KENYA Law and Practice Contributed by: Sammy Ndolo, Brian Muchiri, Nicholas Owino and Valere Nyaboke, Cliffe Dekker Hofmeyr
5.2 Corporate Governance Arrangement Disclosure The CMA Governance Code requires institutions to explain in their annual reports how they have applied its recommendations. 5.3 Incorporation and Registration In Kenya, companies are incorporated and registered through the Business Registration Service (BRS), a statutory agency responsible for managing the incor - poration process and maintaining company records. It oversees the Companies Registry, which handles regulatory filings and stores official records for all reg - istered companies. Most services offered by the BRS are now available online through the eCitizen portal. As part of its regulatory mandate, BRS requires com - panies to lodge annual returns with the Registrar on the anniversary of their incorporation or, if their last return was made on a different date, on the anniver - sary of that date. Failure to lodge annual returns may result in the company and each officer in default being separately liable to a fine not exceeding KES200,000. The annual returns are open for public inspection. Following a recent amendment of the Companies Act by the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Act, 2023, a company may be deemed not to be carrying on busi - ness if it has failed to file annual returns or financial statements for a period of five years or more or where a company has failed to lodge a copy of the register of beneficial owners after being directed to do so by the Registrar. The Registrar of Companies has been given broad powers to ensure compliance with corporate obliga - tions. These include the authority to strike off com - panies from the register if they appear to be inactive, such as those that have not submitted annual returns or financial statements for an extended period or have not provided their register of beneficial owners after being instructed to do so. In line with these powers, BRS issued a compliance notice on 11 April 2025 to private companies that have not filed their register of beneficial owners. The notice warned that non-compliant companies may
shares in which they have an interest as shown in the issuer’s register of members; • immediate disclosure by an issuer of any informa - tion likely to have a material effect on market activ - ity; and • disclosure in the annual report of any substantial sale of assets involving 25% or more of the total assets. Notification to the Kenya Revenue Authority Every business entity is required to report to the Commissioner-General of the Kenya Revenue Author - ity within thirty days of any change in the ownership structure resulting in a change of ten 10% or more of the issued share capital. 5. Corporate Reporting and Disclosures 5.1 Financial Reporting Requirements Directors of a company are required to prepare annual financial statements that give a true and fair view of the company’s financial position for the relevant year. A copy of the annual financial statement must be sent to every member of the company, every holder of the company’s debentures and every person entitled to receive notice of general meetings. In addition, directors are required to prepare a direc - tor’s report for each financial year. For companies that do not qualify for exemption under the small compa - nies’ regime, the report should also include a business review of the company’s operations. Listed companies are required to publish their annual financial statements, as well as the directors’ report, on their website. The directors are required to lodge certain documents, such as balance sheets, annual financial statements, directors’ report and auditor’s report, with the Reg - istrar of Companies, but in practice, this is not done as the Companies Registry only provides for filing a company’s annual returns.
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