There
is no requirement in the Kenya Companys Act that a director must hold shares, but more
frequently, the articles provides that no person shall act as a
director unless he holds certain number of shares or stock.
If
the articles of association contain a provision that the qualification
of a director shall be holding a specified number of shares, then
Section 183 provides that:-
(i) Each
director must acquire and retain such qualification shares within two
months after his appointment or such a shorter time as may be fixed by
Articles.
(ii) The warrant payable to bearer will not count for the purpose of qualification shares.
(iii) If he fails to acquire qualification shares within 2 months he automatically ceases to be a director.
(iv) He cannot be reappointed director unless he has obtained his qualification shares.
(v) If
he acts as a director after expiry of 2 months without taking
qualification shares, he is liable to a fine up to Sh. 100 for everyday
until he stops acting.
Retirement Age
Every
director is under Kenya laws required to retire from office shortly after 70 years and
no one should be reappointed after that age-but this does not apply
where the appointment is made or approved in Annual General Meeting
after a special notice has been given.
It
does not apply to private companies unless they are subsidiaries of
public company. The act also fixes the minimum age and states that no
person is capable of being appointed as a director if at the time of his
appointment, he has not reached or attained the age of 21.
Bankruptcy also disqualifies any person from holding office as a director.
Effects of Disqualification