KENYA Law and Practice Contributed by: Sammy Ndolo, Brian Muchiri, Damaris Muia and Nicole Gacheche, Kieti Law LLP
3. Management of the Company 3.1 Bodies or Functions Involved in Governance and Management The principal bodies and functions involved in the governance and management of a company in Kenya are the board of directors, the company secretary, the shareholders and the contact per - son. Board of Directors The board of directors is ultimately responsible for overseeing the company’s affairs. As stipu - lated by the Companies Act, the directors are entrusted with the power to direct and regulate the company’s business, set strategic direction, and ensure compliance. While the board of directors retains ultimate authority, it can delegate specific functions to individual directors, committees, management teams, and employees. Company Secretary The Companies Act mandates that public and private companies with a share capital of KES5,000,000 (approximately USD38,760) or more appoint a company secretary. The company secretary has various responsi - bilities, including documenting board and share - holder meetings and maintaining registers of directors, shareholders, and debenture holders. They also liaise with the Registrar of Companies and file required documents like annual returns and financial statements. Shareholders Shareholders are the company’s owners. Their ownership translates into specific rights and influence over the company’s direction. Share - holders exercise their power through voting
rights, allowing them to elect board members and approve significant changes, including amendments to the company’s articles of asso - ciation. Contact Person Private companies or companies limited by guarantee that do not meet the threshold for a company secretary and do not have a resident director in Kenya must appoint a contact person. The contact person’s primary function is to main - tain critical company records, including those related to directorships, shareholding, beneficial ownership, and any other information required by law. Notably, the contact must be a natural person with a permanent Kenyan residence. 3.2 Decisions Made by Particular Bodies Directors The Board of Directors serves as the main deci - sion-making body of the company. It oversees daily operations and establishes the company’s strategic direction. Typically, the articles of asso - ciation state that the company’s management is entrusted to the directors, who have the author - ity to exercise all powers of the company. Shareholders Certain fundamental decisions are explicitly reserved for the shareholders and require a formal resolution passed at a duly constituted meeting. These decisions typically involve sig - nificant changes to the company’s core structure or capital, such as amendments to the articles of association and alterations to the share capi - tal. The company’s articles of association may, however, allow for delegating certain reserved decisions to the board of directors.
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