A company can close its offices, stop trading and cease operations, but does that mean its debts disappear too? For creditors, the removal of a company’s name from the Companies Register can raise a difficult question: what happens when a business that owes money is no longer legally registered? In Kenya Revenue Authority v Salsa Global Investment Company Limited & 3 Others [2025] KEHC 5619 (KLR), the High Court addressed this question, reinforcing an important principle of company law: striking a company off the register does not necessarily put an end to accountability.
The dispute arose after Salsa Global Investment Company Limited was struck off the Register of Companies on 14 October 2022 through Gazette Notice No. 211. The problem, according to the Kenya Revenue Authority (KRA), was that the company allegedly owed Kshs. 38,041,137.26 in unpaid taxes. This comprised Kshs. 10,341,577.05 in income tax and Kshs. 27,699,560.22 in value added tax (VAT), with interest and penalties continuing to accrue. KRA was concerned that the company had been removed from the register without the required notification, despite the outstanding tax liabilities.
For KRA, this was not simply a matter of an unpaid tax bill. The authority argued that the company had been struck off without following the applicable procedures, including the requirements relating to notification of creditors and the conclusion of its tax affairs. It also maintained that the company had not complied with the relevant tax deregistration requirements, including those relating to the cancellation of its Personal Identification Number (PIN).
On 16 November 2023, KRA moved to court seeking the restoration of Salsa Global to the register. The application was brought against the company, its two directors and the Registrar of Companies. The respondents opposed the application, describing it as defective, misconceived and an abuse of the court process. The court, however, allowed the application and ordered the Registrar of Companies to restore the company to the register.
At the heart of the dispute was the question of whether a company can be removed from the register without properly addressing the interests of those to whom it owes money. Section 900 of the Companies Act, 2015 provides for the notification of specified interested parties in the company strike-off process. Such requirements serve an important purpose: they give creditors an opportunity to become aware of the proposed removal and take steps to protect their interests before it is completed.
The significance of this requirement is easy to overlook. A creditor cannot effectively protect its position if it is unaware that the company owing it money is about to be struck off. Notice is therefore not merely a procedural formality; it is part of the legal safeguards intended to prevent the removal process from unfairly prejudicing interested parties. Where the statutory requirements have not been met, the removal may be challenged through the appropriate legal process.
In the Salsa Global dispute, KRA maintained that it had not received the required notification despite the substantial tax arrears allegedly owed to it. The restoration order demonstrates the importance of observing the statutory procedure and the availability of a legal remedy where the requirements for restoration are satisfied. A company should not assume that its removal from the register is beyond challenge simply because the process has already been completed.
The case also draws attention to a distinction that businesses should take seriously: company deregistration and tax deregistration are not the same thing. Removing a company from the Companies Register does not, by itself, establish that its tax affairs have been properly concluded. KRA relied on section 36 of the Value Added Tax Act, read together with sections 10 and 14 of the Tax Procedures Act, in advancing its argument that the company had not complied with the applicable tax requirements. These provisions formed part of the wider dispute over whether the company’s closure had been handled lawfully.
This distinction matters because closing a business involves more than ceasing commercial operations or completing a company registry process. Depending on the circumstances, a company may still have outstanding tax obligations, creditor claims and regulatory requirements to address. Treating deregistration as a substitute for dealing with those matters can expose the company to further legal proceedings.
The ruling also has broader implications for directors and those responsible for managing companies. Although a company is a separate legal entity, its affairs must still be conducted in accordance with the law. Directors should ensure that the applicable closure procedures are followed and that the rights of creditors and other interested parties are properly considered. However, the restoration of a company does not automatically make its directors personally liable for all the company’s debts. Any claim against a director personally must be supported by an independent legal basis.
Equally important is what the court’s decision did not establish. The order restoring Salsa Global to the register should not be confused with a final determination of every issue relating to the alleged tax debt. Its immediate effect was to restore the company to the register, allowing the outstanding matters to be addressed through the appropriate legal processes. The distinction is important because restoration and proof of liability are separate questions.
For creditors, the case illustrates why a company’s removal from the register should not always be treated as the end of the road. Where a company is struck off while obligations remain unresolved, creditors may have legal options, depending on the applicable statutory requirements and the circumstances of the removal. For businesses, the decision is a reminder that corporate closure must be approached as a legal process, not simply an administrative exercise.
Ultimately, Kenya Revenue Authority v Salsa Global Investment Company Limited & 3 Others reinforces a straightforward but important principle: a company may stop doing business, but it cannot assume that its legal responsibilities disappear with it. The law provides procedures for closing companies while protecting the interests of creditors and other affected parties. Where those procedures are not followed, restoration may be available as a remedy. For businesses, the case is a warning not to mistake closure for escape. For creditors, it is a reminder that a strike-off is not necessarily the end of the story. Sometimes, when a company tries to disappear, the law has a way of bringing it back.