Deregistration of limited companies in Kenya
Had you registered a limited company that you no longer require? We are pleased to respond below to some of the most frequently asked questions about deregistration.
What does it mean to deregister a company?
This is the striking off a company from the Register of Companies by the Registrar of Companies. It follows an application by the company which is the most common way deregistration is initiated. In certain cases, deregistration may be initiated by the Registrar.
What are some of circumstances that may call for deregistration of a company?
These include but not limited to cessation of operations and relevance prompting directors to apply for a voluntary dissolution; Compulsory winding up which may be as a result of a court order; Declaration of insolvency hence impaired financial capacity to carry on operations or at the end of a liquidation process when the company is no longer required.
Why is it important to apply for deregistration of an inactive company
This saves on compliance costs as a dormant company is still required to fulfil certain ongoing statutory compliance obligations otherwise non-compliance penalties would continue to accrue.
What are the steps in the deregistration process?
- The company submits an application to the Registrar of Companies using the prescribed statutory forms
- The existing members, employees, creditors, directors or trustees of any pension fund established for the benefit of employees of the company must be furnished with a copy of the application within seven (7) days after the date of the application. Failure to furnish such persons with a copy of the application is an offence which on conviction attracts a fine not exceeding Kshs 50,000. Where it is found that failure to comply was due to an intention to conceal the making of the said application, a person becomes liable to a fine of not more than Kshs 500,000 or imprisonment for a term not exceeding 2 years or to both
- The Registrar of Companies reviews the application and once approved, a notice of intended dissolution is published in the Kenya Gazette for a period of three months to invite any outstanding claims owed to creditors by the company for settlement
- If there are no claims brought forward, the Registrar proceeds to strike off the company from the Register of Companies by publishing a dissolution notice in the Kenya Gazette.
- The Registrar issues a letter confirming the date of dissolution and specifying the Kenya Gazette notice number under which the final dissolution notice was published.
- The company should then apply to Kenya Revenue Authority for cancellation of its PIN. This should be done after filing all outstanding tax returns and fulfillment of any other applicable tax obligations.
How long does the deregistration process take?
The entire process from submission of an application to publishing of the final dissolution notice and issuance of a letter by the Registrar confirming the dissolution takes about four (4) to six (6) months
For more information on deregistration of companies, please contact:
Ndanu Mwengi, Advisor
E-mail: nmwengi@findelassociates.co.ke