The Anti-money Laundering and Combating of Terrorism Financing Laws (Amendment) Act, 2023 ("Amendment Act") was assented to on 1 September 2023 and came into force on 15 September 2023. The Amendment Act introduces section 243A to the Companies Act, 2015 ("Companies Act") which requires a private company or company limited by guarantee that does not have either a Kenya-qualified company secretary or a resident director to appoint a contact person. This amendment is aimed at addressing the challenge of insufficient accuracy and accessibility of company identification and ownership information, to promote transparency and disclosure of beneficial ownership of companies in line with the Financial Action Task Force ("FATF") standards.
Who can be a contact person?
A natural person with a permanent residence in Kenya.
How is a contact person appointed?
Companies are required to lodge a notice of appointment with the Registrar of Companies ("Registrar") specifying the contact person's name and residential address.
Companies registered before 15 September 2023 will be required to lodge a notice of appointment with the Registrar within 60 days of coming into force of this provision.
If the contact person dies, resigns or for any reason stops being the contact person of the company, the company should, within 14 days, lodge a notice to the Registrar that the person has ceased to be the contact person and provide notice of the appointment of a new contact person.
The Registrar should also be notified if the contact person changes their residential address.
What are the duties of a contact person?
The contact person is required to keep a copy of records relating to directorship, shareholding, beneficial ownership and any other information required to be kept by the company under the Companies Act. The contact person is also required to avail the copies of such records to competent authorities and the Registrar upon request.
Does the contact person carry any liability for breach of duty?
A contact person who fails to carry out the aforementioned duties commits an offence and on conviction is liable to a fine not exceeding KES 500,000.
What is the penalty for non-compliance with this requirement?
If a company which is required to appoint a contact person fails to make such an appointment, the company and each officer of the company who is in default commits an offence and on conviction are each liable to a fine not exceeding KES 500,000.
If the company is non-compliant after conviction, the company, and each officer of the company who is in default, commit a further offence on each day of non-compliance and on conviction are each liable to a fine not exceeding KES 50,000 for each day of non-compliance.
The Registrar may also issue the company with an enforcement notice specifying the statutory requirement which has been breached, the action to be taken by the company within 14 days and the consequences of failing to comply with the enforcement notice.
When is the deadline for compliance?
Whilst the deadline for compliance was 14 November 2023, the mechanism for compliance is still under development by the Registrar. The appointment of either a company secretary accredited by the Institute of Certified Public Secretaries of Kenya ("ICPSK") or a resident director, remains a viable option in the meantime.
Reviewed by Mahesh Acharya, an Executive at the ENS Kenya.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
