June 11, 2021 - 5 minutes read

Highlights of the Business Registration Services Draft Bill

By Acha Ouma

The Business Registration Services has published several business laws amendments bills. They hope the amendments will address the necessary gaps and achieve a coherent legislative framework for these laws. The amendments bills are:

  • The Registration of Business Names (Amendment) Bill,2021.
  • The Insolvency (Amendment) Bill, 2020
  • The Movable Property Security Rights (Amendment) Bill, 2021.
  • The Companies (Amendment) Bill,2021.
  • The Hire Purchase (Amendment) Bill,2021.
  • The Business Registration Service (Amendment) Bill, 2021.

The Registration of Business Names (Amendment) Bill, 2021.

The most significant amendments are on time for registration and registration term. The amendments propose that a person can register a Business Name after commencement of a business. 

They also propose that the registration of a business name will remain in force for a period of three years only. Upon expiry and deregistration, a trader may elect to renew the registration.

The Insolvency (Amendment) Bill, 2020

The bill proposes to describe the nature of bankruptcy as when the Court makes an order in respect of a debtor adjudging the debtor bankrupt.

They also propose the disqualification of body corporate from acting as receiver while stating that any body corporate which purports to act as a receiver will have committed an offence and on conviction be liable to a fine not exceeding one million shillings

The Bill also proposes the Code of Ethics for the Regulation of Insolvency Practitioners in Kenya.

The Movable Property Security Rights (Amendment) Bill, 2021.

The only significant amendment in this bill is the proposal that the Registrar shall be the Registrar of Companies.

The Companies (Amendment) Bill,2021.

The amendments in this Bill propose that an applicant for registration of a company, should state in the statement of initial beneficial owner required to be submitted to the registrar, the  particulars of initial beneficial owners.

The amendments also require companies to ensure that they have a registered office to which all communication and notices may be addressed.

Private companies will also be exempted from using the word limited or Itd as required by the law if they meet certain requirements.

In the event where the Registrar suspects that  the  name  by which a company is registered gives a misleading indication of the nature of its activities as to be likely to cause harm to the public, the Registrar may in writing, direct the company to change its name.

The last significant proposed amendment states that a person shall not be subject to both the imposition of an administrative penalty and the prosecution of an offence in respect of the same act or omission under this Act.

The Hire Purchase (Amendment) Bill,2021.

The bill proposes a new definition for the term hire-purchase agreements. This will now mean agreements whereby an owner of goods allows a person,  known  as  the  hirer,  to  hire  goods  from  him  or  her  for  a  period  of  time  by paying instalments.  The  hirer  has  an  option  to  buy  the  goods  at  the  end  of  the Agreement if all instalments are being paid. However, it is not a contract of sale but contract of bailment as the hirer merely has an option to buy the goods and although the hirer has the right of using the goods, he is not the legal owner during the term of the agreement, the ownership of the goods remains with the owner.

The amendments also propose to put the Hire Purchase registration regimen under the Registrar of Companies.

The Business Registration Service (Amendment) Bill, 2021.

The bill proposes to rename the Act to the Business Registration and Insolvency Service Act, 2015. The amendment also proposes a business Registration and Insolvency Service Board and a Conduct of Business and Affairs of the Business Registration and Insolvency Service Board.

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