Section
389 of the Kenya companys Act provides that “No company, association or partnership consisting of
more than twenty persons shall be formed for the purpose of carrying on
any business …unless it is registered under this Act.” Registration
is the condition precedent to the formation of a registered company and
failure to register a proposed company will mean that it does not
legally exist.
Case Law: Fort Hall Bakery Supply Co. vs. Wangoe
A
plaint bearing the name “The Fort-Hall Bakery Supply Co.” filed a case
against a defendant for recovery of certain amount of money. During
the hearing it was established that the business called “Fort-Hall
Bakery Supply Co.” was being carried on by a group of 45 persons and had
not been registered under Companies Act. The defendant submitted that the action was not properly before the court since the business was illegal under Section 338.
It was
held that the plaintiff could not be recognized as having any legal
existence and were incapable of maintaining the action. The
court terminated the proceedings without making any order as to costs
because a non-existent plaintiff can neither pay nor receive costs.
Effect of Registration of a company under Kenya laws
(a) The date mentioned in the certificate of incorporation is the date from which the company’s legal existence commences. Consequently,
if an incorrect date is written in the certificate, that date would be
regarded as the actual date on which the company was registered.
(b) The
company’s registration constitutes it “a body corporate”. It becomes a
legal person or “corpora corporata” whose name is that appearing in the
memorandum of association. The
certificate of incorporation is regarded as the company’s birth
certificate and the date written on it is the company’s birthday.
(c) Once
the company is registered it must be treated like any other independent
person with rights and liabilities appropriate to itself.