Kenya is facing a wave of corporate deregistration after the Business Registration Service (BRS) gave a 30-day ultimatum to almost half of all private companies. This is to force companies to disclose their beneficial owners — individuals who own more than 10% of a company’s shares directly or indirectly.

Out of 801,027 registered companies, only 405,329 have complied with the mandatory disclosure requirement. The remaining 395,698 entities — 49.3% — will be deregistered, have their assets frozen and lose their operational rights if they don’t comply by September 11, 2025.

What the Law Requires

Under the Companies Act 2015 and the 2020 regulations, companies must submit detailed records of beneficial owners to the Registrar of Companies through the BRS. Required details are:

  • Full name of the owner

  • KRA PIN

  • ID or passport

  • Residential and postal addresses

  • Phone number

  • Occupation

  • Date of becoming a beneficial owner

This must be done electronically through the eCitizen platform, where the BRS has set up a Beneficial Ownership e-Register.

Consequences of Non-Compliance

Companies that miss the deadline will face:

  • Delisting: Non-compliant companies will be struck off the companies register.

  • Asset Freezes: Their bank accounts, land titles and other movable or immovable assets will be frozen.

  • Legal Penalties: A base fine of Sh500,000 and a Sh50,000 daily fine thereafter.

  • Loss of Shareholder Privileges: Companies can suspend dividends, block share transfers and revoke voting rights for substantial shareholders who fail to disclose their ownership.

  • Operational Inhibition: Delisted companies cannot transact, sell assets or conduct business under their name.

Once deregistered, reviving a company requires permission from the Attorney General or a court order — a process that is both time consuming and costly.

State’s Strategic Motive

The push for transparency in beneficial ownership is part of Kenya’s anti-corruption and anti-money laundering strategy. Secret shareholding structures have been used to hide illicit activities such as:

  • Money laundering

  • Tax evasion

  • Financing of terrorism

  • Misuse of public procurement According to the BRS, the beneficial ownership data will not be public but will be accessible to government agencies such as KRA, Financial Reporting Centre and security agencies. This allows for targeted investigations and tax enforcement while protecting privacy.

IMF and Public Procurement Compliance

This disclosure is also a condition under Kenya’s IMF loan program. One of the conditions is transparency in public procurement. Procuring entities must now submit awarded contracts alongside beneficial ownership details to the Public Procurement Information Portal (PPIP).

Challenges

Low awareness, dormant companies and lack of urgency have slowed it down. But the BRS has taken steps to address this by:

  • Zero rating the cost of filing disclosures

  • Publishing tutorials and step by step guides

  • Streamlining the online compliance process through eCitizen

Now enforcement is taking center stage as the deadline passes and enforcement timelines kick in.

The Bigger Picture

Kenya is joining the global effort to end anonymous company ownership which has been used to hide illicit wealth. For legitimate businesses, the message is clear: transparency is no longer optional.

As deregistration looms, company directors, legal advisors and corporate service providers must act fast. The cost of doing nothing is not just financial - it could mean losing access to bank accounts, real estate and business assets.