In October 2024, the Registrar of Companies issued Directive No. 1 of 2024 pursuant to Section 93A of the Companies Act. Pursuant to this directive all private companies were required to file a copy of their register of beneficial owners with the Business Registration Service (BRS) by November 30, 2024. The deadline for compliance has since expired, and the BRS has identified non-compliance by certain companies, as detailed in a public notice available here.
Inquiry into Business Operations and Compliance Status
Under the Companies Act, the Registrar of Companies may, on the following grounds, draw reasonable belief that a company may no longer be conducting business:
failure to file annual returns and financial statements: non-submission of annual returns and financial statements for a period of five (5) years or more, as stipulated under Section 894(1A)(a) of the Act.
failure to lodge a copy of the company’s register of beneficial ownership upon issuance of a directive from the Registrar of Companies.
Obligations of Affected Companies
The BRS has issued a formal notice requiring all companies listed in the referenced notice to undertake the following actions within thirty (30) days from 11 April 2025:
Written confirmation of operational status: Companies must confirm in writing whether they are currently active and operational.
Submission of supporting evidence: Companies are required to provide evidence of ongoing operations, which may include:
recent financial statements or tax filings; and
copies of active trade licenses, contracts, or invoices.
Filing of outstanding statutory documents: Companies must submit all overdue statutory documents, including:
annual returns; and
the register of beneficial ownership.
Responses must be submitted to the Registrar of Companies via email at compliance@brs.go.ke within the stipulated thirty (30) day period.
Consequences of Non-Compliance
Failure to respond within the thirty (30) day timeframe may result in any of the following regulatory actions:
issuance of a final letter from the Registrar of Companies confirming that there has been no response to their initial notice; and
where there is no response to the letter referred to above within 1 month, the publication of a notice in the Kenya Gazette, signaling the intent to strike the company’s name from the Register of Companies.
Conclusion
The BRS’s recent actions underscore the importance of adherence to statutory obligations under the Companies Act.
Affected companies are advised to act promptly to avoid the risk of deregistration as well as other penalties and fines.
For further information, please contact Samuel Kisuu or your relationship partner at Africa Law Partners.