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Why is it important to file Company Annual Returns?

by | May 5, 2021

The Annual Returns is a record containing information about a Company. This usually includes inter alia the details of the shareholder, directors, Company secretary, the share capital and the registered address.

When you should file your annual company returns

The Companies Act, 2015 places a mandatory obligation upon all companies to ensure that their Annual Returns are filed annually. Further, the Act stipulates that the Annual Return date for each company shall be on the anniversary of the company’s incorporation date. Alternatively, it can be on the anniversary of the date of the last lodged return, if made up to a different date.

Your records should accurately reflect your company’s status

It is very essential to update and file the company’s Returns at the Attorney General’s office of the registrar of companies. This effectively ensures that the Registrar of Companies has up-to-date information on the status of your company. Conventionally, the information detailed in the Returns is used by the Registrar to generate the Company’s official status report. This status report may be necessary during tender applications, loan applications and even when soliciting for potential investors. As such, this is more than enough reason to always have the latest information forwarded to the Company Registrars office.

Consequences for not providing regular Annual Returns

Further, the Act places penalties upon the Company for non-compliance. Fundamentally, the Company and every officer in default commit an offence if they do not comply. When brought before a court of law and on convicted, all company officials are liable to a fine not exceeding KShs 200,000.00. Thus, every company is advised to lodge their Annual Returns timeously within the stipulated time frame.

By nkarumba@scriberegistrars.com