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Companies Beneficial Ownership Information Regulations 2020

The Companies (Beneficial Ownership Information) Regulations

Companies Beneficial Ownership

Introduction:-

The Companies Act, 2015 (the Act) was amended in 2019 through The Statute Law (Miscellaneous Amendment Act, 2019) dated 9 July 2019 by introducing S.93A which requires every company to maintain a register of Beneficial Owners and notify the Registrar of Companies.

The Companies (Beneficial   Ownership   Information) Regulations, 2020 came into force on 18 February 2020.

Who is a Beneficial Owner?

The Companies Act defines a beneficial owner as follows;
“The natural person who ultimately owns or controls a  legal person or arrangements or the natural person on whose behalf a  transaction is conducted, and includes those persons who exercise ultimate effective control over a legal person or arrangement”.

Company Obligation

Every company is required to take reasonable steps to identify its beneficial owners, and maintain a register with their particulars including full name, birth certificate number, national identity card number or passport number, personal identification number (PIN), nationality, date of birth, postal, business and residential address, telephone number, email address, occupation or profession, nature of ownership or control, the date on which a person became or ceased to be a beneficial owner, as well as any other relevant detail the Registrar may require from time to time.

Beneficial Ownership Qualification

The regulations further expound that a BO shall be a natural person who meets any of the following conditions in relation to the company: -

  • Holds at least ten percent of the issued shares in the company either directly or indirectly;
  • Holds a right, directly or indirectly, to appoint or remove a director of the company; or
  • Exercises significant influence or control, directly or indirectly, over the company meaning participation in the finances and financial policies of a company without necessarily having full control over them.
  • Exercises at least ten percent of the voting rights in the company either directly or indirectly;

Beneficial Ownership (BO) Information Required?

A company shall take reasonable steps to identify its beneficial owners and enter in the register the following particulars relating to the beneficial owners:

    Full name;

    National identity card number/passport number;

    Personal identification number;

    Nationality;

    Date of birth;

    Postal address;

    Business address;

    Residential address;

    Telephone number;

    Email address;

    Occupation or profession;

    Nature of ownership or control;

    The date on which any person became a beneficial owner;

    The date on which any person ceased to be a beneficial owner; and

    Any other detail the Registrar may from time to time require.

Penalty for non-compliance

Failure to comply with Section 93A of The Company Act's obligation to keep the register of beneficial

owners makes the company and all officers implicated liable for up to Kshs. 500,000. After

conviction, if the company does not comply, the company and each officer of the company in

default is liable for up to Kshs. 50,000 for each day of non-compliance

Data protection

The Regulations prohibit the disclosure of Beneficial Ownership (BO) information to the public, save for requests for information made to the Registrar by criminal investigation and law enforcement agencies, and financial sector regulators.

The penalty for this disclosure is a fine not exceeding twenty thousand shillings (KES. 20,000.00) or imprisonment for a period not exceeding six months, or to both.

Conclusion

Inver Corporate Consultants would be pleased to assist your company to comply with the requirements of the Regulations. For any inquiries, please Contact Us at This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 NB: This alert is for general use only and should not be relied upon without seeking specific legal advice on any matter.