Most private companies in Kenya are run day to day on a mix of habit and informal understanding among the people who founded them, right up until a bank, an investor, or a dispute forces someone to produce the paperwork proving a decision was actually made properly. The Companies Act, 2015 sets out exactly what that paperwork needs to look like, and the gap between what the Act requires and what most closely held companies actually keep on file is usually wider than directors realise.
How a valid board resolution is made
Directors exercise the company’s management powers collectively, as a board, and the ordinary way they record a decision is by resolution, either passed at a properly convened board meeting or, for many routine matters, by written resolution circulated for signature without a meeting at all. A written resolution is valid once it has been signed by the number of directors the company’s articles require, and it takes effect on the date the last required signature is obtained, not on some earlier date the board might prefer to backdate it to. Minutes of every board meeting must be kept, and under the Companies Act, 2015 those minutes, once signed by the chairman of the meeting or of the next meeting, are evidence of the proceedings without further proof being required, which is precisely why a company that skips minuting its board meetings loses one of the easiest ways to prove, months or years later, that a decision was properly authorised.
Certain resolutions, special resolutions requiring a seventy-five per cent majority, and any written memorandum or agreement affecting the company’s constitution, must be filed at the Companies Registry within fourteen days of being passed. This is not a formality that can be caught up on later without consequence; a resolution that alters the company’s constitution but was never filed leaves the public record out of step with what the company’s internal documents actually say, which becomes a real problem the moment a third party relies on the Registry’s version.
Whether the company needs a company secretary
Under section 243 of the Act, a private company with paid-up capital of less than five million shillings is not legally required to appoint a company secretary, a deliberate relaxation of the position under the repealed Companies Act, which required every company to have one. Public companies must appoint a qualified company secretary regardless of size. Many older private companies that were required to have a secretary under the previous law are, technically, no longer obliged to keep the position, though retaining one, or engaging a secretarial firm on a retainer basis, remains one of the more reliable ways to avoid missed filing deadlines, since the secretary’s core function is precisely to maintain the statutory registers and file the company’s annual return each year.
The statutory registers every company must keep
Regardless of whether a company secretary is appointed, the company itself remains responsible for maintaining its statutory registers: the register of members, the register of directors and their residential addresses, and the register of charges over the company’s property, among others. The Companies Act was amended in 2019 to add a further requirement that applies to essentially every Kenyan company: a register of beneficial owners, meaning any natural person who directly or indirectly holds at least ten per cent of the company’s shares or voting rights, holds the right to appoint or remove a director, or otherwise exercises significant influence or control over the company. The Companies (Beneficial Ownership Information) Regulations, 2020 require the register to be filed with the Registrar within thirty days of preparation, with any subsequent change notified within fourteen days. The Business Registration Service has been actively enforcing this requirement in recent years, and the penalties are not nominal: a fine of up to five hundred thousand shillings for a first offence, plus a further fifty thousand shillings for every day the non-compliance continues, and persistent non-filing can ultimately expose the company to being struck off the register entirely.
Annual returns and ongoing filing obligations
Beyond one-off resolutions and registers, every company must file an annual return with the Registrar, and a private company must lodge its financial statements within nine months of its balance sheet date, with public companies given a shorter six-month window. Missing these deadlines does not immediately threaten the company’s existence, but it does accumulate: the Registrar’s own enforcement mechanism for a company that appears not to be operating, including simply failing to file, is precisely the strike-off process, so a pattern of missed annual returns is not a purely administrative embarrassment but a live risk to the company’s continued registration.
The risk is not limited to companies that are struck off involuntarily for non-filing. In Kenya Revenue Authority v Dream Dressing and Household Items Trading Co. Limited & 3 others, the High Court restored a company to the register nearly three years after its own directors had voluntarily applied to have it struck off, because they had failed to serve a copy of that application on a creditor as section 900 requires. The omission was enough for the court to reopen the company’s affairs so the creditor, in that case the Kenya Revenue Authority pursuing an unpaid tax debt, could still make its claim. A board that wants to close a company down cleanly needs the same discipline about notifying every member, employee, creditor, and other stakeholder that section 900 requires, not just a company trying to avoid an involuntary strike-off for missed filings.
Building a compliance calendar that actually gets followed
A practical starting point for any private company, whether or not it is legally required to have a secretary, is a single calendar tracking every recurring filing obligation: the annual return date, the beneficial ownership register review, and the fourteen-day windows that apply to constitutional resolutions and director changes. Boards should also adopt the discipline of minuting every substantive decision, including ones that feel too routine to bother with, since the absence of a minute is far more damaging in a dispute than a poorly worded one, and treat the register of members and register of beneficial owners as living documents that get updated the moment a change happens rather than reconstructed retrospectively when a bank or investor asks to see them.
How We Can Help
Clay & Associates Advocates advises companies on board resolution practice, company secretarial compliance, and the statutory registers the Companies Act requires, including beneficial ownership filings, and helps companies catch up on lapsed filings before they become a strike-off risk. Our guide to corporate governance for private companies covers the underlying director duties this record-keeping is meant to evidence. Contact our corporate and commercial practice to review your company’s current compliance position or to set up a secretarial function that keeps pace with the Act’s requirements.
Sources: Companies Act, 2015, sections 243, 93, 900, 916, and 918; Companies (Beneficial Ownership Information) Regulations, 2020; Kenya Revenue Authority v Dream Dressing and Household Items Trading Co. Limited & 3 others, Miscellaneous Application E005 of 2024, [2025] KEHC 3942 (KLR).
Frequently asked questions
Does every Kenyan private company need a company secretary?
No. Under section 243 of the Companies Act, a private company with paid-up capital below five million shillings is not required to appoint one, though it may still choose to do so.
What counts as a beneficial owner for the register the Act requires?
Any natural person who directly or indirectly holds at least ten per cent of the company’s shares or voting rights, holds the right to appoint or remove a director, or otherwise exercises significant influence or control over the company.
How quickly must a company report a change to its beneficial ownership register?
Within fourteen days of the change, with the initial register itself due within thirty days of preparation.
Can a company be struck off for failing to file its annual returns?
Yes. Persistent failure to file is one of the grounds the Registrar relies on to conclude a company is not carrying on business, which can lead to strike-off from the register.
Can a company that struck itself off voluntarily be brought back onto the register later?
Yes. Courts have restored voluntarily struck-off companies years later where a creditor was not properly notified of the strike-off application, so the creditor’s claim could still be pursued.
