Days are numbered for unscrupulous company owners in the country who are engaging in shady business operations without a clear account of the beneficial owners.The move which is targeting company owners and limited liability partnerships (LLPs) engaging in opaque practices is meant to deal with those who fail to provide up-to-date registers about their business’ beneficial ownership. LLPs will also be required to file their returns every year.

“All companies and LLPs adhere to the compliance requirements of the Companies Act and Limited Liability Partnership Act. Effectively, all companies and LLPs are required to prepare and maintain a Register of Beneficial Owners,” read part of a public notice by the registrar of companies.

Compliance deadline

Registrar of Companies Joyce Koech announced that private limited companies must file these ownership registers by November 30, 2024, while a compliance deadline for LLPs will follow later.

“Failure to file the information for 5 years shall lead to companies and LLPs being declared as not carrying on business and subsequently struck off from the Register as per Section 894 of the Companies Act and 33A of Limited Liability Partnerships Act,’ read part of the notice. Koech emphasised that failure to submit this information for five years will lead to companies being declared inactive and subsequently struck off the registry as per sections 894 of the Companies Act and 33A of the Limited Liability Partnerships Act.

For companies failing to maintain these ownership registers, penalties are set to be enforced. A fine of Sh500,000 will be applied initially, with an additional fine of up to Sh50,000 for every day the violation continues. Companies that amend their beneficial ownership details must also file any updates within 14 days. Failure to comply will result in an administrative fine of Sh2,000 per company and each officer in default, plus Sh100 for each additional day of non-compliance.

This comes amid scandals involving prominent political figures whose companies operate under questionable circumstances. Recently, the Registrar of Companies gazetted an order to deregister several companies, including Apiero Kenya Technologies, reportedly linked to the wife of  David Ndii, economic advisor to President William Ruto.

Concerns about Apiero Kenya Technologies arose when it secured a lucrative contract tied to the Adani Group shortly after its registration.