A company must not be limited by guarantee and its certificate of incorporation must state that it is a private company.
In relation to an undertaking with a share capital, 'shares' means shares in the share capital of the undertaking and includes stock, except when a distinction between shares and stock is expressed or implied in the Act.
An unlimited company exposes its members to the risk of being held personally liable for all the contractual debts and obligations of the company without limitation.
The phrase 'debts of the company' does not mean that members are directly liable to individual creditors. Instead, members are liable to contribute to the company's assets during liquidation, limited to the company's uncalled capital.
It refers to liability to the company or undertaking and not to individual creditors of the company.
A holding company that is unlikely to incur trading debts may be registered as an unlimited company.
The liability is usually determined with reference to (a) the amount remaining unpaid on the shares held in the company; or (b) the amount guaranteed by each member to be paid in the event of a liquidation.
A private company may have one or more shareholders to a maximum limit of fifty.
Private companies are prohibited from offering any of their securities to the public and from allotting or agreeing to allot any of their securities with a view to their being offered to the public.
Yes, shares listed in a securities exchange are freely transferable, and directors must not have any powers to refuse to approve transfers of shares other than in exceptional circumstances approved by the Exchange.
A registered company is incorporated under the Companies Act, 2015.
Public companies have a minimum capital requirement fixed by section 518 of the 2015 Act.
Private companies can only raise capital privately and may allot shares without issuing a prospectus or statement in lieu of prospectus.
The right of pre-emption allows existing shareholders the first refusal when another member wishes to transfer shares to a person other than an existing member of the company.
The court may make either a remedial order in accordance with section 514 or an order for compulsory liquidation of the company under the supervision of the Court.
The company and each officer of the company who is in default commits an offence and is liable to a fine imposed under section 519(1).
The four types of companies are: (a) chartered companies formed by grant of a Charter; (b) statutory companies incorporated by special Acts of Parliament; (c) state corporations and public entities established by order of the President; and (d) registered companies incorporated under the Companies Act, 2015.
Members who are employees of the company and any person mentioned in section 9(1) are excluded.
A company is considered a public company if its articles allow its members the right to freely transfer their shares, do not prohibit invitations to the public to subscribe for shares or debentures, and its certificate of incorporation states that it is a public company.
The 2015 Act sanctions the registration of single-member companies and permits the continued existence of a company as a single-member company following reduction in the number of its members.
No, the articles cannot be altered with retrospective effect to allow the directors to refuse to register a transfer that has already taken place.
The Oxford Dictionary of Law defines a company as an association formed to conduct a business or any other activities in the name of the association.
Incorporation of companies by Special Acts of Parliament or Presidential orders.
To all bodies corporate except in so far as they are inconsistent with the specific statutes or legal instruments under which such corporations are established.
Public companies can raise capital from the public by issuing shares or other securities.
In an undertaking registered without capital, 'shares' refers to interests conferring a right to share in the profits or liability to contribute towards the losses of the undertaking, or giving rise to an obligation to contribute to the debts or expenses of the undertaking in the event of a liquidation.
The liability of members to contribute to the assets of the company in the event of a liquidation is joint and several and may be enforced on all or any of the members.
A member or creditor of the company, or the Attorney-General, can apply for restraining orders or orders compelling re-registration.
No, contravention of section 516 does not affect the validity of a transaction entered into by the company.
No, private companies are not required to obtain trading certificates before embarking on their business.
Yes, companies limited by shares invariably have a share capital.
No, a company limited by guarantee cannot have a share capital.
No, private companies are prohibited from issuing securities to the public.
The promoters behind the formation decide the type of company to be formed. Their decision depends on the main objects of the company, the nature of the business proposed to be carried out, and the extent to which the company's business exposes members to the risk of liability for the contractual or other legal obligations of the company.
The private company must meet the statutory requirements for registration as a public company.
A private company is not deemed to have contravened section 511(1) if it acted in good faith under arrangements to be re-registered as a public company before the securities are allotted, or if it undertakes to re-register as a public company within a specified period.
The directors of the company are jointly and severally liable to indemnify any other party to the transaction in respect of any loss or damage suffered by that party.
A statutory company is incorporated by special Acts of Parliament, which confer upon them special powers and monopolistic rights.
It does not have a share capital, the liability of its members is limited by the articles to the amounts which the members have undertaken to contribute to the assets of the company in the event of liquidation, and the certificate of incorporation states that it is a company limited by guarantee.
The essence of the concept of limited liability is to protect shareholders from liability for the trading debts of their company.
The articles of a private company restrict the right to transfer shares and may vest in the directors an absolute power to refuse registration of any proposed transfer of shares.
A trading company should be registered with a share capital to limit the liability of its members for the trading debts of the company to the amount unpaid on the shares respectively held by them.
A public company must apply for and obtain a trading certificate in accordance with section 516(1).
No, shareholders of a company as contributors of capital do not necessarily participate directly in the day-to-day management of the enterprise.
They are gradually undergoing privatization and conversion into public corporations or public limited liability companies with shareholders and nominal capital.
A private company restricts a member's right to transfer shares, limits the number of members to fifty, and prohibits invitations to the public to subscribe for shares or debentures.
The defining features of a private company include its closed nature, restriction in the number of its members, and the manner in which it may raise capital, with statutory restrictions on invitations to subscribe for its shares.
No, there is no statutory limit placed by the Act on the maximum number of members that may incorporate into a public company.
No, members of a public company do not enjoy the right of pre-emption in relation to the transfer of shares by other members.
The nominal value of the allotted share capital must not be less than six million seven hundred and fifty thousand shillings.
Because it is far more expedient and cost-effective.
A state corporation or public entity is established by order of the President to perform specified public functions or for sector-specific service delivery.
There is no limitation on the liability of members for the debts of the company, and the certificate of incorporation states that it is an unlimited company.
Yes, shares of public companies are freely transferable at the stock exchange.
No, the company secretary has no authority to make entries in the register of members without approval of the Board.
A remedial order places a person affected by a contravention of section 511 in the position they would have been in had the contravention not occurred.
In legal theory, the term 'company' usually denotes an association of a number of persons (other than a partnership or other unincorporated association) who come together and contribute money or money's worth to a common stock and employ it for some common economic purposes.
A chartered company is formed by the grant of a Charter, which is in the nature of a licence by the Crown under the royal prerogative or under special statutory powers of the Sovereign.
Into companies limited by shares, companies limited by guarantee, and unlimited companies.
Contravention gives rise to a cause of action for restraining orders, and the private company may be required to re-register as a public company under an order of the Court.
A company is defined as a company formed and registered under the Companies Act, 2015 or any existing company established by statute or Royal Charter.
No, the Act does not prescribe a minimum share capital for private companies.
Friendly societies and scientific research institutes.
Yes, though uncommon, unlimited private companies may be registered with a share capital.
The prerogative powers of the President by which universities and colleges may be established by means of a Charter granted under sections 19 and 24-25 of the Universities Act, Revised 2015 (2012).
Health and education, supply of electricity, communication, information and postal services, air and railway transport, water supply, insurance, banking and financial services, building, and co-operative marketing services.
The liability of members for the debts of the company is limited by its articles to the amount unpaid on the shares respectively held by them.
Yes, public companies may be re-registered as unlimited private companies with a share capital.
