LexBytes Archives - Mboya Wangongu & Waiyaki https://lexgroupafrica.com/category/lexbytes/ Mon, 24 Nov 2025 11:55:23 +0000 en-US hourly 1 https://wordpress.org/?v=6.9.4 Impact of Business Laws (Amendment) Bill, 2024 on Non-Deposit Taking Microfinance Banks https://lexgroupafrica.com/impact-of-business-laws-amendment-bill-2024-on-non-deposit-taking-microfinance-banks/ Tue, 26 Nov 2024 13:51:52 +0000 https://lexgroupafrica.com/?p=8912 New proposals in the Business Laws (Amendment) Bill, 2024 published on 1st November, 2024 seek to regulate non-deposit taking institutions under both the Microfinance Act and the Central Bank of Kenya Act (“CBK Act”). The proposed amendments to the CBK Act aim to expand the definition of digital credit providers (“DCPs”) to include non-deposit taking microfinance banks.

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New proposals in the Business Laws (Amendment) Bill, 2024 published on 1st November, 2024 seek to regulate non-deposit taking institutions under both the Microfinance Act and the Central Bank of Kenya Act (“CBK Act”). The proposed amendments to the CBK Act aim to expand the definition of digital credit providers (“DCPs”) to include non-deposit taking microfinance banks. If enacted, non-deposit taking microfinance banks currently regulated under the Microfinance Act could be considered DCPs and therefore fall under the purview of the CBK. The CBK has been advocating for an expanded regulatory mandate to oversee all credit providers, aiming to tackle issues such as excessive interest rates, unfair debt recovery practices, and misuse of the data of borrowers. However, the proposed changes have triggered debate as non-deposit taking microfinance banks risk being subject to dual licensing under two separate legal frameworks creating potential duplication in licensing and compliance requirements.

 

For substantive legal advice on this and other legal matters, please contact us through advocate@lexgroupafrica.com

 

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]]> New Deadline for Updating Beneficial Ownership Registers https://lexgroupafrica.com/new-deadline-for-updating-beneficial-ownership-registers/ Tue, 12 Nov 2024 12:08:29 +0000 https://lexgroupafrica.com/?p=8831 The issue of Beneficial Ownership Registers has come up once again. Companies have up to 30th November 2024 to update their Beneficial Ownership Registers or risk facing the consequences for non-compliance. The Beneficial Ownership Register was introduced by the Companies Act 2015 and the Companies (Beneficial Ownership Information) Regulations 2020. The said Act and Regulations make it an offence for a company, and every officer of that company, to fail to comply with this requirement.

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]]> The issue of Beneficial Ownership Registers has come up once again. Companies have up to 30th November 2024 to update their Beneficial Ownership Registers or risk facing the consequences for non-compliance. The Beneficial Ownership Register was introduced by the Companies Act 2015 and the Companies (Beneficial Ownership Information) Regulations 2020. The said Act and Regulations make it an offence for a company, and every officer of that company, to fail to comply with this requirement. Directors of a company risk being fined up to Kshs. 500,000/= each and an additional Kshs. 50,000 fine for each day the failure continues, if they fail to update the company’s beneficial ownership register within the stipulated time that lapses on 30th November, 2024. Contact us through the email addresses below for advice on Beneficial Ownership Registers.

 

For substantive legal advice on preparation of Beneficial Ownership Registers and other legal matters, please contact us through cgmbugua@lexgroupafrica.com and imakena@lexgroupafrica.com

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]]> LANDLORD AND TENANT BILL 2021 https://lexgroupafrica.com/landlord-and-tenant-bill-2021/ Fri, 05 Jul 2024 13:26:17 +0000 https://lexgroupafrica.com/?p=7469 The Landlord and Tenant Bill 2021 (“the Bill”) seeks to consolidate all the laws on residential and commercial tenancies and to ensure regulation of the rental sector in Kenya. It applies to both residential and business premises (with some exceptions) and proposes various provisions including establishment of tribunals, limits on rent increases, termination notices, among others. On rent increases, the Bill provides that rent can only be increased after 12 months for residential premises and 24 months for business premises. The landlord also has to give a 90-day notice for the increase in rent to be valid. On termination notices, the Bill provides that, unless there is a breach of covenant by the tenants or the term of the tenancy has expired, landlords have to give at least 24-month notice of termination for business premises and 12-month notice for residential premises. The Bill was published in February 2021 and is still undergoing review in Parliament.

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]]> The Landlord and Tenant Bill 2021 (“the Bill”) seeks to consolidate all the laws on residential and commercial tenancies and to ensure regulation of the rental sector in Kenya. It applies to both residential and business premises (with some exceptions) and proposes various provisions including establishment of tribunals, limits on rent increases, termination notices, among others. On rent increases, the Bill provides that rent can only be increased after 12 months for residential premises and 24 months for business premises. The landlord also has to give a 90-day notice for the increase in rent to be valid. On termination notices, the Bill provides that, unless there is a breach of covenant by the tenants or the term of the tenancy has expired, landlords have to give at least 24-month notice of termination for business premises and 12-month notice for residential premises. The Bill was published in February 2021 and is still undergoing review in Parliament.

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]]> DRAFT NATIONAL INSURANCE POLICY https://lexgroupafrica.com/draft-national-insurance-policy/ Fri, 05 Jul 2024 13:25:02 +0000 https://lexgroupafrica.com/?p=7467 The Draft National Insurance Policy: Possible Review of the Insurance Legal Framework in Kenya - The National Treasury recently published the Draft National Insurance Policy (“Draft Policy”), dated March 2021, following a decline in the performance of the insurance industry in the recent years. The National Treasury notes the high levels of underwriting losses which is a big threat to the insurance industry and its role as a sustainable risk management tool in Kenya. The Draft Policy was therefore developed with the main objective of creating a vibrant and competitive financial sector through the development of a fair, safe, customer-centric, competitive and stable insurance industry. It aims at addressing the challenges that hinder the development of the industry including: low level of public awareness on insurance products and services; low penetration rate and coverage; concentration of insurance in main urban areas; slow adoption of technology by the industry; low contribution of life insurance in the overall insurance industry business; limited underwriting capacity of the insurance industry; gaps in the legal and regulatory framework; relatively poor financial performance by most of the general insurance companies and poor perception about the insurance industry. If the Draft Policy is adopted, it is likely to prompt the review of insurance laws, regulations and guidelines.

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]]> The Draft National Insurance Policy: Possible Review of the Insurance Legal Framework in Kenya – The National Treasury recently published the Draft National Insurance Policy (“Draft Policy”), dated March 2021, following a decline in the performance of the insurance industry in the recent years. The National Treasury notes the high levels of underwriting losses which is a big threat to the insurance industry and its role as a sustainable risk management tool in Kenya. The Draft Policy was therefore developed with the main objective of creating a vibrant and competitive financial sector through the development of a fair, safe, customer-centric, competitive and stable insurance industry. It aims at addressing the challenges that hinder the development of the industry including: low level of public awareness on insurance products and services; low penetration rate and coverage; concentration of insurance in main urban areas; slow adoption of technology by the industry; low contribution of life insurance in the overall insurance industry business; limited underwriting capacity of the insurance industry; gaps in the legal and regulatory framework; relatively poor financial performance by most of the general insurance companies and poor perception about the insurance industry. If the Draft Policy is adopted, it is likely to prompt the review of insurance laws, regulations and guidelines.

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]]> VALIDATION OF NAIROBI BLOCK 110 TITLE DEEDS https://lexgroupafrica.com/validation-of-nairobi-block-110-title-deeds/ Fri, 05 Jul 2024 13:23:44 +0000 https://lexgroupafrica.com/?p=7465 Validation of Nairobi Block 110 Title Deeds: Final chance for affected plot owners to verify their ownership details - The Ministry of Lands and Physical Planning (the “Ministry”) recently suspended land transactions involving Nairobi Block 110 title deeds following several complaints of fraudulent land transactions. The

purpose of this suspension is to enable the Ministry review and verify the ownership details of all the properties registered under the Nairobi Block 110 register. In this regard, the Ministry will conduct an exercise to validate the ownership details of all affected plot owners from 24th May 2021 to 4th June 2021 at the Survey of Kenya offices in Ruaraka. Affected plot owners are required to present the following documents for review: (i) certified copies of title deeds, grants, transfers and sale agreements, (ii) certified copies of share certificates and payment receipts issued by Thome farmers, and (iii) certified copies of identification documents including National ID, KRA PIN Certificates for individuals and certified copies of Certificate of Registration, CR12 and KRA PIN Certificate for companies/institutions. These documents should be submitted in sealed envelopes.

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]]> Validation of Nairobi Block 110 Title Deeds: Final chance for affected plot owners to verify their ownership details – The Ministry of Lands and Physical Planning (the “Ministry”) recently suspended land transactions involving Nairobi Block 110 title deeds following several complaints of fraudulent land transactions. The

purpose of this suspension is to enable the Ministry review and verify the ownership details of all the properties registered under the Nairobi Block 110 register. In this regard, the Ministry will conduct an exercise to validate the ownership details of all affected plot owners from 24th May 2021 to 4th June 2021 at the Survey of Kenya offices in Ruaraka. Affected plot owners are required to present the following documents for review: (i) certified copies of title deeds, grants, transfers and sale agreements, (ii) certified copies of share certificates and payment receipts issued by Thome farmers, and (iii) certified copies of identification documents including National ID, KRA PIN Certificates for individuals and certified copies of Certificate of Registration, CR12 and KRA PIN Certificate for companies/institutions. These documents should be submitted in sealed envelopes.

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]]> INCREASE OF CAPITAL GAINS TAX (CGT) https://lexgroupafrica.com/increase-of-capital-gains-tax-cgt/ Sun, 28 May 2023 09:37:29 +0000 https://lexgroupafrica.com/?p=6821 The Finance Act, 2022 (“the Act”), published on 23rd June, 2022 introduced various changes to several statutes, amongst them, the Income Tax Act, Chapter 470 Laws of Kenya. Section 15 of the Act has amended Section 34(1)(j) of the Income Tax Act by increasing the tax on Capital Gains from 5% to 15%. Consequently, the sellers of land will now be required to remit 15% of the gains from such sale of land as Capital Gains Tax. While this increase could be a move to align the national tax rate to the regional CGT rates, and increase revenue collection in the local property sector, it is noted that this increase could slow down real estate transactions involving the sale of land. This CGT increase will take effect from 1st January, 2023, as provided in Section 1 of the Act.

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]]> The Finance Act, 2022 (“the Act”), published on 23rd June, 2022 introduced various changes to several statutes, amongst them, the Income Tax Act, Chapter 470 Laws of Kenya. Section 15 of the Act has amended Section 34(1)(j) of the Income Tax Act by increasing the tax on Capital Gains from 5% to 15%. Consequently, the sellers of land will now be required to remit 15% of the gains from such sale of land as Capital Gains Tax. While this increase could be a move to align the national tax rate to the regional CGT rates, and increase revenue collection in the local property sector, it is noted that this increase could slow down real estate transactions involving the sale of land. This CGT increase will take effect from 1st January, 2023, as provided in Section 1 of the Act.

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]]> DERIVATIVE ACTION BY MINORITY SHAREHOLDERS https://lexgroupafrica.com/derivative-action-by-minority-shareholders/ Tue, 25 Apr 2023 05:43:06 +0000 https://lexgroupafrica.com/?p=6139 Derivative Action is a form of protection afforded by the existing legal regime to minority shareholders in a Company. The Companies Act, 2015 allows a member of a company to institute a legal action and/or seek remedy on its behalf. This remedy is available to minority shareholders who desire to challenge harsh conduct, if any, by the majority shareholders and is aimed at enhancing accountability. In the past, a Derivative Action could only be brought under certain instances and exceptions e.g. where the company had acted ultra vires, in instances of fraud by the majority shareholders etc. This was the case because only the Company, being a separate legal entity from its members, could institute claims for any wrongs it had suffered. Currently however, derivative claims may be instituted in instances of acts or omissions that involve negligence, default, breach of duty or breach of trust by a director or any other member of the company.

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]]> Derivative Action is a form of protection afforded by the existing legal regime to minority shareholders in a Company. The Companies Act, 2015 allows a member of a company to institute a legal action and/or seek remedy on its behalf. This remedy is available to minority shareholders who desire to challenge harsh conduct, if any, by the majority shareholders and is aimed at enhancing accountability. In the past, a Derivative Action could only be brought under certain instances and exceptions e.g. where the company had acted ultra vires, in instances of fraud by the majority shareholders etc. This was the case because only the Company, being a separate legal entity from its members, could institute claims for any wrongs it had suffered. Currently however, derivative claims may be instituted in instances of acts or omissions that involve negligence, default, breach of duty or breach of trust by a director or any other member of the company.

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]]> REGISTRATION OF DATA CONTROLLERS AND PROCESSORS https://lexgroupafrica.com/registration-of-data-controllers-and-processors/ Tue, 28 Jun 2022 09:50:07 +0000 https://lexgroupafrica.com/?p=6826 On 31st March 2022, the Office of the Data Protection Commissioner (ODPC) issued a press notice notifying the public that the Regulations on the Registration of Data Controllers and Processors will come into effect from 14th July 2022. The Regulations inter alia, set out the requirements and procedures for registration as a data controller, data processor or both. Following this announcement, data controllers and processors will now be required to register as such with the ODPC on/around 14th July, 2022.

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]]> On 31st March 2022, the Office of the Data Protection Commissioner (ODPC) issued a press notice notifying the public that the Regulations on the Registration of Data Controllers and Processors will come into effect from 14th July 2022. The Regulations inter alia, set out the requirements and procedures for registration as a data controller, data processor or both. Following this announcement, data controllers and processors will now be required to register as such with the ODPC on/around 14th July, 2022.

Entities with a turnover/revenue of below Kshs. five million (5,000,000) or those which have less than 10 employees are exempted from mandatory registration. The exemption does not apply for entities involved in the financial sector, health, gambling, hospitality industry, telecommunication sector or service providers, educational institutions, politics, property management including selling of land, direct marketing and entities dealing with genetic data.

The scheduled commencement date of this registration comes on the heels of the passage of the Data Protection (Registration of Data Controllers and Data Processors) Regulations, Data Protection (Complaints Handling and Enforcement Procedures) Regulations, 2021, and Data Protection (General) Regulations, by the Parliamentary Committee on Delegated Legislation on 17th February, 2022. The latter two are already in force and data controllers and processors are now required to fulfill their obligations as pertains to the realisation and protection of personal data of data subjects.

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]]> PUBLICATION OF THE DRAFT CAPITAL MARKETS (PUBLIC OFFERS & LISTING OF SECURITIES) REGULATIONS, 2022 https://lexgroupafrica.com/publication-of-the-draft-capital-markets-public-offers-listing-of-securities-regulations-2022/ Fri, 13 May 2022 09:40:38 +0000 https://lexgroupafrica.com/?p=6823 On 4th May 2022, the Capital Markets Authority (“CMA”) published the Draft Capital Markets (Public Offers & Listing of Securities) Regulations, 2022 (“draft Regulations”) inviting the general public and stakeholders for comments pursuant to section 12A (3) of the Capital Markets Act. The draft Regulations seek to repeal the existing Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations 2002 (“existing Regulations”) which are deemed as being overly prescriptive, outdated and onerous thus hindering the growth of the capital markets in Kenya. The draft Regulations seek to address the pertinent shortcomings in the existing Regulations in a bid to encourage more listing of securities while also ensuring the protection of investors.

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]]> On 4th May 2022, the Capital Markets Authority (“CMA”) published the Draft Capital Markets (Public Offers & Listing of Securities) Regulations, 2022 (“draft Regulations”) inviting the general public and stakeholders for comments pursuant to section 12A (3) of the Capital Markets Act. The draft Regulations seek to repeal the existing Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations 2002 (“existing Regulations”) which are deemed as being overly prescriptive, outdated and onerous thus hindering the growth of the capital markets in Kenya. The draft Regulations seek to address the pertinent shortcomings in the existing Regulations in a bid to encourage more listing of securities while also ensuring the protection of investors.

Some of the changes proposed by the draft Regulations include:

  • Allowing SMEs to raise capital on the GEMS market (now referred to as SME Market Segment) at the time of listing – the existing Regulations only allow SMEs to list by introduction;
  •  Introduction of the SME Fixed Income Securities Market Segment – This will allow smaller companies (SMEs) to issue bonds (upto an aggregate amount of Kshs. 250 Million) to the market creating another avenue for SMEs to raise capital;
  • Merging the Main Investment Market Segment and the Alternative Investment Market Segment – Transitional provisions have been provided;
  • New provisions on shelf prospectus/shelf registration and green shoe options;
  • Broadening the scope of transaction advisers and removing the requirement of having a nominated advisor for issuers of securities on the GEMS (now SME Market Segment);
  • Reviewing the provisions on private offers to address current shortcomings;
  • Introduction of Special Purpose Acquisition Companies (SPAC).

The draft Regulations are available for download on the CMA website. The public has until 3rd June, 2022 to give comments of the draft Regulations.

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]]> THE SECTIONAL PROPERTIES ACT 2020: ITS SALIENT FEATURES AND ITS EFFECT ON LONG-TERM LEASES https://lexgroupafrica.com/the-sectional-properties-act-2020-its-salient-features-and-its-effect-on-long-term-leases/ Mon, 28 Mar 2022 09:55:25 +0000 https://lexgroupafrica.com/?p=6830 The Sectional Properties Act 2020 (“the current SPA”) was passed to address the challenges under the former Act and to align the law on sectional properties to the current land laws and the Constitution of Kenya. The salient features of the current SPA include: the requirement that owners of sectional units be responsible for any rates, rent or taxes; the establishment of the Corporation (body responsible for managing the common areas) and the responsibility of the Lands Registrar in its establishment; the duties and powers of the Corporation and the review of existing long-term leases to ensure that they are properly georeferenced and that the geo-referencing has been approved by the Survey of Kenya. The current SPA is intended to ease the registration and the management of the sectional properties and consequently encourage investment in sectional properties in Kenya. However, it is yet to be observed whether the new provisions will remedy the delays in the registration of units under the sectional properties regime. Further, the requirement that all long-term leases should be reviewed is expected to inconvenience many owners and developers who are required to have completed the review process by 28th December 2022.

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]]> The Sectional Properties Act 2020 (“the current SPA”) was passed to address the challenges under the former Act and to align the law on sectional properties to the current land laws and the Constitution of Kenya. The salient features of the current SPA include: the requirement that owners of sectional units be responsible for any rates, rent or taxes; the establishment of the Corporation (body responsible for managing the common areas) and the responsibility of the Lands Registrar in its establishment; the duties and powers of the Corporation and the review of existing long-term leases to ensure that they are properly georeferenced and that the geo-referencing has been approved by the Survey of Kenya. The current SPA is intended to ease the registration and the management of the sectional properties and consequently encourage investment in sectional properties in Kenya. However, it is yet to be observed whether the new provisions will remedy the delays in the registration of units under the sectional properties regime. Further, the requirement that all long-term leases should be reviewed is expected to inconvenience many owners and developers who are required to have completed the review process by 28th December 2022.

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