Under Kenya’s Companies Act, 2015, Section 97 outlines how joint shareholding is handled when one joint shareholder dies:
- Joint Holders: According to Section 97(1), if shares are held jointly by two or more people, the surviving joint holders automatically inherit the deceased’s share(s). The remaining joint holders are the only ones entitled to these shares, following the principle of joint tenancy.
- Death of a Joint Holder: When one joint shareholder dies, the surviving joint holders inherit the deceased’s shares. The deceased’s estate cannot claim the shares without surviving joint holders. This means the shares do not become part of the deceased’s estate and are transferred directly to the surviving holders without probate or other legal processes (see Section 56).
Additional considerations include:
- Articles of Association: The company’s articles of association might have specific rules about transferring shares when a shareholder dies. These rules could include extra procedures or requirements.
- Administrative Details: The registrar of companies may ask the surviving joint holders to provide proof of the deceased’s death and other legal documents to update the company’s share register.
This provision simplifies the transfer of shares held jointly by passing them directly to the surviving holders without complex legal steps.
