Quote:The law now compels foreign firms to include local directors in a new provision that makes it a punishable offence for them to operate without the input from local directors.
“The registrar may not register a foreign company under this part unless the company has at least one local representative in relation to whom the foreign company has complied with the prescribed requirements of the foreign companies regulations relating to local representatives of foreign companies,” section 980 of the Act says.
It goes further to say that should the local representative choose to exit, then the foreigners will have 21 days to get a replacement failure to which the company shall have breached the law, attracting a fine of Sh500,000 from each of the directors. This is if they continue operation in the country without the local representation.
That requirement sounds more Tanzanian than Kenyan. Wont that discourage foreign investors?
Quote:Another fresh development in the local enterprise set up is how companies are named. Section 53 of the Act requires that an entity that is both a limited company and a public company may only be registered with a name that ends with the words “public limited company” or the abbreviation “plc”.
You will therefore begin seeing companies with the name ending PLC instead of the usual LTD. The LTD suffix is now a preserve of the private companies according to section 54.
“A company that is both a limited company and a private company may be registered only with a name that ends with the word “limited” or the abbreviation “ltd.” 55.
The Act also empowers the Cabinet Secretary to exempt private companies from using the word ‘limited’ or ‘ltd’ by way of giving a notice to the company.