Our Contacts

(+254) 0722801991
(+254) 0780801991
[email protected]

Download our app

The Business Registration Service Act

The Business Registration Service Act (2015) “the BRS Act”  Was Signed Into Law By The President On 11th September 2015 And Became Operational On 6th November 2015. The Main Purpose Of The BRS  Act Is To Create The Corporation That Would Be Responsible For The Implementation And Observation Of  the Laws Concerned With The Formation And Registration Of Companies (Incorporation) And The Registration Of Partnerships And Sole Proprietor Businesses (Business Names).  This Corporation Is Known As The Business Registration Service. The Mandate Of The Service Is To Ensure Effective Administration Of The Laws Relating To The Incorporation, Registration, Operation And Management Of Companies, Partnerships And Firms.

Section 3 of the BRS Act creates the Business Registration Service (“ the Service”) , as a State Corporation that shall continue to exist from the date of its formation irrespective of the changes in the office holders. It has the right/power to own or sell its property, borrow money among other actions that will be necessary for the performance of its duties. Where one is aggrieved by any of the Business Registration Service, they can bring an action against them (sue). 

The Functions of the Service

Section 4 of the BRS Act states the main function of the Service as Implementation of laws, regulations and policies concerning the registration of companies, partnerships, business names, societies, hire purchase businesses, trade unions, books and newspapers among others.  This shall be carried out under the general supervision of the Attorney General. Other duties include:

  1. Carrying out the registration of companies and businesses in Kenya and maintain records, registers and data on these registrations.
  2. Implementation of policies and guidelines on the registration of businesses
  3. Providing the necessary information to the Attorney General that will be required for the making and amendments of these policies and guidelines.
  4. Carrying out research relevant to its duties
  5.  Giving the findings of their research and the recommendations aimed at improving the business arena in Kenya
  6. Interlinking and collaborating with other corporations and arms of the government as may be  necessary in  enhancing the effective discharge of their duties.
  7.  Charge fees for any service performed by the Service

The following are the bodies through which the service shall carry out its functions:

  1. The Board Of Directors (“The Board’) (sections 5- 16)
    1. The governing body in the Service is the Board of Directors consisting of the following members:
      1. The Chairperson (appointed by the Attorney General, 2016: Carole Musyoka)  
      2. The Solicitor – General or his representative,
      3. The PS in the Ministry of  Industry, Trade and Cooperatives
      4. The PS, National Treasury
      5. The Registrar - General
      6. Four other members appointed by the Attorney General (2016: Michael Mugasa, Shallah Sheikh, Irene Wamakau & Ben Gaithuma)

The Chair person and the 4 members appointed by the AG shall hold office for a term of 3 years and may be re-appointed for a further term of 3 years only. The terms and conditions of their holding office are determined by the AG while their salaries are determined by the AG in consultation with the Salaries and Remuneration Commission.

These appointees  may also cease seize being members of the Board on occurrence of either death, absence from 3 consecutive meetings of the Board without acceptable reasons for non - attendance, resignation in writing addressed to the AG, Physical or mental incapacitation leading to inability to carry out their duties, negligence or incompetence in performance of their duties, being declared bankrupt, violation of  Chapter Six of the Constitution of Kenya (2010) on the  Leadership and Integrity or  conviction for a criminal offence and sentenced to a term of 6 or more months.

Functions of the Board of Directors

  1. The Board of Directors (“the Board”) is responsible for ensuring that the Service performs its duties/ it does so by making (formulation), implementing, monitoring and evaluating the policies and performance of the Service.
  2. It is the Board that is responsible for the appointing, training, disciplining and removing the members of the Service.
  3. To ensure that the operations of the Service run smoothly, the Board shall be required to establish departments within the Service and determine the duties and responsibilities of each of the departments.
  4. The assets, finances, investments, association/ affiliations of the Service will be under the control, supervision and determination of the Board. (Section 8 (f) & Section 27)
  5. In their dealings either under contracts, agreements or any other documents necessary, the Board shall affix the  Common Seal of the Service in the required documents which seal shall be witnessed (by signing) by the chairperson of the Board or such other person authorized to do so by a resolution of the Board. The affixing of the seal and witnessing by signature of chairperson shall be evidence that the Board has given its approval/ authorization in the contents of the document to which the seal is affixed. This shall thus mean the Service shall have created rights and/or duties or obligations as per the contents of the document sealed. (Section 22)

Conduct of Board meetings   ( Provisions under the Schedule to the Act)

  1. The Board shall meet as often as necessary for the performance of its duties but not less than 4 times annually. 
  2. The minimum number of members present in the Board meeting for them to conduct business shall be five (5).  The meeting shall be chaired by the chairperson or in her absence the vice chair or in the absence of both, the members shall select a chair.
  3. Decisions shall be by a majority vote or where there is a tie, the chair shall cast the deciding vote (second vote). The minutes of the meetings shall then be authenticated by the signature of the chairperson.
  4. Where the subject of the Board Meeting (a contract or other matter)  is of direct or indirect interest by any member, the member shall disclose their interest which shall be noted in the minutes. The interested member shall not vote in regard to the subject of interest.
  5. To increase their efficiency, the Board may form various committees of members and where necessary may engage the services of experts and consultants whose pay shall be determined by the Board.

Liability of the Board  (Section 16)

  1. Where a member, officer, employee or agent of the Board does anything in the course of their duties in carrying out the functions of the Board and such an action ( or failure to act) results to a claim, action or demand brought against such person  by an aggrieved party, such a member, officer, employee or agent of the Board shall not be personally liable to any claim , action or demand resulting from their actions.
  2. It is the Service that shall be liable as a corporation not the individual person and the Board shall be liable to pay the requisite/ determined compensation to the aggrieved party.

B. The Registrar-General  (Sections 17- 21)

Appointment

  1. The Board shall be required to recommend to the Attorney General the names of persons qualified for appointment as the Registrar-General (“the RG”).
  2. To qualify for the post of the RG, one must be an advocate of the High Court of Kenya with a minimum of 10  years’ experience in matters of public affairs and management. The appointee must also comply with the provisions of the Constitution of Kenya on Leadership (Chapter Six).
  3. The appointment procedure shall be through an open, transparent and competitive procedure carried out by the Board.

 Removal from office (Section 19)

The R.G. may be removed from office before the lapse of the stipulated term of 4 years if a written notice of the reasons for his/her removal is given by the Board and the R.G. is given an opportunity to be heard in accordance to the Constitution Article 47. The reasons for issue of such a notice may include; violation of the constitution, being incompetent and/ or negligent in carrying out his duties, being mentally or physical incapacitated resulting to his inability to perform his duties orbehaving so badly in ways that are contrary to the terms and conditions of employment suchthat the employer- employee relationship is destroyed (gross misconduct).

Term

The R.G shall hold office for a term of 4 years and may be reappointed for a further 4 years only.

Duties of the R.G.

  1. The R.G shall be the C.E.O and accounting officer of the Service who shall be responsible for the implementation of the decisions of the Board.
  2. The implementation shall be through formulation and development of the administrative structure of the service, organizing, controlling and managing the members of staff of the service and carrying out the day to day administration and management of the affairs of the Service.
  3. The R.G. may also delegate any of his/her duties to a member of staff in writing. Such delegated duties must specify the terms to the person to whom they are delegated and must be approved by the Board (Section 21).

The other duties of the R.G. will be determined by the Board.

C. Members of Staff    (Section 20)

Members of staff shall be appointed by the Service on such terms and conditions as determined by the Board.

Members of staff may also be seconded by the Public Service Commission from other departments of the public service and such seconded members shall when seconded fall under the control and direction of the Board.

Government employees who were under the Department of the Registrar-General (State Law Office) before the commencement of this Act became the staff of the service (Section 31).

 

Funding

The finances of the Service shall come from money allocated by Parliament, grants and donations made to the Board and fees charged for services offered.The Board shall be required to provide an estimate of expected expenditure for the financial year at least 3 months before the financial year begins ( 3 months before 1st July each year). These estimates shall be expected to include the remuneration to members and staff of the Service, costs of pension, gratuities and other charges, maintenance costs on buildings, grounds, equipment, training, research, development, insurance, expected future liabilities among other necessary expenditure.

These estimates shall be approved by the Board and presented to the Attorney General for approval. All expenditure within the financial year shall be done in accordance to the estimates.

Obligations

The Board is expected to ensure that proper accounting records are maintained clearly showing the income, expenditure, assets and liabilities of the Service. Annual audit shall also be carried out and a report made in accordance to the provisions of Public Audit Act.

As per section 28, the Board shall be required to prepare an annual report each financial year which shall be given by the Attorney General to parliament 3 months after the lapse of the financial year (after 30th June). This report shall contain financial statements of the Service, an outline of the activities carried out by the Service, a report on the impact of the functions of the Service, a report on the welfare of the members of the service in matters such as insurance, housing, safety equipment and their working conditions,a report on the gender and regional balance of members of the Service and any other information that may be required.

As provided by section 29 of the BRS Act, one commits an offence which if found guilty can be fined up to Kenya Shillings Five Hundred Thousand or can be sentenced to imprisonmentfor a term of up to 3 years or both the fine and imprisonment ifthe persondoes any of the following acts:

  1. Gets in the way of a member of the Service thus preventing them from carrying out of their duty; or
  2. Threatens a member of the Service who is carrying out of their duty; or
  3. While knowing that the information is false or incorrect, gives such false or incorrect information to the Service as if it were the true or correct information; or
  4. Knowingly Gives false or misleading information on anything (as if it were the true / correct information)  to a person acting under the authority of the service and  the person in authority of the Service acts based on such false or misleading information

One can comfortably say that several improvements have been seen in the registration ofCompanies and businesses names following the coming into effect of the BRS Act. These include:

  1. The Companies Act 2015 became operational on 1st January 2016. The Companies  Act would have been difficult to implement without the BRS Act.
  2. The Companies Regulations and Forms 2015: These regulations and forms were formulated and published by the Attorney General with the input and recommendations of the Service. The forms have further been amended to include details that had been left out earlier to ensure comprehensive. example form CR1 on the details of the directors now include details on the number of expected employees and  email addresses as a result newly registered companies are issued with NSSF and  KRA PIN numbers at   the point of issue of the incorporation certificates.
  3. Cost of registration of companies: Previously, the costs incurred in registration of companies were Kshs 2,000/- to which one was required to add an amount of 1% of the nominal share capital as stamp duty. When the Companies regulations 2015 were formulated, the registration costs were also based on the nominal share capital of a company. As at today, the total cost of registering a company is Kenya Shillings 10,000/- irrespective of the amount of share capital. This has encouraged both local and foreign investors.
  4. Online services: One can now apply for reservation of a business name online on e-citizen and pay for the requisite fees via Mpesa. At Huduma Centres in Nairobi City Center, there are also counters specifically for the reservation of names.
  5. The presentation of registration documents: Previously, this was done at the Companies Registry at Sheria House.  As at today, this is done at the two Huduma Centers in Nairobi City Center and this is expected to devolve to various Huduma centers at county levels.  
  6. Time taken: Previously, registration of a company would take over a month. As at today, one can collect their documents within 14 working days of them being presented and accepted for registration.

Subscribe to our Newsletter

x

Subscribe to our mailing list to get updates to your email inbox