An amendment to the Regulations was published on 19 October 2023, The Companies (Beneficial Ownership Information) (Amendment) Regulations, 2023.

The Business Registration Service (BRS) published a public notice on 17 October 2024 requiring all private limited companies and limited liability partnerships to adhere to the compliance requirements of the Companies Act and Limited Liability Partnership Act. Effectively, all companies and limited liability partnerships are required to prepare and maintain a register of beneficial owners. The timelines for compliance with submission with the Registrar of Companies (Registrar) for the different types of entities are:

Definition of a beneficial owner

The Regulations define a beneficial owner as a:

“Natural person who ultimately owns or controls a legal person or arrangements or the natural person on whose behalf a transaction is conducted and includes those persons who exercise ultimate effective control over a legal person or arrangement.”

According to the parameters that define the term, the beneficial owner of a company, is a natural person who:

• holds at least 10% of the issued shares in 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, directly or indirectly, appoint or remove a majority of the members of the board of directors; or
• exercises significant influence or control, directly or indirectly, over the company.
• For purposes of a company limited by guarantee, a beneficial owner of a company shall be a natural person who meets any of the following criteria:
• whether individually or jointly, exercises at least 10% of the voting rights directly or indirectly;
• whether individually or jointly, has a right to exercise or actually exercises significant influence directly or indirectly over the running of the activities of the company limited by guarantee;
• whether individually or jointly, has the right to, directly or indirectly, appoint or remove any of the board of directors;
• whether individually or jointly, has the right to, directly or indirectly, direct or veto the distribution of funds, assets or investment decisions of the company limited by guarantee; or
• whether individually or jointly, has the right to, directly or indirectly, liquidate the company limited by guarantee.

Particulars of a beneficial owner required by the BRS

The particulars that a company must enter in its register of beneficial owners include:

• full name of the beneficial owner;
• national identity card number or passport number (copies of this are required to verify nationality);
• personal identification number;
• nationality;
• date of birth;
• postal address, business address, physical address, residential address;
• telephone number and email address;
• occupation or profession;
• nature of ownership or control;
• the date on which any person became a beneficial owner of the company;
• the date on which any person ceased to be a beneficial owner; and
• any other relevant detail the Registrar may from time to time require.

Beneficial ownership compliance requirements for a company registered in Kenya

Under the Regulations a company registered in Kenya is required to:

• Take reasonable steps to identify its beneficial owners and enter their details in its register of members.
• Lodge a copy of its register of beneficial owners and any changes to the beneficial owners and/ or their particulars with the Registrar.
• Give notice to all people it knows or has reasonable cause to believe are the beneficial owners of a company to provide details of their particulars as set out in the Regulations within 21 days from the date of the notice.
• Issue a warning notice to a person who fails to comply with the first notice requiring that provide their particulars.
• Restrict the relevant interest of a person who fails to comply with the warning notice within 14 days, notify the person affected by the warning notice, and file the warning with the Registrar.
• Withdraw the restriction placed on the relevant interest of the beneficial owner within 14 days upon their complying with the warning notice and file the withdrawal with the Registrar.

Any amendment to the beneficial ownership register should be lodged with the Registrar within 14 days of making the amendment for a company other than a public listed company and within 30 days for a public listed company.

Offence and penalties relating to beneficial ownership obligations

Failure by a company to lodge a copy of its register of beneficial ownership with the Registrar shall amount to an offence both for the company and each of its officials and, on conviction, both the company and its officials shall each be liable to a fine not exceeding KES 500,000 and a further fine of KES 50,000 for each day thereafter that the company is in breach.

A person who discloses beneficial ownership information in the manner other than for the purpose for which such information is obtained commits an offence and is liable upon conviction to a fine not exceeding KES 20,000 or imprisonment for a period not exceeding six months, or to both.

Data protection provisions relating to beneficial ownership

The Regulations prohibit companies from disclosing the details of a beneficial owner without the written consent of the beneficial owner, save for where disclosure is made pursuant to a court order or as prescribed in the Companies (Beneficial Ownership Information) (Amendment) Regulations, 2023.

The Regulations provide that beneficial ownership information shall not be made available to the public or to be published except:

• by the Public Procurement Regulatory Authority in the government portal in relation to entities that have been awarded a tender by the procuring entity as part of a contract award; or
• by a government, where the matter is of public interest.

The publication or disclosure of the beneficial ownership information under the Regulations shall not include protected personal identifiable information, except where such disclosure is made to a competent authority or pursuant to a court order.

For any questions or inquiries, please send an email to  alex.muchira@cdhlegal.com