Beneficial Owner
“the natural person who ultimately owns or controls a legal person or arrangements or a natural person on whose behalf transactions are conducted, and include persons who exercise ultimate effective control over a legal person or arrangement.”
It is by law that companies incorporated or registered in Kenya are required to keep a register of their beneficial owners. (Legal Notice dated 18th February 2020). Operational as from 13th October 2020.
The intent of this regulation is to make a better attempt to Combat Money Laundering and the Finance of Terrorism and Proliferation.
The definition offered therein is that a Beneficial Owner is:
“the natural person who ultimately owns or controls a legal person or arrangements or a natural person on whose behalf transactions are conducted, and include persons who exercise ultimate effective control over a legal person or arrangement.”
Requirement
For the purpose of the regulations, a Beneficial Owner is a natural person who directly or indirectly:
- holds at least ten percent (10%) of the issued shares of the company;
- exercises at least ten percent (10%) of the voting rights in the company;
- holds the right to appoint or remove a director of a company; or
- exercises significant influence or control over a company.
Significant influence or control under the regulations means participation in the finances or financial policies of the company.
Conclusion
It is important to comply with the legal notice given the deadline given. We advise that one should engage a lawyer to correctly submit the requisite information. Note that there is punitive measure attached to non-compliance. The highlight of the penalties is that each director shall be penalize to pay Kes. 500,000.00. Be advised.
This is an opinion intended for informational purposes merely. In case of any queries or need for clarifications, please contact us on info@atandiadvocates.africa
