The Companies Act No. 17 of 2015Section 386 of The Companies Act No. 17 of 2015: Company’s share premium account and application of share premiums
(1) If a company issues shares at a premium (whether for cash or otherwise),the company shall—
(a) if it has not already done so, establish an account to be called the share premium account; and
(b) transfer to that account an amount equal to the aggregate amount or value of the premiums on those shares.
(2) If, on issuing shares, a company has transferred an amount to its share premium account, it may use the amount to write off— (a) the expenses of the issue of those shares; and
(b) any commission paid on the issue of those shares.
(3) The company may use its share premium account to pay up new shares that are to be allotted to members as fully paid bonus shares.
(4) Subject to subsections (2) and (3), the provisions of this Act relating to the reduction of a company's share capital apply as if the company's share premium account were part of its paid up share capital.
(5) This section has effect subject to sections 387, 388 and 390.
(6) If a company fails to comply with subsection (1), the company, and each officer of the company who is in default, commit an offence and on conviction are each liable to a fine not exceeding five hundred thousand shillings.
Check the current authoritative text and amendment history before relying on this provision.
(1) This section applies if an issuing company that is a wholly-owned subsidiary of a holding company allots shares— (a) to the holding company; or (b) to another wholly-owned subsidiary of the holdin…
(1) This section applies if an issuing company acquires at least a ninety percent equity holding in another company under an arrangement providing for the allotment of equity shares in the issuing com…
(1) This section applies for the purpose of determining whether a company has, for the purposes of section 388, acquired at least a ninety percent equity holding in another company under an arrangemen…
The regulations may prescribe provisions for either or both of the following— (a) for relieving companies from the requirements of section 386 in relation to premiums other than cash premiums; (b) for…
If an amount that corresponds to the amount representing the premiums, or part of the premiums, on shares issued by a company that, as a result of relief (if any) under this Division, is not included…
(1) For the purposes of this Act, shares are of one class if the rights attachedto them are in all respects uniform. (2) For purposes of subsection (1), the rights attached to shares are not to be reg…
(1) This section is concerned with the variation of the rights attached to a class of shares in a company having a share capital. (2) Rights attached to a class of a company’s shares may be varied onl…
(1) This section is concerned with the variation of the rights of a class of members of a company that does not have a share capital. (2) Rights of a class of members may be varied only— (a) in accord…
Neither section 393 nor section 394 affects the powers of the Court under section 78, Part XXIX or XXXIV.
(1) This section applies if the rights attached to any class of shares in a company are varied under section 393. (2) The holders of not less in the aggregate than fifteen percent of the issued shares…
(1) This section applies if the rights of any class of members of a company are varied under section 394. (2) Members comprising not less than fifteen percent of the members of the relevant class (bei…
(1) Within fourteen days after the making of an order by the Court on anapplication under section 396 or 397, the company concerned shall lodge a copy of the order with the Registrar for registration.…
(1) If a company assigns a name or other designation, or a new name or otherdesignation, to any class or description of its shares, it shall, within fourteen days after doing so, lodge with the Regist…
(1) If the rights attached to shares of a company are varied, the company shall,within fourteen days after the date on which the variation is made, lodge with the Registrar for registration a notice g…
(1) If a company not having a share capital creates a new class of members,the company shall, within fourteen days after the date on which the new class is created, lodge with the Registrar for regist…
(1) If a company not having a share capital assigns a name or other designation, or a new name or other designation, to any class of its members, it shall, within fourteen days after doing so, lodge w…
(1) If the rights of any class of members of a company not having a sharecapital are varied, the company shall, within fourteen days after the date on which the variation is made, lodge with the Regis…
(1) A limited company having a share capital may alter its share capital only—(a) by increasing its share capital by allotting new shares; or (b) reducing its share capital in accordance with this Par…
(1) A limited company having a share capital may— (a) subdivide its shares, or any of them, into shares of a smaller nominal amount than its existing shares; or (b) consolidate and divide all or any o…
(1) Within one month after subdividing, consolidating or dividing its shares, a company shall lodge with the Registrar for registration a notice specifying the shares that are affected, and accompanie…
(1) A limited company that has a share capital may reduce its share capital byspecial resolution. (2) A special resolution under subsection (1) takes effect as provided by section411(3). (3) A company…
(1) As soon as practicable a company has passed a resolution for reducing itsshare capital, it shall apply to the Court for an order confirming the reduction. (2) If the proposed reduction of capital…
(1) When this section applies, each creditor of the company who, at the date fixed by the Court, is entitled to a debt or claim that, if that date were the commencement of the liquidation of the compa…
(1) The Court may make an order confirming the reduction of capital on such terms and conditions as it considers appropriate. (2) The Court may not confirm the reduction unless it is satisfied, in rel…
(1) On production of an order of the Court confirming the reduction of a company’s share capital and the lodgement of a copy of the order and of a statement of capital approved by the Court, the Regis…
(1) If a company’s share capital is reduced, a member of the company (past orpresent) is not liable in respect of any share to any call or contribution exceeding the amount of difference (if any) betw…
(1) This section applies to a creditor who, in the case of a reduction of capital confirmed by the Court, was entitled to object to the reduction of share capital but who, as a result of being unaware…
An officer of a company who— (a) intentionally or recklessly— (i) conceals the name of a creditor entitled to object to the reduction of capital; or (ii) misrepresents the nature or amount of the debt…
A person is not precluded from seeking or obtaining damages or other compensation from a company only because the person— (a) is holding or has held shares in the company; (b) has a right to apply or…
(1) If the net assets of a public company are half or less of its called-up Share capital, the directors shall convene a general meeting of the company to consider how to deal with the situation. (2)…
(1) If the Court makes an order confirming a reduction of a public company’scapital that has the effect of bringing the nominal value of its allotted share capital below the authorised minimum, the Re…
(1) The Court may authorise a public company to be converted into a private company without its having passed the special resolution required by section 77. (2) If the Court does so, it shall specify…
(1) A resolution for reducing share capital of a private company limited byshares is supported by a solvency statement if— (a) the directors of the company make a statement of the solvency of the comp…
(1) A solvency statement is a statement that each of the directors— (a) has formed the opinion, as regards the company's situation at the date of the statement, that no ground exists on which the comp…
(1) Within fourteen days after the resolution for reducing share capital is passed the company shall lodge with the Registrar for registration a statement of capital that complies with subsection (3).…
The regulations may make further provision for the implementation of this Part.
(1) In this Part— "distributable profits", in relation to the giving of any financial assistance— (a) means those profits out of which the company could lawfully make a distribution equal in value to…
(1) A limited company shall not acquire its own shares, whether by purchase, subscription or otherwise, except in accordance with this Part. (2) Subsection (1) does not prevent a limited company from…
(1) This section applies to shares in a limited company that— (a) are taken by a subscriber to the memorandum as nominee of the company; (b) are issued to a nominee of the company; or (c) are acquired…
(1) This section applies to shares in a limited company that— (a) are taken by a subscriber to the memorandum as a nominee of the company; (b) are issued to a nominee of the company; or (c) are acquir…
(1) This section applies to a public company if— (a) shares of the company are forfeited, or are surrendered to the company instead of forfeiture, as provided by the company's articles for a failure t…
(1) Within one month after cancelling shares in order to comply with section427, a company shall lodge with the Registrar for registration a notice giving details to the cancelled shares. (2) The comp…
(1) If a public company is obliged to convert itself into a private company in orderto comply with section 427, the directors may resolve that the company should be so converted. (2) Such a resolution…
(1) The Registrar shall register the conversion of a company into a private limited company if satisfied that the application for registration complies with the requirements of section 429. (2) If the…
(1) If a public company that is required by section 427 to apply to the Registrarfor the registration of the conversion of the company into a private company fails to do so before the deadline specifi…
(1) If a company that is required to do so by section 427— (a) fails to cancel specified shares; or (b) fails to make an application for the registration of the conversion of the company into a privat…
(1) This section applies to a private company that is registered as a public company— after shares in the company have been forfeited in accordance with the company's articles or have been surrendered…
(1) If— (a) a public company, or a nominee of a public company, acquires shares in the company; and (b) those shares are shown in a balance sheet of the company as an asset, the company shall transfer…
(1) A lien or other charge of a public company on its own shares(whether taken expressly or otherwise) is void, except as permitted by this section.( 2) In the case of any description of company, a ch…
In determining for the purposes of this Part whether a company has a beneficial interest in shares, the interests referred to in sections 437, 438 and 439 are to be disregarded.
