With the increasing statutory requirements for companies in Kenya including the requirement to update Beneficial Ownership Registers, most shareholders with dormant companies are looking to dissolve their companies to avoid the risks of non-compliance. The infamous mode of dissolving a company is liquidation, as it is most commonly known. However, another mode that is available for dormant companies is strike off. Strike off is the process where a company that has been inactive for a long time and that has few or no obligations is removed from the register of companies. The effect of this removal is that the company ceases to exist and it can no longer trade in its name. This effectively means that it will also not be liable to meet any statutory requirements relating to companies. Strike off is also less costly compared to liquidation where the company has to incur the cost of an insolvency practitioner. However, there are certain requirements that companies need to meet to qualify for strike off.
