Chama Annual Returns and AGM: What's Legally Required for Registered Groups

Kenya has hundreds of thousands of registered chamas, investment clubs, and savings groups. A significant number are currently non-compliant: they have not filed annual returns, have not held a formal AGM in years, or have changed membership and officials without updating the registry. The consequences range from losing legal standing to having the group struck off the register entirely — at which point all those years of accumulated assets exist in a legal grey zone.

This guide breaks down what is required based on how your chama is structured, what an AGM should actually look like, and what records you need to be keeping.

It Starts With How You Are Registered

The obligations your chama has depend entirely on the legal vehicle it operates under. There are three main paths:

Self-Help Group (Social Development Department)

Self-help groups are the most informal of the three structures. Registration is done through the Department of Social Development at the county level, and the compliance requirements are comparatively light. You are expected to update your membership list and report on group activities annually, but there is no requirement to produce audited financial statements.

That said, "no legal requirement" does not mean "no accountability." A self-help group managing significant member funds without proper internal accounts is asking for disputes. Good governance — a cash book, clear records of who contributed what, and signed minutes for every meeting — is not optional just because the law does not mandate it.

Society (Societies Act, Cap 108)

If your chama registered under the Societies Act, it has a more structured set of annual obligations.

Every year, a registered society must file annual returns with the Registrar of Societies. These returns include an updated membership list and a financial summary covering the year's income, expenditure, and current assets. The filing fee is approximately KES 1,000 to KES 2,000. You must also hold an AGM at least once a year and keep the minutes.

Filing through eCitizen has made this easier. You log in, navigate to the Registrar of Societies section, select your registered group, upload the required documents, and pay the fee. It is a one-morning job if your records are in order.

Failure to file for two or more consecutive years puts your society at risk of deregistration. Once deregistered, the group loses its legal identity. Getting reinstated requires submitting all the outstanding returns together with the accumulated fees — and it is a more cumbersome process than simply staying current.

Limited Company (Business Registration Service / eCitizen)

Some investment-oriented chamas have opted to incorporate as private limited companies. This gives them a clean legal structure for holding property and entering contracts, but it comes with the full weight of the Companies Act.

Annual returns must be filed with the Registrar of Companies within 42 days of each anniversary of the company's date of incorporation. The filing fee ranges from KES 2,000 to KES 4,000 depending on the share capital structure. The company must also maintain proper financial statements each year.

On the AGM question: the Companies Act 2015 removed the mandatory AGM requirement for private companies. A private company is no longer legally required to hold one. However, this does not mean the decision should be avoided — an annual meeting to review accounts, discuss performance, and re-elect or confirm officials is basic governance, and any well-run investment chama will hold one regardless of whether the law demands it.

If the company is struck off, the consequences are more serious than deregistration of a society. A struck-off company legally ceases to exist. Property held in the company's name can become unclear in title. If the company had assets or liabilities, members may find themselves dealing with complications on their personal records. Restoration requires either a court order or an administrative reinstatement process through the Companies Registry, with fees at each step.

What a Proper AGM Looks Like

Many chamas hold a meeting in December, call it an AGM, and consider the box ticked. The meeting drifts from greetings to complaints to a party, and no formal record is produced. That is not an AGM for legal purposes — and it will not protect you if the group's affairs are ever questioned.

A proper AGM should work through a structured agenda. The standard items are:

1. Confirmation of the previous AGM minutes — members formally agree the record of last year's meeting is accurate
2. Chairperson's report — a summary of the year's activities, decisions made, and where the group stands relative to its goals
3. Treasurer's report — income, expenditure, assets, liabilities, and individual member account balances; this is the most important item on the agenda
4. Appointment or re-election of officials — any positions coming up for rotation should be voted on formally, with the result recorded
5. Budget and investment plan for the coming year — discussion and formal approval, so it is on record that members agreed to the plan
6. Amendments to the constitution, if any are proposed — these typically require a special majority (often two-thirds of members) under the group's own rules
7. Any other business — members raise issues not covered in the agenda; anything that requires a decision should be voted on and recorded

The minutes must be written up, signed by the chairperson and secretary, and kept in the group's records. For a registered society, a copy may need to be submitted with your annual returns. For a company, minutes of shareholder meetings must be kept at the registered office and retained indefinitely.

Financial Statements Your Chama Should Produce

The treasurer's report at the AGM should be based on actual written financial statements, not just a verbal summary from memory.

The core documents are:

• Income and Expenditure Statement — for groups structured as non-profit societies, this shows all money that came in (member contributions, interest earned, loan fees) against all money spent (welfare, administrative costs, investments made), arriving at a surplus or deficit for the year
• Statement of Financial Position (Balance Sheet) — a snapshot of what the group owns (cash at bank, investments, loans receivable from members) versus what it owes (member savings, outstanding obligations); note that member savings are technically a liability — the group holds those funds on behalf of members
• Member Account Statements — every member should be able to see their individual contribution history, any loans they have taken, repayments made, and their share of accumulated returns; this is what prevents disputes

For investment clubs, the AGM financial report should also cover the investment portfolio: what was purchased, what was sold, returns realised, and the current market value of the portfolio together with each member's proportionate share (their Net Asset Value).

Internal Audit: Not Just for Large Groups

An internal audit does not require a professional auditor. It means two members who are not office bearers — not the treasurer, not the secretary — sit down with the cash book, bank statements, and receipts and confirm that the numbers match. They produce a short written statement confirming their review, and this is tabled at the AGM.

For groups managing more than KES 1 million, an external audit by a qualified accountant is worth the cost — typically between KES 15,000 and KES 40,000 depending on the complexity of the accounts. Registered societies with significant funds may be required to produce externally audited accounts. The audit protects the officials as much as it protects the members: a clean audit opinion is the treasurer's best defence against accusations of mismanagement.

Record Keeping: What to Keep and for How Long

Good records are the difference between a chama that survives a dispute and one that dissolves over it. At minimum, your group should be maintaining:

• Meeting minutes — for every ordinary meeting and every special meeting; each set of minutes should be signed by the chair and secretary before the next meeting
• Cash book and ledger — every financial transaction recorded with date, description, and amount; if the group uses a mobile money account, download and file the statements monthly
• Bank statements — keep for at least seven years; this is the KRA's standard retention period for registered entities
• Member files — contribution history, loan agreements, copies of ID; these are your evidence if a dispute ever goes to court or mediation

Physical files work. A Google Drive folder shared with the entire committee works equally well and reduces the risk of records disappearing when an official leaves. Whichever system you use, the records should be accessible to more than one person at all times.

If Your Group Has Already Fallen Behind

If your chama has missed one or two years of annual returns, act before it becomes a formal deregistration. For a registered society, gather the outstanding paperwork — membership list, financial summary, AGM minutes for the years missed — and file everything together through eCitizen along with the accumulated fees. The Registrar's office will typically accept late returns without penalty if the group can demonstrate it was still actively operating.

For a company that has been struck off, the path back is more involved. Administrative restoration through the Companies Registry is available within a set period of being struck off; after that, a court order is required. Either way, there will be fees, and you will need a lawyer if the company held property. The lesson is the same in both cases: it is far cheaper to file on time than to restore after the fact.

The Practical Minimum

If your chama is a registered society and you want to stay compliant without overcomplicating things, the annual checklist is short:

1. Hold a proper AGM before the end of each year — put an agenda on paper, go through it, produce signed minutes
2. Have the treasurer produce a written income and expenditure statement and a member account summary before the meeting
3. Have two non-official members review the accounts and sign off
4. File the annual return on eCitizen with the updated membership list, financial summary, and AGM minutes — pay the fee
5. Keep a copy of everything, signed and dated, in a shared folder the whole committee can access

That is it. One afternoon of paperwork and one eCitizen session per year is all it takes to keep the group legally sound. The chamas that lose their registration rarely do so because they were actively non-compliant — they do so because no one was assigned to handle the paperwork, and the task slipped through the gaps year after year until it was too late.

Assign the filing to someone specific. Put the deadline on the group calendar. Treat it like a contribution — because keeping your legal status intact is part of what protects every member's money.