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Transfer of Businesses Act

Cap. 500

This is the latest version of this Act.
Transfer of Businesses Act
Citation
Cap. 500
Date
1 July 1978
Language
English
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LAWS OF KENYA

TRANSFER OF BUSINESSES ACT

CAP. 500

  • Assented to on 24 December 1930
  • Commenced on 24 December 1930
  1. [Amended by Kenya (Amendment of Laws) (Written Laws) Order, 1963 (Legal Notice 2 of 1964) on 12 December 1963]
  2. [Amended by Transfer of Businesses (Amendment) Act, 1970 (Act No. 15 of 1970) on 1 May 1970]
  3. [Amended by Transfer of Businesses (Amendment) Act, 1978 (Act No. 9 of 1978) on 1 July 1978]
An Act of Parliament to prevent certain fraudulent transfers of businesses

1. Short title

This Act may be cited as "the Fraudulent Transfer of Businesses Act, 1980."[L.N. 2/1964]

2. Interpretation

In this Act—"business " means any trade or occupation, other than a profession, carried on with a view to profit;"transferor" and "transferee" respectively include a sub-transferor and sub-transferee, and, where the notice referred to in section 3 is given before the date bf the transfer, an intended transferor and an intended transferee.[L.N. 2/1964]

3. Transferee of business to be liable for liabilities of transferor in certain cases

(1)Whenever any business or any portion of any business is transferred, with or without the good will or any portion thereof, the transferee shall, notwithstanding any agreement to the contrary, become liable for all the liabilities incurred in the business by the transferor, unless due notice in accordance with this section shall have been given and shall have become complete at the date of the transfer.
(2)The liability of the transferee under sub-section (1) of this section shall cease immediately notice given in accordance with this section shall have become complete:Provided nevertheless that should proceedings be instituted against the transferee before such liability has ceased the said notice shall (for the purposes of such proceedings but for such purposes only) be deemed incomplete pending the final determination of such proceedings including all possible appeals, and pending the expiration of all periods during which such appeals may be brought.
(3)The notice referred to shall contain the particulars hereinafter specified, and shall be given by publication, either before or after the date of the transfer, in the Gazette and in such newspaper or newspapers circulating in the Colony as may from time to time be prescribed by the Registrar General, and shall, subject to the proviso to sub-section (2) of this section be deemed to be complete upon the expiration of two months from the publication of the notice in the manner aforesaid.The particulars above referred to are as follows:—
(a)The name and address of the transferor;
(b)the nature of the business, and the name or style under which, and the address at which the transferor has carried on the business;
(c)the name and address of the transferee;
(d)the address where the transferee intends to carry on the business; and
(e)a statement as to whether the transferee is assuming or is intended to assume all the liabilities incurred in the business by the transferor.
(4)The production of the Gazette containing the notice shall be prima facie evidence as against both the transferor and the transferee of the statements contained in the notice.
(5)Nothing in this section contained shall have the effect of relieving the transferor from any liability to which he would otherwise be subject.

4. Registrar General may prescribe newspapers

The Registrar General may by notice in the Gazette prescribe the newspaper or newspapers in which notice of transfer shall be given under section 3 of this Act, either in respect of the whole Colony or in respect of businesses carried on in any part of the Colony.[L.N. 2/1964]

5. Saving

Nothing in this Act contained shall be deemed to apply to the transfer of any business consequent upon the reconstruction or winding up of a company in accordance with the provisions of the Companies Act (Cap. 93).[L.N. 2/1964]

7. Saving

Nothing in this Act shall apply to the transfer of any business or portion thereof—
(a)consequent upon the reconstruction or winding up of a company in accordance with the Companies Act (Cap. 486); or
(b)by way of bona fide creation of a security; Or
(c)by way of bona fide realization of a security:Provided that, before completion of any transfer under this paragraph otherwise than pursuant to a sale by public auction, an accountant registered under the Accountants Act (Cap. 531) shall certify in writing to the Registrar-General both the amount to be realized thereby and his opinion that it represents the best price obtainable for the security so realized without undue delay.
[Act No. 9 of 1978, s. 3.]

8. Limitation of actions

Notwithstanding the provisions of this Act or of any other written law, no proceedings shall be brought against a transferee in respect of any liability imposed by this Act after the expiration of six months after the date of the transfer concerned.[Act No. 15 of 1970, s.2.]
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History of this document

01 July 1978 this version
01 May 1970
12 December 1963
24 December 1930
Assented to
Commenced

Cited documents 3

Act 2
1. Companies Act 1732 citations
2. Community Service Orders Act 211 citations
Legal Notice 1
1. The Accountants (Quality Assurance Review) Regulations 5 citations

Documents citing this one 11

Judgment 9
1. APA Insurance Limited v RLA (Minor Suing Through her Next Friend RA) (Civil Appeal 440 of 2019) [2024] KEHC 2943 (KLR) (Civ) (19 March 2024) (Judgment) Interpreted
2. Arungu v SBM Bank (Kenya) Limited (Civil Case E498 of 2022) [2025] KEHC 1807 (KLR) (Commercial and Tax) (13 February 2025) (Ruling)
3. Computech Limited v Leakey's Auctioneers & another (Constitutional Petition 280 of 2019) [2022] KEHC 13225 (KLR) (Constitutional and Human Rights) (30 September 2022) (Judgment) Cited
4. Geoggrey Oluoch Yogo and Erick Otieno Ojuro T/A Otieno, Yogo Ojuro & Company Advocates v Dominion Farms Limited & another (Civil Suit 2 of 2020) [2022] KEHC 12740 (KLR) (26 August 2022) (Ruling) Interpreted
5. Katambo v SBM Bank (Kenya) Limited & 2 others (Commercial Petition E018 of 2023) [2025] KEHC 128 (KLR) (Commercial and Tax) (16 January 2025) (Judgment)
6. Kennedy Odhiambo Owiti t/a Odhiambo Owiti & Company Advocates v Dominion Farms Limited & 3 others (Commercial Case 1 of 2020) [2024] KEHC 9877 (KLR) (5 August 2024) (Judgment)
7. Odera v Garda World Limited (Cause 2437 of 2017) [2023] KEELRC 1544 (KLR) (16 June 2023) (Judgment) Interpreted
8. SBM Bank (Kenya) Limited v Afrasia Bank Limited (Civil Application E327 of 2022) [2023] KECA 366 (KLR) (31 March 2023) (Ruling) Cited
9. Stitching Medical Credit Fund v SBM Bank Kenya Limited (Commercial Case E142 of 2020) [2024] KEHC 3466 (KLR) (Commercial and Tax) (1 March 2024) (Ruling)
Legal Notice 2
1. The Statutory Instruments (Exemption from Expiry) Regulations
2. The Statutory Instruments (Exemption from Expiry) Regulations

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