Co authored by Grace Mwagome
The Companies Registry has been undergoing a digitization process for some time now. We advise our esteemed corporate clients to regularly update their records, to guard against loss of the same, or any fraudulent activity.
Pursuant to the above, we recommend that annual returns be filed with the Registrar of Companies every year, without fail, as a failure to do so amounts to an offence under Section 708 as read with Section 705 of the Companies Act (with the attendant possibility of a fine of KES 200,000) and subsequent disqualification of Directors under Section 217 of the Act). Apart from meeting the statutory requirements, the annual returns will highlight the structure of the company in terms of its shareholding, nominal capital, current registered office, as well as names and addresses of the directors and shareholders, thus providing the current status of the company, in the event of a dispute. It is important that all documents presented to the Companies Registry are duly acknowledged, in writing and copies maintained by clients.
In addition to the foregoing, we further advice, that out of abundant caution, applications for CR 12 should be made to the Registrar of Companies annually. The said form provides the official position on the records at the Companies Registry and may therefore highlight any discrepancies with the records in the Client’s custody. This provides an opportunity to rectify information early in the event of any issue. It may be easier for a Client to raise any issues with the Registry, immediately an issue arises, instead of several years later.
Where there has been full or partial satisfaction of a Charge, debenture or any security over a company’s assets, the same must be discharged/released at the Companies Registry. Unfortunately, some clients ensure that discharges are obtained only at the Land Registry, but not at the Companies Registry.
It is also advisable that any change or development in respect of a company is filed at the Companies Registry, however insignificant in the opinion of the Client to ensure maintenance of accurate records, whether this simply relates to an appointment or cessation, change of particulars of a director or secretary, return of allotment, transfer of shares etc. The requisite forms which are to be used in case any of the aforesaid instances takes place, are available here