HOW TO REGISTER YOUR BENEFICIAL OWNERSHIP INFORMATION

What is beneficial ownership?

• Section 93A of the Companies Act introduced mandatory beneficial ownership registers for private companies. The Companies (Beneficial Ownership Information) Regulations of 2020 were promulgated to bring this provision into effect.
• A beneficial owner (‘BO) is a person who owns or controls an entity.
• Only a natural person can be a BO. Under Regulation 3(2), a BO is one who meets either of the following requirements:

1. Shareholding: holds at least 10% of the company’s issued shares directly or indirectly. Indirect shareholding is where one holds shares in a company through a proxy or intermediary.
2. Voting rights: exercises at least 10% of the voting rights in the company either directly or indirectly.
3. Power to appoint or remove a director: holds a right, directly or indirectly, to appoint or remove a director of the company.
4. Significant influence or control: directly or indirectly participates in finance matters or financial policies of a company, whether or not they have control over them.

The company’s duty to have a beneficial owner register

• Regulation 3 provides that each company must identify its beneficial owner(s) and serve that person a notice under Regulation 4 requesting information to be filled in the register.
• If the BO does not comply with the notice they may be restricted from transacting with the company in matters such as receiving payments form the company and voting.

Procedure for registration of beneficial owners

1. Log into e-citizen. Under ‘National Services’, select Business Registration Service.
2. Under ‘My Businesses’, select the company.
3. Click on ‘enter beneficial owners’.
4. Fill in the requisite details.
5. Add shareholding and voting rights as applicable.
6. Select complete.
7. Download forms for signing.
8. After signing, scan and upload the signed forms.
9. Review the application to verify the details entered are correct.
10. Select finish.

Details of the beneficial owners required:

1. Identification details: Name, I.D/birth certificate/passport number
2. Contact details: postal address, phone number, residential address, email address
3. Personal details: KRA Pin, nationality, date of birth, occupation
4. Date when they became a B.O
5. Date when they ceased being a B.O
6. The Registrar may further require any other relevant details.

Penalty in default and registration deadline

• The following are penalties for failing to provide BO information:

1. A fine not exceeding Kshs. 500,000
2. A fine of Kshs. 50,000 daily after the deadline.

• The company and each of its officers will be fined individually. Officers include directors, company secretaries and managers.

Who can access Beneficial Ownership information?

• The BO register is confidential. It may be accessed as follows:

1. Upon request by a government authority such as the Attorney General; or
2. With the written consent of the company.

BO registration deadline

• The Deadline for registration is 31 July 2021.