The Companies Registry has introduced a mandatory requirement for all companies to keep and maintain a register of Beneficial Owners of the company effective 13th October 2020, as stipulated in Section 93 of the Companies Act 2015.
As per the Companies Act 2015, a beneficial owner is any 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.
The guidelines on how to maintain the register for Beneficial Owners as contained in the Companies (Beneficial Ownership Information) Regulations, 2019, apply to beneficial owners who:-
- Hold at least 10% of the issued shares of the company either directly or indirectly;
- Exercise at least 10% of the voting rights in the company;
- Hold a right to directly or indirectly appoint or remove a director of the company; or
- Exercise significant influence or control over the company (whether directly or indirectly).
The Register of Members in respect of Beneficial Owners shall include the following particulars:-
- the full name; national identity card number/passport;
- personal identification number; nationality;
- date of birth;
- postal address; residential address; current telephone number; current email address;
- date on which any person became a beneficial owner;
- date on which any person ceased to be a beneficial owner;
- nature of ownership or control; and
- any other detail the Registrar may from time to time require.
Furthermore, Companies are required to lodge a copy of the register with the Registrar within 30 days of preparation of the Register. Any amendments to the Register are to be lodged with the Registrar within 14 days with the exception of listed companies.
Kindly note that the failure to comply with the disclosure and filing requirements of Beneficial Owners is an offence under the Companies Act that on conviction attracts a penalty of up to Kshs 500,000 (approx. USD 4,800) on each officer liable and a further KES 50,000 for continued non-compliance for each offence.