Types of businesses / Companies you can register in Kenya:
- Business name/Sole Proprietorship
- Partnership Business
- Private limited Company
- Company Limited by Guarantee
- Public Limited Company Limited
- Foreign Company – Local Office
- Unlimited Company
1. BUSINESS NAME
In this model, the proprietor and the business are one and the same. This is as opposed to a limited company for example, which is a different entity from the shareholders. Registering a business name is the fastest way to get business running and the process usually takes 1 day. You will need to submit 3 possible names in order of priority. You will also be required to fill in some easy to fill in application forms and that’s it. The cost of registering a business name in Kenya is also the lowest.
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Business name registration allows for a single director to register the business.
Below are the requirements to register a business name/Sole Proprietorship in Kenya:-
- Three (3#) proposed Business names in order of preference
- Nature of the business or activities the business will be doing
- Full Name(s) of the Business proprietor(s)
- Postal address for the business Name
- Proposed Physical address for the business proprietor or partners
- Copy of ID/Passport of the business proprietor or partners
- Passport photo of the business proprietor
- Copy of PIN certificate of the business proprietor
The partnership may be formed under any form of agreement by the partners. The agreement must be in writing. The partnership may have to register a business name under the business names act if the partners are not using one of their own names for the business.
Once formed, the partnership is required to fill and submit the statement of particulars form to have it registered. Your partnership will then get a certificate of registration from the registrar general.
In a partnership, the company liabilities are also liabilities to the partners and there is no distinction between the owners and the business entity. However, you can register as a limited liability partnership to separate the director’s liability from the partnership.
You may decide to form a limited liability partnership under the limited liability act, 2011. A limited liability partnership (LLP) is a partnership in which some or all of the partners have limited liabilities. In some instances, a partnership can look like a corporation. In an LLP no partner is liable to the conduct of the other partner.
3. PRIVATE LIMITED COMPANY
A private limited company can be registered under a sole director or as many as desired. It is therefore possible to register a limited company in Kenya with a single director or shareholder. A Private limited company cannot therefore issue shares to the general public and neither can it be listed in the Nairobi stock exchange. Such a move would need approval from the Capital Markets Authority and an issuance of an IPO (Initial Public Offer) would be declared to allow the public to buy into the company shares.
Requirements for registration of a Private limited company in Kenya:-
- Duly filled in private limited company Form CR1
- Passport size photo of the limited company director (s)
- KRA PIN number of the limited company shareholders
- Memorandum of the limited company indicating shares distribution
- Proposed limited company physical address to include street, building, plot number, town and county
- Notification of company directors residential addresses
- Limited Company Directors’ names, telephone number
- Limited Company Directors’ email addresses
- Company Directors’ occupations
When registering a private limited company, one must indicate the total number of shares, the value of each share and the nominal capital.
4. COMPANY LIMITED BY GUARANTEE
The directors in this CLG companies must undergo vetting by the National Security and Intelligence Services NSIS before the company can be registered.
Requirements to register a Company Limited by Guarantee in Kenya:-
- Three proposed names for the CLG in order of preference
- A National Identity cards of the Directors
- Passport Size photos of the directors
- Kenya Revenue Authority PIN numbers
- Physical Address of the company
- Notification of directors Residential address
- Duly filled company registration form 1 or CR1
- Model Memorandum company limited by guarantee
- Name and telephone Number of ID of person lodging the documents
You can also apply for exemption of the name “limited” by making an application to the registrar general at a fee.
5. PUBLIC LIMITED COMPANY (PLC)
The buyers of the shares or stock have limited liability. This means that they cannot be held responsible for any business losses. The PLC is similar to the public companies in the USA known as incorporations or Inc. These companies are under scrutiny of the securities exchanges or the capital markets authorities in regard to financial reporting and governance.
Requirements to register a public limited company in Kenya:-
- 3# proposed names for the public limited company PLC
- Names of the public limited company shareholders in full
- Names of the public company directors if different from the shareholders
- Nature of the business and company activities
- Number of shares to be held by each public company shareholder
- Email addresses, postal addresses, and telephone numbers of the company shareholders
- Notification of company directors residential addresses
- Proposed physical address for the company including road, building, plot number, town and country
- Copy of ID/Passport of company shareholders/directors
- Passport photos of the company shareholders/directors
- Copy of the KRA PIN certificate of the shareholders and Directors
6. FOREIGN COMPANY BRANCH OFFICE
In some cases, a parent company located in a second country wishes to start business in Kenya and retain their identity. In this case, such a company can register a local branch in Kenya using their parent company name in the country of origin. This means that you will have to provide all registration documentation from the home country and also a letter of no objection to the use of the name locally.
The mother company carries on the liabilities of the branch in Kenya. It is not required to have a local board either and the registration process for a branch is straight forward and takes a shorter time.
Requirements to register a foreign company branch in Kenya
- A certified copy of the company certificate of incorporation in country of origin
- A certified copy of the company constitution in its country of origin
- A memorandum that stipulates the Kenyan directors powers
- Directors and shareholders details including names, emails, addresses and phone numbers
- A notice of address of registered office and principle place of business in its country of origin
- A notice of the company’s registered office in Kenya
- Name, email, addresses and phone number of the Kenyan representative
- The name to be registered in Kenya. It can be the original name of the company or a new one for the Kenyan branch
The new companies Act 2015 had made a requirement that foreign companies must include 30% Kenyan ownership. This article was very unpopular and it was later repealed in September 2016.
Foreign companies are registered in a special register called the foreign companies register. Upon registration, the foreign company receives a certificate of incorporation which includes the name of the company, a unique registration number, the date of registration, and the date of its incorporation in the foreign country.
Foreign companies are exempt from internal investigation while local companies can be investigated upon request by the attorney general. The attorney general cannot therefore start investigations on a foreign company ownership or on any of its securities.
7. UNLIMITED COMPANY
This means that each member is jointly and severally liable for the debts of the company in the event of its insolvent winding up.