Advocates Risk Permit Losses Over Fraudulent Business Filings

Advocates and certified secretaries face the loss of their licences for fraudulent filings at the Business Registration Service under a proposed code of conduct.

The move also aims to allow lawyers and governance compliance experts to make such submissions without seeking consent from company directors.

Following a consultative meeting with the Institute of Certified Secretaries and the Law Society of Kenya, the Business Registration Service agreed to jointly develop a conduct and implementation structure.

The framework would restore direct filing by professionals without directors’ consent. The direct channel was suspended under an updated system known as BRS II after fraudulent filings saw shareholders lose stakes worth billions of shillings.

Under the initial version of the system, known as BRS I, advocates and certified secretaries could lodge and process applications without seeking consent from directors.

This changed under the new automated system. Individual company directors now receive a one-time password on their mobile phones for verification.

Business Registration Service Director-General Kenneth Gathuma said the meeting resolved to jointly develop and implement, within August 2026, a Code of Conduct and an implementation framework.

The framework will define clear roles, responsibilities and accountability measures for all parties. Advocates and secretaries act on behalf of company directors in filings that include transfers of shares and changes in directorships.

Complaints of fraudulent filings have included cases where directors were replaced without their knowledge or consent. Shareholders have also discovered shares transferred without authorisation.

The increased cases prompted the end of direct filing. Professionals were required to obtain consent from directors, prolonging post-registration services.

Under the changes being made, the advocate or secretary will provide the consent instead of each director. Other citizens will still need director consent.

The enhanced process will automate confirmation of new director appointments, resignations and share transfers through multi-factor authentication using a one-time password.

Automation is expected to reduce the time for directorship changes from approximately 14 working days to five working days. The Business Registration Service handles post-registration services including updates to share ownership and beneficial owners.

Gathuma described the one-time password component as critical in safeguarding investments and curbing identity theft and fraudulent lodgements.

The joint work with the professional bodies is scheduled for completion within the month. Implementation of the new structure will follow the agreed framework.