Let’s face it: entrepreneurship is not for everyone. After trying your hand at running a business entity and it doesn’t work, how do you dissolve it? It takes more than just closing the doors to the physical location and calling it a day. This article addresses the legal procedures of deregistering a registered business entity in Kenya.
Since the business entity is known, it is needless to say that the business type is known. The business type shall dictate the kind of procedure to be followed and the forms to be filled. Before deciding to close down the business entity, you could consider converting it into a different business entity. To find out about other business entities, be sure to check out our article on how to start a business in Kenya. However, if the die is cast, here is how to go about the deregistration process.
How to close a business name in Kenya
Deregistration of a company begins with a special meeting of the board of directors, in which a resolution to dissolve the company is passed. The minutes of this meeting are required to be submitted, together with the resolution itself, in the form of a CR19 form, an application to be struck out of the companies register (form CR18), and the company’s statement of annual returns. There should also be a statement to the effect that the company is cleared from all charges and credit, or that it is able to do so. 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. A copy of the application should be given to all the members and employees of the company within seven days. This application is also done online, on the eCitizen portal.
For a business name, a BN/6 form should be filled within three months of cessation of the business. The requirements are the business name and registration number and the date of winding up. That form must be signed by the business owner(s) who may be a sole proprietor, two or more partners or a corporation. In the event of the business owner being a corporation, it may be signed by the director or the secretary. The certificate of registration must also be submitted for cancellation. It can, however, be returned to the business owner(s) upon request. This application is done online, on the eCitizen portal.
How do I deregister my ltd company?
To wind up a limited liability company, the manager(s), or in the event that they are more than two, a majority of them, must make a declaration of solvency of the partnership (form LLP 10), meaning that it will be able to pay off its debts within twelve months. After at least thirty-five days from the making of this declaration, a resolution must be passed by all the partners, and it must be lodged with the registrar within seven days, together with the declaration mentioned and a statement of the partnership’s assets and liabilities. The resolution must also be published in at least one local newspaper that circulates nationally within fourteen days. These documents are delivered personally at the offices of the Registrar of Companies.
Once the applications have been submitted, the registrar will strike the business entity from the register, and will gazette a notice to that effect. After this, the business is deemed as dissolved, with the only exception being that the liabilities must be cleared.
By: Victory Wanjohi