Weaknesses in the State-run online business registration portal have stalled official searches for companies, delaying multimillion-shilling transactions that rely on verification of details on ownership and indebtedness.
Company secretaries have raised questions over the efficiency of the registration platform, saying that they are also having difficulties linking older businesses to the portal.
In a letter seen by the Business Daily, advocates Raffman, Dhanji Elms & Virdee, who act as company secretaries for nearly 500 firms, complain that they have been unable to file annual returns for their clients for the last three months, especially those relating to previous years.
Further, the advocates say that foreign directors of firms are unable to access the system, making them unable to monitor their local interests.
The number of registered businesses rose by 300,000 to nearly one million between 2011 and 2016.
“CR12s (official search) are almost impossible to obtain and don’t contain certain information that was formerly obtained by manual search, for example registered charges/debentures, previous directors and shareholders among others,” says the law firm in the letter dated January 24.
'Taking too long'
“It is also virtually impossible to link companies online. This process is taking too long and is virtually causing a halt in filing of annual returns and restructuring of companies. Some applications to link a company to an individual’s e-citizen account are being rejected without any reason being given.
Acting registrar-general of the Business Registration Service (BRS) Kenneth Gathuma told the Business Daily that there was a system downtime for one and a half weeks until last Friday, but that it has now been stabilised.
He added that the issues are more to do with processes rather than the system itself.
“The link-a-business procedure may be a bit lengthy because it has a lot of back-and-forth between the business and the registry.
“The issue of the company secretaries filing documents becomes a bit problematic because they sometimes do not have the proper annual returns filed and at times do not have justification as to why we have a different reflection of documents in the registry from what they have,” said Mr Gathuma.
“It is an ongoing engagement which we have with the Institute of Certified Public Secretaries of Kenya (ICPSK) and the Law Society of Kenya. We had a meeting with them on Friday in Mombasa, to address these issues systematically.
"We are applying more resources on our part and streamlining the work processes to ensure the process is better.”
The migration of the business registration to an online system began in 2015, with the registry going fully digital last October.