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Striking off a Company registered in Kenya

Striking off a Company registered in Kenya

INTRODUCTION

Running a business is not a bed of roses. There is so much that goes on behind the scenes that we don’t know. The socio-economic and political environment is sometimes not business friendly. One day you are doing well, next day you are unable to pay your creditors. Debts pile up.

Sometimes it is Poor corporate governance and management wrangles. This has caused the fall of big industry players. It could be natural causes and epidemics such as the novel Corona Virus disease of 2019 which has adversely affected the world economy. Many industries have collapsed some of which may never recover again.

Other times one is desirous of pursuing other interests. So they opt to close and strike off their business entity. Whatever your reason may be, it is totally legal to strike off your company.

However, before you do so, kindly consider other business options such as restructuring, merging with another company, converting the business entity into a simpler and manageable form etc. Striking off should be used as a final resolve.

Before you commence the process of deregistering a business, please ensure that your business is linked on the eCitizen Portal.

Striking off a Business name in Kenya

This is also known as Cessation of a Business Name.

You can deregister a business name anytime upon:-

  • Completion of business for which the entity was registered.
  • Termination of the partnership term.
  • Death of a partner,
  • Withdrawal of a partner or for any other reason which make it impossible to carry on the business

To deregister a business name, the application is made through Form BN/6 which is a Notice of cessation of Business which should be filled within three months of cessation of the business.

The contents of the Notice include:-

  • the business name 
  • registration number and
  • the date of winding up.

This notice must be signed by the proprietor or all partners, as the case may be. A director or the secretary can sign for a corporation which is the proprietor or a partner.

The Certificate of Registration must also be submitted for cancellation.

Once the Business name has been deregistered, it is important to state legally that you will no longer be doing business under that name.

Notwithstanding the cessation and cancellation, the Business name can be returned to the business owner(s) upon request. 

Process of striking off a company in Kenya

Striking off a company is also known as Deregistration or Dissolution.

In addition to the circumstances explained above, other reasons for dissolution of a company include:

  • By Court Order also known as compulsory winding up.
  • Where the company is no longer in operation or carrying out business, the registrar of companies has the power to dissolve the company.
  • Where the Directors of the Company or majority of the directors make an application to the registrar of companies to have the company be struck off.
  • Where the members of the company voluntarily apply to have the company dissolved. This is known as voluntary dissolution.
  • Where the company is under liquidation and it has been wound up, the Registrar may strike off the Company’s name from the Register.

Dissolution by the Registrar of Companies in Kenya

  1. Where the Registrar has reasonable belief that a company is not carrying on business or is not in operation, the Registrar may send to the company by post or electronic mail, a letter inquiring whether the company is carrying on business or is in operation.
  1. If after one month from the date of issuing the letter the Registrar does not receive a response, the Registrar shall within 14 days send out a second letter.
  1. If 30 days after issuing the second letter the Registrar still does not receive a response, a notice will be published in the Gazette with a view to striking the name of the company off the Register.
  1. After three months from the date of the notice, the name of the company referred to in it will, unless cause is shown to the contrary, be struck off the Register and the company will be dissolved.
  • As soon as practicable after striking the name of the company off the Register, the Registrar shall publish in the Gazette a notice to the effect that the name of the company has been struck off the register.
  • Once the Gazette is published, the Company shall be deemed to be officially struck off the Register of companies.

Striking off company on company’s application in Kenya

  1. The Application is lodged online on the Attorney General’s eCitizen portal.
  1. Such an application is effective only if it is made on behalf of the company by its directors or by a majority of them;
  1. The process begins with a special meeting of the Board of Directors, in which a resolution to dissolve the company is passed.
  1. The Application is submitted together with the following documents:-
  • The minutes of the meeting together with the Special Resolution decision to have the company dissolved/struck off  (form CR19)
  • The Application for striking out of the companies register (form CR18). The information needed for the CR18 form includes the name and registration number of the company, its date of incorporation, and the names and signatures of the directors making the application.
  • The company’s statement of annual returns.
  • A statement to the effect that the company is cleared from all charges and credit, or that it is able to do so.
  • A copy of the application should be given to all the members and employees of the company within seven days.
  • The Registrar will thereafter assess the application and publish a notice of the intended dissolution the Kenya Gazette and to invite any person to show cause why the name of the company should not be struck off.
  • As soon as practicable after striking the name of the company off the Register, the Registrar shall publish in the Gazette a notice to the effect that the name of the company has been struck off the register.
  • On publication of the gazette notice, the company is dissolved.

Circumstances when a company may not apply for dissolution in Kenya

A company may not make this Application if, at any time during the preceding three months, the company has:-

  • changed its name;
  • carried on business;       
  • made a disposal for value of property that, immediately before ceasing to carry on business, it held for the purpose of disposal for gain in the normal course of carrying on business;

CONCLUSION

Notwithstanding the dissolution/deregistration, the Company can always be reinstated, an act known as Restoration.

In the event that your mind on striking off your company or you wish to cease using a business name, at Capita registrars, we shall help you with the process. We have a team of highly skilled and qualified staff.

Please contact us on info@capitaregistrars.co.ke or by phone +254709747555.