How to Transfer Shares in a Company in Kenya

When you are running a Company you may want to transfer shares for one reason or the other. Maybe you want to add an investor to your Business in exchange for funding or give an employee shares to ensure that they are loyal to your Company.
This is how to transfer shares in a company in Kenya;

  1. Determine the number of shares you want to transfer. It is important to determine both the quality and quantity of shares you wish to transfer. Consider how the share transfer will change your company, for instance, you don’t want to lose control over your company by issuing too many high-quality shares to another person. In such a situation it may be wise to issue non-voting shares instead. In another situation, you may want to entice investors with preference shares which ensures that they are paid their share of profits ahead of other shareholders.
  2. Prepare the Minutes of the Shareholders’ Meeting approving the Share Transfer.
  3. Prepare the Transfer Deed for the transaction. Sign it together with the person you are transferring shares to. Have it properly witnessed. Also, fill out Form D (one of the forms attached to the Companies Act), it should be filled and signed by your Company Auditor or a Company Secretary.
  4. It is also important to have a Share Purchase Agreement between you and the person purchasing the shares in question. It is important to get legal advice on this depending on the context, for example, a Share Purchase Agreement between you and an investor is different compared to one between you and an employee. For example, you will want to have a dispute resolution clause that ensures all the disputes you have with an investor are settled in Kenya under Kenyan laws to avoid having to travel to where the Investor is from to settle a dispute.
  5. File the Deed, Form D and Minutes with the Companies Registry and have the Stamp Duty Assessed and paid. Also, attach a copy of your Company’s interim annual returns to support the transfer request.
  6. If the Companies Office is satisfied that you have met the requirements, they will make the changes on the company’s e-citizen platform and update the company’s records.
  7. You will have successfully transferred your shares and now you can amend your Shareholders Agreement accordingly

The writer is a lawyer who specializes in offering legal services to people in technology. You can reach him through

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