By Purity Ngigi – Sundays

Companies are now required to submit their beneficial ownership register. The deadline has been extended to 31st July 2021 from 31st January 2021. Hefty fines of up to KES 500,000 and an additional fine of KES 50,000 per day for continuing non-compliance are applicable for failure to comply by the deadline.

Why is it a requirement by the government?

The government through an amendment to the Companies Act and subsequently published regulations, introduced the requirement for all companies to keep and submit a register of its beneficial owners to the Companies Registrar. This requirement is a strategy for the government to curb money laundering activities in the country.

Who is a Beneficial Owner?

Under the companies amendment regulations, a beneficial owner has been defined as any natural person who exercises ownership or control in a company so that he/she exercises either of the following mandates:

• either directly or indirectly holds at least 10% of the issued shares of the company;
• either directly or indirectly exercises at least 10% of the voting rights in the company;
• either directly or indirectly holds a right to appoint or remove a director of the company; or

either directly or indirectly exercises significant influence or control over the company.  The definition of a beneficial owner is broad enough so that every registered company in the country has a beneficial owner. This includes those companies whose ownership is held by another company or whose shares are held in trust for another beneficiary. 

How is the register submitted?

The register is submitted online through e-citizen. We can assist you to comply by identifying your company’s beneficial owners (where they are not as apparent) and to submit the beneficial ownership register before the deadline. Kindly reach out through any of our contact details or personnel for assistance.