Reforms to Kenya's Corporate Law and Practice
REFORMS TO KENYA’S CORPORATE LAW AND PRACTICE
Introduction
The Companies Act1 (hereinafter referred to as ‘the Act’) is based extensively on the United Kingdom's Companies Act 1948. This law has been in existence for the past 60 years with very minimum developments. It is imperative that laws should not be static but should change in tandem with the societal changes. Therefore, there is need to modernize Kenya's company law to make it responsive to the currents needs by taking into consideration emerging trends in corporate affairs around the globe. Such emerging trends include modern means of communication, modern patterns of regulation and ownership as well as current trends of globalization and regional integration. A modern company law regime will support a competitive economy and spur Kenya’s economic growth as envisaged by Vision 2030. Amendments to the company law as it is will definitely keep it in stride with the changing modes of corporate law and practice.
It is of interest to note that the UK’s Companies Act 1948 which our very own Act is based on has undergone considerable changes. This same law has been discarded in most commonwealth countries. In UK, the changes have culminated into the enactment of the Companies Act of 2006.In Nyali Limited v. Attorney General2, it was Lord Denning’s view that:
“…the common law cannot be applied in a foreign land without considerable qualification. Just as with an English oak, so with the English Common law. You cannot transplant to the African continent and expect it to have the same character it has in England. It will flourish indeed, but it needs careful tending… The common law cannot fulfill this obligation except with considerable qualification…”
Taking into consideration Lord Denning’s words about common law as stated above, we submit that with reference to an imported Act, it has to be tailored towards a jurisdiction’s needs before or after importation. Therefore, such an imported law needs to be
Introduction
The Companies Act1 (hereinafter referred to as ‘the Act’) is based extensively on the United Kingdom's Companies Act 1948. This law has been in existence for the past 60 years with very minimum developments. It is imperative that laws should not be static but should change in tandem with the societal changes. Therefore, there is need to modernize Kenya's company law to make it responsive to the currents needs by taking into consideration emerging trends in corporate affairs around the globe. Such emerging trends include modern means of communication, modern patterns of regulation and ownership as well as current trends of globalization and regional integration. A modern company law regime will support a competitive economy and spur Kenya’s economic growth as envisaged by Vision 2030. Amendments to the company law as it is will definitely keep it in stride with the changing modes of corporate law and practice.
It is of interest to note that the UK’s Companies Act 1948 which our very own Act is based on has undergone considerable changes. This same law has been discarded in most commonwealth countries. In UK, the changes have culminated into the enactment of the Companies Act of 2006.In Nyali Limited v. Attorney General2, it was Lord Denning’s view that:
“…the common law cannot be applied in a foreign land without considerable qualification. Just as with an English oak, so with the English Common law. You cannot transplant to the African continent and expect it to have the same character it has in England. It will flourish indeed, but it needs careful tending… The common law cannot fulfill this obligation except with considerable qualification…”
Taking into consideration Lord Denning’s words about common law as stated above, we submit that with reference to an imported Act, it has to be tailored towards a jurisdiction’s needs before or after importation. Therefore, such an imported law needs to be