Q: What is the process of dissolving a dormant company with no assets or liabilities in Kenya?
A: A company can apply to the Registrar of Companies (the “Registrar”) to strike off its name from the Register of Companies (the “Register”) if during the preceding three (3) months it has not:
- changed its name;
- carried on business; or
- made a disposal for value of property that immediately before ceasing to carry on business it held for the purpose of disposal for gain in the normal course of carrying on business.
A company intending to proceed by way of dissolution should not have an ongoing insolvency case or be under administration or liquidation.
Here is a detailed step-by-step guide on dissolving a company by a member: –
- Application for Dissolution.
An application for dissolution by a company without assets or liabilities can be made by a company through its directors or a majority of directors through the requisite form. The directors must confirm that the company is dormant and qualified per the criteria listed above.
The application is made online through the Business Registration Service tab located on the E-Citizen platform. The application must be accompanied by a special resolution.
- Special Resolution.
The decision to dissolve the company by way of dissolution is through a special resolution.
A hard copy or electronic notice of the intended meeting is sent to each of the directors either electronically, through postal address, or their physical address. The notice shall mention the date, place, time, and agenda of the meeting which is the company’s dissolution. The notice period shall be twenty-one (21) days.
A special resolution is passed by a majority of the members ie not less than 75%. For written resolutions by a private company, the resolutions will be deemed special if it was proposed as a special resolution.
Once the special resolution is passed, the company shall proceed to lodge the application for dissolution enclosing this resolution.
- Gazette Notices
First Gazette Notice: Once the application is made in the required format, the Registrar will proceed to publish in the Kenya Gazette the intention to deregister the company and invite any person to show cause why the name of the company should not be struck off.
After three (3) months of this first gazette notice, the Registrar may then proceed to strike off the name of the company from the Register.
Second Gazette Notice: The registrar shall then proceed to publish in the gazette a notice that the company’s name has been struck off the Register and the date of striking off. Once this notice is published, the company is dissolved.
Conclusion
Dissolving a company in Kenya involves a multifaceted approach that requires careful planning, legal compliance, and effective communication. Understanding the intricacies of the process, engaging the right professionals, and adhering to legal requirements can help ensure a smooth and efficient dissolution.
