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  • Definition of company law
  • It’s a study of the rules & principles that governs and regulates the affairs of a company/corporation.


  • Types of companies


  1. Chartered corporations
  • These are corporations created by a charter that is granted by the president.
  • Only private universities are created through charter in Kenya.
  • Under university’s act, the president is empowered to grant a charter to any private university intending to be set up to benefit the country.
  • The charter must set out the name, membership and also the powers and functions of the universities e.g. mount Kenya University.


  1. Statutory corporations
  • They are created by an Act of parliament or an order of the president in accordance with the state corporations Act.
  • These are government corporations especially parastatals.
  • The Act creating the corporation gives it a name, management structure and also prescribes the objects i.e. Kenya pipeline, Kasneb, NSSF, NHIF, Central Bank etc.


  1. Registered corporations
  • Are created in accordance with the provisions of companies Act.
  • Certain documents must be delivered to the registrar of companies for registration i.e. MOA and AOA. Examples include public and private companies.


Public company

  • This is a company with the following features:
  1. Must have a minimum of 7 members and no. maximum.
  2. Must have at least 2 directors.
  3. Its shares must be freely transferable.
  4. It must have a statutory meeting i.e. first AGM within 3 months of formation for companies that were created before 2015.
  5. Must publish annual accounts.
  6. After acquiring certificate of incorporation, it must go ahead and acquire certificate of trading to commence business.
  7. It must have a company secretary.


N/B: A public company is required to include at the end of its name the words-public limited company (PLC) e.g. Safaricom PLC



Private company

A private company is a company with the following features.

  1. Members are a minimum of 1 and max of 50 persons excluding employees.
  2. It requires at least 1 director.
  3. Restricts the right to transfer its shares.
  4. It prohibits any invitation to the public to subscribe for its shares i.e. doesn’t issue a prospectus.
  5. Not mandatory to publish its accounts.
  6. Required to have a Company secretary if it has a share capital of 5million.


N/B: A private company must include the word limited or Ltd at the end of its name.



A public and private company may be classified under;


  1. Companies Limited by shares

It refers to a company which the liability of members is limited to the amount unpaid on the shares held by them.


  1. Companies Ltd by guarantee

A company Limited by Guarantee if:

  1. it does not have a share capital;
  2. The liability of its members is limited by the company’s articles to the amount that the members undertake, by those articles, to contribute to the assets of the company in the event of its liquidation; and
  3. Its certificate of incorporation states that it is a company limited by guarantee.

Companies Limited by Guarantee in Kenya are mainly registered for the purpose of operating non-profit organizations that require a legal personality.

  1. Unlimited companies
  • These are companies where member’s liability is unlimited.
  • Such members may lose their private assets, in case the company is declared insolvent.

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