On 1^st September 2023, the President assented to the Anti-Money Laundering and Combating of Terrorism Financing Laws (Amendment) Act. The Act will come into effect on 15 September 2023.  The Act amends 18 Acts of Parliament relating to AML, CTF and counter-financing of the proliferation of weapons of mass destruction in addressing deficiencies identified during the FATF Mutual Evaluation of Kenya in September 2022. The Acts amended include the Companies Act, the Limited Liability Partnerships Act, the Foreign Limited Liability Partnership Act, the Insurance Act, the Banking Act, etc.

Purpose of the amendments

The amendments introduce measures to detect and prevent AML activities in Kenya, including supervision and enforcement of terrorism financing, reporting of suspicious transactions, transparency of beneficial ownership and combating terrorism financing.

The new law provides for increased transparency on beneficial ownership information for companies and introduces the requirement to maintain beneficial ownership information for Limited Liability Partnerships (LLPs), Foreign Limited Liability Partnerships and Foreign Companies.

Additional requirements for new/ proposed companies

When registering a new company, you should submit:

• a register of the proposed beneficial owners (“BO”);
• a statement of capital including information on whether any shareholder is a nominee shareholder and the particulars of their nominator;
• a statement of proposed officers including any nominee directors and particulars of their nominator; and
• a statement of particulars of the BO and contact person – the name and addresses of BO.

Additional requirements for proposed LLPs and Foreign LLPs

New requirements for existing companies

All companies (public companies, private companies, foreign companies and companies limited by guarantee) incorporated and registered in Kenya;

• should maintain and lodge their register of beneficial owners with the registrar within 60 days of the Act taking effect (by 14 November 2023);
• that don’t have a company secretary or a resident director should appoint a company secretary or a Kenyan resident contact person and lodge with the registrar the notice of appointment of the contact person by 14 November 2023;
• should maintain a register of nominee directors and give particulars of the nominators.
• should include in their register of members information on whether any of the shareholders is a nominee shareholder and provide details of the nominator.

Any amendments to the beneficial ownership register or contact person’s details including residential address should be lodged with the registrar within 14 days of the changes.

Record keeping

• Information on BO should be kept for at least 10 years from the date within which the person ceases to be a beneficial owner.
• All other company documents should be kept for a minimum period of seven years

Filing of annual returns

• When filing annual returns, you are required to also include a statement on whether there has been any change in the register of BO and the date of the change, if any.

New requirements for LLPs and Foreign LLPs

• Maintain a register of beneficial owners and nominee partners and lodge it with the registrar by 14 November 2023 and lodge any amendments with the registrar within 14 days of the changes.
• File annual returns within 30 days of the anniversary of its registration
• Keep its registers, documents and books at its registered office
• Lodge with the Registrar, a copy of the register of the name and address of each partner, manager and legal representative where applicable within 30 days of its preparation
• A foreign limited liability partnership not to carry on business in Kenya unless it is registered as a foreign LLP in Kenya.
• A foreign LLP to appoint at least one local representative who shall either have a permanent residence in Kenya or a Kenyan citizen who ordinarily resides in Kenya
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Increased mandate of the registrar in striking off of companies/LLPs

• The Registrar may strike off a company/ LLP from the register when the registrar has reasonable belief that the company/LLP is not carrying out business in Kenya. Among the reasons the amendment has outlined is where a company/LLP has failed to file annual returns or financial statements for five years or more; has failed to lodge a copy of the register of BO after it has been issued with a directive to do so.

I have attached a table containing the amendments, compliance timelines and the fines/fees arising from non-compliance.