Changes In The Companies Act (2021)

The Written Laws (Miscellaneous Amendments) (No 3) Act 2021 brought with it some changes to the Companies Act 2002 (CAP 212). These changes include the followings;  

1. Introduction of the requirement for a company to notify the Registrar of any transfer and transmission of shares within 28 days from the date of transfer or transmission. This will enable the Registrar to have updated and correct company information that will facilitate the business environment concerning the current shareholder status of the company. The notification shall require a copy of the Tax Clearance Certificate from the responsible Authority.

2. Introduction of appointment criteria for the Company Secretary that will facilitate smooth compliance with the prescribed standards. Owing to the lack of criteria for the appointment of company secretaries, services by many appointed company secretaries have to date been implemented without observing the prescribed standards. By this amendment qualification for the company secretary in Public Companies must be an advocate, CPA (T), an Auditor, or any other qualifications as may be prescribed by the Minister in regulations. In private companies, the qualification remains to be “who appears to the directors to have requisite knowledge and experience”.

3. Amendment to allow an adult person of 18 years to be eligible for appointment as Director of a company. Before the amendment, the age for appointment as Director was 21 years.

4. Amendment to allow persons above the age of 70 to serve as directors of a company. Initially, section 194 of the company’s Act restricted appointing a person as a director who is above the age of 70.  With this amendment therefore there is no restriction on directors’ retirement age this is because this is an internal affair of a company that can be regulated through a company’s internal policies.

5. Amendments to empower the Minister, after consultation with the Minister of Finance, to waive penalties arising out of late filing fees within the prescribed period to enable the effective and smooth operation of the Online Registration System (ORS). The smooth inception of ORS was being hampered due to the existence of the prescribed late filing fees in updating company information.

Changes In The Companies Act (2021)

6. Amendment to empower the Minister to make Regulations to impose a time limit for companies to keep their records and documents. Before the amendment, the Act was silent on the mandatory time-frame for retaining company records.

7. Introduction of powers for the Registrar to verify facts and information lodged. Before the amendment, the Registrar had no power to require certain facts to be verified where it appeared that those facts need verification. The Registrar now has powers to request such information in a manner as he may deem appropriate.

Important Notice:

This publication has been prepared for general guidance on matters of interest only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, MAK Africa Legal its members, employees, and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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