the goods; but
(b) under which, if the seller is not paid and the company is wound up,
the seller will have priority over all other creditors of the company
with respect to the goods or any property representing the goods;
“securities” includes—
(a) options;
(b) futures; and
(c) contracts for differences, and rights or interests in those
investments;
“service address”, in relation to a person, means an address at which
documents may be effectively served on that person for the purposes of this Act;
“services” means anything other than goods or land;
“shares” —
(a) in relation to an undertaking with a share capital, means shares in
the share capital of the undertaking;
(b) in relation to an undertaking with capital but no share capital,
means rights to share in the capital of the undertaking; and
(c) in relation to an undertaking without capital, means interests—
(i) conferring a right to share in the profits, or the liability to
contribute to the losses, of the undertaking; or
(ii) giving rise to an obligation to contribute to the debts or
expenses of the undertaking in the event of a liquidation;
“sign” includes sign by means of an electronic signature;
"significant accounting transaction", in relation to a dormant company,
means a transaction that is required by section 638 to be entered in the
company's accounting records;
"subsidiary” means a company of which another company is its holding
company;
"subsidiary undertaking” (of another undertaking) means an undertaking
of which the other undertaking is its parent;
"traded company", means a company whose securities are admitted to
trading on a securities exchange or other regulated market operating in Kenya;
"turnover", in relation to a company, means the amounts derived from the
provision of goods or services, or goods and services, in the course of the
company ordinary business, after deducting—
(a) trade discounts;
(b) value added tax; and
(c) any other taxes based on the amounts so derived;
“uncalled share capital”, in relation to a company, means so much means
so much of the company's share capital as is not called-up share capital of the
company;
“under administration" has the same meaning as provided for in the laws
related to insolvency;
“undertaking” means—
(a) a body corporate or partnership; or
(b) an unincorporated association carrying on a trade or business,
with or without a view to profit;
"undistributable reserves" (of a company) means those reserves of the
company that comprise—
(a) its share premium account;
(b) its capital redemption reserve;
(c) the amount by which its accumulated, unrealised profits (so far as
not previously utilised by capitalisation) exceed its accumulated,
unrealised losses (so far as not previously written off in a reduction
or reorganisation of capital duly made); and
(d) any other reserve that the company is prohibited from distributing
by its articles;
“unlimited company” has the meaning given by section 8;
"virtual meeting" in relation to a company general meeting, means a
meeting where all members join and participate in the meeting through
electronic means including video conference, audio conference, web
conference or such other electronic means;
“wholly-owned subsidiary company" (of another company) means a
company that has no members other than that other company and that other
company's wholly owned subsidiaries (or persons acting on behalf of that other
company or its wholly-owned subsidiaries;
“working day" means any day between Monday and Friday, but does not
include a public holiday.
(2) In this Act, a reference to a company having a share capital is to a company
that has power under its constitution to issue shares.
(3) In this Act, a reference to issued or allotted shares, or to issued or allotted
share capital, includes shares taken on the formation of the company by the
subscribers to the company's memorandum.
(4) For the purposes of this Act, shares in a company are allotted when a
person acquires the unconditional right to be included in the company's register of
members in respect of the shares.
(5) In the case of an undertaking not trading for profit, a reference in this Act
to a profit and loss account is a reference to an income and expenditure account,
and a reference—
(a) to profit and loss; and
(b) in relation to a group financial statement—to a consolidated profit and
loss account, is to be construed accordingly.
(6) The reference in paragraph (c) of the definition of "undistributable
reserves" in subsection (1) to capitalisation does not include a transfer of profits
of the company to its capital redemption reserve.
(7) In a provision of this Act in which a reference to the laws relating to
insolvency occurs, the reference includes, so far as relevant to a matter existing
before the commencement of the provision, a reference to the corresponding
provision (if any) of the repealed Act.
(8) The regulations may, for the purposes of this Act, explain and circumscribe
the definitions of "parent undertaking" and "subsidiary undertaking" in
subsection (1) and otherwise supplement those definitions.