Beneficial Ownership Regulations updates

Registrar of Companies Regulations Alert

Registrar of Companies requires all companies to keep and lodge a register of its beneficial owners. The gazettement of the enabling regulations under the Companies Act 2015, (Beneficial Ownership Information) Regulations, 2020, the Registrar of Companies hereby notifies all Officers of Companies and authorized persons that the Beneficial Ownership (BO) E-Register has been operationalized with effect from 13th October 2020.

To ensure compliance with these new regulations, companies are required to lodge with the registrar of companies, a list of its beneficial owners i.e the ultimate natural persons who own and control a Company.

 

Definitions of Beneficial Owners

The regulations define beneficial owner as a 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;
  • holds a right to directly or indirectly appoint or remove a director of the company; OR
  • exercises significant influence or control over the company (participation in the finances and financial policies of a company without necessarily having full control over them)

Though the regulations are meant to disclose the owners of companies that own companies and nominee shareholders, even companies owned by natural persons should also update the Beneficial Official (BO) register.

 

Timelines

To enable Companies, comply, the Registrar hereby grants a grace period of preparation of Beneficial Ownership (BO) register up to 31st January 2021, before enforcement for non-compliance.

 

Penalties

When the company fails to comply, each officer of the company shall be subjected to a fine of up to KES 500,000 and a possibility of KES 50,000 penalty for each day in default if the default continues.

 

Way forward

In light of these new regulations, we at Chartafai LLP are keen to support our clients update their company Beneficial Ownership (BO) information with the Registrar of Companies.