Transfer of Businesses Act

LAWS OF KENYA
THE TRANSFER OF BUSINESSES ACT
CAP. 500
Revised and published by the National Council for Law Reporting
with the authority of the Attorney-General as gazetted by the Government Printer
www.kenyalaw.org

Kenya
Transfer of Businesses Act
Cap. 500
Legislation as at 1 July 1978
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Share widely and freely.

Transfer of Businesses Act (Cap. 500)
Contents
1. Short title ........................................................................................................................................................................................................... 1
2. Interpretation .................................................................................................................................................................................................... 1
3. Transferee of business to be liable for liabilities of transferor in certain cases ...................................................................... 1
4. Registrar General may prescribe newspapers ...................................................................................................................................... 2
5. Saving .................................................................................................................................................................................................................. 2
7.

................................................................................................................................................. 2
7.

Saving ................................................................................................................................................................................................................... 2
8. Limitation of actions ..................................................................................................................................................................................... 2

.................................................................................................................................................... 2

Transfer of Businesses Act (Cap. 500) Kenya
TRANSFER OF BUSINESSES ACT
CAP. 500
Assented to on 24 December 1930
Commenced on 24 December 1930
[Amended by Kenya (Amendment of Laws) (Written Laws)
Order, 1963 (Legal Notice 2 of 1964) on 12 December 1963]
[Amended by Transfer of Businesses (Amendment) Act, 1970 (Act No. 15 of 1970) on 1 May 1970]
[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.

here 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.

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;
1

he publication of the notice in the manner
aforesaid. The particulars above referred to are as follows:—
(a) The name and address of the transferor;
1

Transfer of Businesses Act (Cap. 500) Kenya
(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.

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.

d 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.]
2