Business Laws (Amendment) Bill 2021
President Uhuru Kenyatta signed into law the Employment (Amendment) Bill 2019 and Business Laws (Amendment) Bill 2021 on March 30, 2021.
The Business Laws (Amendment) (No.2) Act of 2021 modifies a number of legislation to make doing business in Kenya easier.
The National Assembly Majority Leader Amos Kimunya introduced the Business Laws (Amendment) Bill of 2021.
Business Laws (Amendment) Bill 2021
This bill grants companies and enterprises the right to request information from an insolvency practitioner about a company that has been put under administration.
The insolvency practitioner must include the relevant information within five days, or within any other time period agreed upon by the insolvency practitioner and the borrower.
The amendments also make it clear that an administrator can pay unsecured creditors on a regular basis without the court’s permission.
It also suggests a 30-day pre-insolvency moratorium to prevent creditors from taking enforcement action as a company considers its reorganization options. Companies with major outstanding liabilities were previously ineligible to apply for a moratorium until the amendment.
It is also no longer necessary for a Kenyan organization to have a “common seal” or to affix seals to documents. A business seal is a stamp that is used to certify official documents such as contracts, certificates, and deeds, among other things. The name and registration number of the company are printed on company seals.
In the execution of company records, contracts, and deeds, the new legislation removes the necessity of affixing a company seal.
Instead, a document, contract, or deed signed on behalf of the company by two approved signatories or by a representative of the company in the presence of a witness who attests the signature, it will be deemed validly executed by the company.
This is intended to eliminate the costly and time-consuming method of embossing documents with a sealing system and red wafers, which must then be observed by two directors or one director and the company secretary. It also represents the growing use of technology to facilitate document execution.
These reforms are in line with international standards, and they aim to make doing business in Kenya easier. Furthermore, as a result of the difficulties faced during the Covid-19 pandemic, the new legislation would now make it easier for companies to conduct hybrid and interactive meetings and promote business operations, saving businesses money that would have been spent on holding physical meetings.
