UNIVERSITY OF NAIROBI

SCHOOL OF LAW

GPR 304: LAW OF BUSINESS ASSOCIATIONS I

Contact Hours: 45
Pre-requisite: None
COURSE OUTLINE AND READING LIST

COURSE INSTRUCTORS
Tim Mweseli tmweseli@uonbi.ac.ke,
Bosire Nyamori bosire.nyamori@uonbi.ac.ke
Simon Ngare ngaresn@uonbi.ac.ke
Francis Kaburu fkaburu@uonbi.ac.ke

PURPOSE OF THE COURSE

To introduce the learner to the legal regime that governs the registered company as a
form of business association and its application in the business environment.

COURSE LEARNING OUTCOMES

The learner should be able to:
1. Analyze the historical origins of the company and the fundamental principles of
company law and describe the process of incorporating companies.
2. Characterize the various types of companies and distinguish them from other
forms of business associations such as partnerships and other corporations.
3. Articulate the memorandum and articles of association.
4. Discuss and apply the basic principles and provisions relating to the veil of
incorporation and exceptions thereto, doctrine of ultra vires, effect of registration of
articles and alteration, promoters, prospectuses, general meetings, role of directors
and liabilities, corporate securities and capital, enforcement of corporate duties,
auditors, corporate governance, winding up and receiverships.
5. Discuss and apply the principles governing corporate restructuring such as
amalgamation, mergers, takeovers, reconstruction and schemes of arrangements.
6. Discuss emerging trends in corporate development.

COURSE DELIVERY
Course Delivery Methodology will include: Lectures, class discussion, group
discussions and group presentations. The lectures shall be hybrid: physical and
online. The course istructors may post some materials on e-learning platform.
Students are required to prepare beforehand to facilitate effective participation and
highlighting difficult areas.

ASSESSMENT

Page 1 of 18
Type Weighting (%)
Examination 70
Continuous Assessment 30
Total 100%

COURSE CONTENT
Part A: Company Formation

1. INTRODUCTION
a) Scope and meaning of Company and Company Law Re Stan1ey (1906)1 Ch.
131 at 134.
b) Historical evolution and development of the registered company
c) Types of companies-limited and unlimited companies; companies limited by
shares and companies limited by guarantee; public and private companies;
holding (patent) company and subsidiary companies- Secs 5-10 CA 2015
d) Sources of company law

2. PROMOTERS
a) Meaning
b) Position and Powers of Promoter
c) Duties of Promoters
d) Remunerations of Promoters
e) Preliminary Contracts
f) Remedies against Promoters
✔ Twyfords v Grant (1877)2 CPD 469
✔ Jubille CottonMills v Lewis (1924)AC 958) HL
✔ Erlanger v New Sombrero Phosphates Co. (1878) 3 AC 1218
✔ Salomon v Salomon (1897) AC 22 HL
✔ Gluckstein v Barnes (1900) AC 240 HL
✔ Motani v Thobani (1945) 12, EACA 37
✔ Price v Kelsall (1957) EA 752
✔ Mawagola Farmers & Growers Ltd. V Kanyanja (1971) EA 272
✔ Re National Motor Mail Coach Co. (1908) 2 Ch. 515
✔ Natal Land Co.v Pauline Syndicate (1904) AC 120
✔ Newborn v Sensolid(G.B. Ltd) (1954) 1 QB 45
✔ Kelner v Baxter (1886) LR 2 CP 174

3. FORMATION OF COMPANIES AND CONSEQUENCES OF

INCORPORATION- Secs 11-19 CA 2015

Page 2 of 18
 a) The legal process of creating registered company
b) Consequences of incorporation
(i) Corporate personality
✔ Salomon v Salomon (1987) AC 22.
✔ Macaura v Northern Assurance Co. Ltd. (1925) AC 619
✔ Lee v Lee’s Air Farming Ltd. (1961) AC 12
✔ Mergo Builders and Contractors Ltd. V Kasibante (1985) EA 591
✔ Handu Dispensary v Patne (1958) EA 74
✔ Katate v Nyakatukura (1956) 7 ULR 47
(ii) Limited Liability
✔ Mann v D’arcy (1968) 2 AII ER 172
✔ Bradley Egg Farm Ltd. V Clifford (1943) AII ER 378
✔ Wise v Perpetual trustee (1903) AC 139
(iii) Holding Property
✔ Leahy v A-G N.S.W. (1959) AC 467
✔ Re sick & Funeral Society (1957) Ch. 51
✔ Re Denleys Trust Deed (1968) 3 AII ER 65
(iv) Suing and being sued
✔ E.A. Roofing Ltd. V Pandit (1954) 27 KLR 89
✔ Bloom v National Federation (1918) 35 TLR 50
(v) Perpetual Succession
✔ Re Noel Tedman Holding Pty Ltd. (1967) QD.R, 561
✔ Re St. Andrews Allotment Association (1969)1 ALL ER147
(vi) Transferability of Shares
(vii) Borrowing
(viii) Formalities, Publicity and Expense (disadvantage)
(ix) Others e.g. Ultra Vires Rule

4. LIFTING THE VEIL

a) Under Statutory Provision
(i) Reduction of number of members (this was applicable under the repealed
Act).
The current Act allows an individual to form a Limited Liability Co.
(ii) Fraudulent Trading
✔ Re William C. Leitch Ltd (1932) 2 Ch. 71

Page 3 of 18
 ✔ Re Patrick Lyon Ltd. (1934) Ch. 786
✔ Re Cyona Distributors Ltd. (1967) Ch 889
✔ Kirkel v Adams (1934) 1 EACA 26
(iii) Misdescription of Company
✔ Penrose v Martyr (1858) EB & E 499
✔ Atkins v Wardle (1889) 5 TLR 734
✔ Durham Fancy Good Ltd, v Michael Jackson (Fancy Goods) Ltd. (1968) 2 QB
839
✔ Goldsmith (sicklesmere) Ltd. V Baxter (1970) Ch. 85
(iv) Holding and Subsidiary Companies-Section 643 Companies Act 2015
(v) Reduction of capital to below minimum- Section 516 Companies Act 2015
(vi) Taxation
✔ D.H.S.S. v Wayte (1972) 1 WLR 19
(vii) Miscellaneous
✔ Kapur v Shields (1976) 1 WLR 131
✔ Nokes v Doucaster Amalgamated Collieries(1940) AC 1014 HC.
✔ Tunstall v Stelgunann (1962) QB 593, CA

b) Judicial Grounds
(i) Introduction
✔ Lee v Lee’s Air Farming Ltd (1961) AC 12 PC
(ii) Agency
✔ Smith stone & Knight v Birmingham Corp. (1939) 4 AII ER 116
✔ Re F. G. (Films) Ltd (1953) 1 WLR 483
✔ Y & Co. Ltd. V Commissioner of Income Tax (1955) 2 EATC 50
✔ Firestone Tyre and Rubber Co. v. Liewelyn (1957) 1 WLR 464
✔ Esso Petroleam Co. Ltd. V Mardon (1976) QB 801
✔ Ashcraft v Curtin (1971) 1 WLR 1731
✔ Littlewoods Stores v IRC (1969) 1 WLR 1241
✔ Ebbw vale UDC V South Wales Traffic Authority (1951) 2 K.B. 366
(iii) Determination of residence
✔ De Beers Consolidated Mines v Howe (1906) AC 455 HL

Page 4 of 18
 ✔ Littaur Glove Corporation VFW Millington (1928) 44 TLR 746
✔ Unit construction Company Ltd v Bullock (Inspector of Taxes) (1959] Ch.
147
✔ Firestone Tyre & Rubber Co. v. Lewellyn (1957) 1 WLR 464 HE.
✔ Facebook Inc v Australian Information Commissioner [2022] FCAFC 9 – 289,
(7 February 2022), https://www.ags.gov.au/publications/express-law/el305-0
(iv) Trust
✔ The Abbey, Malvern Wells Ltd v Ministry of Local Government and
Planning (1951)1 Ch 728.
(v) Fraud and/or Improper Conduct
✔ Jones v Lipamn (1962) 1 WLR 832
✔ Re Darnu (1911) 1 KB 95
✔ Gilford Motor Co. v Horne (1933) Ch. 935 CA
✔ Re Bugle press Ltd. (1961) Ch. 270 CA
✔ R v McDonnell (1966( 1 QB 233
(vi) Group Companies (Associated Companies)
✔ The Albazero (1975) 3 WLR 491 CA
✔ Littlewoods Stores v IRC (1969) 1241
✔ Firestone Tyre & Rubber Co. v Lierwellyn (1957) 1 WLR464 HL
✔ The Roberta (1937) Lloyds Rep. 157
✔ Re F. G. (Films) Ltd. (1953) 1 WLR 483
✔ Holdworth & Co. v Caddies (1955) 1 W.L.R. 352
✔ DHN Food Distributors Ltd v Tower Hamlets London Borough Council
(1976)
✔ Adams v Cape Industries plc [1990] Ch 433, CA
✔ Mugenyi & Company Advocates v The Attorney General (1999)2 EA 199
✔ Vedanta Resources PLC and another v Lungowe and others [2019] UKSC
20
(vii) Ratification of Corporate Acts
✔ Re Express Engineering Works Ltd (1920) 1 Ch. 975
(viii) Determination of character/Illegality
✔ De Beers Consolidated Mines v Howe (1906) AC 455 HL

Page 5 of 18
 ✔ Daimler Co. v Consolidated Tyre and Rubber Co. (1916) 2 AC 307 HL
✔ Littaur Glove Corporation VFW Millington (1928) 44 TLR 746

Part B: Constitution of the Company

5. MEMORANDUM AND ARTICLES OF ASSOCIATION

a) Legal effect
✔ Hickman v Kent or Romney Sheep Breeds Association Ltd (1915) 1 Ch. 881
✔ Eley v Positive Government Security Life Association Co. Ltd (1876) Ex D. 88
✔ Wood v Odessa Waterworks Co. (1880) 42 Ch. 636
✔ Rayfield v Hands (1960) Ch. 1
b) Alteration of Articles
✔ Andrews v Gas Meter Co.(1897) 1 Ch. 361
✔ Allen v Gold Reefs of West Africa (1900) 1 Ch. 656
✔ Shuttleworth v Cox Bros. Ltd. (1927) 1 Ch. 154
✔ Side Bottom v Kershaw Leese & Co. (1920) 1 Ch. 154
✔ Brown v British Abrasive Wheel Co. (1919) 1 Ch. 290
c) Effects of alteration of articles in contracts of directorship
✔ Southern Foundries v Shirlaw (1940) AC 701
✔ Read v Astoria Garage (1952) 1 AII ER 922
✔ British Murac Syndicate Ltd. V Alperton Rubber Co. Ltd (1915) 2 Ch. 186
✔ Punt v Symens & Co. (1903) 2 Ch. 506
✔ British Equitale Assurance Co. v Baily (1906) AC 573
✔ Sovereign Life Assurance v Dodd (1892)2 QB 573
d) Variation of Class Rights
✔ Sovereign Life Assurance v Dodd (1892) 2 QB 573

6. THE DOCTRINE OF ULTRA VIRES

a) The Rule
b) History
c) Evasion age and its curbs
d) The application of the doctrine under the Companies Act, 2015.
✔ Ashbury Carriage Co. v Riche (1875) LR 7 HL 653
✔ Musa Misango v Musigire (1966) E.A. 390

Page 6 of 18
 ✔ Attorney General v Grate Eastern Railway (1880) App. Cas 473
✔ Bell House Ltd. V Cit Wall Properties (1966) 2 QB 656
✔ Hely – Hurchinson v Brayhead Ltd. 1 QB 549 CA
✔ Freeman & Lockyer v Buckhurst Park Properties (mangal) Ltd. (1964) 2 QB 480
✔ Mahony v Easst Holyford Mining Co. (1975)LR 7 HL 869
✔ Cotman v Brougham (1918) AC 514
✔ Re John Beauforte (London) Ltd. (1953) CH 131
✔ Parke v Daily News (1962) Ch. 927
✔ Re David Payne & Company (1904) 2 Ch. 608
✔ Campbell v Panddington Corporation (1911) 1 KB 869
✔ Re David Payne & Company (1904) 2 Ch. 608
✔ Re Private Boarding House Ltd. (1967) EA 143
✔ Re German Date Coffee (1883) 23 Ch. D 654
✔ Hutton v Westocork Railway Co. (1883) 23 Ch. D 654
✔ Re Behrens & Co. (1932) 2 Ch. 46
✔ Evans v Brunnes Mound & Co. (1921) 1 Ch. 359.
Part C: Capital of the Company

7. SHARE CAPITAL
a) The concept of company members
b) Definition of capital
c) Meaning of and types of capital
d) Nature and various classes of shares- Secs 322-326 CA 2015
e) Means of raising share capital- IPO, FPO, Rights Issue, Bonus Issue ESOPs etc.
f) Allotment of Shares, pre-emption right- Secs 327-355 CA 2015
g) Payment for Shares- Secs 356-384 CA 2015
h) Class rights & variation of class rights- Secs 392-403 CA 2015
i) Share certificate & transfer of shares- Secs 495-509 CA 2015
j) Rules on dividend payments
✔ Re-Spanish Prospecting Ltd (1911)
✔ Re Air Safaris (Tom Air Ltd. (1969) EA 593
✔ Oregum Gold Mining Co. V Roper (18920 AC 125
✔ Hang v Buhemba Mines (1953) 20 EACA 28

Page 7 of 18
 ✔ Potel v I. R. C (1971) 2 AII ER 504
✔ Re Thomas de la Rue (1911) 2 Ch. 361
✔ Re Robert Stephen Holdings Ltd. (1968) 1 AII ER 195
✔ Re Wragg ltd (1897) I Ch. 796
✔ Lee v Nauchatel Asphalt Co (1889) 41 Ch.D 1
✔ Verner v General Commercial Investment Trust (1894) 2ch 239
✔ Ammonia Soda Co Ltd v Chamberlain (1918) 1 Ch. 266

8. DEBT CAPITAL AND CORPORATE SECURITIES- Secs 570-582, 877-892 CA

2015
a) Borrowing power
b) Meaning and types of debentures
c) Debenture Trust Deed
d) Fixed and floating charges
e) Registration of charges & its effects
f) Remedies of debenture holders
✔ Borland’s Trustees v Steel 1 Ch. 279
✔ Levy v Abercorris Slate & Slab Co. (1887) 37 Ch. D. 260
✔ Achelis (Kenya) Ltd. v Nazarali & Sons Ltd. (1967) EA 382
✔ Household Centre Ltd v Achedis (Kenya) Ltd. (1967) EA 823
✔ Guaranty Discount Co. Ltd. v Credit Finance Corp. (1963)EA 345
✔ Re Katengera Estate Ltd. (1957) EA 239
✔ Illingsworth v Houblworth (1904) AC 355
✔ Re C. L. Nye Ltd. (1970) 3 AII ER 1061
✔ National Provincial & Union Bank v Charmley (1924) 1 KB 431
✔ Birch v Cropper (1889) Ac 525
✔ Re Isle of Tharnet Electricity Supply Co. (1950) Ch. 161

9. RAISING & MAINTAINING CAPITAL

a) Prospectuses
(i) Meaning and issue of prospectuses and information memorandum
(ii) Reasons for issue and circumstances
(iii) Contents of prospectuses
(iv) Essential requirements- registration, approvals etc.
(v) Civil and criminal liability in respect of prospectuses

Page 8 of 18
 ✔ J. Friedman & R.J. Harvey Mason v Njoro industries ltd (1954) EACA 172
✔ Akerhielm v De mare (1969) E.A. 476
✔ Re South of England Natural Gas Co.(1911) 1 Ch. 573
✔ R v Kylsant (1932) 1 KB 442
✔ Derry v Peek (1889) 14 AC 337
✔ Peek v Gurney (1873) LR HL 377
✔ Andrews v Mock Ford (1896) 1 QB 372
✔ Hedley Byrne & Co. v Heller & Partners (1974) AC 465
b) Capital maintenance
(i) Doctrine of capital maintenance and capital reduction
(ii) Issuing shares at either discount or premium- Secs 356, 385-391 CA 2015
(iii) Alteration of share capital- Secs 404-406 CA 2015
(iv) Reduction of share capital- Secs 407-418 CA 2015
(v) Purchase/redemption of own shares- Secs 423-484 CA 2015
(vi) Paying dividends out of capital
✔ Flitcrafts Case (1882) 21 Ch. D. 519
✔ Trevor v Whitworth (1857) 12 AC 449
✔ Dimblla Valley (Ceylon) Tea Co. v Laurie (1961) Ch. 353

Part D: Company Management- Officers and Organs

10. COMPANY OFFICERS

a) Directors
(i) Qualification and disqualifications- Secs 128-131 CA 2015
(ii) Appointment of directors- Sec 132 CA 2015
(iii) Board of directors
(iv) Types of Directors- Shadow, de facto etc.
(v) The Managing Director
(vi) Loans and other payments to and retirement of directors,
(vii) Legal position of directors.
(viii) Duties of Directors
⮚ Statutory Duties

● Duty to act within powers- Sec 142

● Duty to promote the success of the company- Sec 143

● Duty to Exercise Independent Judgment- Sec 144

● Duty to exercise reasonable care, skill and diligence- Sec 145

Page 9 of 18
 ● Duty to avoid conflict of interest- Sec 146

● Duty not accept a benefit from a third parties- Sec 147

● Duty to declare interest in a a proposed/existing transaction or

arrangement with the company- Secs 151-154
⮚ Common Law Duties

● Fiduciary Duties- General equitable principle, bona fides, proper

purpose conflict of duty and interest, unfettered discretion
● Duty of care and skill

✔ Percival v Wright (1902) 2 Ch. 421

✔ Allen v Hyall (1914) 30 TLR 444
✔ Bell v Lever Bros. (1932) AC 161 HL
✔ Re Smith & Faw Cett Ltd. (1942) Ch. 304 CA
✔ Re W. & M. Roith Ltd. (1967) 1 WLR 432
✔ Parke v Daily News Ltd. (1962) Ch. 927
✔ Tejani & Another v Officail Receiver (1962) EA 710
✔ Howard Smith Ltd. v Ampol Ltd (1974) AC 821
✔ Banford v Bamford (1969) 2 WLR 1107
✔ Aberdeen Ry V Blaikie (1854) 1 Macq HL 461
✔ Price v Kelsall (1957) EA 752
✔ Highlands Commercial Union v Jamal (1957) EA 641
✔ Overseas Finance Corporation Ltd. v Admin. General of Tanganyika (1942) 9
EACA 1
✔ Voi Sisal Estatae v H. K. Lakha (1964) EA 532
✔ Re City Equitable Fire Insurance Co. (1925) Ch. 407
✔ Re Denham & Co. (1883) 25 Ch. D. 752
✔ Re Eryeza Bwambale Co.Ltd. (1969) EA 660
✔ Bugerere Coffee Growers Ltd. v Sebaduka (1970) EA 147
✔ Kiwanuka & Co. v Walugembe (1969) EA 660
✔ Musa Misango v Eria Musigira (1966) 390

Page 10 of 18
 ✔ Paulides v Jensen (1956) 565
✔ Marquis of Butes case (1892) 2 Ch. 100
✔ Dovey v Cory (1901) AC 477
✔ Punt v Sumons (1903) 2 Ch. 506
✔ Piercy v Mills & Co. (1920) 1 Ch.78
✔ Hugg v Crmphurn Ltd. (1967) Ch. 254
✔ Bamford v Bamford (1969) 1 AII ER 969
✔ Aberdeen v Blaike (1854) 1 Macq HL 461
✔ Selar Ngor United Rubber Estates (No. 3) (1968) AII ER 567
✔ Re Forest of Dean Coal Mining Co. (1879) 10 Ch. D. 450
✔ Regal Hasting v Gulliver (1954) 1 AII ER 378
✔ Phipps v Boardman (1966) 3 AII Ar 721
✔ Peso Silver Mines v Cropper (1960) 58 DLR 29)1
✔ Industrial Development Consultants v Dooleg (1972) AII ER 162
(ix)Breach and Enforcement of Directors Duties- Sec 148
✔ Foss v Harbottle (1843) 2 Hare 461

✔ Render v Lushington (1877) Ch. D. 170

✔ Elder v Elder & Watson (1952) S. C.49 Scottish Cooperative Wholesale

✔ Society v Meyer (1959) WLR 62

✔ Re Hammer (1959) 1 WLR 62

✔ Re Five Minute Car Wash Ltd. (1966) 1 WCR 745

✔ Re Bella Our Sick Ltd. (1965) 1 AII ER 667

(x) Removal of Directors from Office- Sec 139, 141 CA 2015
(xi)Disqualification of Directors- Secs 214-232 CA 2015
(xii) Liability of Directors under the Act- Secs 194-199 CA 2015
b) Company Secretary- Secs 243-254 CA 2015
(i) Qualifications
(ii) Appointment & removal
(iii) Duties and powers
c) Auditor- Secs 714-770 CA 2015
(i) Qualifications
(ii) Appointment & removal
(iii) Duties and powers

Page 11 of 18
 (iv) Rights of auditors
(v) Cessation of office
(vi) Auditors' liability

11. DECISION MAKING IN THE COMPANY: COMPANY ORGANS

a) The General Meeting-
(i) Annual General Meeting
(ii) Special General Meeting
(iii) Conducting general meetings- Secs 275-316 CA 2015
(iv) Decisions of general meetings- ordinary, special and written
resolutions- Secs 255-274 CA 2015
b) The Board of Directors
✔ Pope v R. (1960) EA 132
✔ R v Camps (1962) EA 403
✔ Isle of Wight Rly Co. v Tahpirdom (1883) Ch. D. 320
✔ Automatic Self-cleansing filter Syndicate v Cunighane (1906) 2 Ch. 34
✔ Shaw & Sons (Salford) Ltds v Show (1953) 2 KB 113
✔ Marshalls Valve Gear Co. v ManingWardie & Co. (1909) 1Ch. 34
✔ BanfordV Bamford (1970) Ch. 212
✔ Bugerere Coffee Growers v Sebadduka & Another (1970) EA 147
✔ Ellis v N.G. Balley (1962) EA 626
✔ Bushell v Faith (1970) AC 1099
✔ Borrow v Porer (1914) 1 Ch. 895

12. COMPANY LIABILITY FOR ACTS OF ITS ORGANS AND OFFICERS

a) The effect of ultra vires rule
b) Constructive Notice
c) The rule in Turquand’s case
d) The organic Theory
e) Criminal liability of companies
✔ The Royal British Bank v Turquand (1856) 6 E & B 327
✔ Mahoney v East Holyford Mining Co. (1875) LR 7 HL 869
✔ Freeman & Lockyer V Buchhurst Part Properties (1964)2 QB 480
✔ Hely – Hurchinson v Brayhead Ltd (1968) 1 QB 549
✔ Lennard’s Carrying Co. v Asiatic Petroleum Co. Ltd (1915) AC 705 HLHMS
Truculent (1952) P. 1

Page 12 of 18
 ✔ Kampala Cotton Co. Ltd v Madhvani (1954) 21 EACA 129
✔ DPP v Kent & Sussex Contractors (1944) KB 146
✔ R. V. McDonnell (1966) 1 QB 159
✔ Bolton Engineering Co. v Graham (1957) 1 QB 159
✔ Emco Plastica International v Freeberne (1971) EA 432
✔ Rama Corp. v Proved Tin & General Investment (1952) 2 QB 147

13. MAJORITY RULE AND MINORITY PROTECTION- Secs 780-784 CA 2015

Brown v. Abrasive Wheel Co. (1999) 1 Ch. 290
Menier v. Hooper Telegraphy Works (1874) LR 94 Ch. Appeal 350
Cook v. Deeks (1916) 1 AC 354
Hely-Hutchinson v. Bravhead (1968) 1 Q B. 549
Foss v. Harbottle (1843)2 Hare 461
Render v. Lushington (1877) 6 Ch. D. 170
Elder v. Elder & Watson (1952) SC. 49
Scottish Cooperate Wholesale Society v. Meyer (1959) AC 324
Re Harmer Ltd (1959) 1 WLR62
Re Five Minutes Car Wash Services Ltd (1966) 1 WLR 745
Re Belladdor Silk Ltd (1 965) 1 ALL ER 667

Part E: Company Records and Alteration of Status of Companies

14. STATUTORY RECORDS AND RETURNS

a) Registers & Records
(i) Company Records Generally- Secs 1006-1009 CA 2015
(ii) Records relating to resolutions and company meetings- Secs 317-321 CA
2015
(iii) Register of members- Secs 93-106 CA 2015
(iv) Register of directors- Secs 134-136 CA 2015
(v) register of directors’ residential addresses- Sec 137-138 CA 2015
(vi) Registrar’s register of charges- Secs 884-888 CA 2015
(vii) Companies’ register of charges- Secs 890-892 CA 2015
(viii) Register of Secretaries- Secs 248-253 CA 2015
(ix) Register of interests disclosed- Secs 551-562 CA 2015
(x) Register of debenture holders- Secs 572-578 CA 2015
(xi) Register of beneficial owners
⮚ Why register? Objectives

⮚ The law- Section 93A Companies Act, Companies (Beneficial

Ownership Information) Regulations 2020; Companies (Beneficial
Ownership Information) (Amendment) Regulations, 2022
⮚ Implementation weaknesses

Page 13 of 18
 ⮚ Comparative perspectives

⮚ Proposals for reform

b) Annual Accounts & Audit- Secs 620-704, 709-716 CA 2015
(i) Keeping of books of account
(ii) Presentation of accounts
(iii) Group accounts
(iv) Balance sheet and annexure
✔ Re London and General Bank (No. 2) (1895) 2 Ch. 673
✔ Re Kingston Cotton Mill Co (No 2) (1896) 2Ch. 279
✔ Fomento Ltd v. Selsdon Fountain Pen Co. Ltd (1958) I.W.L.R 45
✔ Re City Equitable Fire Insurance Co Ltd (1925) Ch 407
✔ Re Thomas Gerrard & Son Ltd (1968) Ch. 455
✔ Bolivia Exploration Syndicate (1914) 1Ch. 139
✔ JEB Fasteners Ltd v. Marks Bloom & Co (1983) ALLER 583
✔ Yuen Kun Yeu v. Attorney General of Hong Kong (1988) A.C. 175
✔ Caparo Products Plc v. Dickman [1990] 2 A.C. 605
c) Annual Returns- Secs 705-708 CA 2015.
(i) Duty to lodge
(ii) Content
(iii) Offences

15. ALTERATION OF THE STATUS OF COMPANIES: CONVERSION,

RECONSTRUCTIONS, MERGERS, TAKEOVERS AND SCHEMES OF
ARRANGEMENT
a) Conversion of Companies- Sections 69-91 CA 2015
(i) Conversion of Private company to Public limited company- Secs 70-76
(ii) Conversion of Public company to Private company- Secs 77-81
(iii) Conversion of Private company to Unlimited company- Secs 82-84
(iv) Conversion of Unlimited company to Private limited company- Secs 85-
88
(v) Conversion of Public company to Unlimited Private company with share
capital- Secs 89-91
b) Takeovers- Secs 583-619 CA 2015
c) Compromises, Arrangements, Reconstructions and Amalgamations- Secs 922-
929 CA 2015
d) Mergers and Divisions- Secs 930-968 CA 2015
✔ Bisgood v. Henderson’s Transvaal Estates Ltd (1908) I Ch. 743
✔ Griffith v. Paget (1977) 5 Ch.D 894

Page 14 of 18
 ✔ Re-Anglo Continental Supply Co. Ltd 91922) 2 Ch. 723
✔ Re Alabama New Orleans, Texas and Pacific Junction Railway Co (1891) 1Ch.
213
✔ Nokes V. Doncaster Amalgamated Collieries Ltd (1940) A.C 1014
✔ Re Bugle Press Ltd (1961) Ch. 270
✔ Blue Metal Industries Ltd V. Dilley (1969) 3 W.L.R. 359
✔ Re Grierson Oldham & Adams Ltd (1967) I.W.L.R 385
✔ Morgan V. Tate & Lyle Ltd (1955) A.C. 21

Part F: Company Insolvency

16. COMPANY INSOLVENCY: LIQUIDATION AND ITS ALTERNATIVES

a) Liquidation
(i) Definition of Liquidation
(ii) Types of Liquidation
(iii) Voluntary Liquidation- Secs 382, 393-398 Insolvency Act 2015 (IA 2015)
(iv) Members’ voluntary liquidation- Secs 399-404, 415-422 IA 2015
(v) Creditors’ voluntary liquidation- Secs 405-414, 415-422 IA 2015
(vi) Liquidation by the Court- Secs 423-459 IA 2015
(vii) The Liquidator- Secs 460-470 IA 2015
(viii) Distribution of property- Secs 471-493 IA 2015
(ix)Dissolution after liquidation- Secs 494-497 IA 2015
(x) Offences relating to Liquidation- Secs 498-511 IA 2015
b) Alternative to Liquidation: Administration
(i) Definition and Objectives- Secs 520-522 IA 2015
(ii) Appointment and Removal of an Administrator- Secs 523-557 IA 2015
(iii) Effect of administration order- Secs 558-562 IA 2015
(iv) Process of Administration- Secs 563-575 IA 2015
(v) Function and Powers of an Administrator- Secs 576-602 IA 2015
(vi) Termination and replacement of administrators- Secs 603-615 IA 2015
c) Alternative to Liquidation: Voluntary Arrangements- Secs 624-676 IA 2015
✔ Re Camparia Marabella San Nicholas (1973) Ch. 75
✔ Re Allorbrogrja Cooperative (1978) 3 ALL ER 423
✔ Ross v P. J. Herrings Ltd. (1970) NCLR 170
✔ R Sejpal Ltd (1957) EA 289
✔ Green & Co Ltd v. Rose & Christie (1930) 12 KLR 81
✔ Re Ranjan Nanji & Sons Ltd (1952)25 KLR 124
✔ Re Tanganyika Produce Agency Ltd (1957) EA 57

Page 15 of 18
✔ Re Modern Retreading Co. (1962) EA 57
✔ Re Westbourne Galleries Ltd (1963) AC 360
✔ Re A & C Chewing Gum Ltd (1975) 1 WLR 579
✔ Averst v. C & K (Construction Ltd (1976) AC 167
✔ Re Associated Travel Ltd (1978) 1 WLR 547
✔ Re Yenidje Tobacco Co. Ltd (1916)2 Ch. 426
✔ Re Surrey Garden Village Trust Ltd (1965) IWLR 974
✔ Re Perveril Gold Mines Ltd (1898) 1Ch. 123
✔ Re Rica Gold Washing Co (879) II Ch D 36
✔ Re Thomas Edward Brinsmead & Sons (1897) I Ch.406
✔ Loch v. John Blackwood (1924) A.C. 783
✔ Re Lundie Brothers (1965) W.L.R 1054
✔ Re London & Paris Banking Corporation (1814) L.R. 19 444
✔ Re Kitson Co Ltd (1946) 1ALLER 435
✔ Musa v. Life Agencies International (Kenya) Ltd (1981) KLR 1994
✔ Leisure Lodges v. Shretta (1997) LLR 513
✔ J.K. Kanja v.J.T. Bernie and D. Steward (A. no. 117 of 1986)
✔ F.T. Nyammo v J. T. Bernie and D. Stewart CA No. 118 of 1986)
✔ Anspar Beverages Ltd v. Development Bank of Kenya 7 Ors (2003) LLR 3726
✔ Queens Trustees Ltd v. Official Receiver and Liquidator of Tanneries of Kenya
Ltd (1981) LLR 4425
✔ Aluminum I. Vaasen BV v. Romalpa Aluminum Ltd (1976) ALLER 552
✔ Gosling v. Gaskell (1897) AC 575
✔ Muchunguzi & Ors v. Asayo & Ors (1997) LLR 658
✔ Omondi v. National Bank of Kenya Ltd & Ors (2001) LLR 1362
✔ Madhupaper International Ltd v. Paddy Kerr & others CC No. 438 of 1985
✔ Charles Kariuki Githungo v. African Banking Corporation Ltd CC. No. 758 of
2000
✔ Lochabs Brothers v. Kenya co. Furfural Co Ltd & Ors (1982) LLR 77

Page 16 of 18
 ✔ Combs Book Ltd v. Industrial and Commercial Development Corporation (1990)
LLR 5007

CORE TEXTS AND OTHER READINGS

Books
1. K. I.Laibuta, A Handbook of Company Law (Nairobi: LawAfrica, 2017)
2. Charles Wild and Stuart Weinstein, Smith and Keenan’s Company Law (14th edn,
Longman 2009)
3. John Joseph Ogolla, Company Law (Nairobi: Focus Books, 1997, Reprint 2005)
4. LS Sealy & S Worthington: Cases and Materials in Company Law (Latest edition)
5. Sally Wheeler, Company Law (International Library of Essays in Law and Legal
Theory) (NYU Press 1993)
6. Ashiq Hussain, A Textbook of General Principles and Commercial Law of Kenya
(Nairobi: East African Book Publishers, 1978, Reprint 2003)
7. K. I. Laibuta, Principles of Commercial Law (Nairobi: LawAfrica, 2006)
8. Birds and AJ Boyle et al, Boyle & Birds; Company Law (latest edition)
9. Morse G. et. al. Charlesworth’s & Morse Company Law (latest edition)
10. Philip J.S., Morris L.J. Oliver S. & Stanley B., Handbook on the Formation
Management and Winding up of Joint Stock Companies, 1952.
11. Smith and Keenan’s Company Law
12. Brenda Hannigan, Company Law
13. Farrar J. H. et. al., Farrar’s Company Law

E-Resources
Core Academic Articles and E -books
1. Kiarie Mwaura, Statutory Protection for Oppressed Minority Shareholders in
Kenya: Reflections on the Reforms under the Companies Act 2015 <
www.chasecambria.com>
2. Company Law Notes, Africa Law Centre < www.africalawcentre.blogspot.com>
3. Bowmans, The new Companies Act 2015 www.bowmanslaw.com
4. Kiarie Mwaura, “ Reforming the Duties of Directors under the Kenyan Company
Law: A Critique”. European Business Law Review, 2019;volume30(4),pp.617-
632.Available
Kluwerlawonline.com/Journals/European+Business+Law+Review/383
5. Kiarie Mwaura, “Disqualification of Company Directors:Safeguarding the Public
Interest in the Kenyan Investment Market”, Journal of Law and Commerce,
volume 37(2), Spring 2019,pp. 167-178. Available
https://doi.org/10.5195/jlc.2019.160

Relevant Websites
6. https://www.lexisnexis.com/en-us/gateway.page
7. https://home.heinonline.org/
8. http://kenyalaw.org/kl/
9. https://www.researchgate.net/

Recommended Reference Material

Page 17 of 18
1. J.W. Katende, et al, The Law of Business Organizations in East and Central Africa
(Nairobi, Kampala, Dar Es-Salaam: E.A.L.B., 1976)
2. Davis P. L. Gower and Davies’ Principles of Modern Company Law (London: Sweet
& Maxwell, 2008)
3. Francis Gowre-Browne & William Jordan, Handbook on the Formation Management
and Winding up of Joint Stock Companies (General Books LLC 2012)

Statutes
1. Companies Act No 17 of 2015
2. Insolvency Act
3. Limited liability Partnership Act 2012
4. Partnership Act 2012
5. Limited Liability Partnership Act 2012
6. State Corporations Act, Cap. 446.
7. Co-operative Societies Act, 2004
8. Universities Act.
9. Capital Markets Act, Cap. 485 A.
10. Central Depositories Act, 2000.
11. Insurance Act. Cap. 487.
12. Banking Act, cap. 488.
13. The Business Laws (Amendment) Act, 2020.
14. The Statute Laws (Miscellaneous Amendment) Act, 2019.

Subsidiary Legislation
1. Capital Markets (Securities) (Public Offers, Listings and Disclosures) Regulations.
2002
2. Capital Markets (Takeovers and Mergers) Regulations 2002
3. Capital Markets Guidelines on Corporate Governance for Listed Companies.

Page 18 of 18