Nearly 5,000 companies have asked to be struck out of the company registry since President William Ruto took office in 2022. The closure has rendered several Kenyans jobless.
Our analysis of Business Registration Service (BRS) records shows that the number of new companies registered during the year to last December dropped by 16,666 to 130,527. The number of businesses registered in 2023 stood at 141,193.
The drop comes amid a tough economic time during which businesses have complained of high taxes and input costs. Analysts attributed this drop to the contraction of business name registrations, which reduced to 70,693 from 83,458 in 2023.
According to our analysis, 4,774 companies have applied to be struck off the company registry since 2022. In 2022/2023, 2,030 companies applied to be struck off the registry, 1,817 companies applied to be removed in 2023/2024, and 927 companies applied to be removed between July and December.
Companies may be struck off the registry for several reasons including ceasing operations, failing to file annual returns, not disclosing beneficial ownership, or having names too similar to existing entities. Directors can also apply for voluntary dissolution.
Court orders may mandate dissolution in cases of insolvency or legal violations. Maintaining compliance with statutory obligations is essential to avoid involuntary deregistration.
According to the Business Registration Service (BRS), 22 companies entered administration in the year, highlighting the intensified challenges businesses face amid rising taxes and escalating lending rates.
This is despite President Ruto's continued insistence that the economy is resurging. According to the organisation, this comes as the living standards of employed Kenyans deteriorated under Ruto’s regime.
Last month, it emerged that nearly 6,000 Kenyans lost their jobs over the last three years as companies struggled to keep up with the changing economic climate.
According to the Federation of Kenya Employers (FKE), 5,567 Kenyans were declared redundant in the past 3 years. However, that number is likely higher with FKE only tracking those losing jobs among its members.
While offering its advice to the government ahead of the budgetmaking process, FKE CEO Jaqueline Mugo revealed that employers are receiving more distress calls as the employee take-home continues to shrink.
According to FKE, employers are facing pressures to meet production costs that are rising with taxes around input products and labour as well.
Manufacturers contend with elevated costs due to factors such as expensive energy, high taxation, and the influx of cheaper imports. These issues have led to the closure of more than 30 manufacturing plants between 2014 and 2022.
