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AMENDMENTS TO THE COMPANY’S CONSTITUTIVE DOCUMENTS: LIMURU COUNTRY CLUB

 

PURPOSE

The purpose of this memo is to highlight the changes made to the Memorandum and Articles of Association of the Club. The focus will mainly be on the additions, deletions and amendments as well as the rationale behind these changes. This memo is to be read along with the attached draft amended Memorandum and Articles of Association of the Company containing the highlighted provisions.

 

INTRODUCTION

The proposal to amend the Memo and Articles of Association of the Club was brought by the need to update the provisions to reflect the changing times and to provide for areas that had previously been left out in the review. It sought to ensure that the Memo and Articles reflect modern practices as well as the dynamic needs of the membership. This course of action was also prompted by the enactment of the Sports Act Number 25 of 2013 as well as the promulgation of the Constitution, 2010 both of which have a direct bearing on the Club’s regulations

 

There was a need to clean up areas where minor inconsistencies in the constitutive documents which were noted and reconcile them to give the Memorandum and Articles of Association the sanctity they deserved as the primary and constitutive charter of the Club.

 

The proposal was also prompted by the need to import various critical provisions of a permanent nature from its by-laws to form part of the Articles of Association.

 

In coming up with these changes the Committee has held several and expansive discussions as well as consultations and have looked into similar associations for guidance on various areas. It is however important to note that notwithstanding this comparative review exercise the proposed Articles are quite unique in their nature as they take into consideration the special needs of its members, the history of the Club, the nature of the activities of the Club and the unique fact that the Club is a Limited Liability Company and not a Society as some Clubs.

 

PROPOSED AMENDMENTS:

 

        I.            MEMORANDUM OF ASSOCIATION.

 

There has been no change with regard to the content: just a slight amendment and beefing up of the objects;

 

·         The numbering has changed from letters (a,b,c…) to Arabic numbering (3.1, 3.2, 3.3…)

 

·         Object 3.13 has been amended by the addition of these words; “food, beverages of every description, intoxicating liquors cigarettes and any other items that the Company may deem fit guided by the needs of the members”.

 

This amendment which gives an inexhaustive list of products that can be purchased provides needed guidance on the class of products that can be purchased by the Club.

 

·         Paragraph 5 has been amended to include the words; “to dispense with the word “Limited” in its name”.

 

This clearly lays out the implication of the invocation of Section 21 of the Companies Act.

 

     II.            ARTICLES OF ASSOCIATION.

 

 

1.       Interpretation;

 

The Articles as they currently refer to Table C of the Companies Act. This is adopted by the proposed Articles which have provided in addition the definitions of ‘Club’, ‘Club Facilities’ and ‘Member”.

 

This gives a more detailed and unique explanation of the meaning of these terms as used by the Club.

 

2.       Membership;

 

Although the content remains unchanged, the structuring of this part has been altered to provide more clarity and detail.

 

 The part starts off by elaborating on the eligibility of persons to become members, the rights of members as well as the Directors’ discretion on membership this is still exercised through the Membership and Disciplinary Committee).

 

The provisions under each particular class have been amended by providing more detail as to eligibility of the members to stand for certain posts in the club, right to nominate persons for election as well as their role in nominating persons to join the club.  This amendment is not to change the provisions but to provide greater clarity and understanding.

 

·         Joint Social Membership

 

The change with regard to this class is that; unlike in the current Articles where (Article 29) the resignation of a joint social member would automatically affect the nominated spouse, the new articles provide that;

 

“For the avoidance of doubt, the resignation, suspension, expulsion or change of Class of Membership by one Joint Social Member shall not, by itself, affect the Membership status of the other Joint Social Member.”

 

 

This change will provide equal treatment to member of all classes regarding this matter and ensures that a joint member willing to continue on as a member after the resignation of one joint member is allowed such a chance.

 

 

·         Honorary Full Member.

 

The current Articles provide that this class is restricted to persons who apply for this class and make the required entrance payments.

 

The proposed change however restricts eligibility to this class to ‘Members who have been Joint Full Members or Single Full Members for a period of at least five (5) continuous years and who shall pay such fee or otherwise meet such qualifications as shall be prescribed by the Directors in the invitation made to the general Membership.’

 

This ensures that the class’ memberships is confined to a given class and conferred upon those loyal to the club and not open to random persons as the members of this class are exempted from paying subscription or levies payable.

 

The new Articles also provide for the nominated spouse of a previously Joint Full Member who becomes an Honorary Full Member.

 

 

·         Temporary Membership.

 

This is currently a confine of non- Kenyan citizens. This qualification has been in the new Articles is deleted to simply cater for persons temporarily working or residing in Kenya.

 

This will therefore allow citizens who are temporarily in the country to join this class; an important provision taking into consideration that the 2010 Constitution which provides for dual citizenship.

 

 

·         Junior Membership.

 

The current Articles provide that a Junior Member upon reaching 25 years could become a Joint or Single Member without payment of entrance fees. The new Articles however require such a Member to pay the applicable subscription fee but are exempted from paying the Membership Fee.

 

 

 

Minors.

 

This part is not provided for in the current Articles and requires members to notify the Company of the names, age and gender of their children.

 

This is meant to complement the By-laws relating to ‘Children’ and to cater for the payments to be made by parents for the enjoyment of the facilities by their children.

 

 

 

·         Absentee Membership.

 

The new Articles amends this paragraph by inserting a timeline of 14 days as the notice period within which one who intends to qualify for this membership should notify the Club of his impending abseentism. Ample notice allows the Club to organize its affairs with this information in mind and therefore not suffer due to the detrimental effects of short notice.

 

·         Corporate Membership.

 

The number of nominees to be nominated by a corporate member has been amended in the new articles to be a maximum of 10.

 

This will serve to contain the number of persons who can be nominated, a discretion which had previously been left to the Board.

 

·         Change of Class of Membership.

 

The current Articles provide that any member changing the class of membership will not have to undergo the balloting process.

 

The new articles , however , provide that any person changing membership to a Joint Full Member, Joint Country Member or Joint Social Member where the nominated spouse shall have to undergo the balloting process. This will ensure that all persons go through the balloting process which an essential element of a private club.

 

·         Resignation from Membership.

 

The current Articles simply require one to deliver the notice before the last day of a quarter. The proposed articles amend this provision by stating that the notice must be delivered 7 days before the end of the quarter. This gives the Club ample time to put its affairs in order and not suffer the disadvantages and disruptions of late notice.

 

 

3.       Membership Fees, Subscription Fees and Levies

 

This clause lists out all the fees and levies payable, to whom they are payable and the Committee that determines the fee.

 

This more elaborate provision consolidates all the fees payable to the club and explains them creating a certainty and ease of reference.

 

 

4.       Balloting Process.

 

This process has been clearly elaborated in a step by step process that provides a clear layout on how this process is done:

 

i.         Through an application form containing a recommendation from an eligible Member and a second eligible Member as a seconder.

 

ii.       It is submitted together with payment by the applicant of the applicable Membership Fees (such fees shall be refunded, subject to deduction of administration fees of K.Shs.5,000/= or such reasonable fee as the Directors determine, if application is not successful or be treated as Membership Fees if the application is successful.)

 

iii.      Within 14 days of receipt of the duly completed application the General Manager must acknowledge receipt of the said payment.

 

iv.      Within 1 month of receipt of the acknowledgement by the General Manager, the eligible Members recommending the applicant shall introduce the applicant to at least two (2) members of the Membership and Disciplinary Committee who shall then append their signatures to the application form as a confirmation of the applicant having been introduced to them.

 

v.       The Application form shall then be returned to the General Manager who shall within 14 days of receipt thereof present the same to the Membership and Disciplinary Committee for vetting and recommendation

 

vi.      The Membership and Disciplinary Committee shall consider the application and vet the applicant within 21 working days

 

vii.    Upon rejection of application; the Committee informs the G.M who in turn informs the recommending applicants of the rejection.

 

viii.  Upon acceptance; the Committee shall notify the General Manager of its recommendation who shall then post on the Company’s general notice board.

 

ix.      Members shall be allowed a 21 days period to object in writing to the Committee.

 

x.        If applicant is recommended for admission by the Committee after considering the submissions made during the objection period, the Committee shall notify the General Manager who shall in turn inform the applicant through the recommending members within 7 days.

 

The clearly set out procedure and the timelines provide a certainty that offers a predictable scenario for applicants and also ensures efficiency.

 

 

5.       Right to Vote and be elected.

 

This paragraph reproduces the rights discussed under the clause of the classes of membership with regard to voting rights and the right to be elected as an officer of the Club. The consolidation ensures that reference is made with ease.

 

Article 28(b) of the current articles provide that it is only Full, Country and Social members can vote in Directors and other Officers of the Company; the proposed articles, however, have widened this scope to allow  Life Members and Honorary Life Members as well (Article 25.2)

 

The current Articles provide that only Full Members may be elected as Directors. The proposed Articles expand this list to also include Life Members and Honorary Life Members.

 

This provision expands the pool to give more classes an opportunity to be elected and participate in the running of the Club’s affairs.

 

 

6.       Resignation from Membership.

 

The proposed Articles provide a notice period of seven days before the end of a quarter for the submission of the resignation letter.

 

This notice period will allow the Club to put its affairs in order and not suffer the disadvantages brought along by short notices or no notice.

 

 

7.       Arrears of fees levies and dues.

 

The new Articles retain the period of non-payment that results in one losing his membership at 3months. The new Articles however provide that after the 1st month, one’s name shall be posted on the Club’s general notice board as having arrears and shall be liable to pay a Fine. If the person continues to be in arrears for a further 2 months, then the person shall cease ipso facto to be a member.

 

This change provides one with ample notice after the first month of default and discourages such behaviour due to the payment of a fine.

 

 

8.       Place and Mode of Payment.

 

Article 33 of the current Articles states that the all moneys will be payable at the registered office of the Company or as the Directors may decide.

 

The proposed Articles under Article 28 however require one to pay to the Company’s Bank accounts which would no doubt be a safer, faster and neater mode of paying than delivering the same to the Company’s registered office.

 

 

9.       Disciplinary Action, Suspension and Expulsion from Membership

 

The provision in the proposed Articles differs from that of the current Articles as in the former such a complaint can be made to not only the Directors but to any Captain or Games Committee.

 

The new Articles also provide that the Disciplinary Action of suspending a Member facing a Disciplinary Matter may be taken by Directors or the relevant Games Captain pending the conclusion of the Disciplinary process.

 

 

10.    Bankruptcy of a Member.

 

The provision of the new Articles differs from that of the current Articles by adding the fact that a member who ceasing to be a member due to the operation of this part (Article 35 of current Articles and Article 30 of the new Articles) and is re-admitted and his/her membership restored will not be required to pay Membership Fees afresh or to undergo the Balloting Process.

 

This would save time and resources as one would have already undergone some sort of vetting to allow him to re-join the Club.

 

 

11.    Annual General Meeting.

 

The meeting provided for by Article 64 of the current Articles is referred to as the Annual General Meeting by Article 32.1 of the proposed Articles.

 

 This clarification eliminates any confusion that may occur between the ordinary meetings and this Annual General Meeting which is a requirement of the Companies Act.

 

 

12.    Meetings of Game Sections.

 

The provision on meetings also provides for the meetings for the Game Sections and requires them to hold at least one annual meeting.

 

 

13.    Voting

 

A reserve of full members only (on matters/issues put to the Company) as per Article 36 of the proposed Articles. 

 

 

14.    Directors and Officers

 

Article 39 is amended in the new Articles to provide that the captain of the Men’s Golf Section and the captain of the Women’s Golf Section shall during the currency of their captaincy automatically be Directors of the Company. The previous Articles only spoke of the ‘Captain of Golf’.

 

Article 40 in its list of the Officers of the Company includes among others the Lady Golf Captain and the Lady Golf Vice-Captain unless decided to the contrary by the Members in a General meeting. The fact that Article 54 of the Articles also includes the captain and vice captain of the Women’s Golf Section in the membership of the Golf Management Committee is also noteworthy.

 

These provisions highlight the equitable representation the Club allows with regard to gender. The inclusion of this provision is consistent with provisions of the Constitution, 2010, which guarantees under its Article 27 the freedom from discrimination and equality of all before the law. We believe this inclusion of the lady captain still allows the Club to exercise its free rein as a private club to choose its officials and the manner in which they are elected.

 

 

15.    Powers of Directors.

 

The powers under the current Articles are retained and the provisions of this part are essentially the same. The most apparent change would be with regard to Clause 50.1 on the issue of borrowing and leasing out the Company’s assets.

 

The current Articles read as follows;

 

56. The Directors of the Company may issue debentures, debenture stock, bonds or obligations of the Company at any time, in any form or manner and for any amount subject as provided herein and may raise or borrow for the purposes of the Company such sum or sums of money as they may think fit provided that the amount borrowed by the Company shall not at any time, without the previous consideration and approval of a General Meeting exceed the sum of Kenya Shillings Two Million and provided further that a debt incurred or security, given in excess of such limit shall be invalid and ineffectual.

 

57. The Directors of the Company shall not, without the sanction of a General Meeting of the Company lease (save for five years and below), exchange, sell or otherwise dispose of all or any part of the lands, buildings, tenements or hereditaments of the Company, save so far as the Directors may deem it necessary or expedient or convenient for the purpose of Article 56 hereof.

 

The proposed Article has made the highlighted changes to the previous articles and reads as follows;

 

‘Except for a lease in respect of premises in the Club not used or required by Members for their use or enjoyment and then only for a lease not in excess of six (6) years and except for borrowings for the Company’s purposes not exceeding Kenya Shillings five million (K.Shs.5,000,000/=) the Directors shall not issue debentures, debenture stock, bonds, or charge or lease, sell, exchange or otherwise dispose of any of the land, property or assets of the Company without the previous consideration and approval of a General Meeting. A disposition undertaken or debt incurred or security given in breach of this Article shall be invalid and ineffectual and not binding on Members or the Company whatsoever. The monetary limit placed on the borrowing may be varied from time to time following the recommendation of the Finance and Administration Committee by and at the Annual General Meeting in which it is included as an agenda for consideration by Members.’

 

The increased value of borrowing and the time for leasing is a clear reflection of the current economic times and the growth of the Club.

 

 

16.    Special Purpose Committees.

 

The proposed Articles provides for various Committees; their constitution and mandate. These committees though in existence had not been provided for by the current constitution. This addition therefore sheds light to these Committees, legitimises them and the reference in the Articles means one does not have to consult another document to understand the working of the Club.

 

The committees provided for are;

 

a)       Games Sections Committees

 

b)      Golf  and Golf Committees:

 

The Articles under Clause 53.1 provides that there shall be two separate and distinct Golf Sections – one for men and one for women. The clause goes on to provide that the two are to be treated as different sports and governed by separate by-laws (Clause 53.2)

 

c)       Golf Management Committee:

 

This Committee shall be in charge of any matter concerning the game of golf. The constitution of this committee will be:

 

·         the captain and vice captain of the Men’s Golf Section- The captain of the Men’s Golf Section shall be the chair of this Committee.

 

·         the captain and vice captain of the Women’s Golf Section

 

·         two members appointed by the Directors (but not being Directors) from the Members and

 

·         three additional Members nominated by the captain of the Men’s Golf Section to be co-opted to the committee by the initial members of the Golf Management Committee to assist it in running the matters vested on the Golf Management Committee.

 

d)      Gymkhana Committee

 

This Committee shall comprise of 2 Directors and not more than 5 Members nominated by the Directors from the committee members of the Games Sections recognised by the Board under the provisions of Article 56. Article 56 of the proposed Articles also provides that the members playing a particular game for which facilities are provided or available as part of the Club Facilities or which is compatible with the objects of the Company may on reaching a number of at least ten (10) Members apply to the Directors to be recognized as a Games Section.

 

Article 56 creates freedom for members to engage in various sports and the recognition by the Club boosts the said game which helps the Company realise its objectives in an even greater sense.

 

 

17.    Membership and Disciplinary Committee & Finance Administration Committee.

 

These Committees have retained their powers as provided in the current Articles with an additional power to perform ‘additional duties and powers as may be conferred on it by these Articles and by the Bylaws and by a resolution of the Members at a General Meeting of the Company. The Membership and Disciplinary committee will be constituted of Vice Chairman of the Company, the Men’s Golf Section Vice Captain and not more than 4 other members to be appointed by the Board.

 

 

18.    Notices.

 

The new Articles introduce the notification via electronic mail.

 

CONCLUSION:

 

The proposed articles serve to boost the provisions of the previous Articles and will go a long way in clarifying pertinent issues. The inclusion of certain provisions previously provided for in the By-laws eliminates the need to refer to another document and makes the Memorandum and Articles more ‘self-contained’ and removes the provisions of a permanent nature from the by-laws and imports them to the Articles.

 

It is noteworthy that the Sports Act Number 25 of 2013 under Section 48 provides that the Registrar shall not register more than one national sports organization to run any one discipline. This provision has prompted the proposals to merge the KGU and the KGLU and such proposal will result in further changes in the constitution of the officers of the resultant organization.

 

The Act has also introduced the Sports Disputes Tribunal. It is to this body that appeals against decisions of national sports organization are to be made. The appeals will, however, only lie if so provided by the rules of the said organization.

 

We propose that the new articles be adopted in totality to replace the previous Articles of Association of the Company.

 

 In conclusion I wish to note the very valuable contributions of my fellow committee members and dedication to this task. I do hope that the Board will appreciate their efforts and salute them at the appropriate time. I must also add that this memorandum is merely explanatory to be read together with, and should not be taken as a replacement, of the proposed Memorandum and Articles of Association.

                                                                    

 

Godwin Wangong’u                                                                                                                      

Chairman of the Review Committee