Secret Company Shareholders on the spotlight

The government has put out a notice to all companies to give in the names of their beneficial owners. The companies have been given until 2021 to submit the required information of every shareholder.

 This movement is the government’s way of implementing the law and generating transparency in shareholding firms. The State aims at breaking down illicit cash flows such as finance of terrorism and laundering of money.

The Business Registration Services (BRS) Director-General, Kenneth Gathuma, gave companies up to January 31, 2021 to prepare and hand out the Beneficial Ownership Registers (BOR). The BRS has been formed to supervise operations of the Companies Registry and the execution of the Companies Act, 2015.

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Mr. Gathuma stated that the BOR will form a much better transparency in company ownership in Kenya. He added that the BOR will help in the combat against financing terrorism, laundering of money and corruption.

Companies are to register within a 30-day period of the register’s preparation and inform the necessary registrar within 14 days of any revision in ownership information. The companies have been given a notice that failure to comply would be considered an offence to the company.

According to the Companies (Beneficial Information) Regulations, 2020 and the Companies Act, 2015, all firms registered under the Act are required to keep a listing of beneficial holders and submit with the Registrar of Companies. Negligence in complying to the law will lead the company and each officer a fine of up to Sh500, 000.

Shareholder information required by the State include ID card number, birth certificate number and full names of all the company’s’ beneficiary. Other required information include the nature of ownership or control, contacts, occupation or profession and details for when they became or ceased to be the beneficial owner of the company.

The global organization, Klynveld Peat Marwick Goerdeler (KPMG), however says the execution of the law may face challenges. They added that a challenge in companies identifying their beneficial owners in it will leave freedom in interpreting what entails ‘reasonable steps.’