A company director's legal duties
Companies Act; Business Registration Service · sources read 4 Oct 2026
Under the Companies Act a director must act within the company's powers, promote its success, use independent judgement, take reasonable care, skill and diligence, avoid conflicts of interest, refuse benefits from third parties and declare any interest in company deals. These duties are owed to the company.
- Deadline
- Public companies: a director's interest must also be declared to the members within 72 hours
- Where
- Inside the company (board of directors); breach claims go to the High Court
Steps
- As a director, declare to the other directors the nature and extent of any interest you have in a deal with the company, before the company enters it.
- Where you may have a conflict, get the matter authorised by the other directors. Without that, it is a breach of the duty to avoid conflicts.
- As a shareholder, if a director breaches a duty, you can bring a derivative claim in court on the company's behalf. You need the Court's permission to continue it.
Watch out
- A director who breaks the conflict-of-interest rule commits an offence and can be disqualified for up to 5 years.
- Accepting a benefit from a third party because you are a director is an offence with a fine of up to KSh 1 million.
- Failing to declare an interest is an offence with a fine of up to KSh 1 million.
Who this covers
- Every director of a company. The duties are owed to the company itself
- Former directors too, for conflicts over property, information or opportunities they learnt of while a director, and for third-party benefits
Official sources (1)
- Companies Act, 2015 (No. 17 of 2015) new.kenyalaw.org · read 4 Oct 2026