COMPANY & INCORPORATION LAW
Dissolution of a Company in Kenya

What is dissolving or winding up a company in Kenya?
This means filing the appropriate documents with the companies’ registry to terminate the existence of a registered company in Kenya such that the company is wound up. It is the process to terminate a company that does not have creditors. Companies with debts can look to insolvency laws to guide their winding up.
Who can dissolve a company in Kenya?
The directors of the company must sign a resolution showing the directors have agreed to dissolve the company.
Are there any resolutions pertaining to the dissolution of the company to be filed with the Companies’ Registrar?
Yes, the directors need to file with the companies’ registry, a resolution for dissolving the company.
What type of reasons would lead the directors to dissolve a company?
- If the company has ceased operations in Kenya.
- If the objectives of the company have been fulfilled.
- If the company has been dormant and it is onerous to keep up with statutory filings annually e.g. company returns and tax filings.
- If the company has no debt and the directors resolve to end the company
What is the process of dissolving a company in Kenya?
The first document to refer to is the articles of the company that outlines the types of resolutions to wind up the company.
Some companies have drafted articles of association where it is mandatory for there to be special or ordinary resolutions by the shareholders.
Other companies may only direct that a majority director’s resolution is sufficient to wind up the company.
The application to dissolve the company is filed on the ecitizen platform.
The appropriate documents to file are the director’s resolution and the application to the companies’ registry to dissolve the company.
These documents are signed by the directors and the lawyer winding up the company.
Thereafter the companies’ registry will publish in the Kenya Gazette, the name of the company giving notice to the public of the intended dissolution of the company.
At this stage the companies’ registry will also liaise with KRA to ascertain the company does not have outstanding tax liabilities that ought to be paid off before dissolution and once this is confirmed to the registry, if there are tax arrears these will have to be paid off first.
If there are no tax arrears, after 30 days the company has moved a closer step to dissolution.
Also note that members of the public may object and stall dissolution e.g. employees owed money; creditors of the company who are unpaid; if the company is involved in any litigation and dissolution is prejudicial to a litigant in such a case. These are examples of situations where a party would object to the intended dissolution of your company.
If there is no objection after 30 days, some months thereafter a second notice of dissolution of the company shall be published in the Kenya Gazette confirming to the public that your company has been dissolved.
Afterwards, the letter confirming dissolution can be obtained from the Business Registration Service and this letter is used in support of cancelling the PIN certificate of the dissolved company.
This application to cancel the pin and the companies’ registered tax obligations is filed with KRA. If KRA is satisfied the company has no outstanding tax liabilities the PIN can be cancelled.
Its important to cancel the PIN so the dissolved entity does not incur tax liabilities and penalties that it would if the Pin is still active in the tax system.
Duration of the dissolution process?
On average, the process can take an estimated 4 months to an indefinite time period. It can take a long time to dissolve the company if there are objections to the notice of intended dissolution e.g. outstanding tax liabilities notified to the companies’ registry. These have to be paid for a go ahead for the companies’ registry to progress the company’s dissolution.
How can tax and debt liabilities affect the dissolution process?
Before starting the dissolution of your company, ensure that the company does not owe creditors money. Also ensure the taxes and penalties owed by the company are fully paid; as failure to pay these can lead to stalling of the dissolution process as these must first be paid before the companies’ registry will proceed with the dissolution process.
Also ensure the company has duly filed returns at the companies’ registry up to the date of starting the dissolution process.
Also the entity should be up-to-date with filing tax returns.
How to conduct Bank account closure for the company?
This is guided by the particular bank’s guidance and appropriate resolutions by the directors will be filed and lodged with the bank to shut down the account. The money in the account can be removed or transferred prior to the closure of the corporate bank account. For more guidance the bank can provide information on its internal processes for closing the corporate bank account for the company being dissolved.
The provision of general information herein does not constitute an advocate-client relationship with any reader. All information, content, and material in this article are for general informational purposes only. Readers of this article should get in touch with us/a qualified advocate to obtain legal advice with respect to any particular legal matter.
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