The Business Laws (Amendment) Act 2021: Business Talks

On 30th March 2021, the Business Laws (Amendment) Act, 2021 (the Act) was assented to by the President and it came into force on the same date. This Act comes after the enactment of the Business Laws (Amendment) Act 2020. The Act amended several existing statues including: The Law of Contract Act (Cap 23), the Industrial Training Act (Cap 237), Stamp duty Act (Cap 480), the National Hospital Insurance Fund Act (Act No.9 of 1998), National Social Security Fund (Act No.45 of 2013), the Insolvency Act (Act No.18 of 2015) and Small Claims Court Act (Act No.2 of 2016) and the Companies Act, 2015 (the Companies Act). We highlight below some of the changes brought into force by the Act.

Business Talks : The Business Laws (Amendment) Act 2021: Business Talks

The Law of Contract Act has been amended by changing the definition of the term “sign” to align it with the Companies Act. The Act has amended the definition of the word sign to read, “execution of the document in accordance with section 37 of the Companies Act, for body corporates incorporated under the Companies Act.”

Section 37 of the Companies Act previously provided that a document is executed by a company either “by the affixing of its common seal (if any) and witnessed by a director; or in accordance with subsection (2).” This section was amended under the Business Laws (Amendment) Act 2020 by deleting the requirement for execution of documents by a company by affixing of the common seal.

Despite the amendment of the Companies Act in 2020, the Law of Contract Act still retained the requirement of affixing of the common seal of the body corporate. The amendment now aligns the methods of attestation between the Companies Act and the Law of Contract Act. A company’s document will now be deemed to have been validly executed if signed by two authorized signatories or by a director in the presence of witness who attests the signature. There is no requirement for such documents to be sealed.

In this edition of CrystalPerk Mombasa Magazine Business Talks, we welcome Ms. Jacqueline Waihenya of  Managing Partner of JWM Law PLC., to disambiguate the Act to the SMEs in the region.

The Act defines a hybrid meeting as “a company general meeting, where some participants are in the same physical location while other participants join the meeting through electronic means including video conference, audio conference, web conference or such other electronic means.

Other notable amendments under the Act include the following:

  • The Industrial Training Act has been amended to provide that the industrial training levy payable shall be remitted at the end of the financial year of the business but not later than the ninth day of the month following end of the financial year;
  • The National Social Security Fund Act has been amended to require an employer to pay its contribution on the on the ninth day of each month; and
  • The National Hospital Insurance Fund Act has been amended to require that a person shall pay the contribution to the Board on the ninth day of each month.


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