Key Point
The Business Laws (Amendment) Act No. 1 of 2020 (the “Amendment Act”) was assented to on 18th March, 2020 and came into force upon assent. The main objective of the Amendment Act is to enhance ease of doing business in Kenya by amending various laws which were, in some way, seen as impediments to transacting effectively in Kenya. Some of the key changes introduced by the Act include:
- Validation of the use of electronic signatures in land transactions;
- Abolition of the requirements to produce Land Rates and Rent clearance certificates and to obtain certain consents as pre-requisites for registration of instruments of transfer of land;
- Abolition of the requirement of affixing a company seal in the execution of company documents;
- Requirement to convert all bearer shares into registered shares;
- Raising the threshold to buy out minority shareholders from 50% to at least 90%; and
- Tax incentives for bulk storage investors of the Standard Gauge Railway project
1. Validation of the use of electronic signatures in land transactions
The Amendment Act amended the following laws to allow the use of electronic signatures in land transactions:
a. Law of Contract Act, Cap 23, Laws of Kenya
The definition of the term “Sign” under Section 3(6) of the Act was amended to include by means of an advanced electronic signature. The term “advanced electronic signature” is defined under Section 2 of the Kenya Information and Communications Act, 1998 (the KICA) to mean an electronic signature which is :-
- uniquely linked to the signatory;
- capable of identifying the signatory;
- created using means that the signatory may maintain under his or her sole control; and
- linked to the data to which it relates in such a manner that any subsequent change to the data may be detectable.
- Section 2 of the KICA defines the term “electronic signature” to mean data in electronic form affixed to or logically associated with other electronic data which may be used to identify the signatory in relation to the data message and to indicate the signatory’s approval of the information contained in the data message.
