New Changes to the Kenyan Business Laws: Here’s what you need to know

The Business Laws (Amendment) (No. 2) Act, 2021 (the “New Act”) was passed on 30th March, 2021. Its main purpose is to facilitate the ease of doing business in Kenya by reducing the costs and time spent on various transactions.

We have set out below a detailed review of major amendments to the various laws:

Law of Contract Act (Cap 23)

The New Act has amended the meaning of the term “sign” in Section 3 to include execution of Company documents in the manner outlined in the Companies Act 2015. According to the Companies Act 2015[1], a company can sign documents as follows:

  1. by the affixing of its common seal and witnessed by a director; or
  2. by two authorised signatories or by a director of the company in the presence of a witness who attests the signature.

Therefore, all contracts by a company which have to be in writing under this Act, must be executed as stated or they will not be valid.

Industrial Training Act (Cap 237)

Payment of training levies by employers will now be remitted at the end of the financial year of a business. Businesses are therefore not required to follow the government’s financial year or the calendar year.

Further, the payment should be made by the ninth day of the month following the end of the business’ financial year.

Stamp Duty Act (Cap 480)

Contracts which are considered to be conveyances on sale under Section 49 of the Stamp Duty Act will be exempt from the fixed duty of one hundred shillings, that was previously charged under the said Section of the Act.

National Social Security Fund Act, No. 45 of 2013

Section 27 has been amended to require employers to pay contribution to NSSF on the ninth day of the month to harmonize payroll deductions through the Unified Payroll Return.

Previously, they were collected on the first day of the month.

Companies Act, No. 17 of 2015

The definition of a general meeting has been expanded and the same can now be a physical, virtual or hybrid meeting which are defined as follows:

  1. Hybrid meeting - where some participants are in the same physical location while other participants join the meeting through electronic means;
  2. Virtual meeting - where all members join and participate in the meeting through electronic means.

For hybrid and virtual meetings, the notice of the meeting must specify the means of joining and participating in the meeting. 

Paragraph 11 of Sixth Schedule of the Companies Act has been deleted. This section previously allowed the use of the official seal of an existing Company that had been obtained prior to the repeal of section 37 of the DDC.

Insolvency Act, No. 18 of 2015

The New Act has made the following amendments to the Insolvency Act, among others:

  1. Under Section 643, on obtaining a moratorium, company directors have to prepare a document setting out the terms of the proposal and a statement of the company’s financial position containing such particulars of its creditors and of its debts and other liabilities and of its assets.
  2. Directors are required to set out why a moratorium is desirable to assist in agreeing to an informal restructuring or other agreement with creditors or entering a formal insolvency procedure which could lead to the rescue or efficient liquidation of the company.
  3. Additionally, Directors are now required to submit the financial statements to the Monitor for consideration and comment.
  4. A moratorium ends after thirty (30) days from and including the day on which it takes effect, unless the moratorium period is extended under Section 669.
  5. During a voluntary arrangement, the Company is now required to appoint a Monitor, not a provisional supervisor as previously required. The Monitor has to be an insolvency practitioner who will supervise the voluntary arrangement including giving an opinion as to whether a moratorium has a reasonable prospect of achieving its aim and if the company is likely to have sufficient funds available to it during the proposed moratorium to enable it carry on its business.

Small Claim Courts Act, No. 2 of2016

 Section 34 has been amended to provide a sixty-day (60) timeline for adjudication of small claims.  

Article by Mary Ndung’u


This article is intended for general knowledge only. It does not create an advocate-client relationship between any reader and Mboya Wangong’u & Waiyaki Advocates. For particular expert advice on any matter dealt with above, please contact us through This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it..


[1] Section 37

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