Starting or running a business?
Discover everything you need to know about doing business in your country from one of the Ye! country guides. We have kick-started a few and will be adding more. Check it out and stay tuned!
Legal
Which legal structure can I choose?
In Kenya, any association of more than 20 people should be registered under the Companies Act. The Act provides various types of companies:
Sole proprietorship
Partnership
Limited Liability Partnership
Public Limited Company
Private Limited Company
Sole Proprietorship
- Owned by the owner itself (1 person), usually a business structure for small and medium-sized enterprises (SMEs)
- No distinct existence from owner, so profit regarded as income of owner
- Owner is accountable for company’s debts and may affect properties of owner (personal possessions may be used as a guarantee in case of financial difficulty)
Partnership
- Owned by two or more persons
- Partnership agreements will determine contributions, liability and entitlement
- All partners (and their spouses) are jointly, personally liable for business debts and obligations, though a marriage contract can protect spousal assets
Limited Liability Partnership
- Incorporated by one or more persons
- The liability of a shareholder is limited to the value of the shares he owns so shareholders have limited liability
- A limited liability company may either be a private or a public company
Public Limited Company
- Members of the company cannot be held personally liable for the company’s debts or liabilities.
- Formed by a minimum of 51 shareholders
- Shares are offered to the public and are freely transferable
Private Limited Company
- Members of the company cannot be held personally liable for the company’s debts or liabilities.
- Minimum of 2 shareholders and a maximum of 50 shareholders
- May not offer shares to the public and restrictions are placed on the trading of their shares
For more information on the various forms of businesses and their establishment, please refer to the Business Licensing Portal
How do I register a company in Kenya?
As of October 15, 2017, manual registration was abolished. Kenyans can register their new businesses instantly using their mobile phone or e-Registry. Applicants are required to dial *271# to be able to access services offered at the State Law Office which includes business registration and marriage certificate among others.
Below is a quick summary of steps of registering a company in Kenya, provided by Kenyans.co.ke
- Business Name Search: Sign up or log on to your eCitizen account. Once done, the system will send you an email verification. Click on the link shared. Once done/logged in, you will be able to see the various government agencies you can interact with on display. Click on the Business Registration Service button from the various options. You will then be redirected to a page that will prompt you to register your business name. Enter your preferred name and the relevant details. Choose your preferred payment method.
The name search results are usually available on the portal within one or two business days. Once your business name is approved, you can now move on to register your business.
- Business registration via eBusiness portal
Documents required:
- A completed registration form CR1 (available for download on the portal).
- Statement of capital.
- Memorandum and article of association.
l Shareholders details; you will be required to upload scanned copies of ID card/passport, KRA PIN certificate and recent colored passport photographs. The directors/shareholders have to be registered on the iTax platform.
- Physical residential address of directors.
- Company registration fee – KES 10,650
Note: Partnership or Sole Proprietorship Registration, the following procedure applies:
- Go to the Business registration tab and click on the partnership or sole proprietorship tab.
- You will be redirected to an empty BN2 form which you will be required to fill with the relevant details.
- Upload ID card/passport, KRA PIN certificate and recent colored passport photographs of sole proprietor or partners.
- Partnership and Sole proprietorship registration fee – KES 1,000
Registration usually takes a week and the certificate will be available on the eCitizen platform for download.
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