Reasons for winding up or deregistration

• Business Closure: The company has ceased trading.
• Purpose Achieved: The objective for which the company was formed has been fulfilled.
• Financial Difficulty: The business is no longer sustainable or profitable.
• Regulatory Changes: Shifts in the business environment or compliance requirements.
• Voluntary Exit: Owners wish to retire, restructure, or start a new venture.

Types of winding up

There are three main ways to wind-up a company in Kenya:

1. Voluntary Winding up: Initiated by the company’s directors and shareholders through a resolution.
2. Winding up by the Court: Ordered by a court, often due to insolvency or legal disputes.
3. Creditors’ Voluntary Winding up: Initiated by creditors under the supervision of the court.

This guide focuses on voluntary winding up, the most common method for private companies.

Step-by-Step Winding up Procedure

1. Pass a Special Resolution

The directors and shareholders must hold a meeting and pass a special resolution to dissolve the company. The resolution should outline the reasons for winding up and authorize the process.

2. Prepare and Submit Required Documents

Submit the following documents to the Registrar of Companies

• Cover Letter: Explaining the intention to wind up and the reasons for Deregistration.
• Form CR 19: Notice of the special resolution.
• Form CR 18: Application to strike off the company’s name from the register.
• Minutes of the Resolution Meeting: Signed by the directors and shareholders.

3. Settle Outstanding Obligations

Ensure all annual returns are filed and up to date. Clear any outstanding debts, including taxes, loans, and supplier payments. Notify all stakeholders, including shareholders, creditors, employees, and pension fund managers.

4. Publish a Notice in the Kenya Gazette

The Registrar of Companies will publish a notice of the company’s dissolution in the Kenya Gazette. This notice allows creditors and other stakeholders to raise objections or claims within 3 months.

5. Strike Off the Company from the Register

If no objections are raised during the 3-month period, the Registrar will proceed to strike off the company’s name from the register. The company will be officially dissolved, and a Certificate of Dissolution will be issued.

Requirements for winding up

• Completed Form CR18 – Application to strike off the company name.
• Form CR19 – Special Resolution passed by the shareholders.
• Signed Minutes of the Meeting.
• Up-to-date Annual Returns filed with the Registrar.
• Tax Clearance and debt settlement confirmation.
• Written application to the Registrar of Companies.

Reference: See the BRS Insolvency and Dissolution Guide.

Cost of Winding up a company in Kenya

Registry Fee: Around KES 4,000 for processing the winding-up application.

• Payment of pending annual returns.
• Settlement of outstanding tax obligations with KRA.
• Professional service or legal consultant fees.

For updated fees, check the BRS Companies Registry Fee Schedule.

How long does it take to Winding up a company in Kenya?

On average, dissolution takes about four months. The timeline depends on tax clearance, creditor claims, and whether any objections arise after Gazette publication.

1. Weeks 1–2: Pass resolution, file CR18 and CR19, attach tax clearance and consents.
2. Weeks 3–4: Registrar issues Gazette notice of intended strike-off.
3. Months 2–4: Mandatory 90-day objection period for KRA or creditors.
4. After 3 Months: Registrar issues final Gazette notice confirming dissolution.

Tip: Conduct a pre-filing compliance check (KRA, creditors, annual returns) to avoid objections and shorten processing time.

Common causes of delay

• KRA objections for unpaid taxes or missing returns
• Creditor claims or unsettled debts
• Pending litigation
• Delayed statutory filings

Pro tip: run a pre-filing compliance check (KRA, creditors, annual returns) to reduce objections and speed the process.

Notifications required during Deregistration

Under Section 900 of the Companies Act, the company must notify within seven days:

• All shareholders and directors.
• Creditors and lenders.
• Employees and pension fund managers.

Frequently Asked Questions

Can a company be reinstated after Winding up?

Yes. A company may apply for reinstatement within 20 years of dissolution by order of the Registrar or the High Court.

What happens to company assets after dissolution?

Remaining assets are distributed among shareholders, or transferred to the government if unclaimed.

Is a Gazette notice mandatory?

Yes, Gazette publication is required to notify creditors and the public of intended dissolution.

Can a company with debts be dissolved?

No. All tax and creditor liabilities must be settled before dissolution

De-registration consultants in Kenya

Winding up a company in Kenya is a structured process that requires careful planning and compliance with legal requirements. Whether you’re closing your business due to financial challenges or achieving your goals, following the steps outlined above will ensure a smooth and legally compliant dissolution.