Legal compliance for limited companies in Kenya

Legal Statutory Compliance is the act of obeying a law, regulation, guideline, or policies that relate to business practices in a given jurisdiction.  This is guided by an act of parliament or any other regulation as provided.

These filings include:

1. Filing of Annual Returns.

Companies are required to prepare and submit to the Registrar annual returns made up to a date not later than the date that is from time to time the company’s return date.

The date of the return would be the anniversary date of the company’s incorporation or the date when the Company last lodged its returns if different from the incorporation date. Failure to fill for annual returns attracts penalty

2. Filing of Financial Statements.

Directors of a company are required to lodge with the Registrar financial statements for each financial year. Public Companies and Companies Limited by Guarantee have 6 months from the end of the financial year to file their financial statements. While, Private Companies have 9 months from the end of the financial year to file their financial statements. The statements are to be filed together with the accompanying reports. These are the Auditors’ and Directors’ reports.

3. Changes in the Company.

There are various changes that take place within a Company. These include changes of officials i.e. appointment and the resignation of Directors; changes in shareholding that covers Increase in share capital transfer and allotment of shares; Amendment of the Company’s Articles of Association; Change of the Registered office and financial year-end, to mention a few.

The Companies Act, 2015 states that Companies should lodge with the Registrar of Companies notifications on all changes that occur in the Company. Failure to comply with the above requirement can result in financial penalties to the officials of the Company found to contravene the regulations.

4. Filing of Ultimate Beneficial Ownership

Following the enactment of the Beneficial Ownership regulations in 2020, all Companies are required to declare their Ultimate Beneficial Owners (UBO), prepare a Register of Beneficial Owners, and file the same with the Registrar of Companies. The Companies Registry has assured Companies of the privacy of the data provided, noting the Confidential Nature of the Beneficial Ownership Information.

Failure to comply with the set regulations does not only result in hefty penalties and fines to the Company and each of its officers deemed to be liable, but can also lead to censures, reputational damage, and jail time.

This are the legal statutory compliance as per the companies act 2015. Other legal compliance exists under other law and regulations.