1. The Application before the Court is the Notice of Motion dated 6th November, 2023. It is supported by the Affidavit of Victor Mino sworn on 6/11/2023. He depones that he is an Officer of the Kenya Revenue Authority, appointed under Section 13 of the Kenya Revenue Authority Act Cap 469 the Laws of Kenya.
2. The Application is presented under the provisions of Sections 916 and 917 of the Companies Act No. 17 of 2015 as read with Section 3A of the Civil Procedure Act, Cap 21 of the Laws of Kenya.
3. The Application seeks the following orders;
1) THAT this Honourable Court be pleased to issue an order to the 3rd Respondent to restore the 1st Respondent to the register of companies;
2) THAT the costs of the application be provided for;
3) THAT this Honourable Court be pleased to grant any further orders and directions that it deems fit.
Factual Background
4. The 1st Respondent, STRATON ENERGY LIMITED, was upon its own application struck off the Register of companies by the 3rd Respondent. The 3rd Respondent in exercising powers donated to it by Section 897(4) of the Companies Act, issued a Gazette Notice No. 182 dated 09/10/2020.
5. The 1st Respondent did not prior to seeking deregistration, seek to be relieved of or cancel its tax obligations and KRA Personal Identity Number P051454396O as required by Section 36 of the Value Added Tax Act and read under Section 10 and 14 of the Tax Procedure Act.
6. To the Applicant the 1st Respondent was merely acting in a clandestine manner, by concealing its application for dissolution. This was meant to evade compliance Section 900 of the Companies Act 2015 as well as Section 36 of the Value Added Tax as read with Section 10 of the Tax Procedures Act.
7. The 1st Respondent is said to owe the Tax Authority Kshs. 120,658,819.38 being unpaid Value Added Taxes, which amount is said to continue to accrue interest and penalties.
8. The 2nd Respondent is a former director of the 1st Respondent and consequently, is contended to bear legal liabilities and responsibilities of the 1st Respondent, including that involving payment of taxes.
9. The Application proceeded by way of written submissions. The Applicant files its submissions dated 30th September, 2024. No response and/or submissions were filed by the Respondents despite having been served.
Analysis & Determination
10. The Court having looked at the motion and the submissions filed, is of the considered view that the only issue for determination in this application is the question whether the 1st Respondent should be restored to the registration of Companies.
11. Section 916 of the Companies Act provides for application to the court for restoration to the register. Subsection (2)(i) provides that such an application may be made by a person who was a creditor of the company at the time of its being struck off the Register or dissolved. The Applicant submitted that at the time of being struck off, the 1st Respondent owed Kshs. 120,658,819.38 in unpaid taxes, which sum continues to accrue interest and penalties. This obviously entitles the Applicant to make the instant application under the law.
12. Further, Section 897 of the Companies Act deals with the deregistration of companies from the register. It provides that:
“897. Striking off company on company’s application
(1) On application by a company, the Registrar may strike the name of the company off the Register.
(2) Such an application is effective only if it—
(a) is made on behalf of the company by its directors or by a majority of them; and
(b) contains such information (if any) as is prescribed by the regulations.
(3) The Registrar may not strike the name of a company off the register under this section until after three months from the date of the publication by the Registrar in the Gazette of a notice—
(a) stating that the Registrar may exercise the power under this section in relation to the company; and
(b) inviting any person to show cause why the name of the company should not be struck off.
(4) As soon as practicable after striking the name of the company off the Register, the Registrar shall publish in the Gazette a notice that the company's name has been struck off the Register and the date of the striking off.
(5) On publication of the notice, the company is dissolved.
(6) Despite subsection (5)—
(a) the liability (if any) of each director, managing officer and member of the company continues and may be enforced as if the company had not been dissolved; and
(b) nothing in this section affects the power of the Court to liquidate a company the name of which has been struck off the Register.”
13. The Applicant submitted that the deregistration was at the instance of the 1st Respondent. This averment by the Applicant is not opposed. The Gazette Notice No. 182 of 09/10/2020 does indeed indicate that the 1st Respondent has been deregistered.
14. The Applicant submits that as at the time of deregistration, the 1st Respondent was aware that it was a debtor to the Applicant. This was on account of unpaid taxes. Again, this averment by the Applicant is uncontroverted.
15. The Applicant asserts that the 1st Respondent had a duty to notify all its creditors, the Applicant herein included, of its application for deregistration.
16. Section 900(1) (c) of the Companies Act provides as follows;
“(1) A person who makes an application under section 897 on behalf of a company shall ensure that, within seven days after the day on which the application is made, a copy of the application is given to every person who at any time on that day is—
(a) a member of the company;
(b) an employee of the company;
(c) a creditor of the company;
(d) a director of the company;
(e) a manager or trustee of any pension fund established for the benefit of employees of the company; or
(f) a person of a class prescribed by the regulations for the purpose of this paragraph.
17. It is the Applicant’s case that, contrary to the requirements of Section 900 of the Companies Act, the 1st Respondent failed to supply the Applicant with a copy of the application for striking off.
18. Further, the Applicant has made reference to Section 36(1) of the Value Added Tax Act, which states as follows;
“36. Cancellation of registration
(1) A registered person who ceases to make taxable supplies shall apply in writing to the Commissioner, for the cancellation of the person’s registration, within thirty days of the date on which the person ceases to make taxable supplies.”
19. Therefore, once an entity ceases to make taxable supplies, it is required under the law to notify the Commissioner for the purposes of cancellation of the VAT registration within thirty (30) days. This, the 1st Respondent failed to comply with.
20. Section 918 of the Companies Act empowers the court to order a company to be restored to the register if;-
(a) the company was struck off the Register under section 894 or 895 and the company was,at the time of the striking off, carrying on business or was in operation;
(b) the company was struck off the Register under section 897 and a requirement of sections 898 to 903 was not complied with; or
(c) in any other case, the court considers it just to do so.
21. In the present case, it is not disputed that the 1st and 2nd Respondents failed to comply with the provisions of section 900 of the Companies Act regarding the need for notification to the Applicant.
22. In the premises, the Notice of Motion dated 6 November 2023 is allowed in the following terms; -
i. The Registrar of Companies is hereby directed and ordered to forthwith restore the 1st Respondent, STRATON ENERGY LIMITED to the Register of Companies;
ii. Costs of the application are awarded to the Applicant.
iii. This file is closed.
23. It is so ordered.
Dated, Signed and Delivered at Nairobi this 24th day of April, 2025.
ADO MOSES
JUDGE