A company requires directors to run the day-to-day business of the company. In Kenya, the Companies Act 2015 states that a private company must have at least one director, while a public company must have at least two directors. It also states that the company, in appointing directors, must ensure that at least one of them is a natural person – a human being. This gives lee way to have legal persons, like other companies or a corporation, as part of the directors of a company. All public companies must have a certified secretary as required by the companies act 2015

How are directors appointed?

There are three ways in which directors can appointed under the Act, for both private and public companies:

Through the company memorandum of association.

At formation of the company, the Act requires that the company should state the company officials. The persons named in the memorandum of association as subscribers and consequently in the CR1 form as directors, are the first directors of the company.

By an ordinary resolution.

During a general meeting, the members of the company are allowed to vote on appointment of directors of the company. This is done where an ordinary resolution for appointment of directors is part of the agenda to be discussed at the meeting, and a notice of this resolution has to be given together with the notice of the meeting.

Here, members of the company vote on the appointment of the directors named in the resolution. If the resolution is passed, by a simple majority, then the person’s subject to the resolution are seen to be appointed as directors of the company.

By a decision of other directors.

There are instances when there is a vacant office of the director or when the existing directors need to add another director. In a meeting of the board of directors, the existing directors can appoint directors to either fill the vacancy or as an addition to the existing directors.

Removal of a director in Kenya

A director can be removed in Kenya by way of a Special General Meeting. This involves calling a Special General Meeting with Special Notice (28 days). The Notice must be issued to all the Shareholders and Directors.

The meeting will then pass a Special Resolution for the removal of the director. The company must ensure that the Notice for the Meeting is served to the outgoing director. This can be through registered post or regular email address. Vacation/Removal of Director can occur as a result of the following;

• When a Director Voluntarily Resigns
• When a Director is Removed by Ordinary Resolution of Members
• When there is a Removal by the Court Authority.
• When a Director becomes of Unsound Mind.
• When a Director is absent without permission for more than 6 months from meetings of Directors held during that period.
• When a Director Dies.
• When a Director retires by Rotation under Articles.
• When the Company is Dissolved.

 

Death of a director in Kenya

What happens when a director dies in Kenya? The company is required to obtain the minutes of the meeting showing that the death of the director was reported to the company. To file the changes, you will be required to upload signed minutes and upload the death certificate.

Retirement/removal at an Annual General Meeting

A director of a company may be removed at the Annual General Meeting by way of retirement (being eligible but does not offer themselves for re-election). Shareholders can also remove the director by not re-electing an eligible director who has expressed interest to continue serving in the company.

Documents to file for removal of the director in Kenya

You will be required to login on to e-citizen.go.ke, Business Registration Service, click on the business, maintain a company and click on change of officials.

1. Resignation from office
   You will be required to file the following documentation within fourteen (14)
   days:
   (a) Letter of resignation;
   (b) Statutory declaration confirming that the director is resigning voluntarily;
   (c) Extract from the Minutes of a meeting of the Directors noting the resignation;
   and
   (d) Notice of Cessation of Office of Directors (Form CR 9).
2. Removal of a director

You will be required to file the following documentation within fourteen (14)
days:
(a) Copy of the twenty-eight (28) days special notice served under sections 139(2)
as read with 287 of the Companies Act or if it is not practicable to give that
notice provide a copy of fourteen (14) day notice of the resolution advertised
in a newspaper having a wide circulation in the area in which the company
carries on business or in any other manner allowed by the company’s articles;
(b) Proof of service of a copy of the special notice from the company to the
director giving the director at least twenty-one (21) days;
(c) Proof of service of notice for general meeting at least twenty-one (21) days
for private company and at least fourteen (14) days for public company;
(d) Form CR 19 containing extract of minutes confirming quorum and removal;
and
(e) Form CR 9 – Notice of cessation of office of director.
C) Rotation

Where a director retires by rotation but is not re-elected at a General meeting:
(a) Form CR 9 – Notice of cessation of office of director.
(b) Form CR 19 containing extract of minutes confirming quorum and status.
d) Retirement
Where a director leaves office by virtue of attaining the age of retirement:
(a) Form CR 9 – Notice of cessation of office of director.
(b) Form CR 19 containing extract of minutes confirming quorum and status.

3) Lack of capacity of a director
(i) Death

(a) Form CR 9 – Notice of cessation of office of director;
(b) Copy of death certificate;

(ii) Insanity

(a) Form CR 9 – Notice of cessation of office of director.
(b) Report under the Mental Health Act (Needs further review of the Mental
Health Act).
(iii) Bankruptcy
(a) Form CR 9 – Notice of cessation of office of director.
(b) Copy of the bankruptcy order issued under the Insolvency Act.

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