Annual Returns for Companies in Kenya: What You Need to Know

Contents

1. Understanding Annual Returns
2. Why Filing Annual Returns is Important
3. Who Must File Annual Returns?
4. Step-by-Step Process to File Annual Returns
5. Penalties for Late Filing
6. Common Challenges and How to Overcome Them
7. Expert Assistance for Filing Annual Returns

Understanding Annual Returns

Annual returns are mandatory filings required by the Business Registration Service (BRS) in Kenya. These returns provide updated information about a company, ensuring that its records with the Registrar of Companies remain current. The return includes details such as the company name, registration number, registered office address, directors, shareholders, and share capital.

Every registered company, including private and public companies, must submit an annual return to maintain compliance with the Companies Act, 2015.

Why Filing Annual Returns is Important

Filing annual returns is crucial for several reasons, including:

• Legal Compliance: Ensures that a company meets statutory obligations under Kenyan law.
• Maintaining Good Standing: Avoids penalties and potential deregistration for non-compliance.
• Business Transparency: Provides an up-to-date record of a company’s structure and ownership.
• Facilitates Business Transactions: Required by banks and other institutions when conducting due diligence on a company.

Who Must File Annual Returns?

The following entities are required to file annual returns:

• Private Limited Companies
• Public Limited Companies
• Foreign Companies with a registered presence in Kenya
• Companies Limited by Guarantee

Sole proprietorships and partnerships are not required to file annual returns but must comply with other tax and business regulations.

Step-by-Step Process to File Annual Returns

Step 1: Log in to the eCitizen Portal

• Visit the eCitizen Portal and sign in to your account.
• Navigate to the Business Registration Service (BRS) section.

Step 2: Select the Annual Return Filing Option

• Choose the company for which you are filing the return.
• Fill in the required details, including updated company particulars.

Step 3: Pay the Required Fees

• The standard fee for filing annual returns depends on the company type.
• Payment is made via M-Pesa, debit/credit card, or bank transfer.

Step 4: Submit the Application

• Review the details entered to ensure accuracy.
• Submit the application through the eCitizen portal.

Step 5: Obtain Confirmation

• Once processed, a confirmation of the annual return filing will be available for download.
• Keep a copy for your company records.

Penalties for Late Filing

Failure to file annual returns on time attracts penalties, including:

• A fine of KES 2,000 per year for private companies.
• Possible deregistration of the company for prolonged non-compliance.

To avoid these penalties, companies should set reminders and ensure compliance before the due date.

Common Challenges and How to Overcome Them

• Incorrect company details: Ensure company records are updated before filing.
• Delays in processing: File annual returns early to avoid system congestion.
• Payment issues: Use verified payment channels and keep transaction records.

Expert Assistance for Filing Annual Returns

Filing annual returns can be complex, especially for companies with multiple shareholders. NileEdge offers expert assistance to ensure smooth and timely filing. Contact us at info@nileedge.com or call +254 714 644 442 for professional support.

For more details, visit Kenya Business Registration Service (BRS).