1. The Notice of Motion application herein dated 15/11/2024 seeks orders to replace deceased shareholders and directors of a company with new ones. It is filed under sections 128, 135, 136 and 780 of the Companies Act (Cap. 486) Laws of Kenya, Order 37 Rule 1 and Order 51 of the Civil Procedure Rules, 2010.
2. The applicants pray for orders that this court directs the Registrar of Companies to remove Stephen Ndungu Nyamo and Mary Mankone – both deceased from the register of directors of Shimoni Supermarket Ltd of registration number C. 79271 on account of both directors being deceased and to direct the Registrar of Companies to register Sam Ndungu Nyamo and Thama Ndungu Nyamo as shareholders and directors of the said company, the two being the administrators and also only beneficiaries of the two deceased’s respective estates.
3. The grounds in support of the application are as outlined on the face thereof and expounded in the supporting affidavit sworn on 15/11/2024 by Sam Ndungu Nyamo, the 1st applicant on his behalf as well as that of the 2nd applicant.
4. In the supporting affidavit, the deponent has annexed a copy of the records relating to Shimoni Supermarket Limited held by the Companies Registry as at 24/5/2021 and copies of respective certificate of confirmation of grant for the estates of the two deceased shareholders and directors.
5. Learned counsel for the applicants filed submissions urging the application. He raised two issues for the court’s determination:
i. whether the court has jurisdiction to grant the above orders and;
ii. whether the Application has merit sufficient to grant the orders sought therein.
6. I have considered the application, the supporting grounds and the supporting affidavit and the submissions by learned counsel for the applicants.
7. The applicants herein state that Shimoni Supermarket Ltd, a company registered under the Companies Act is operating without a shareholder or director as the two registered dire tors of the company, Stephen Ndungu Nyamo and Mary Mankone – both deceased are both deceased. This means that there is no director of the company at the moment. It is the position of the applicants that as the administrators and beneficiaries of the respective estates of the two directors, they have been operating the company as such. It was only when, through their advocates, they sought to have the company linked to the online Business Registration Service platform at the Registrar of Companies that they were advised to file this application for the relevant directions.
8. Section 128(1) of the Companies Act under which the application is filed provides that a private company is required to have at least one director. Section 129(1) provides that a company is required to have at least one director who is a natural person while subsection (2) provides that subsection (1) is complied with if the office of director is held by a natural person as a corporation sole or otherwise by holding a specified office. The particulars of a director who is natural person required to be placed in the register of directors of the company are as provided for under section 135 of the Act.
9. In short, these provisions of the law mean that a private company requires at least one director who is a natural person to conduct its business. The situation presented in this application is interesting. The shareholders and directors of the company are both deceased. Who makes the decisions of the company? The applicants thus approach this court to regularize the position by directing that they be appointed as shareholders and directors of the company.
10. Section 780 of the Companies Act which the applicants rely upon requires that a member of the company must make the application. In this case, the applicants have not shown that they have become members of the company, Shimoni Supermarket Ltd. The fact that they are beneficiaries of the estate of the deceased shareholders/directors does not mean that they automatically become members of the company. This is because section 497 of the Companies Act requires that a company may only register a transfer of shares if a transfer of shares form has been delivered to it failure to which the transfer becomes void.
11. The transmission of shares is regulated by the subject company’s articles of association and in the absence thereof, it is regulated by Regulation 8(2) of the Companies (General) Regulations, 2015 which provides for the Model Articles for Private Companies Limited by Shares. This court has not been provided with the Articles of Association of the company herein, Shimoni Supermarket Limited, and so will go by the provisions of the Model Articles for Private Companies Limited by Shares under the Companies Act.
12. Clause 65(1)(b) of the said Model Articles for Private Companies Limited by Shares provides that if a member dies, and the deceased member was the sole holder of the share, the company may only recognize the legal personal representative of the deceased member as having any title to a share of the deceased member.
13. The applicants herein are the legal personal representatives of the deceased members of the company and so may be recognized by the company as having a title to the shares of the deceased members/shareholders.
14. Clause 67(1) and (2) of the Model Articles for Private Companies Limited by Shares further provides that if a transmittee chooses to become the holder of a share, the transmittee shall notify the company in writing of the choice and within 2 months after receiving the notice, the directors shall either register the transmittee as the holder of the share; or send the transmittee a notice of refusal of registration
15. From the foregoing provisions, since as administrators of the estate of the deceased, the applicants herein have chosen to become the holders of the shares, they are required to notify the subject company in writing of this position to become shareholders even as they would essentially be notifying themselves.
16. In this case the transmission of the shares of the deceased shareholders took place through the certificates of confirmation of grant. Therefore, what the applicants would be required to do is to have the said certificates of confirmation of grant registered with the Registrar of Companies. The said registration has not been produced in this case. The challenge seems to be that the registration of the certificate of transmission of shares cannot be undertaken on the online system thereby necessitating this application.
17. It would be safer for purposes of record if the administrators were to execute a deed of transfer of shares as the transferor, in order to transfer the shares to the beneficiaries, as the transferee, again, even as they would be doing the same essentially between themselves.
18. Upon registration of the deed of transfer of shares or the certificate of confirmation of grant, the transferees, in this case the applicants as beneficiaries of the deceased’s estates, are conferred with proprietary rights over the deceased’s shares in the company. The said deed of transfer of shares should soon thereafter be lodged at the Companies registry to have the register of members at the Companies registry read the beneficiaries/applicants’ names as the holders of the shares in the subject company.
19. Upon being registered as such as shareholders, they will have become members of the company and therefore can exercise the rights of members which include the right to transact the business of the company including to elect directors in accordance with the Articles of Association or in the absence under Regulation 8(2) of the Companies (General) Regulations, 2015 which provides for the Model Articles for Private Companies Limited by Shares. In view of that, this court has no jurisdiction to order for the removal and replacement of directors of the company as prayed as those are internal affairs of the company.
20. Section 103 of the Companies Act provides for the general power of the court to order rectification as follows:
S. 103. (1) If —
(a) the name of any person is, without sufficient cause, entered in or omitted from the register of members of a company; or
(b) the cessation of membership of a person who has ceased to be a member of the company has not been entered in that register, the person affected, or the company or any member of the company, may apply to the Court for rectification of the register.
21. It is clear that the two deceased shareholders have ceased to be members of the company and the applicants who as beneficiaries of the respective estates of the deceased are affected persons, wish to have the register rectified to reflect the obtaining position. In that case, the orders that commend to this court to issue are as per prayers 1 and 2 of the application that:
i. Upon complying with the requirement to issue the requisite notices of their intention to become shareholders of Shimoni Supermarket Limited and the same being registered with the Registrar of Companies;
ii. the Registrar of Companies do remove Stephen Ndungu Nyamo and Mary Mankone – both deceased from the register of directors of Shimoni Supermarket Ltd of registration number C. 79271 on account of both directors being deceased and,
iii. the Registrar of Companies to register Sam Ndungu Nyamo and Thama Ndungu Nyamo as shareholders and directors of the said company, the two being the administrators and also only beneficiaries of the two deceased’s respective estates.
22. For the foregoing reasons, I find that this application has merit and the same is allowed in terms above with no orders for costs.
Orders accordingly.
Written, dated, signed and delivered on the virtual platform, Teams, this 22nd day of July 2025
ANDAYI W. F.
JUDGE
In the presence of:
Nderitu Wang’ombe holding brief for Nechesa for the applicants.
Ummu: Court assistant.
ANDAYI W. F.
JUDGE
2. The applicants pray for orders that this court directs the Registrar of Companies to remove Stephen Ndungu Nyamo and Mary Mankone – both deceased from the register of directors of Shimoni Supermarket Ltd of registration number C. 79271 on account of both directors being deceased and to direct the Registrar of Companies to register Sam Ndungu Nyamo and Thama Ndungu Nyamo as shareholders and directors of the said company, the two being the administrators and also only beneficiaries of the two deceased’s respective estates.
3. The grounds in support of the application are as outlined on the face thereof and expounded in the supporting affidavit sworn on 15/11/2024 by Sam Ndungu Nyamo, the 1st applicant on his behalf as well as that of the 2nd applicant.
4. In the supporting affidavit, the deponent has annexed a copy of the records relating to Shimoni Supermarket Limited held by the Companies Registry as at 24/5/2021 and copies of respective certificate of confirmation of grant for the estates of the two deceased shareholders and directors.
5. Learned counsel for the applicants filed submissions urging the application. He raised two issues for the court’s determination:
i. whether the court has jurisdiction to grant the above orders and;
ii. whether the Application has merit sufficient to grant the orders sought therein.
6. I have considered the application, the supporting grounds and the supporting affidavit and the submissions by learned counsel for the applicants.
7. The applicants herein state that Shimoni Supermarket Ltd, a company registered under the Companies Act is operating without a shareholder or director as the two registered dire tors of the company, Stephen Ndungu Nyamo and Mary Mankone – both deceased are both deceased. This means that there is no director of the company at the moment. It is the position of the applicants that as the administrators and beneficiaries of the respective estates of the two directors, they have been operating the company as such. It was only when, through their advocates, they sought to have the company linked to the online Business Registration Service platform at the Registrar of Companies that they were advised to file this application for the relevant directions.
8. Section 128(1) of the Companies Act under which the application is filed provides that a private company is required to have at least one director. Section 129(1) provides that a company is required to have at least one director who is a natural person while subsection (2) provides that subsection (1) is complied with if the office of director is held by a natural person as a corporation sole or otherwise by holding a specified office. The particulars of a director who is natural person required to be placed in the register of directors of the company are as provided for under section 135 of the Act.
9. In short, these provisions of the law mean that a private company requires at least one director who is a natural person to conduct its business. The situation presented in this application is interesting. The shareholders and directors of the company are both deceased. Who makes the decisions of the company? The applicants thus approach this court to regularize the position by directing that they be appointed as shareholders and directors of the company.
10. Section 780 of the Companies Act which the applicants rely upon requires that a member of the company must make the application. In this case, the applicants have not shown that they have become members of the company, Shimoni Supermarket Ltd. The fact that they are beneficiaries of the estate of the deceased shareholders/directors does not mean that they automatically become members of the company. This is because section 497 of the Companies Act requires that a company may only register a transfer of shares if a transfer of shares form has been delivered to it failure to which the transfer becomes void.
11. The transmission of shares is regulated by the subject company’s articles of association and in the absence thereof, it is regulated by Regulation 8(2) of the Companies (General) Regulations, 2015 which provides for the Model Articles for Private Companies Limited by Shares. This court has not been provided with the Articles of Association of the company herein, Shimoni Supermarket Limited, and so will go by the provisions of the Model Articles for Private Companies Limited by Shares under the Companies Act.
12. Clause 65(1)(b) of the said Model Articles for Private Companies Limited by Shares provides that if a member dies, and the deceased member was the sole holder of the share, the company may only recognize the legal personal representative of the deceased member as having any title to a share of the deceased member.
13. The applicants herein are the legal personal representatives of the deceased members of the company and so may be recognized by the company as having a title to the shares of the deceased members/shareholders.
14. Clause 67(1) and (2) of the Model Articles for Private Companies Limited by Shares further provides that if a transmittee chooses to become the holder of a share, the transmittee shall notify the company in writing of the choice and within 2 months after receiving the notice, the directors shall either register the transmittee as the holder of the share; or send the transmittee a notice of refusal of registration
15. From the foregoing provisions, since as administrators of the estate of the deceased, the applicants herein have chosen to become the holders of the shares, they are required to notify the subject company in writing of this position to become shareholders even as they would essentially be notifying themselves.
16. In this case the transmission of the shares of the deceased shareholders took place through the certificates of confirmation of grant. Therefore, what the applicants would be required to do is to have the said certificates of confirmation of grant registered with the Registrar of Companies. The said registration has not been produced in this case. The challenge seems to be that the registration of the certificate of transmission of shares cannot be undertaken on the online system thereby necessitating this application.
17. It would be safer for purposes of record if the administrators were to execute a deed of transfer of shares as the transferor, in order to transfer the shares to the beneficiaries, as the transferee, again, even as they would be doing the same essentially between themselves.
18. Upon registration of the deed of transfer of shares or the certificate of confirmation of grant, the transferees, in this case the applicants as beneficiaries of the deceased’s estates, are conferred with proprietary rights over the deceased’s shares in the company. The said deed of transfer of shares should soon thereafter be lodged at the Companies registry to have the register of members at the Companies registry read the beneficiaries/applicants’ names as the holders of the shares in the subject company.
19. Upon being registered as such as shareholders, they will have become members of the company and therefore can exercise the rights of members which include the right to transact the business of the company including to elect directors in accordance with the Articles of Association or in the absence under Regulation 8(2) of the Companies (General) Regulations, 2015 which provides for the Model Articles for Private Companies Limited by Shares. In view of that, this court has no jurisdiction to order for the removal and replacement of directors of the company as prayed as those are internal affairs of the company.
20. Section 103 of the Companies Act provides for the general power of the court to order rectification as follows:
S. 103. (1) If —
(a) the name of any person is, without sufficient cause, entered in or omitted from the register of members of a company; or
(b) the cessation of membership of a person who has ceased to be a member of the company has not been entered in that register, the person affected, or the company or any member of the company, may apply to the Court for rectification of the register.
21. It is clear that the two deceased shareholders have ceased to be members of the company and the applicants who as beneficiaries of the respective estates of the deceased are affected persons, wish to have the register rectified to reflect the obtaining position. In that case, the orders that commend to this court to issue are as per prayers 1 and 2 of the application that:
i. Upon complying with the requirement to issue the requisite notices of their intention to become shareholders of Shimoni Supermarket Limited and the same being registered with the Registrar of Companies;
ii. the Registrar of Companies do remove Stephen Ndungu Nyamo and Mary Mankone – both deceased from the register of directors of Shimoni Supermarket Ltd of registration number C. 79271 on account of both directors being deceased and,
iii. the Registrar of Companies to register Sam Ndungu Nyamo and Thama Ndungu Nyamo as shareholders and directors of the said company, the two being the administrators and also only beneficiaries of the two deceased’s respective estates.
22. For the foregoing reasons, I find that this application has merit and the same is allowed in terms above with no orders for costs.
Orders accordingly.
Written, dated, signed and delivered on the virtual platform, Teams, this 22nd day of July 2025
ANDAYI W. F.
JUDGE
In the presence of:
Nderitu Wang’ombe holding brief for Nechesa for the applicants.
Ummu: Court assistant.
ANDAYI W. F.
JUDGE