Entrepreneurship involves failures and successes. In the dynamic world of business, unexpected events, economic shifts, and human decisions might affect a company’s closure or deregistration. In Kenya, this is called “Dissolution” or “Striking off”. This detailed lesson will help you deregister a corporation or business name smoothly and legally.
Before You Begin: Considerations and Alternatives
Deregistering a business is a big choice that ought to be saved for last. Investigate other possibilities, such as restructuring, combining, or changing the corporate entity into a more manageable form, before starting the procedure. When all other options have been carefully considered, striking off should be the ultimate decision.
Striking off a Business Name in Kenya
The Cessation of a Business Name, or deregistration of a business name, can be done for a number of reasons, including the end of the business, the dissolution of the partnership, the death or withdrawal of a partner, or any other condition that makes it impossible to continue. Here is how to proceed:
- Application Submission: Utilize Form BN/6, the Notice of Cessation of Business, to apply for deregistration. Ensure the form is submitted within three months of ceasing the business.
- Contents of the Notice: The notice must include essential details such as the business name, registration number, and the date of winding up. It should be signed by the proprietor or all partners.
- Cancellation of Certificate: Submit the registration certificate for cancellation.
- Post Deregistration: Declare in writing that you will not use the deregistered name commercially. The owner(s) of the business name may request that it be returned, even in the event of discontinuance and cancellation.
Process of Striking off a Company in Kenya
Whether by Court Order, Registrar’s decision, or voluntary dissolution, the process of striking off a company involves several steps:
Dissolution by the Registrar of Companies
- Registrar Inquiry: If the Registrar suspects a business is closed, they will send an inquiry letter. If a response is not received within the allotted period, more action is taken.
- Publication of Notice: Lack of response triggers the publication of a notice in the Gazette, initiating the striking-off process.
- Striking off the Register: After three months from the notice, if no cause is shown, the company’s name is struck off the Register, and it is officially dissolved.
Striking off Company on Company’s Application
- Online Application: Submit the application using the eCitizen site run by the Attorney General. A majority of directors must submit this application.
- Special Resolution: A special meeting of the Board of Directors is held, passing a resolution to dissolve the company.
- Document Submission: Submit minutes of the meeting, the Application for striking out of the companies register (form CR18), the company’s statement of annual returns, and other required documents.
- Notice of Dissolution: Registrar assesses the application, publishes a notice of intended dissolution in the Kenya Gazette, and invites objections.
- Gazette Publication: After striking off the name, the Registrar publishes a notice in the Gazette, officially dissolving the company.
Limitations on Application for Dissolution
A company cannot apply for dissolution if, in the preceding three months, it has changed its name, carried on business, or made disposals for value.
Conclusion: Restoration Possibilities
Even disbanded or deregistered companies can be reinstituted through Restoration. Complex deregistration must be handled carefully and in accordance with regulations. This is a broad guide, but legal specialists should provide particular advice. Recall that the choice to deregister a business should only be taken after giving it considerable thought and considering all of the choices.
