Pursuant to section 93A of the Companies Act, 2015 (“the Act”) requiring all companies to keep and lodge with the Registrar of Companies a register of its beneficial owners and the gazettement of the enabling regulations, Companies (Beneficial Ownership Information) Regulations, 2020, the Registrar of Companies has now operationalized the E-Register with effect from 13th October 2020.
Consequently, every Company is required to comply with the aforementioned provision of the Act and submit a copy of its Beneficial Ownership Register within thirty (30) days of its preparation.
According to the Regulations, a beneficial owner is one who meets any one of the following conditions:
(i) Holds at least ten (10%) percent of the issued shares in the company either directly or indirectly;
(ii) Exercises at least ten (10%) percent of the voting rights in the company either
directly or indirectly;
(iii) Holds a right, directly or indirectly, to appoint or remove a director of the company; or
(iv) Exercises significant influence or control, directly or indirectly, over the company. (Per the Regulation, significant influence or control means participation in the finances and financial policies of a company without necessarily having full control
Accordingly, the effect of this is that every company that has nominee shareholding will now be required to submit to the Registrar of Companies the beneficial owners of any shares being held on their behalf by the nominees.
Further to the foregoing, any company that has another company as its shareholder, will be required to state the particulars of its shareholders and directors, who qualify as beneficial owners under the Regulations, for purposes of the said register.
Collins Bush Wanjala