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Insights Kenya: Directors duties, appointment/exit formalities

Kenya: Directors duties, appointment/exit formalities

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​​​​​​​​​​​​​​​​​​​​published on 14 June 2024 | reading time approx. 3 minutes


Kenya continues to play a key role in attracting and retaining investors interested in accessing the East Africa market and generally the Sub-Saharan Africa. The most preferred market entry vehicle in Kenya is a limited liability company. This form of set up requires the investor shareholder to appoint directors as the primary drivers of the company’s affairs. A private company must have at least one director whereas a public company requires at least two directors. 


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This article briefly highlights the appointment process of a director, related duties and the legal processes involved in effecting the appointment and exit of a director at the Companies Registry in Kenya.

The Appointment

Minimum Age for a Director

One must have attained 18 years to qualify for appointment as a director of a company otherwise the appointment is considered void under the laws of Kenya[1].

Appointment Notice with the Registrar of Companies

To effect this appointment, a notification to the Registrar of Companies, accompanied by the following documents, and which should be made, for the time being, within 14 days is required:
  • ​The shareholder’s appointment resolution
  • A letter accepting the appointment from the director
  • The directors personal data, comprising: email and telephone contacts, residential address, an identity document (a passport for a foreign director or a national identity card for a local director), passport photo, postal address and service address if this differs from the postal address
  • The percentage of control as a beneficial owner – where the director holds at least ten percent shareholding or ten percent of its voting rights or exercises ultimate effective control over the company.

These details should be updated within fourteen days should there be changes in the director’s personal data or exit of the director to avoid noncompliance penalties. An official extract of the Companies Registry records, commonly referred to as a CR 12, is a useful tool used in ascertaining the significant particulars of a company and the key company’s officers.

Duties and Liabilities of a Director

Generally, the duties of a director are based on common law rules and equitable principles associated with a director. In addition, the following laws and governance instruments contain provisions that define the duties of a director:
  • ​The Companies Act 2015
  • The Code of Corporate Governance Practices for Issuers of Securities to the Public
  • A Board Charter

The Companies Act mandates a director to:
  • Act in accordance with the company’s Memorandum and Articles or the constitution
  • Promote the success of the company
  • Exercise independent judgment
  • Exercise reasonable care, skill and diligence
  • Avoid conflicts of interest relating to the exploitation of any property, confidential information, opportunities in or for the company
  • Not to accept benefits from third parties 

Consequences of breach of directors general duties (or threatened breach)

These include: criminal sanctions, civil sanctions, fines[2​]. A director who exploits conflict of interest situations commits an offence and is liable on conviction to disqualification for a period not exceeding five years. In some instances, court action may be taken against the director by the company or by the shareholder if they have suffered loss. Further a director involved in the management of a Kenyan company is personally responsible for all debts and other liabilities of the company incurred during a time when the director is subject to foreign restrictions.

In addition, any provision that purports to exempt a director of a company to any extent from any liability that would otherwise attach to the director in connection with any negligence, default, breach of duty or breach of trust in relation to the company is void. Similarly, provision of indemnity by a company for the same purpose is also void except as may be permitted under the Companies Act.

Exit of a Director

Under typical circumstances, a director may exit the company following:
  • ​An ordinary resolution passed during a meeting convened by a special notice to remove a director before the end of a director’s term or
  • Resignation.

A person who ceases to be a director continues to be subject to duties with respect to exploitation of any property and things done or omitted regarding the duty not to accept benefits from third parties.

Notification to the Registrar of Companies at Exit

During the exit process, the Registrar of Companies will within fourteen (14) days of the exit, require:
  • ​A resignation letter signed by the exiting director
  • A Board resolution from the shareholder acknowledging the resignation
  • A statutory declaration signed by the exiting director confirming that the company does not owe him any dues – a statement on oath before a Public Notary (for a director residing abroad) or a Commissioner for Oaths (for a director resident in Kenya)

Thereafter, the Companies Registrar will undertake a due diligence process to verify the exit formalities, and where satisfied that the formalities meet the compliance requirements under the Companies Act, effect the resignation at the Companies Registry. In some instances, this due diligence process involves a direct communication with the director in question.

It is therefore incumbent upon the investor shareholder to put in place an effective compliance management system that ensures:
  • ​​An effective appointment and offboarding process that supports updating of directors records at the Companies Registry within the stipulated statutory timelines.
  • Directors are inducted on their duties and responsibilities upon being appointed. A Board Charter is a useful governance instrument in this regard.
  • The existence of an effective board evaluation system that regularly examines the understanding of the directors duties.​


A company secretary, who also serves as the corporate governance advisor to the company, is an integral part of the compliance management system.



[1] S.131 Companies Act, 2015​​​​​
[2] A director who accepts benefits contrary to the Companies Act commits an offence and is liable on conviction to a fine not exceeding one million shillings. The benefit or its equivalent is forfeited to the Company.​​​

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