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ENSight

 

Kenya: submit a register of beneficial owners as soon as possible to ensure compliance

Kenyan companies are now required to submit details of their beneficial owners to the Registrar of Companies (“Registrar”). In 2019, the Companies Act, 2015 was amended to introduce a requirement for every company to maintain a register of its beneficial owners and to submit a copy of this register to the Registrar. In early 2020, regulations were published setting out the details required to be provided in the register, as well as other compliance obligations. Companies have, however, not been able to comply with these requirements because the Registrar had not yet established a beneficial ownership register within the registry system.

The register has now been operationalised with effect from 13 October 2020 and companies are therefore required to comply. The Companies Act stipulates that every company is required to submit a copy of the beneficial owners register within 30 days of its preparation. Although this provision does not set an exact date by which companies are required to have prepared and submitted their beneficial ownership registers, compliance is required as soon as possible given that failure to prepare and submit the register renders a company non-compliant with a legal requirement and is an offence committed by both the company and every officer of the company who is in default.

Additionally, the Companies Registry has configured the eCitizen portal such that existing companies are not able to submit any corporate changes on eCitizen unless they have first submitted their beneficial ownership details. Parent companies are also required to first comply by submitting their beneficial ownership register before their subsidiaries can be able to comply. This is likely to result in delays when companies need to update their other corporate records on eCitizen, such as shareholder and director changes, filing of annual returns etc. Going forward, the registry has also made it mandatory for beneficial ownership information to be provided prior to incorporation of new companies.

All companies should begin the process of sifting through their direct or indirect chains of ownership in order to identify and document details of their beneficial owners.

Please see our earlier ENSight, which highlights additional issues relating to beneficial ownership such as data protection, compliance requirements, fines and penalties for non-compliance etc.

For more information about compliance with these requirements, please contact:

Mahesh Acharya
Partner | Kenya
macharya@ENSafrica.com 
+254 721 454 173

Faith Chebet
Associate | Kenya
fchebet@ENSafrica.com
+254 724 912 849