Are you operating your business  in Kenya as a company? We summarize below some of the key points to note regarding the new Beneficial Ownership Register (BOR) requirements under the Companies Act and the Beneficial Ownership Information Regulations.

What is a Beneficial Ownership Register?

This is an e-register that companies are now required to keep and submit to the Registrar of Companies indicating the beneficial owners of a company. Under the Regulations, a beneficial owner is the natural person who directly or indirectly: Holds at least 10% of the issued shares of the company or exercises at least 10% of the voting rights. In addition, any natural person who directly or indirectly holds the right to appoint or remove a director of a company or exercises significant influence or control over a company is also a beneficial owner.

Why is it required?

The BOR seeks to create greater transparency in the ownership of companies in Kenya and support the government and international efforts geared towards fighting corruption, money laundering and the financing of terrorism.

What is the timeline for its preparation and filing?

Companies are required to submit a copy of the BOR within 30 days of its preparation and to notify the Registrar with 14 days of any change in beneficial ownership information. The Registrar had initially given companies up to 31.01.2021 to comply with the requirement but has extended the deadline by 6 months to 31.07.2021. This is a welcome relief particularly for companies registered before 2017 whose records need to first be migrated to e-citizen’s BRS portal (a process known as linking the company to its directors and shareholders) for one to be able to prepare and lodge the register. This process  takes quite some time to complete due to the sheer volume of applications to be processed hence it is advisable to submit your application as early as possible so as not to risk missing the new  deadline.

What is the penalty for non-compliance?

Failure to comply with the BOR requirement would be an offence attracting a fine of up to Kshs 500,000 on the company and any officer in default and Kshs 50,000 for any day of non-compliance.

For more information on the contents of this alert and how the same might affect you, please contact:
Ndanu Mwengi, Company Secretarial Advisor
E-mail: nmwengi@findelassociates.co.ke