Rwanda Development Board (RDB) is urging all registered companies to adhere to compliance requirements set forth by Law N° 007/2021 of 05/02/2021 governing companies as modified by Law No 019/2023 of 30/03/2023. The law stipulates that companies must maintain complete, accurate, and up-to-date records of their shareholders and beneficial owners, submit annual accounts and returns, and provide beneficial ownership information to the Registrar General. Failure to comply with these obligations can result in fines and penalties. According to RDB, compliance holds significant importance for businesses as it not only helps avoid legal consequences but also establishes trust with customers and other stakeholders, enhances revenues, improves internal processes, and protects the company from illegal actions. By adhering to company laws, businesses can ensure transparency and accountability in their operations. One of the primary compliance obligations is the requirement to keep company records. Each registered company must maintain various records, including incorporation documents, share register, accounting records, register of interests of directors, and minutes of all meetings and resolutions of shareholders, directors, and board committees. Additionally, companies must retain copies of annual accounts, auditors' and directors’ reports, the register of beneficial ownership, and written communications to shareholders or holders of the same class of shares. All the aforesaid records, copies of documents, and reports must be kept and retained by the companies for a period of ten (10) years. Where the company ceases to exist, the company secretary, directors, or liquidator must within thirty (30) days of the company ceasing to exist, file copies of all records kept with the Registrar General. In accordance with the filing requirements outlined in the Company Law, companies are required to submit their annual accounts within specific timelines. Each company must establish an accounting reference date in each calendar year, with certain exceptions. Firstly, the initial accounting reference date may not necessarily align with the calendar year of the company’s incorporation. Secondly, if a company decides to change its accounting reference date, it is not required to have an accounting reference date in that particular calendar year, as long as the period between the two dates does not exceed 15 months. To ensure compliance, company directors play a crucial role in delivering the necessary documents to the Registrar General. In the case of private companies, the company must submit a copy of the signed and approved annual accounts, along with the auditor’s report, and the directors’ reports pertaining to the same accounting period as the annual accounts and a copy of beneficial ownership information. This submission should take place no later than seven months after the accounting reference date. Public companies have a slightly shorter timeframe, with a requirement to submit the aforementioned documents within four months after the accounting reference date. In addition to filing annual accounts, companies must submit an annual return in the prescribed form. This return, signed by two directors or the sole member, confirms the accuracy of the information recorded in the register including beneficial ownership information as of the return date. Companies are also required to notify the Registrar General of any changes in registered information, such as company type, registered address, directors and officers, shareholders or members, and the location of company records. Changes in the register of beneficial owners must also be reported within the timelines provided by the Company Law. Non-compliance with these obligations can lead to various sanctions with the most severe being the removal of the company from the register of companies. Failure to keep or update the books that are required by the Company Law can result in an administrative fine ranging between Rwf500, 000 and Rwf 2,000,000. Failure or delay to provide documents required by the Company Law may lead to an administrative fine ranging from Rwf200, 000 to five Rwf500, 000. A member or a shareholder of a company required to disclose the information on shares held in a company and discloses false or deceitful information on shareholding or beneficial ownership is liable to imprisonment for a term of not less than three (3) years and not exceeding five (5) years and a fine ranging from 5,000,000 to 10,000,000. Knowingly submitting a false document can result in an administrative fine ranging from Rwf1 million to Rwf10 million. The approval of non-compliant accounts can lead to an administrative fine ranging from Rwf500, 000 to Rwf2 million. Failure to deliver annual accounts, directors’ reports, and auditor’s reports may result in each director being liable to a fine of Rwf1 million to Rwf10 million.
