On 24th April 2024, the President signed the Statute Law (Miscellaneous Amendments) Bill 2024 into law. The enactment of the Act amended various provisions of the Trustees (Perpetual Succession) Act, Cap 164 Laws of Kenya. Pursuant to the amendment, the Registrar of Companies was conferred the mandate of registration of trusts and issuance of incorporation certificates. The registration fee was also altered from Kshs.3,000 to Kshs.10,000.
The Business Registration Service recently prepared the Trust Administration Bill, 2025 which seeks to overhaul the legal framework for incorporation, registration management and administration of trusts. The Bill also seeks to introduce comprehensive governance, transparency, and accountability measures for both trusts and trustees.
A. Salient Features of The Trust Administration Bill, 2025
(i) Types of Trusts registrable under the Bill
The Bill still maintains the three types trust that may be registered under the Trustees (Perpetual Succession) Act, Cap 164 Laws of Kenya being Charitable trusts, Non-Charitable Purpose Trust and Family Trust. The characteristics of each type of the trusts is akin to the objectives laid out under sections 3B, 3C and 3D of Cap 301.
The Bill also maintains the status on irrevocability of trusts under section 3A of Cap 164, and provides that a trust shall be deemed irrevocable unless the trust deed contains express provisions on the revocation of the trust.
(ii) Parties to a Trust
The Bill introduces a new party, that is, an enforcer to the parties recognized under Cap 164. Consequently, a Bill incorporated under the Bill will have a settlor, trustees, beneficiaries and an enforcer. A charitable or non-charitable trust will be required to have at least three trustees while a family trust will be required to have at least one trustee.
An enforcer of a trust will be the person appointed to enforce the terms of the trust deed and oversee trustees’ actions to ensure compliance with the purpose for which the trust was formed for. An enforcer(s) may be appointed by either the settlor or beneficiary(ies) in the absence of the settlor. The settlor or beneficiary under a trust cannot appoint a trustee to perform the roles of an enforcer. Upon appointment, an enforcer is required to register with the Registrar within 21 days thereof. An enforcer will be protected from personal liability for any action or omission performed in good faith.
The functions of an enforcer include:
- enforcing the terms of the trust deed;
- inquiring into the status of implementation of the trust;
- requiring the trustee(s) to take remedial action where there is a breach of the terms of the trust deed;
- reporting to the settlor or the beneficiaries any financial or other breaches by the trustees; and
- pursuing legal action against the trustees, whether criminal or civil.
(iii) Regulation of Professional Trustees
The Bill defines professional trustees to include persons who offer services for incorporation of trusts, drawing of trust deeds and provides professional advice on trust administration. All professional trustees shall be required to register with the Registrar of Companies and renew their licenses on an annual basis.
(iv) Requirement for a Register of Beneficial Owners
The Bill adopts the meaning of beneficial owners under the Companies Act, 2015. All trusts shall be required to keep a register of beneficial owners which should be updated whenever any changes occur on the identity of the beneficial owners. A copy of the register of beneficial owners ought to be lodged with the Registrar of Companies.
(v) Improved accountability in the Trust administration process
The Bill emphasizes trustee accountability through recordkeeping, reporting, and the obligation of filing annual returns with the Registrar of Companies.
(vi) Regulation of Trusts
The Bill grants the Registrar of Companies various powers in regulating the conduct of Trusts. They include:
- Direct any trust that fails to lodge its register of beneficial owners to pay a fine of 100,000;
- Order any trust that fails to file its annual returns to pay an administrative penalty of Kshs.5,000 for each year of default;
- Issue licenses to professional trustees and revoke such licenses on any grounds specified in the Bill;
- Issue a directive to an existing trust to provide information that is required to be kept by the Registrar under this Act and is not available in relation to the trust; and
- Deregister or restore any trust which has been revoked based on any of the grounds specified under the Bill
Conclusion
The Trust Administration Bill, 2025 marks a significant shift in Kenya’s trust law framework, introducing enhanced governance, transparency, and accountability requirements. By formalizing the role of the enforcer, regulating professional trustees, mandating trusts to keep a register of beneficial owners, and strengthening oversight by the Registrar of Companies, the Bill seeks to close regulatory gaps and align trust administration with global best practices.