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Section 713 of The Companies Act No. 17 of 2015: Availability of small companies exemption in case of group company

    

(1) A company is not entitled to the exemption conferred by section 711 in respect of a financial year during any part of which it was a group company unless— (a) the conditions specified in subsection (2) are satisfied; or (b) subsection (3) applies.
(2) The conditions are—
(a) that the group—
(i) qualifies as a small group in relation to that financial year; and
(ii) was not at any time in that year an ineligible group;
(b) that the group's aggregate turnover in that year is not more than seven hundred and twenty million shillings net or eight hundred and sixty five million and five hundred thousand shillings gross; and
(c) that the aggregate values of the net assets of the companies comprising the group as specified in the group's balance sheet as at the end of that year are not more than three hundred and sixty million shillings.
(3) A company is not excluded by subsection (1) if, throughout the whole of the period or periods during the financial year when it was a group company, it was both a subsidiary undertaking and dormant.
(4) In this section—
(a) "group company" means a company that is a parent company or a subsidiary undertaking; and
(b) "the group", in relation to a group company, means that company together with all its associated undertakings.
(5) For purposes of subsection (4)(b), undertakings are associated if one is a subsidiary undertaking of the other or both are subsidiary undertakings of a third undertaking.
(6) For the purposes of this section—
(a) whether a group qualifies as small is to be determined in accordance with section 625;
(b) a group is ineligible if any of its members is—
(i) a public company;
(ii) a body corporate (other than a public company) whose shares are admitted to trading on a securities exchange or other regulated market in Kenya; or
(iii) a person who carries on insurance market or banking activity;
(c) a group's aggregate turnover is to be determined in accordance with section 625; and
(d) "net" and "gross" have the same meaning as in section 625(6).
(7) Subsection (6) applies for the purposes of this section as if all the bodies corporate in the group were companies.

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

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