Company Registration Services

Company Registration in Kenya

Everyone in Kenya has a dream to start a business. To move forward with this dream, and turn it into a reality, everyone wants to start a company. Therefore, there exists company registration in Kenya. Through the incorporation of a company, you can start your business in a legal way where you are not only provided an infrastructure of growth, but also assistance from the government.

What is a Company Registration?

Before we dive into company registration,  let us understand the concept of a company. What is a company? A company refers to a business entity comprised of at least two directors, and members/shareholders. It is a legal business unit incorporated under the company’s registration online rules established under the Company’s act, 2015.

Simply put, Company registration is a process to acquire a company registration number in Kenya through which the business gets a legal infrastructure through which you can do business.

So, how to register a company in Kenya? The process, even though simple, requires the assistance of company registration service providers. Thankfully, you are with 2Max Group. We can provide you end-to-end assistance- guiding you with every step one needs to take for registering a company in Kenya.

However, there are many factors that you have to take into account before the name of your company lands inside the company register.

Types of Companies in Kenya

  1. Statutory Companies 

These types of companies are incorporated by a special act of parliament and the initial capital is provided for by the treasury.  The company has no shareholders but can make profits and operate under understated commercial laws. When it accrues losses, the government can come to its rescue and the creditors cannot make an application to the court for the company to be dissolved.  Examples of such companies in Kenya are the Kenya Power Limited Company (KPLC), Kengen, and the Kenya Tea Development Agencies (KTDA). 

     2. Registered Companies 

These are companies that are registered under the companies act. This is where the mass of all the Kenyan companies fall under 

Registered companies can be classified into two sets: Unlimited companies and limited companies. 

  1. Unlimited companies 

In this type of company set up, there are no limitations on the liability of the members to pay the debts which means that they are jointly and personally liable for the debts in case of a winding-up scenario. If the company needs more money to pay its debts or liabilities on winding up, it can call on the shareholders to contribute whatever amount is necessary to make up for the shortfall. 

Here are the instances where this kind of company is necessary; 

  • Where the risk of insolvency is small. 
  • Where the owners do not wish to publicly file financial information and are keen on secretion in relation to financial matters. 
  • The company will operate in a field where limited liability is frowned upon.  
  • Where it can be seen that reductions in the capital may become desirable. 

2. Limited companies  

The owners or shareholders keep their own assets and finances separate from the entity. The liability of the shareholders is limited to the extent of the amount of capital they had originally invested or guaranteed in the company as per the memorandum of association which means that they are only liable up to the amount they invested and no more. 

This is a very suitable arrangement as one can get involved without risk to personal wealth. 

They can either be limited by shares or by guarantee 

  1. Limited by Guarantee 

If the company is being wounded up, the Memorandum of association provides for the liability on the part of its members to contribute a fixed sum towards its debts. The shareholders put up a guarantee to pay an amount so as to pay up the debt. 

The following are instances where one should register it as a company limited by guarantee.  

  1. When there is no immediate need for capital. 
  2. If you are looking to avoid the need of having to transfer shares every time a member leaves or joins. 
  3. When you want to limit the liability of the members. 
  4. Incorporation is necessary or desirable.

2. Limited by shares 

The liability of its members is limited by the memorandum to the amount if any, unpaid on the shares respectively held by them. 

This category can be further classified into Sole proprietorship, Partnerships, and limited liability companies.   

  1. Sole Proprietorship 

This type of business is known for its simplicity and ease of setup. It is the easiest form in which one can operate.  The owner and the business are regarded as one and therefore the owner assumes all the risks of the business and is personally liable to the extent of all his or her assets that are used in the business and those that are not.   

2. Partnerships  

Types of Partnerships are normal partnerships, limited partnerships, and limited liability partnerships. 

  •  General/Normal Partnerships 

Two or more people come together to form an organization with the purpose of carrying on a business. Partner contribute their share which can be in the form of their expertise, money and or property, etc. They are liable for any/all debts taken on by the business or by the other partners and share in all the affairs ie assets, profits and liabilities. 

  •  Limited Partnerships 

This type of company has both a general partner and a limited partner. The general partner is responsible for the day to day management of the business and does not have limited liability because they are active in the decision-making while a limited partner who acts as an investor as his only role is to provide capital and receive the share of the profits is liable up to the amount he invested within the business. 

  • Limited Liability Partnerships. 

This type shields the other partners from negligent actions of the other partners making every partner individually liable for their actions or their inactions. They combine the elements of a company with those of a partnership and can only be created by certain types of professionals like law firms, accountants, etc. 

Once an LLP is registered, it becomes a corporate, legal, entity separate from its members and may own property in its own name. It is not subjected to corporate tax rather it’s taxed on the income of the individual partners.  

3. Limited Liability private companies. 

They are separate and distinct entities from their owners and are registered for tax as separate entities. It has its own rights, obligations, and a life separate from its owners. It requires a minimum of at least one director and a maximum of 50 members.   

4. Limited Liability public company 

The public can buy and sell shares in the company. The company shares can be traded at the Over The Counter (OTC)  market and the Nairobi Securities Stock Exchange.   

In the OTC market,  the company is the one that controls the market and offers specific shares for trading to specific persons who in most cases are the shareholders of the companyAn example of a company that trades in the OTC market is Family Bank.  

It requires a minimum of 7 shareholders and 2 directors and has no maximum limit. 

The company will have to publish and file its audited financial statement and statutory reports with the Registrar of companies. 

It is allowed to only start its operations only when they are granted a certificate of commencement of business.  

Features common to every type of company

  • Separate Legal Entity:  A company is a separate legal entity from that of its directors. the company registration number that a company gets after the completion of a new company registration process, acts as a metaphorical birth certificate of the company – making a company an individual as far as the rules are concerned.
  • Limited Liability: The members/shareholders and directors of a company are only liable to its losses to the extent of their share subscriptions.
  • Incorporated business entity: A company is an incorporated business entity – governed under the Companies Act, 2013 by the Ministry of Corporate Affairs.
  • Transferable Shares: The shares of a registered company are transferable among the members of that company.
  • Perpetual existence: Since the existence of the company isn’t bound by the existence of the directors, a company continues to exist even after the death of the director.
  • Common Seal: After registration of a company online (or offline), the directors of the company must put a common seal on every document related to company transactions.

Benefits of Registering a Company in Kenya

  • The Advantages of Registering a Business

Due to these benefits, it is optimal for any starting entrepreneur to go through the registration process of a Company in Kenya.

 

Checklist for company registration in Kenya

1. Proposed company/business name;

2. Objectives of the company/business;

3. Names of the Directors, Contact details and email addresses;

4. Passport photo (copy) for each director;

5. Identity card (for Kenyan Citizens)or Foreign National Registration Certificate – Alien Card (for foreigners residing in Kenya) or Passport (for nonresident foreign nationals);

6. Kenya Revenue Authority (KRA) PIN certificate (copy) for each Director with Kenyan citizenship;

7. Duly signed copy of Notice of Registered Address Form (CR8) by all Directors;

8. Duly signed copy of Company Registration Form (CR1) by all Directors;

9. Duly signed copy of Memorandum of a Company with Share Capital Form (CR2)by all Directors; and

10. Duly signed copy of Statement of Nominal Capital by all directors

Requirements for registering a company in Kenya

The following are the requirements for registering a company in Kenya.

When forming a limited company in Kenya, the law requires that certain documents must be submitted by the persons that are interested in incorporating the company.

These documents include personal documents of the persons registering the company and legal documents.

The personal documents that are required include:

  • A copy of Identity Card of each of the director.
  • A copy of KRA PIN certificate of each of the director.
  • A passport sized photograph of each of all the directors.

The legal documents that you must submit to the registrar of companies include.

  • Memorandum of Association – This document sets up the company’s constitution and objectives.
  • Article of association – This document contains the rules and regulations by which its internal affairs are governed. It deals with matters such as share capital, directors, shares, company meetings among other things.

The documents above must be signed by a minimum of 7 people in the case of public limited company or a minimum of 2 people for private limited company. If the company being formed has share capital, each share subscriber must write opposite to his/her name the total number of shares owned.

Other documents that must submitted include:

  • Statement of Nominal Capital – This document states the amount of nominal capital in KES. The stamp duty that is paid during registration is determined by share capital stated by the company. The document is only required though, if the company has a share capital.
  • Particulars of Directors and Secretary – This document is under section 201 of the Companies Act.

We have drafted a good article on how to register a company in Kenya. Have a look at it and you will get to know how these documents are used.

Process for Company Registration in Kenya

Online Company Registration process in Kenya

Process for registration of a company in Kenya.

  1. Name Search. The proposed company name has to be searched and reserved by the registrar of companies.
  2. Execution of forms CR1, CR2, CR8, and statement of Nominal capital. Once the name is approved and reserved. The company registration forms are executed and signed by the subscribers and directors of the company.
  3. Application for registration. – The application forms are then launched with the Registrar for registration.
  4. Registration and issuance of a certificate of Incorporation.
  5. PIN application

Our Reliable Company Registration Services in Kenya

Our experts provide you end to end company registration services in Kenya by assisting you in the following manner:

  • Collecting and organizing the documents.
  • Applying for the KRA Certificate.
  • Digitally certifying the documents.
  • Precisely drafting the Memorandum and Articles of Association.
  • Filing the application for business registration online.
  • Obtaining and forwarding the Certificate of Incorporation.

We ensure that your online company incorporation services requirements are always on time. Our professionals understand the intricacies of the online company incorporation procedure. Thus, we have expedited the process – helping you incorporate your Company at an affordable rate and a low price.

Registrationwala is an all-legal service provider for start-ups. They provide complete company incorporation services in Kenya. Each service is optimized for good results, and all are provided at the most affordable company incorporation fees you can hope for.

So, reach out to our experts and start realizing your dream of being your boss by starting your own Company.

Branch of an Overseas Registered Company

A company incorporated outside Kenya may carry on business in Kenya through a branch. The following documents are required for formation of a company in Kenya as a branch of a foreign company (also referred to as a foreign company carrying on business in Kenya).

  • A certified copy of the Charter, Statutes or Memorandum and Articles of the company, or other instruments defining the constitution of the company;
  • A list of the directors and the secretary of the company;
  • A statement of all existing charges entered into by the company affecting properties in Kenya;
  • Names and postal addresses of one or more persons resident in Kenya authorized to accept, on behalf of the company, service of notices required to be served on the company;
  • Full address of the registered or principal office of the company in its home country; and
  • Full address of place of business in Kenya.

The Registrar issue a Certificate of company Registration in kenya. Companies that may want to have representative or liaison offices are required to register using the above process.

Partnership

  • A partnership is restricted to a maximum of 20 persons, each of whom is jointly and separately liable for all debts incurred. If these numbers are exceeded, the partnership must be registered under the Companies Act.
  • A partnership may be formed by any kind of agreement. This need not be formal but is usually in writing. If the partnership does not trade under the names of the partners, the business names to be used by the partnership must be registered under the Registration of the Business Names Act, Chapter 499 of the Laws of Kenya.
  • A Partnership is required to file the statement of particulars form with the Registrar of Companies. The form has to be signed by all the partners. Partnership agreements do not have to be filed with the Registrar of Companies. The Registrar will then issue a Certificate of Registration.

Limited Liability Partnership

  • A Limited Liability Partnership (LLP) may be formed under the Limited Liability Partnership Act, 2011.  A natural person or a body corporate may be a partner in an LLP. In addition, the LLP must have a manager who must be resident in Kenya.
  • The partners in an LLP have limited liability but the provisions of the Partnership Act apply in all other respects.

Sole Proprietorship

A sole proprietor is personally liable for all debts incurred.

The proprietor is required to file the Statement of Particulars form with the Registrar of Companies Where a proprietor does not trade under his personal names, the business names used by the proprietor have to be registered under the Registration of Business Names Act. The Registrar will then issue a Certificate of Registration.

 

Conclusion

For successful company registration in Kenya, an investor is required to be in constant contact with professionals. The investor must be correctly informed about the specificities of the local business environment. It ranges from taxation matters, business venues, business registration processes, and the many requirements for compliance with Kenyan law.

Accessing valid information from the Registrar of Companies can sometimes be a challenge since the business environment and its legal framework are regularly updated. Therefore, business successful registration is not only about submitting an application file. It is more about receiving valuable insights from your local partner that will help you implement your strategy without a hitch. It is only this way that you will enable your business structure to start off successfully.

Once your company is duly registered in Kenya, then you can apply for a Tax Identification Number in order to start your payroll with the recruitment of local employees and expatriate staff.

 



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