Understanding how to register a company in Kenya is essential for anyone aiming to establish a legal, recognized business.
Registering a company in Kenya involves several essential steps, from choosing a unique business name to understanding different business structures and making an application via eCitizen.
Here’s a concise guide.
Business structures in Kenya
Kenya offers various business structures that cater to different needs and legal requirements.
a) Sole proprietorship and partnership
A Sole Proprietorship is the simplest form of business. Here, the owner is the business, meaning there is no legal distinction between the owner and the entity. It requires minimal paperwork and is easy to manage.
You can register a Sole Proprietorship through the eCitizen portal or at a Huduma Centre.
A Partnership involves two or more individuals who share ownership and responsibilities. Partnerships are more complex than sole proprietorships and require a Partnership Deed.
This document outlines the roles, profit-sharing, and other important details. A Partnership must also be registered through eCitizen.
b) Private and public companies
A Private Company in Kenya is limited by shares and does not offer its shares to the public. This type of company is suitable for small to medium-sized enterprises.
It must have a minimum of one director and one shareholder.
A Public Company can offer shares to the public and is usually larger. Public companies provide more opportunities for raising capital but face stricter regulations.
They also need to disclose financial information to the public and adhere to more stringent compliance requirements.
c) Limited Liability Company (LLC)
A Limited Liability Company (LLC) offers protection to its owners, as their liability is limited to their investment in the company. An LLC can have one or more members and is considered a separate legal entity from its owners.
This structure is beneficial for minimizing personal risk. Registration involves creating an eCitizen account and fulfilling specific legal requirements, including having a registered office in Kenya.
d) Company limited by guarantee and LLPs
Companies Limited by Guarantee do not have shareholders but members who act as guarantors. This type of company is often used for non-profit organizations and charities.
The members agree to contribute a nominal amount toward company debts if it is wound up. Registration is also completed through the eCitizen portal.
Limited Liability Partnerships (LLPs) combine elements of partnerships and companies. They provide flexible management structures and limited liability protection to all partners. Each partner’s liability is limited to their investment in the LLP.
LLPs must have at least one designated partner responsible for compliance and can be registered through eCitizen.
Preparing for registration
Before registering a company in Kenya, you need to choose a unique company name, gather essential documents, and understand the legal requirements.
These steps are crucial for a smooth and successful registration process.
a) Choosing a unique company name
The first step is selecting a unique and suitable name for your business. You need to ensure the name isn’t already in use by checking the business name database provided by the Kenya Business Registration Service (BRS).
This step is called a name search and reservation and requires a small fee.
- Conduct a Name Search: Use the online name search tool on the Business Registration Service (BRS) website to ensure your desired company name is available.
- Reserve the Name: Pay the nominal fee for name reservation, typically KES 150.
Your chosen name should be easy to remember and reflect your brand. After you confirm the name’s availability, you can reserve it. This reservation process secures the name for a specific period, usually 30 days, allowing you to proceed with the rest of the registration steps.
Note: The processes name search and reservation and business name registration have since been merged. You now need to go to Business Name Registration directly, and provide 3 of your preferred business names
b) Acquiring necessary documents
Next, gather all required documents to complete the registration. You’ll need your National ID or Passport for identification. Also, prepare a passport photo for each director and shareholder.
Another key document is the Memorandum and Articles of Association, which outlines your company’s structure, objectives, and regulations.
You’ll also need to fill out specific Company Registration Forms available on the eCitizen platform.
c) Understanding the legal requirements
You must familiarize yourself with the legal requirements for company registration in Kenya.
The primary legislation includes the Companies Act, 2015, which governs the operation of companies, and the Registration of Business Names Act, which covers the registration of business names.
There are special requirements for different types of companies, such as Limited Liability Companies, which may require additional documentation.
Being aware of these legal frameworks ensures that your company complies with all necessary regulations, avoiding any legal complications in the future.
The registration process
Registering a company in Kenya involves creating an eCitizen account, submitting the necessary registration forms, and paying the required fees. These steps ensure that your business complies with Kenya’s legal and regulatory framework.
1) eCitizen account setup
To begin, you need to create an account on the eCitizen portal. This platform is used for various government services, including business registration.
Here’s how to set up your account:
- Visit eCitizen: Go to the eCitizen website and click on “Create an account.”
- Enter details: You’ll need your Kenyan ID number or Foreigner Certificate number, email address, and a passport photo.
- Verify email: You will receive a verification email. Click on the link to confirm your account.
- Login: Use your email and password to access the portal.
Now, you’re ready to proceed with the registration process. This setup ensures you’re able to handle all your business registration needs online.
2) Access BRS eCitizen Portal
The BRS Portal is where you need to go to access the company registration services. Login with your eCitizen password. Under Make Application, choose the type of business you want to register:
- Sole proprietorships
- Registered companies (public or private)
- Partnership
- Limited liability partnership
- A branch office of a foreign registered company
- Business societies
3) Submitting registration forms
Next, you need to submit the required forms for business registration through the eCitizen portal. The key forms include Form CR1 and Form CR8.
- Form CR1: This is the application for company registration. It includes details about your business name, type of company, and proposed office address.
- Form CR8: This form declares the physical address of the company. You must provide a precise location.
- Additional information: Depending on your business type, you may need to submit additional documents such as a Memorandum and Articles of Association.
- Online submission: Upload the completed forms to the eCitizen portal for review by the Registrar of Companies.
Once submitted, the Registrar’s office will review your documents and approve your registration if everything is in order.
4) Paying registration fees
After submitting your registration forms, you must pay the required fees. This includes the name reservation fee and the company registration fee.
- Name reservation fee: Pay KES 150 for the name search to ensure your chosen business name is available.
- Registration fees: The fee varies based on your company type. You may also need to pay stamp duty, which is calculated on the nominal capital of the company.
- Online payment: Payments can be made directly through the eCitizen platform using a credit card or mobile money.
Make sure to keep all payment receipts as proof of transaction, which may be needed for future reference. This final step completes your company registration process.
Post-registration requirements
After registering your company in Kenya, there are several important steps to ensure compliance and legitimacy. These include tax compliance with the Kenya Revenue Authority and obtaining necessary business permits.
5) Tax and KRA compliance
Once your company is registered, you need to obtain a KRA PIN Certificate. This certificate is essential for tax purposes and is required for various transactions such as opening a bank account and applying for licenses.
Filing annual returns is mandatory under the Companies Act 2015. You must submit these returns every year to the Kenya Revenue Authority. Failure to file can result in penalties.
Keep accurate financial records to ensure your filings are correct and submitted on time. Engage a reliable accountant or tax consultant to help navigate the tax landscape.
This includes understanding Value Added TaxValue Added Tax (VAT) in Kenya is a consumption tax levied on the sale of goods and services. As of , the standard VAT rate is set at 16%. This tax is... ... (VAT) and Pay As You Earn (PAYE) for employees. Regularly review KRA guidelines to stay updated on any changes in tax regulations.
6) Obtaining business permits and licenses
Securing the appropriate business permits and licenses is crucial for operating legally in Kenya. Depending on your business type and location, you may need different permits.
Visit the local County Government offices to apply for these permits. You will often need to provide your company registration documents and KRA PIN.
Different counties may have specific requirements and types of licenses. Here’s a list of counties, the type of license required, and their e-platforms for registration:
| County | License Type | Registration Platform |
|---|---|---|
| Nairobi | Single Business Permit | Nairobi eServices |
| Mombasa | Single Business Permit | Mombasa eServices |
| Kisumu | Trade License | Kisumu eServices |
| Nakuru | Single Business Permit | Nakuru County |
| Kiambu | Trade License | Kiambu eServices |
| Machakos | Single Business Permit | Machakos County |
| Uasin Gishu | Trade License | Uasin Gishu County |
Check the specific require
Common licenses include a Single Business Permit, which is required for most commercial activities, and specific licenses for certain industries. For example, health and safety permits if your business involves food or healthcare services.
Ensure all required permits are renewed annually to avoid fines. Compliance with local regulations is vital for smooth operation and helps build trust with customers and partners. Regularly check for updates from local authorities to ensure ongoing compliance.
Steps and requirements for locals and foreigners
Locals
- eCitizen account: Required for all individuals registering a business.
- ID and KRA PIN: Kenyan national ID and KRA PIN for all directors and shareholders.
- Memorandum and Articles of Association: Must be drafted and submitted.
- Business permits: Apply for relevant permits based on your county of operation.
Foreigners
The procedure for registering a local company by a foreigner is similar to that for locals, with a few differences in requirements.
- Foreigner Certificate: Required in place of a Kenyan ID.
- Local representative: Companies with a paid-up share capital of less than KES 5 million must have a secretary, a local director, or a contact person who is a permanent resident in Kenya.
- Passport: Foreigners use their passport for registration instead of a KRA PIN.
- Business permits: After registration, obtain business permits in the counties where your business will operate. Costs and requirements vary by county.
Registering a branch of a foreign company
Companies incorporated outside Kenya can do business in Kenya by registering a branch. The Registrar of Companies issues a certificate of compliance once all requirements are met.
Steps to register a branch:
- Application: Submit an application to the Registrar of Companies.
- Documents: Provide necessary documents including a certified copy of the company’s certificate of incorporation, details of directors, and a memorandum of association.
- Compliance: Meet all regulatory requirements and obtain a certificate of compliance.
Benefits of registering a company in Kenya
- Legal protection: Separates your personal assets from business liabilities, offering a safety net for your finances.
- Enhanced credibility: Increases trust among customers and partners, showcasing your commitment to operating legally and professionally.
- Access to funding: Makes it easier to secure loans and investments, as financial institutions prefer registered businesses.
- Tax benefits: Eligible for various tax incentives and deductions provided by the government.
Conclusion
Registering your company in Kenya is a vital step that lays a strong foundation for your business.
By following these steps, you ensure that your company is legally recognized, which enhances credibility, offers legal protection, and provides access to numerous business opportunities.
Ready to make your business dream a reality? Start your registration process today on the eCitizen portal and set your business on the path to success.
