March 20, 2019 In Thought Leadership

Highlights of the Business Laws (Amendment) Bill 2019

A short summary of the salient proposed amendments arising from the Business Laws (Amendment) Bill, 2019.


The Business Laws (Amendment) Bill, 2019 (the Bill) was tabled in the National Assembly by the Majority Leader in November 2019. The purpose of the Bill is to make amendments to various statutes to facilitate the ease of doing business in Kenya.

Below, we look at the key features of the proposed amendments.

Digitizing Transactions

The Bill seeks to amend the Law of Contract Act (Cap. 23), the Survey Act (Cap. 299), the Registration of Documents Act (Cap. 285), the Stamp Duty Act (Cap. 480) and the Land Registration Act (No. 3 of 2012).

A notable effect of the proposed amendments is that documents regulated by the respective statutes may be executed by way of electronic signature. An electronic signature has been defined in the Bill as “data in electronic form affixed to or logically associated with other electronic data which may be used to identify the signatory in relation to the data message and indicate the signatory’s approval of the information contained in the data message”. Electronic signatures are classified as either electronic signatures or advanced electronic signatures. The distinction between the two is the threshold of authenticity, whereby an advanced electronic signature uniquely links and identifies the signatory, created by means solely in the control of the signatory, and is uniquely linked to the corresponding data such that any change to the data is detectable. Further to this, the obligation for verification of signatures in instruments relating to land may be dispensed with where the Registrar of Lands is satisfied that the transacting parties executed the instrument electronically.

Tax Laws

The Bill seeks to amend the Income Tax Act to allow for investment deductions equal to one hundred and fifty per cent (150%) for persons who incur a capital investment of at least Kenya Shillings ten billion (KES 10,000,000,000/-), on the construction of bulk storage and handling facilities for supporting the Standard Gauge Railway operations with a minimum storage of one hundred thousand (100,000) metric tonnes of supplies. In line with this, it is proposed that supplies and services procured locally or imported by such persons be exempt from Value Added Tax. Goods imported or purchased before customs clearance for the construction of such bulk storage and facilities will be exempt from the Import Declaration Fee (IDF) and the Railway Development Levy (RDL).

In addition to the above, the Bill seeks to amend the Excise Duty Act to impose excise duty at the rate of twenty five per cent (25%) on imported glass bottles. The rationale behind this proposed duty is to encourage the local manufacture of glass bottles.

Companies Act

A notable proposition of the Bill is to remove the option for a company to have a physical seal by which it executes documents thereby leaving the only options for executing company documents as two (2) authorised signatories or a director and an attesting witness. It is worth noting that where electronic signatures are provided for above, there is no corresponding provision (or logical reason) for witnessing such signatures.

Upon promulgation, the Companies Act provided that share warrants could no longer be issued by companies. As a transitional provision, shares issued pursuant to the provisions of the repealed Companies Act (Cap. 486) would continue to be in effect. The Bill seeks to amend this by providing for the conversion of bearer shares into registered shares within nine (9) months of the Bill being passed into law. Failure to convert bearer shares within the stipulated period carries a fine of up to Kenya Shillings five hundred thousand (KES 500,000).

The Bill further seeks to restore the company take over threshold from fifty per cent (50%) (as was amended by the Statute Law (Miscellaneous Amendments) Act, 2019) to ninety per cent (90%).


The Bill underwent its first reading in the National Assembly in December 2019. In subsequent readings, we expect fine tuning to some of the provisions which are seemingly ambiguous prior to the Bill being put forward for a vote and presidential assent.

Should you require any more information or assistance kindly contact Samuel Kisuu or Craig Douglas Oyugi

This alert is for general use only and should not be relied upon without seeking specific legal advice on any matter.