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Section 625 of The Companies Act No. 17 of 2015: Companies qualifying as small: parent companies

    

(1) A parent company qualifies as a small company in relation to a financial year only if the group of companies headed by it qualifies as a small group.
(2) A group qualifies as a small group in relation to the parent company's first financial year if the qualifying conditions are satisfied in that year.
(3) A group qualifies as a small group in relation to a subsequent financial year of the parent company if—
(a) the qualifying conditions are satisfied in that year and the preceding financial year;
(b) the qualifying conditions are satisfied in that year and the group qualified as small in relation to the preceding financial year; and
(c) the qualifying conditions were satisfied in the preceding financial year and the group qualified as a small group in relation to that year.
(4) The qualifying conditions are satisfied by a group in a year in which it satisfies two or more of the following requirements—
(a) the group has an aggregate turnover of not more than fifty million shillings;
(b) the aggregate values of the net assets of the companies comprising the group as shown in the group's balance sheet as at the end of that year are not more than twenty million shillings; and
(c) the group has not more than fifty employees in total.
(5) The aggregate figures in subsection (4)(a) are calculated by adding together the relevant figures determined in accordance with section 624 for each member of the group.
(6) In relation to the aggregate figures in subsection (4)—
(a) "net" means the amount remaining after any setoffs and other adjustments are made to eliminate group transactions in accordance with the prescribed financial accounting standards; and
(b) "gross" means the amount existing without making those set-offs and other adjustments.
(7) A company may satisfy any relevant requirements on the basis of either the net or the gross figure.
(8) The following figures for each subsidiary undertaking are to be those included in its individual financial statement for the relevant financial year—
(a) if its financial year ends with that of the parent company—that financial year; and
(b) if not—its last financial year ending before the end of the financial year of the parent company.
(9) If those figures cannot be obtained without disproportionate expense or undue delay, the latest available figures can be used.

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

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