The parcel you want is registered in the name of a limited company, and the person negotiating with you introduces himself as a director. Before any deposit is paid, the company’s official records, not the person in front of you, determine who can actually sell.
Why is buying from a company different?
A company holds land as a separate legal person, so a valid sale depends on the company acting through its proper organs, the board of directors and, where the constitution or shareholding requires it, the members themselves. A transfer signed without authority can be disputed long after completion. The buyer’s protection lies in documents the company has generated, not in assurances from individuals.
What is a CR12 and why does it matter?
A CR12 is an official extract from the register of companies showing a company’s directors and shareholders. It is obtained from the Business Registration Service, whose services are accessible through eCitizen and brs.go.ke. Comparing the CR12 against the people who will sign the transfer is a basic test of authority. Because directorships change, the CR12 should be current, an extract dated close to the signing carries more weight than one from a year earlier.
What company documents should a buyer see?
- A current CR12 confirming the directors and shareholding.
- A board resolution approving the sale and nominating the authorised signatories.
- The company’s KRA PIN certificate.
- The company seal and identification documents of the signatories.
What other checks apply?
Search the company register for charges, since a fixed or floating charge over the company’s assets can capture the land, and confirm at the lands registry that no charge is noted on the title itself. Where the company has a broad shareholding, a written consent of the members may also be needed. Where the company is sizeable or the transaction significant, independent verification of the corporate approvals is worth the time. CS Advocates LLP conducts company-side due diligence in land acquisitions through our governance and advisory practice and completes the transfer through our conveyancing team in Nairobi.
For guidance on your specific situation, contact CS Advocates LLP, call, WhatsApp, or book a confidential consultation at our Westlands, Nairobi office.