- Section 424 of The Companies Act No. 17 of 2015: General rule against limited company acquiring its own shares
(1) A limited company shall not acquire its own shares, whether by purchase, subscription or otherwise, except in accordance with this Part.
(2) Subsection (1) does not prevent a limited company from acquiring any of its own fully paid shares otherwise than for valuable...
- Section 425 of The Companies Act No. 17 of 2015: Treatment of shares held by nominee
(1) This section applies to shares in a limited company that—
(a) are taken by a subscriber to the memorandum as nominee of the company;
(b) are issued to a nominee of the company; or
(c) are acquired by a nominee of the company, partly paid up, from a third person.
(2) Shares to which this...
- Section 426 of The Companies Act No. 17 of 2015: Liability of others if nominee fails to make payment in respect of shares
(1) This section applies to shares in a limited company that—
(a) are taken by a subscriber to the memorandum as a nominee of the company;
(b) are issued to a nominee of the company; or
(c) are acquired by a nominee of the company, partly paid up, from a third person.
(2) If the nominee,...
- Section 427 of The Companies Act No. 17 of 2015: Duty to cancel shares in public company held by or for the company
(1) This section applies to a public company if—
(a) shares of the company are forfeited, or are surrendered to the company instead of forfeiture, as provided by the company's articles for a failure to pay an amount payable for the shares;
(b) shares of the company are acquired by it otherwise...
- Section 428 of The Companies Act No. 17 of 2015: Notice of cancellation of shares
(1) Within one month after cancelling shares in order to comply with section427, a company shall lodge with the Registrar for registration a notice giving details to the cancelled shares.
(2) The company shall attach to, or enclose with, the notice a statement of capital that complies with...
- Section 429 of The Companies Act No. 17 of 2015: Conversion of public company into private company in consequence of cancellation of shares
(1) If a public company is obliged to convert itself into a private company in orderto comply with section 427, the directors may resolve that the company should be so converted.
(2) Such a resolution may make such changes—
(a) to the company's name; and
(b) to the company's articles, as are...
- Section 430 of The Companies Act No. 17 of 2015: Issue of certificate of incorporation on registration of conversion of public company into private company
(1) The Registrar shall register the conversion of a company into a private limited company if satisfied that the application for registration complies with the requirements of section 429.
(2) If the company does not already have a unique identifying number, the Registrar shall allocate such a...
- Section 431 of The Companies Act No. 17 of 2015: Effect of failure to apply for registration of company's conversion into private company
(1) If a public company that is required by section 427 to apply to the Registrarfor the registration of the conversion of the company into a private company fails to do so before the deadline specified in subsection (3) of that section, Part XIX applies to it as if it were a private...
- Section 432 of The Companies Act No. 17 of 2015: Offence to fail to cancel shares or apply for registration of company's conversion into private company
(1) If a company that is required to do so by section 427—
(a) fails to cancel specified shares; or
(b) fails to make an application for the registration of the conversion of the company into a private company,
before the deadline specified in subsection (3) of that section, the company, and each...
- Section 433 of The Companies Act No. 17 of 2015: Application of sections 437 to 442 to private company that applies for registration of conversion into public company
(1) This section applies to a private company that is registered as a public company—
after shares in the company have been forfeited in accordance with the company's articles or have been surrendered to the company instead of forfeiture;
(b) after shares in which the company had a beneficial...
- Section 434 of The Companies Act No. 17 of 2015: Transfer to reserve on acquisition of shares by public company ornominee
(1) If—
(a) a public company, or a nominee of a public company, acquires shares in the company; and
(b) those shares are shown in a balance sheet of the company as an asset,
the company shall transfer to a reserve account from profits available for the
payment of dividends an amount equal to the...
- Section 435 of The Companies Act No. 17 of 2015: Public companies: general rule against lien or charges on own shares
(1) A lien or other charge of a public company on its own shares(whether taken expressly or otherwise) is void, except as permitted by this section.(
2) In the case of any description of company, a charge is permitted if the shares are not fully paid up and the charge is for an amount payable in...
- Section 436 of The Companies Act No. 17 of 2015: Interests to be disregarded in determining whether company has beneficial interest
In determining for the purposes of this Part whether a company has a beneficial interest in shares, the interests referred to in sections 437, 438 and 439 are to be disregarded.
- Section 437 of The Companies Act No. 17 of 2015: Residual interest under pension scheme or employees’ share scheme
(1) When the shares are held in trust for the purposes of a pension scheme or an employees’ share scheme, any residual interest of the company that has not vested in possession is to be disregarded.
(2) For the purpose of subsection (1), “residual interest” means a right of the company to receive...
- Section 438 of The Companies Act No. 17 of 2015: Employer’s charges and other rights of recovery
(1) If the relevant shares are held on trust for the purposes of a pension scheme, the following are to be disregarded—
(a) a charge or lien on, or set-off against, any benefit or other right or interest under the scheme for the purpose of enabling the employer or former employer of a member of the...
- Section 439 of The Companies Act No. 17 of 2015: Rights as executor, administrator or trustee
(1) If the company is an executor, administrator or trustee, rights that thecompany has in that capacity are to be disregarded.
(2) Those rights include—
(a) a right of the company to recover its expenses or be remunerated out of the estate or trust property; and
(b) a right of the company to be...
- Section 440 of The Companies Act No. 17 of 2015: Meaning of “financial assistance” for purposes of this Part
(1) In this Division, “financial assistance” means—(a) financial assistance given in the form of a gift; (b) financial assistance given—
(i) in the form of a guarantee, security or indemnity other than an indemnity in respect of the indemnifier's own neglect or default; or
(ii) in the form of a...
- Section 442 of The Companies Act No. 17 of 2015: Assistance for acquisition of shares in public company
(1) If a person is acquiring or proposing to acquire shares in a public company, neither the company nor any other company that is a subsidiary of the company may give financial assistance (directly or indirectly) for the purpose of the acquisition before or at the same time as the acquisition takes...
- Section 443 of The Companies Act No. 17 of 2015: Assistance by public company for acquisition of shares in its private holding company
(1) If a person is acquiring or proposing to acquire shares in a private company, a public company that is a subsidiary of that company shall not give financial assistance (directly or indirectly) for the purpose of the acquisition before or at the same time as the acquisition takes...
- Section 444 of The Companies Act No. 17 of 2015: Offence to give prohibited assistance
(1) If a company contravenes section 442(1) or (3) or 443 (1) or (3), thecompany, and each officer of the company who is in default, commit an offence.
(2) A company that is found guilty of an offence under subsection (1) is liableon conviction to a fine not exceeding one million shillings.
(3) An...
- Section 445 of The Companies Act No. 17 of 2015: Certain transactions excepted unconditionally from sections 442 and 443
Sections 442 and 443 do not prohibit any of the following transactions— (a) a distribution of a company’s assets in the form of—(i) a dividend lawfully made; or
(ii) a distribution in the course of a company's liquidation;
(b) an allotment of bonus shares;
(c) a reduction of capital;
(d) a...
- Section 446 of The Companies Act No. 17 of 2015: Certain transactions excepted from sections 442 and 443 conditionally
(1) This section applies to the following transactions—
(a) if the lending of money is part of the ordinary business of the company —the lending of money in the ordinary course of the company’s business;
(b) the provision by the company — in good faith in the interests of the company or its...
- Section 447 of The Companies Act No. 17 of 2015: Power of limited company to purchase own shares
(1) A limited company having a share capital may purchase its own shares
(including any redeemable shares), subject to— (a) the following provisions of this Division; and
(b) any restriction or prohibition in the company's articles.
(2) A limited company may not purchase its own shares if as a...
- Section 448 of The Companies Act No. 17 of 2015: Purchase of company’s own shares
(1) A limited company may not purchase its own shares unless they are fullypaid.
(2) A limited company that purchases its own shares shall pay for them on purchase.
(3) A purchase in contravention of this section is void.
- Section 449 of The Companies Act No. 17 of 2015: Financing of purchase of company's own shares
(1) A private limited company may purchase its own shares out of capital in accordance with Division 4.
(2) Subject to subsection (1)—
(a) a limited company may purchase its own shares only out of—
(i) distributable profits of the company; or
(ii) the proceeds of a fresh issue of shares made for...
- Section 450 of The Companies Act No. 17 of 2015: Approval for company to purchase own shares
(1) A limited company may purchase its own shares only—
(a) by an off-market purchase, under a contract approved in advance in accordance with section 451; or
(b) by a market purchase, approved in accordance with section 458.
(2) A purchase is off-market if the shares either—
(a) are purchased...
- Section 451 of The Companies Act No. 17 of 2015: Authorisation for off-market purchase
(1) A company may make an off–market purchase of its own shares under acontract but only if—
(a) the terms of the contract have been approved by a special resolution of the company before the contract was entered into; or
(b) the contract provides that no shares may be purchased under the contract...
- Section 452 of The Companies Act No. 17 of 2015: Resolution authorising off-market purchase: exercise of voting rights
(1) This section applies to a resolution to confer, vary, revoke or renew an approval for the purposes of section 451.
(2) If the resolution is proposed as a written resolution, a member who holds shares to which the resolution relates is not an eligible member.
(3) A resolution proposed at a...
- Section 453 of The Companies Act No. 17 of 2015: Resolution approving off-market purchase: disclosure of details of contract
(1) This section applies to a resolution passed by a company to confer, vary, revoke or renew an approval to make a purchase under section 451.
(2) The company shall ensure that a copy of the relevant contract (if it is inwriting) or a memorandum setting out its terms (if it is not in writing) is...
- Section 454 of The Companies Act No. 17 of 2015: Variation of contract for off-market purchase
(1) A company may agree to a variation of a contract approved under section451 only if the variation is approved in advance in accordance with this section.
(2) The terms of the variation have effect only if they have been approved bya special resolution of the company.
(3) The approval may be...