Section 327 of The Companies Act No. 17 of 2015: Exercise by directors of power to allot shares, etc
(1) The directors of a company shall not exercise a power of the company—(a) to allot shares in the company; or
(b) to grant rights to subscribe for, or to convert any security into, shares in the company, except in accordance with section 328 or 329.
(2) Subsection (1) does not apply—
(a) to the allotment of shares under a share scheme of an employee; or
(b) to the grant of a right to subscribe for, or to convert any security into, shares so allotted.
(3) If this section applies in relation to the grant of a right to subscribe for, orto convert a security into, shares, it does not apply in relation to the allotment of shares in accordance with that right.
(4) A director who—
(a) is knowingly a party to a contravention of subsection (1); or
(b) authorises a contravention of that subsection, commits an offence and on conviction is liable to a fine not exceeding five hundred thousand shillings.
(5) Nothing in this section affects the validity of an allotment or other transaction.
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- Section 328 - Power of directors to allot shares etc: private company with only one class of shares
If a private company has only one class of shares, the directors may exercise any power of the company—
(a) to allot shares of that class; or
(b) to grant rights to subscribe for or to convert any...
- Section 329 - Power of directors to allot shares etc: authorisation by company
(1) The directors of a company may exercise a power of the company to—(a) allot shares in the company; or
(b) grant rights to subscribe for or to convert any security into shares in the company, only...
- Section 330 - General prohibition of commissions, discounts and allowances
(1) Except as permitted by section 331, a company shall not apply any of itsshares or capital money, either directly or indirectly, in payment of any commission, discount or allowance to any person in...
- Section 331 - Permitted commission
A company may pay a commission to a person in consideration of the person—
(a) subscribing or agreeing to subscribe whether 40 absolutely or conditionally for shares in the company; or
(b) procuring...
- Section 332 - Registration of allotment
(1) A company shall register an allotment of shares as soon as practicable andin any event within two months after the date of the allotment.
(2) If a company fails to comply with subsection (1), the...
- Section 333 - Return of allotment by limited company
(1) Within one month after making an allotment of shares, a limited companyshall lodge with the Registrar for registration a return of the allotment.
(2) The company shall ensure that the...
- Section 334 - Return of allotment by unlimited company allotting new class of shares
(1) An unlimited company that allots shares of a class with rights that are notin all respects uniform with shares previously allotted shall, within one month after making such an allotment, lodge...
- Section 335 - Offence for company to fail to lodge return of allotment for registration
(1) If a company fails to lodge a return of allotment as required by section 333 or 334, the company, and each officer of the company who is in default, commit an offence and on conviction are each...
- Section 336 - Provisions about allotment not applicable to shares taken on formation
The provisions of this Part on allotment do not apply to the taking of shares by the subscribers to the memorandum on the formation of the company.
- Section 337 - Interpretation: Division 3
In this Division, a reference to the allotment of equity securities includes—
(a) the grant of a right to subscribe for, or to convert any securities into, ordinary shares in the company;...
- Section 338 - Existing shareholders’ right of pre-emption
(1) A company shall not allot equity securities to a person on any terms unless—
(a) the company has made an offer to each person who holds ordinary shares in the company to allot to the person on...
- Section 339 - Communication of pre-emption offers to shareholders
(1) This section has effect as to the manner in which offers required by section338 are to be made to holders of the shares of a company.
(2) An offer made under section 338 may be made in hard copy...
- Section 340 - Liability of company and officers in case of contravention
(1) If a company contravenes section 338 or 339, the company and each officer of the company who is in default, are jointly and severally liable to compensate any person to whom an offer should have...
- Section 341 - Exception to pre-emption right; issue for non-cash consideration
Section 338(l) does not apply in relation to the allotment of bonus shares.
- Section 342 - Exception to preemption right: securities held under employees' Sharescheme
Section 338(1) does not apply to a particular allotment of equity securities if these are, or are to be, wholly or partly paid up otherwise than in cash
- Section 343 - Exception to preemption right: securities held under employees' sharescheme
Section 338 does not apply to the allotment of securities that would, apart from any renunciation or assignment of the right to their allotment, be held under an employees' share scheme.
- Section 345 - Exclusion of pre-emption right: articles conferring corresponding right
(1) This section applies when, in a case in which section 338 would otherwise apply—
(a) a company's articles contain provision prohibiting the company from allotting ordinary shares of a particular...
- Section 346 - Disapplication of pre-emption rights: private company with only one class of shares
(1) The articles of a private company that has only one class of shares, or aresolution passed by the company, may confer on the directors of the company power to allot equity securities of that class...
- Section 347 - Disapplication of pre-emption rights: directors acting under general authorisation
) If the directors of a company are generally authorised for the purposes of section 329, they may be given power by the articles, or by a special resolution of the company, to allot equity...
- Section 348 - Disapplication of pre-emption rights by special resolution
(1) If the directors of a company are authorised for the purposes of section 329 (whether generally or otherwise), the company may by special resolution resolve that section 338—
(a) does not apply...
- Section 349 - Disqualification of pre-emption rights: sale of treasury shares
(1) This section applies in relation to a sale of shares that is an allotment ofequity securities because of section 337(b).
(2) The directors of a company may be given power by the articles, or by...
- Section 350 - References to holder of shares in relation to offer
(1) In relation to an offer to allot securities required by section 338, a reference,however expressed, to the holder of shares of any description is to whoever was the holder of shares of that...
- Section 351 - Provisions about pre-emption not applicable to shares taken on formation
The provisions of this Division relating to shareholders’ pre-emption rights do not apply to the taking of shares by the subscribers to the memorandum on the formation of the company.
- Section 352 - Saving for other restrictions on offer or allotment
(1) This Division does not limit the application of any other written law underwhich a company is prohibited (whether generally or in specified circumstances) from offering or allotting equity...
- Section 353 - Saving for certain older pre-emption requirements
(1) This Division does not apply to an allotment of equity securities of a publiccompany that are subject to a pre-emption requirement in relation to which the repealed Act applied immediately before...
- Section 354 - Public companies: allotment if issue not fully subscribed
(1) A public company shall not allot shares of the company offered for public subscription unless—
(a) the issue is subscribed for in full; or
(b) the offer is made on terms that the shares...
- Section 355 - Public companies: effect of irregular allotment if issue not fully subscribed
(1) If an allotment of shares is made to an applicant in contravention of section354, the applicant has a right to avoid the allotment at any time within one month after the date of the allotment, but...
- Section 356 - Shares not to be allotted at a discount
(1) A company shall not allot its shares at a discount.
(2) If shares are allotted in contravention of subsection (1), the allottee is liable to pay the company an amount equal to the amount of the...
- Section 357 - Provision for different amounts to be paid on shares
A company may, if authorised to do so by its articles, pay dividends in proportion to the amount paid up on each share.
- Section 358 - General rule as to means of payment
Shares allotted by a company, and any premium on them, may be paid up in money or in money's worth (including goodwill and know-how).
- Section 359 - Meaning of payment in cash
For the purposes of this Act, a share in a company is paid up, as to its nominal value or any premium on it, in cash, or allotted for cash, if the consideration received for the payment or allotment...
- Section 360 - Public companies: shares taken by subscribers of memorandum
(1) A subscriber to the memorandum of a public company who takes shares of the company as a result of an undertaking given in the memorandum shall pay for the shares, and any premium on the shares, in...
- Section 361 - Public companies: not to accept undertaking for work or services
(1) A public company shall not accept at any time, in payment up of its shares or any premium on them, an undertaking given by a person that the person or another person should work or perform...
- Section 362 - Public companies: shares to be at least one quarter paid up
(1) A public company shall not allot a share except as paid up at least as toone-quarter of its nominal value and the whole of any premium on it.
(2) Subsection (1) does not apply to shares allotted...
- Section 363 - Public companies: payment by long-term undertaking
(1) A public company shall not allot shares as fully or partly paid up as to their nominal value or any premium on them otherwise than in cash if the consideration for the allotment is or includes an...
- Section 364 - Liability of subsequent holders of shares
(1) Except as provided by subsection (2), a person who becomes a holder of shares in respect of which—
(a) there has been a contravention of a provision of this Division; and
(b) because of that...
- Section 365 - Power of the Court to grant relief
(1) This section applies in relation to liability under section 360(2), 362(3) or (4) or 366 as it applies in relation to a contravention of those sections.
(2) A person who—
(a) is subject to any...
- Section 366 - Offences involving contravention of section 358, 363, 364 and 365
If a company contravenes a provision of section 356, 361, 362 or 362, the company, and each officer of the company who is in default, commits an offence and on conviction are each liable to a fine not...
- Section 367 - Meaning of “appropriate rate of interest” for purpose of this Division
(1) For the purpose of this Division, the appropriate rate of interest is—
(a) five percent; or
(b) if some other rate is fixed under subsection (2), that rate of interest.
(2) The Cabinet...
- Section 368 - Restrictions on public company allocating shares for non-cash consideration
(1) A public company shall not allot shares as fully or partly paid up (as to their nominal value or any premium on them) otherwise than in cash unless—
(a) the consideration for the allotment has...
- Section 369 - Exception to valuation requirement: arrangement with another company
(1) Section 368 does not apply to the allotment of shares by a company in connection with an arrangement for the allotment of shares in the company on terms that the whole or part of the consideration...
- Section 370 - Exception to valuation requirement: merger
(1) Section 368 does not apply to the allotment of shares by a company in connection with a proposed merger with another company.
(2) For the purpose of subsection (1), a proposed merger exists when...
- Section 371 - Non-cash consideration for shares: requirements as to valuation and report
(1) Part XLI applies to the valuation and report required by section 368.
(2) The valuer shall specify in the report—
(a) the nominal value of the shares to be wholly or partly paid for by the...
- Section 372 - Copy of report to be lodged with Registrar
(1) A company to which a report is made under section 368 as to the value of any consideration for which, or partly for which, it proposes to allot shares shall lodge a copy of the report to the...
- Section 373 - Public company: agreement for transfer of non-cash asset in initial period
(1) A public company formed as such shall not enter into an agreement—(a) with a person who is a subscriber to the company's memorandum;
(b) for the transfer by the person to the company or another,...
- Section 374 - Agreement for transfer of non-cash asset: requirement of independent valuation
(1) The following conditions are conditions that are required to be complied with for the purpose of section 373—
(a) that the consideration to be received by the company, and any consideration other...
- Section 375 - Agreement for transfer of non-cash asset: requirements as to valuation and report
(1) Part XLI applies to the valuation and report required by section 374.
(2) In the report, the valuer shall specify—
(a) the consideration to be received by the company, describing the relevant...
- Section 376 - Agreement for transfer of non-cash asset: requirement of approval by members
(1) The following conditions are further conditions that are required to be complied with for the purpose of section 374—
(a) that the terms of the agreement have been approved by an ordinary...
- Section 377 - Copy of resolution to be lodged with Registrar
(1) Within fourteen days after a company passes a resolution with respect tothe transfer of a non-cash asset, the company shall lodge with the Registrar for registration a copy of the resolution,...
- Section 378 - Modification of provisions in relation to company whose conversion into a public company has been registered
Sections 373 to 377 apply with the following modifications in relation to a company whose conversion into a public company has been registered by the Registrar—
(a) the reference in section 373(1)(a)...