Massive job losses are on the horizon after 24 companies issued notices of dissolution, signalling their subsequent closure.
“Under Section 897(4) of the Companies Act, it is notified for the information of the general public that the following companies are dissolved and their names have been struck off the Register of Companies with effect from the date of publication of this notice,” the notice read.
Further, 63 companies issued notices of intended dissolution, with the firms set to close shop over the next three months.
“Under Section 897(3) of the Companies Act, the Registrar of Companies gives notice that the names of the companies specified hereunder shall be struck off from the Register of Companies at the expiry of three months from the date of publication of this notice, and invites any person to show cause why the companies should not be struck off from the Register of Companies,” the notice stated.
In light of the new notices, the latest could trigger job losses across the various areas in which the companies are specialised.
In Kenya, the Registrar of Companies can order the dissolution of a company, commonly referred to as a "strike-off", primarily when there is non-compliance with statutory filing requirements, or when the Registrar reasonably believes the company is no longer carrying on business or is not in operation.
Failure to file annual returns and financial statements is one of the most common reasons companies are dissolved.
Companies are legally required to file annual returns and financial statements with the Registrar each year. If a company repeatedly fails to submit these documents, the Registrar may assume it is no longer active and initiate the strike-off process.
Additionally, failure to respond to official communications can lead to a company’s dissolution. If the Registrar sends letters to a company’s registered office and receives no response, or if the letters are returned undelivered, it may indicate that the company is no longer operating from its registered address.
Furthermore, failure to have and maintain a registered office can provide sufficient grounds for a company to be dissolved. A registered office address is a legal requirement.
If the Registrar can establish that a company no longer has a registered office or is not operating at the listed address, the regulator can proceed with a strike-off.
Although less common as a direct cause for strike-off, continuous non-compliance with core corporate governance obligations, such as failing to appoint or maintain a company secretary (where legally required), or not having the minimum number of directors, can raise concerns with the Registrar. This may prompt further investigation, which could lead to dissolution if the company is found to be defunct.
If the Registrar has reasonable cause to believe that a company is not carrying on business or is not in operation, based on public records, lack of filings, absence of activity, or information from third parties, they can initiate the strike-off process. This may be inferred from the absence of required filings or responses.
Typically, the dissolution process begins with warning letters, which include a 14- or 28-day ultimatum, followed by a gazette notice announcing the intended dissolution, and finally the formal strike-off.
Once a company is struck off, it ceases to exist as a legal entity. Its assets may become bona vacantia (ownerless property) and revert to the state. Directors and shareholders may also face penalties or liabilities if the strike-off was due to their non-compliance.
