KENYA Law and Practice Contributed by: Sammy Ndolo, Brian Muchiri, Damaris Muia and Nicole Gacheche, Kieti Law LLP
(b) names of the ten largest shareholders and the number of shares in which they have an interest as shown in the issuer’s register of members; and • immediate disclosure by an issuer of any information likely to have a material effect on market activity; and • disclosure in the annual report of any sub - stantial 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 Authority within thirty days of any change in the ownership structure resulting in a change of ten per cent (10%) or more of the issued share capital. 6. Corporate Reporting and Other Disclosures 6.1 Financial Reporting Directors of a company are required to prepare annual financial statements that give an accurate and fair view of the company’s financial position for the relevant year. A copy of the annual finan - cial 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 director’s report for each financial year. For com - panies that do not qualify for exemption under the small companies regime, the report should also contain a business review containing infor - mation about the company’s business. Listed companies are required to publish their annual financial statements, as well as the direc - tor’s report, on their website.
The directors are required to lodge certain docu - ments, such as balance sheets, annual financial statements, director’s reports, and auditor’s reports, with the Registrar of Companies, but in practice, this is not done as the Companies Registry only provides for filing a company’s annual returns. 6.2 Disclosure of Corporate Governance Arrangements The CMA Governance Code requires institutions to explain in their annual reports how they have applied the Code’s recommendations. 6.3 Companies Registry Filings In Kenya, companies are incorporated and regis - tered through the Business Registration Service (BRS), a statutory agency responsible for man - aging the incorporation process and maintaining company records. It oversees the Companies Registry, which handles regulatory filings and stores official records for all registered compa - nies. Most services the BRS offers are now avail - able online through the eCitizen portal. As part of its regulatory mandate, BRS requires companies to lodge annual returns with the Reg - istrar on the anniversary of their incorporation or, if their last return was made on a different date, on the anniversary 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 inspection to the public. Following a recent amendment of the Companies Act by the Anti-Money Laundering and Combat - ing of Terrorism Financing Laws (Amendment) Act, 2023, a company may be deemed not to be carrying on business if it has failed to file annual returns or financial statements for a period of 5 years or more or where a company has failed to
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