Companies get six more months to reveal secret owners

Companies have six more months to disclose to the State the identity of secret shareholders including names, phone numbers and residential addresses in efforts to unmask illicit wealth.

The Office of the Attorney General said on Wednesday it has extended the deadline for companies to fill the beneficial ownership registers to July 31 from the earlier timeline which was to lapse on Sunday.

The Business Registration Service (BRS), the State agency in the AG’s office overseeing the process, said there has been a “significantly high” number of applications to file the data as firms rush to comply with Section 93A of the Companies Act 2015.

“Having taken note of the progress made in filing these registers and in the spirit of encouraging compliance with the Companies Act, BRS has in consultation with stakeholders granted a final grace period of six months ending 31st July 2021,” BRS director-general Kenneth Gathuma said in a statement.

The law requires new firms to fill the Beneficial Ownership Information E-Register at the Companies Registry ahead of registration and existing firms to comply within the set timelines in a major shakeup of shareholder records.

“We have first operationalised the e-Register for private limited companies and shall progressively operationalise the e-Registers for the other types of companies,” Mr Gathuma said.

The new rules, which are aimed at curbing insider trading, will shed light on market activity by limiting the use of nominee accounts that investors have been using to side-step ownership limits in firms listed on the Nairobi Securities Exchange.

They are also aiming to curb money laundering by revealing the true identify of investors owning large blocks of shares in both private and listed companies, who will also be of interest to the taxman.

“Failure to comply with this requirement after 31st July 2021 makes it an offence to the company and every officer of the company who is in default and such officer will be liable to a fine upon conviction,” Mr Gathuma said.

The details required for filing include names of the substantial shareholders, KRA PIN, national ID or passport copies, postal address, residential address, occupation, telephone number and the date when the investor became a beneficial owner.