Mboya Wangong’u & Waiyaki Advocates

Anti-Corruption Regulation

admin — Wed, 26 Jan 2011 09:10:05 +0000

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Licensing

admin — Sat, 15 Jan 2011 14:43:49 +0000

1 Are there any restrictions on the establishment of a business entity by a foreign licensor or a joint venture involving a foreign licensor and are there any restrictions against a foreign licensor entering into a licence agreement without establishing a subsidiary or branch office?

There are no restrictions on the establishment of business entities by foreign licensors. Only registration, either as a limited liability company or as a business name (sole proprietorship or partnership), is required. This business must not offend the provisions of the Restrictive Trade Practices Monopolies and Price Control Act (chapter 504).
It serves to protect against monopolistic behaviors by businesses. A foreign licensor can enter into a licence agreement with a Kenyan entity without the need to register the foreign licensor as a branch or subsidiary

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Financial record keeping

admin — Tue, 11 Jan 2011 14:54:44 +0000

What legal rules require accurate corporate books and records, effective internal company controls, periodic financial statements or external auditing?
The Companies Act of Kenya requires proper books of account to be kept which should be open to the inspection of directors. These should be able to disclose the financial position of the company at intervals of six months. Within 18 months of the incorporation of a company, and annually thereafter, financial statements are required to be laid before the company at a general meeting. The directors are personally liable for keeping of proper records and a breach of this duty may lead to fines, imprisonment or both.
The law requires every company to appoint an auditor. If a vacancy arises and is not filled by the company, the registrar of companies is permitted to appoint an auditor for the company.
The Banking Act requires banks and financial institutions to submit to the Central Bank of Kenya (CBK), not later than three months after the expiry of its financial year, an audited balance sheet showing its assets and liabilities in Kenya and a profit and loss account covering its activities in Kenya together with a copy of the auditor’s report. It also requires that a bank or financial institution appoint an auditor who is qualified under the Companies Act and approved
by the CBK annually.
Section 55 of the Insurance Act also requires an insurance company to keep such accounting records in order to correctly record and explain the transactions and financial position of the insurance company, to enable the accounts, reports and statements required under the Act to be prepared, and to enable those accounts and statements to be conveniently and properly audited. The law also requires that insurance companies have their account audited annually by an auditor.
The Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations, 2002 require listed companies to prepare complete financial statements including a balance sheet, an income statement, a statement showing changes in equity, a cash flow statement, accounting policies and explanatory notes.

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Law affecting international licensing

admin — Sun, 09 Jan 2011 14:49:14 +0000

Q. Does legislation directly govern the creation of an international licensing relationship or require registration of the licence with local authorities? Describe any requirements.
Yes, legislation governs certain international licensing relationships, and some acts of parliament do require that licences be registered with local authorities. The Trade Marks Act (chapter 506 Laws of Kenya) and the Industrial Property Act (Act No. 3 of 2001 Laws of Kenya) require that licence agreements be registered with the Kenya
Industrial Property Institute (KIPI). The Copyright Act (Act No. 12 of 2001 of the Laws of Kenya) is however silent on this. In practice, parties do not register software licence agreements. They act as contracts between parties and govern their relationship and usage as in a normal contractual relationship.

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