Compliance Steps to Safeguard Your Company

In light of the recent directive mandating compliance with Beneficial Ownership disclosure rules, company directors and owners must promptly undertake the following actions to satisfy legal requirements under Kenyan law:

📌 1. Identify Non‑Compliant Status
 Consult the official list of non‑compliant companies published by the Business Registration Service (BRS).

If your company appears, formally notify the Registrar of Companies in writing confirming whether the entity remains active and operational.

📌 2. Maintain & File a Beneficial Ownership Register

Under Section 93A of the Companies Act 2015 and Section 31B of the Limited Liability Partnerships Act, your company or LLP must identify individuals with significant control (e.g., ≥10% shares or voting rights, power to appoint/remove directors, or significant influence).

Compile a register of beneficial owners containing:

·       Full legal names, identification (ID, passport, birth certificate), KRA PIN, nationality, date of birth;

·       Postal, business, residential addresses, contact details, occupation/profession,

·       Nature of ownership/control, date became/ceased to be beneficial owner.

Prioritize verification and validation of these details, and lodge the completed register with the Registrar within 30 days of preparing it.

📌 3. Promptly Report Changes

Any amendments (e.g., new or ceased beneficial owners) **must be submitted within 14 days for private entities (30 days for public companies).

📌 4. Submit Outstanding Documents

Furnish any missing filings requested by the Registrar, including contracts, annual returns, trade licenses, and financial statements covering the last five (5) years or more.

🛡️ Key Legal Provisions & Penalties

1. Companies Act 2015 & BO Regulations 2020 (effective Feb 28, 2020):

·       Section 93A mandates maintaining a BO register; failure to lodge within 30 days constitutes an offense.

·       BO defined as persons with ≥10% shares or voting rights, appointment/removal rights, or significant influence.

·       BO register must be submitted and updated as specified.

2. Limited Liability Partnerships Act & BO Regulations 2023:

Section 31B requires LLPs to maintain and lodge a BO register with detailed particulars, including identifying dates of status changes. ( Read the Act).

3. Penalties:

• Late initial filing: fine up to KES 500,000 for the company and each officer, plus daily fines of KES 50,000 until compliance.
• Late updates: administrative fine of KES 2,000 plus KES 100 per day of default for each responsible party.
• Unauthorized disclosure** of BO information incurs a fine up to KES 20,000 or up to six months imprisonment (or both) See from The Companies (Beneficial Ownership Information) Regulations
• Continued non‑compliance—such as failure to file for five (5) years—may lead to deregistration under Section 894 (Companies Act) or Section 33A (LLP Act).

Ensuring compliance with these regulations will help your company avoid substantial fines, possible deregistration, and legal sanction—while enhancing transparency in line with Kenya’s Anti‑Money Laundering and Counter‑Terrorism Financing (AML‑CTF) obligations.