Business Law: Limited Partners and Limited Liability in Kenya

Below is section 56-67 of the Kenya Partnership Act which provides laws  to govern limited partnerships and  limited liability.

Limited partners and limited liability
56. What constitutes a limited partnership
(1) A partnership is a limited partnership for the purposes of this Part only if it
has—
(a) one or more general partners, each of whom has unlimited liability;
and
(b) one or more limited partners, each of whom has limited liability.
(2) A general partner shall he liable for all debts and obligations of the
partnership.
(3) A limited partner shall be liable for the debts or obligations of the
partnership to the extent of the amount contributed the partnership at the time of
joining the partnership.
57. Becoming and ceasing to be a limited partner
(1) A person shall become a limited partner in a limited partnership when the
person is registered as such.
(2) A person shall cease to be a limited partner if—
(a) the person is deregistered as a limited partner;
(b) the person dies; or
(c) the partnership is dissolved.
58. Role of limited partner to be restricted
(1) A limited partner shall not take part in the management of the partnership
business.
(2) A person who contravenes subsection (1) is personally liable for—
(a) any partnership obligation incurred as a result of the contravention;
and
(b) any other partnership obligation incurred during the period of
contravention.
(3) Nothing in subsection (1) shall prevent a limited partner from doing
anything which is a permitted activity under the Sixth Schedule.
59. Limited partner’s liability to be limited
(1) A limited partner shall not be entitled either directly or indirectly to draw
out or receive back the whole or part of the capital contribution that the partner
has made to the partnership.
(2) A limited partner shall not, during the continuance of’ the partnership,
either directly or indirectly draw out or receive back the whole any part of any
capital contribution that the partner has made to the partnership.
(3) A limited partner who contravenes subsection (2) shall be personally
liable for any partnership obligation incurred while he is a limited partner.
(4) A limited partner’s liability under subsection (3) exceed the amount drawn
out or received back by the partner.
(5) In this section, “capital contribution” means a capital contribution
consisting of—
(a) a sum or sums of money; or
(b) property that has an agreed capital value.
60. General application of Act to limited partnerships
Subject to sections 62, 63 and 64, this Act applies in relation to limited
partnerships as it applies in relation to general partnerships.
61. Rights and duties of the partners, etc.
(1) Differences arising relating to ordinary matters connected with the
partnership business or affairs shall to decided by—
(a) the general partner; or
(b) if there is more than one general partner, a majority of them.
(2) Differences arising relating to other matters connected with the
partnership business or affairs shall be decided by—
(a) the general partner; or
(b) if there is more than one general partner, all of them acting together.
(3) The question as to whether a limited partner should be given authority to
act on behalf of the partnership is not an ordinary matter.
(4) The partners in a partnership may not vary the provisions of subsection
(3) or (4).
62. Changes in partners
(1) A person may become a partner in an existing partnership if all the
general partners in the partnership agree to the person’s admission into the
partnership.
(2) Partners in a partnership may not expel a limited partner under section
(3) Nothing in section 34 prevents a person to whom a partner has assigned
the whole of his share absolutely from becoming a partner in place of such
partner if—
(a) all the general partners agrees to the substitution; or
(b) the substitution is made in accordance with the partnership
agreement.
63. Break up and winding up of limited partnership
(1) Unless the Court orders otherwise the winding up of a limited partnership
shall be conducted by a general partner.
(2) Sections 54 and 51 and the Second Schedule shall with necessary
modifications, apply in relation to a limited partnership.
64. Limited partnership Registered Office
A limited partnership shall establish and maintain a registered office to which
communications may be delivered or addressed.
65. Name of a limited partnership
(1) The name of a limited partnership shall have—
(a) the word “limited partnership”; or
(b) the abbreviation “lp” or “LP”,
appearing at the end of its name.
(2) A partnership may not be registered in a name—
(a) which is the same as a name appearing in the index kept under the
Companies Act (Cap. 486);
(b) the use of which would in the opinion of the Registrar constitute an
offence; or
(c) which in the opinion of the Registrar is offensive.
(3) In determining for the purposes of this section, whether one name is the
same as another, the Registrar shall have regard to the existence of otherwise
of—
(a) the definite article as the first word of the name;
(b) any of the following, or abbreviations of them, at the end of the
name—
(i) “limited partnership”;
(ii) “limited liability partnership”;
(iii) “company”;
(iv) “and company”;
(v) “company limited”;
(vi) “limited”;
(vii) “unlimited”;
(viii) “public limited company”;

(ix) “investment company with variable capita!”; or
(c) “open-ended investment company”.
(4) For the purposes of subsection (3), the type and case of letters, accents,
spaces between letters and punctuation marks, and “and” and “&” shall be taken
as the same.
66. Improper use of the expression “limited partnership”, etc.
(1) This section applies to the following entities—
(a) a limited partnership;
(b) a partner in a limited partnership;
(c) a foreign limited partnership; or
(d) a partner in a foreign limited partnership.
(2) An entity to which subsection (1) applies shall not carry on the business of
a limited partnership under a name which is not registered as a limited
partnership or which does not include at the end of its name, the words “limited
partnership”; or any contraction or imitation of either of those.
(3) An entity which contravenes subsection (1) commits an offence and is
liable on conviction to a fine not exceeding one hundred thousand shillings.
67. Information to be provided on partnership documents
(1) The partners of a limited partnership shall state the name and the address
of the registered office of the limited partnership on any partnership document.
(2) A general partner who fails to comply with subsection (1) commits an
offence and is liable on conviction to a fine not exceeding one hundred thousand
shillings.

Business Law: Registration of Partnerships in Kenya

Below is section 68-74 of the Kenya  Partnerships Act which provides for the registration of partnerships in Kenya.

Application for registration
(1) A person who wishes to register a partnership shall deliver to the
Registrar an application for registration together with a statement specifying—
(a) the name under which the limited partnership is to be registered;
(b) the names and addresses of the proposed genera! partners;
(c) the name of each proposed limited partner and the amount of capital
contribution made by the partner to the partnership;
(d) the location and address of the proposed registered office; and
(e) if the application relates to an existing general partnership, the date
of its formation.
(2) The statement shall be signed by—
(a) the proposed general partner; or
(b) if there is more than one proposed general partner, all of the
proposed general partners.
69. Registration and registration certificate
(1) On receiving an application for the registration of a limited partnership
under section 68, the Registrar shall, if satisfied that section 65 has been
complied with—
(a) register it as a limited liability partnership; and
(b) issue it with a registration certificate.
(2) A registration certificate shall indicate—
(a) the name of the limited partnership as specified in the application for
registration;
(b) the fact of its registration as a limited partnership; and
(c) the date of registration,
and shall be signed by the Registrar.
(3) If the partnership to which the application relates was not formed before
registration, the partnership is formed when it is registered.
70. Registration of charges, deregistration and other matters
(1) The Registrar may make rules relating to the procedures of registration
under this Act.
(2) The Fifth Schedule shall have effect for purposes of this section.
71. Offences of providing false information
(1) A person who knowingly provides or causes to another person provide,
false information commits an offence and is liable on conviction to a term not
exceeding six years or to a fine not exceeding one hundred thousand shillings or
to both.
(2) A person who provides, or causes or allows another person to provide, in
a notice to the Registrar, changes or corrections which the person knows to be
false, commits an offence and is liable on conviction to imprisonment for a term
not exceeding six years or a fine not exceeding one hundred thousand shillings
or to both.
72. Offences by bodies corporate
(1) If an offence under this Part committed by a body corporate is proved—
(a) to have been committed with the consent or connivance of an officer
of the body corporate; or
(b) to be attributable to neglect on the part of such an officer,
the officer as well as the body corporate commits an offence and is liable on
conviction to a fine not exceeding one hundred thousand shillings, and the officer
is liable in addition to the fine to imprisonment for a term not exceeding six
months, or to both.
(2) If the affairs of a body corporate are managed by its members, subsection
(1) applies in relation to the acts and defaults of a member in connection with his
functions of management as if the member were a director of the body corporate.

(3) In this section, “officer” includes—
(a) a director, manager or secretary; and
(b) a person purporting to act as director, manager or secretary.
73. Evidence
(1) A certificate of the registration of a partnership is conclusive evidence
that—
(a) the requirements relating to registration, and other matters
precedent and incidental to it, have been complied with;
(b) the partnership was registered as a limited partnership on the date
stated in the certificate; and
(c) its partnership name is as specified in the certificate.
(2) A certificate of a change in the name of a partnership shall in the absence
of evidence to the contrary, be evidence that—
(a) the partnership was registered as having a new name on the date
specified in the certificate; and
(b) its partnership name is as specified in the certificate.
(3) A copy of an original document or of part of such a document sent to the
Registrar shall, if purporting to be certified by the Registrar, be admissible in a
legal proceeding as evidence of the contents of that document or part of the
document.
74. Disclosure of information about partners, etc.
(1) A person dealing with a partnership shall be entitled, on request to the
partnership or to a partner, to be informed of—
(a) the full name of each partner; and
(b) the address of service of each partner.
(2) A person who has a complaint against a partnership connected with the
dealings the person has had with the partnership shall be entitled, on request
made to the partnership, a partner of a former partner, to be given such
information as the partnership, partner or former partner is reasonably able to
provide or to obtain with regard to—
(a) the full name of each person who was a partner at the time of the
act or omission to which the complaint relates; and
(b) an address for service, or the last known address, of each such
person.
(3) The Registrar may in consultation with the Minister, make rules relating
to—
(a) the making of claims made against a partnership;
(b) a partner or former partner in respect of a partnership obligation
before legal proceedings are brought in respect of a claim for an
order for the disclosure of the information in subsection (1) or (2).

Business Law: Winding Up and Dissolution of Partnerships in Kenya

Below is Section 40-42 if the Kenya partnership Act which provides for winding and dissolution of partnerships
40. Winding up by partners
(1) A partnership which breaks up may be wound up under this section by
one or more partners in the partnership.
(2) Differences arising as to matters connected with the winding up of the
partnership shall be decided by a majority of the partners.
41. Distribution of partner’s assets on winding up
(1) The interests of partners in the partnership property and their rights and
duties in relation to the partnership property shall, on the winding up of the
partnership, be determined by the following rules and in the following order—
(a) each partner shall pay into the partnership any amounts which the
partner owes to the partnership;
(b) the partnership shall pay all amounts it owes to persons other than
partners;
(c) the partnership shall pay to each partner any amount owed to him,
but excluding the partner’s contribution towards the capital of the
partnership, on which it shall pay to each partner the amount, if any,
which it owes to the partner in respect of capital;
(d) the partners shall share among themselves any surplus assets in
the same proportion as they would be entitled to share the
partnership profits, if any;
(e) if the partnership is unable to meet its obligations under paragraph
(b), the partners shall contribute towards the deficiency in the same
proportions as they would be liable to share any partnership losses
in order to meet a partnership obligation;
(f) if a partnership is unable to pay to each partner the amount
contributed by the partner towards the capital of the partnership, it
shall transfer to the partners, the remaining assets of the partnership
in equal proportion to the capital contributed by the partner.

(2) A partner shall not be liable to contribute—
(a) under subsection (1)(b) and (c) in respect of a partnership obligation
for which he is not secondarily liable;
(b) under subsection (1)(c) in respect of a, partnership obligation to
indemnify another partner under section 12(3), if the partner would
not be liable under this Act to make contribution to that partner in
respect of the obligation; or
(c) under subsection (1)[(c)] in respect of an amount which is owed to
another partner and to which this section applies, if the partner
would not be liable under that provision to make a contribution to
that other partner in respect of the amount.
(3) If a partner—
(a) is not required to contribute an amount under subsection (2); or
(b) is, because of insolvency, unable to contribute an amount required
under subsection (1)(b) and (c),
the other partners shall contribute that amount according to the proportions in
which they are liable as among themselves.
42. Dissolution of partnership which has broken up
(1) A partnership which breaks up under section 35 shall stand dissolved if—
(a) all partnership property is distributed to persons entitled to it;
(b) any trust property has been transferred to—
(i) the person entitled to it; or
(ii) a trustee for that person;
(c) no liabilities are outstanding against the partnership;
(d) no claims are outstanding by or against the partnership; and
(e) if a liquidator has been appointed under section 53, the liquidator
has ceased to hold office without being replaced.