Section 416 of The Companies Act No. 17 of 2015: Public companies: duty of directors to convene a meeting on loss of capital
(1) If the net assets of a public company are half or less of its called-up Share capital, the directors shall convene a general meeting of the company to consider how to deal with the situation.
(2) The directors shall issue a notice of a general meeting not later than twenty eight days from the day on which a director first became aware of the fact referred to in subsection (1).
(3) The date for which the meeting is to be convened may not be later than fifty six days from the day referred to in subsection (2).
(4) This section does not authorise any matter to be considered at the meeting other than the situation referred to in subsection (1).
(5) If the directors fail to convene a meeting as required by this section, each of the directors who — (a) authorised the failure;
(b) being aware of the requirement, failed to take all practical measures to ensure that the requirement was complied with; or
(c) after the last date by which the meeting should have been convened— (i) authorises the failure to continue; or
(ii) fails to take all practical measures to ensure that the meeting is convened, commits an offence and on conviction is liable to a fine not exceeding five hundred thousand shillings.
(6) If, after a director is convicted of an offence under subsection (5), the directors continue to fail to convene a meeting as required by this section, each of the directors commits and offence on each day on which the failure continues and on conviction is liable to a fine not exceeding fifty thousand shillings for each such offence.
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