Local Representative: Beyond Records to Compliance Excellence

A local representative, as the name suggests, refers to a natural person appointed to represent a foreign Company in Kenya. This appointment is a mandatory requirement for all foreign companies under the Companies Act of 2015 in Kenya. Beyond the common perception that a local representative merely serves the purpose of formal representation on records, it is essential to recognize that their role extends far beyond this function. A local representative is entitled to perform various other crucial functions, often overlooked by many.

It's crucial to highlight that if an individual ceases to be the local representative of a foreign Company on a specific day, and the registered foreign Company does not have a local representative but continues to conduct business or maintain a place of business in Kenya, the Company must appoint a new local representative within twenty-one days from that day. Failure by a registered foreign Company to adhere to this constitutes an offense. In such a case, both the Company and any officer found in default, upon conviction, may face a fine of up to five hundred thousand (500,000) Kenya shillings.

The local representative of a registered foreign Company bears a crucial responsibility, being answerable for executing all acts, matters, and obligations mandated by the Companies Act, 2015, on behalf of the Company. Furthermore, the local representative assumes personal liability for any penalties imposed on the Company due to violations or failures to comply with the provisions of this Act, as determined by the Court. In instances where a registered foreign Company has multiple local representatives, they share joint and several responsibilities for fulfilling the Company's obligations under this Act and are collectively personally liable for penalties, should the Court find it appropriate.

A registered foreign Company must have and uphold a registered office in Kenya, designated for receiving all communications and notices. It is a requirement that a local representative of the Company be present whenever the office is open.

The local representative of a registered foreign Company is required to notify the Registrar of specific events affecting the Company within one month. For instance, if a foreign Company, let's call it B&B Inc, decides to cease its business operations in Kenya or undergoes dissolution or deregistration in its home country, the appointed local representative must promptly notify the Registrar of Companies. This notification involves submitting a formal notice to the Registrar, detailing the cessation of business or dissolution in the foreign Company's place of origin. Subsequently, upon receiving this notice, the Registrar takes immediate action by striking off B&B Inc.'s name from the Foreign Companies Register. This process results in the termination of B&B Inc.'s registration under this particular section of the regulatory framework.

A local representative plays a crucial role in the ongoing operations of a foreign Company. It's important to emphasize that they are responsible for maintaining up-to-date compliance and can be held liable for any deviations from the provisions of the Companies Act, 2015.