Adding Directors to Your Kenyan Company
The growth and success of any Kenyan company hinge on strong leadership. As your business evolves, you may reach a point where adding new directors becomes a strategic decision. This comprehensive discussion paper delves into the process of adding directors to your Kenyan company, providing you with the necessary information to make informed choices.
The Importance of a Well-Rounded Board
A diverse and qualified board of directors brings immense value to a company. New directors can inject fresh perspectives, specialized skills, and valuable industry experience. They contribute to strategic decision-making, enhance corporate governance, and bolster investor confidence.
Who Can Be Appointed as a Director?
Kenyan law dictates the eligibility criteria for company directors. Here’s a breakdown of the key points:
- Minimum Age: Directors must be at least 18 years old.
- Residency: While residency in Kenya is not mandatory, at least one director should be resident within the East African Community (EAC).
- Disqualification: Individuals with a history of bankruptcy, fraud convictions, or certain mental health conditions are disqualified from serving as directors.
Procedures for Adding a Director in Kenya
Adding a director to a Kenyan company requires adherence to specific procedures outlined in the Companies Act, 2015, and your company’s Articles of Association. Here’s a step-by-step approach to guide you:
- Board Resolution: The board of directors must first pass a resolution formally approving the appointment of the new director.
- Director’s Consent: Written consent from the individual you wish to appoint as director is essential. This document confirms their willingness and understanding of the responsibilities involved.
Transition: Once these two initial steps are complete, it’s crucial to ensure the new director understands their rights and duties. Mich&Ronia Consultants offers a range of corporate governance training programs to equip directors with the knowledge and skills they need to excel in their roles. Contact us at 0745 359397 or email info@michroniaconsultants.co.ke to learn more.
- Shareholder Meeting: Depending on the company’s Articles of Association, a shareholders’ meeting might be required to formally ratify the appointment of the new director. This meeting necessitates proper notice and adherence to voting procedures.
Transition: Following the shareholders’ meeting (if applicable), the company must officially notify the Business Registration Service (BRS) of the new director’s appointment. The BRS website (https://brs.go.ke/) provides detailed information on the filing process.
Additional Considerations on adding Directors to Your Kenyan Company
Beyond the basic steps outlined above, there are several other aspects to consider when adding a director:
- Number of Directors: Kenyan law doesn’t mandate a minimum or maximum number of directors. However, your company’s Articles of Association typically specify the authorized number of directors.
- Director Service Agreements: While not mandatory, formalizing the terms and conditions of the director’s role through a service agreement is a prudent measure. This document outlines responsibilities, compensation, and termination clauses.
Transition: For expert guidance on drafting effective director service agreements, consulting a qualified corporate lawyer is highly recommended. Mich& Ronia Consultants has a team of experienced lawyers specializing in corporate governance matters. We will assist you in customizing a service agreement that aligns with your specific needs. Feel free to contact us at 0745 359397 or email info@michroniaconsultants.co.ke to discuss your requirements.