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Section 151 of The Companies Act No. 17 of 2015: Duty to declare interest in proposed or existing transaction or arrangement

    

(1) If a director of a company is in any way, directly or indirectly, interested in a proposed transaction or arrangement with the company, or in a transaction or arrangement that the company has already entered into, the director shall declare the nature, and extent of that interest—
(a) to the other directors; and
(b) if the company is a public company, to the members of the company within seventy-two hours.
(2) If, in the case of a public company, a proposed transaction or arrangement with the company, or a transaction or arrangement that the company has already entered into, is for an amount, or for goods or services valued at an amount, that is ten percent or more of the value of the assets of the company, the declaration shall also be disclose to the members of the company either—
(a) at a general meeting of the company; or
(b) by notice given to the members, in accordance with section 152.
(3) A declaration is not effective for the purpose of subsection (2) unless the valuation of the goods or services and the valuation of the assets of the company are certified by the company's external and independent auditors as being the true market value of those goods or services and those assets.
(4) If a declaration of interest under this section, is inaccurate or incomplete, the director shall make a further declaration.
(5) A director shall make a declaration required by this section before the company enters into the transaction or arrangement concerned.
(6) This section does not require a director to make a declaration of an interest if the director—
(a) is not aware of the interest; or
(b) is not aware of the transaction or arrangement to which the interest relates.
(7) For the purpose of subsection (6), a director is taken to be aware of matters of which the director ought reasonably to be aware.
(8) A director need not declare an interest under this section—
(a) if it cannot reasonably be regarded as likely to give rise to a conflict of interest;
(b) if, or to the extent that, the other directors are already aware of it, and for this purpose the other directors are treated as being aware of anything which they ought reasonably to be aware; or
(c) if, or to the extent that, it concerns terms of the director's service contract that have been or are to be considered—
(i) by a meeting of the directors; or
(ii) by a committee of the directors appointed for the purpose under the constitution of the company.
(9) For the purpose of subsection (8)(b), the other directors are treated as being aware of anything of which they ought reasonably to be aware.
(10) A director who contravenes this section commits an offence and is liable on conviction to a fine not exceeding one million shillings.

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Disclaimer: This document is not to be taken as legal advise.

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