The law governing fees chargeable by advocates for various legal services is found in the Advocates (Remuneration) Order (ARO) as read with the Advocates Act, Chapter 16 of the Laws of Kenya. The ARO stipulates that lawyers should charge a minimum of Ksh. 50,000 for registration of companies as PROFESSIONAL FEES.
Section 36 (1) of the Advocates Act on the other hand provides that “Any advocate who holds himself out or allows himself to be held out, directly or indirectly and whether or not by name, as being prepared to do professional business at less than the remuneration prescribed, by order, under this Act shall be guilty of an offence.” Section 36 (2) thereof provides that “No advocate shall charge or accept, otherwise than in part payment, any fee or other consideration in respect of professional business which is less than the remuneration prescribed, by order, under this Act.”
On the face of it, it would therefore appear that selling an already registered company at less than Kshs. 50,000 would be an illegality by virtue of section 36 of the Advocates Act. However, the ARO does not prescribe the PRICE at which a lawyer and or anyone else for that matter may SELL his existing companies to someone else. As such, once a company is registered, its shareholders may as well sell the company at Kshs. 1 as consideration.
Unfortunately or otherwise, this lacuna in the law has been used by practitioners keen on defeating the import of Section 36 of the Advocates Act in so far as legal fees for incorporation of companies is concerned.
Be that as it may, that which the law does not prohibit expressly or otherwise remains lawful. Accordingly, it's perfectly lawful to incorporate a company (shelf) and thereafter sell the same at whichever price the buyer is willing to part with.
We welcome any enquiries regarding registration of companies, business names and any other corporate entity. Our email address is firstname.lastname@example.org or you may call us on +254 773 865 798. We will endevour to revert to your queries within 24 hours.
For: Strategic Legal Solutions Group Limited
Corporate Law & Business Services Consulting Group * a participating consultancy in the SLS Group of Consultancies.