On the 14th day of May 2021, the Minister for Industry and Trade issued detailed procedures for submissions of information of beneficial owners vide the Companies (Beneficial Ownership) Regulations, 2021 (the Regulations).
The Regulations impose a mandatory obligation for companies incorporated or registered under the Companies Act to declare their beneficial owners. That statement is required to be filed in the Company Registry together with the memorandum during the incorporation process. Companies that are already incorporated have a period of up to December 2021 to comply with this requirement.
The term Beneficial Owner has been defined under the Act and in the Regulations to mean a natural person who directly or indirectly ultimately owns or exercises substantial control over an entity or an arrangement; who has a substantial economic benefit from an entity or an arrangement directly or indirectly whether acting alone or together with other persons; on whose behalf an arrangement is conducted or who exercises significant control or influence over a person or agreement.
The particulars that are to be filed in the Company Registry concerning Beneficial Owners shall include:
- Full name, date, and place of birth
- Telephone number
- Nationality, national identity/passport number
- Residential, postal, and email addresses
- Place of work and position held
- Nature of interest including the details of the legal, financial, security, debenture, or informal arrangement giving rise to the beneficial ownership, and
- Oath or affirmation as to whether the beneficial owner is a politically exposed person or not
Regulation 4 requires a registered owner of shares (who does not hold the beneficial interest in such shares) to file with the company a declaration to that effect. Regulation 4(2) obliges a person who holds/acquires a beneficial interest in shares of a company not registered in his name, to disclose a such interest in Form No. 14e within 30 days after acquiring such beneficial interest in the shares of the company.
Nevertheless, The Regulations also require companies, registered owners of shares, and the beneficial owners to notify the Company Registry of any change of Beneficial Ownership within 30 days of its occurrence.
Moreover, where there is a transfer or transmission of shares or an increase or reduction of share capital or a restructuring of a company’s share capital, or changes in the voting rights leading to any change in beneficial interest, the company is obliged to deliver to the Registrar a notice together with the applicable procedures prescribed in the Companies Act indicating whether or not there has been a change in the beneficial ownership of the company.
Further to the above, the notice of change in beneficial ownership must be signed by at least one director of the company or the company secretary, and a certified true copy of the official identification document for every beneficial owner has to be submitted to the Registrar. Failure to comply with the Regulations amounts to an offense punishable by a fine of not less than five million shillings but not exceeding ten million shillings.
Important Notice:
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