How to Register a Company in Kenya

Understanding how to register a company in Kenya is essential for anyone aiming to establish a legal, recognized business in Kenya. The process involves several critical steps, from choosing a unique business name to understanding different business structures and making an application via eCitizen.

What Are the Structures When Registering a Business in Kenya?

Kenya offers various business structures that cater to different needs and legal requirements, making it essential to choose the right one for your business in Kenya.

1. Sole Proprietorship and Partnership

A Sole Proprietorship is the simplest form of business in Kenya. 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 in Kenya 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.

2. 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 business in Kenya is suitable for small to medium-sized enterprises. It must have a minimum of one director and one shareholder.

A Public Company in Kenya can offer shares to the public and is usually larger. Public companies provide more opportunities for raising capital but face stricter regulations. They need to disclose financial information to the public and adhere to more stringent compliance requirements.

3. Limited Liability Company (LLC)

A Limited Liability Company (LLC) in Kenya 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.

4. Company Limited by Guarantee and LLPs

Companies Limited by Guarantee in Kenya 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) in Kenya 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.

How Do You Prepare for Business Registration in Kenya?

Before registering a business 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 for any business in Kenya.

1. Choosing a Unique Company Name

When registering a company in Kenya, 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.

2. Acquiring Necessary Documents

Next, gather all required documents to complete the registration of your business in Kenya. You’ll need;

• Your National ID or Passport for identification.
• A passport photo for each director and shareholder.
• The Memorandum and Articles of Association, which outlines your company’s structure, objectives, and regulations.
• To fill out specific Company Registration Forms available on the eCitizen platform.

3. Understanding the Legal Requirements

To successfully register a company in Kenya, you must familiarize yourself with the legal requirements. 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.

What is The Registration Process of A Business in Kenya?

Registering a business in Kenya involves creating an eCitizen account, submitting the necessary registration forms, and paying the required fees. These steps ensure that your business in Kenya complies with the country’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 in Kenya. Visit the eCitizen website, click on “Create an account.” Enter details such as:

• Your Kenyan ID number or Foreigner Certificate number
• Email address
• A passport photo.

Once you verify your 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 in Kenya needs online.

2. Access BRS eCitizen Portal

The BRS Portal is where you need to go to access the company registration services in Kenya. Login with your eCitizen password. Under Make Application, choose the type of business in Kenya 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 in Kenya 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

Registering a company in Kenya requires that you not only submit your registration forms, but you must also 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 in Kenya.

What are the Post-Registration Requirements for Business in Kenya?

After registering your business 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, including understanding Value Added Tax (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 registering a business 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.

Common licenses include a Single Business Permit, which is required for most commercial activities, and specific licenses for certain industries, such as 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.

What are Licensing and Compliance Requirements to Register a Business in Kenya?

It is crucial to verify the specific licensing requirements to successfully register a business in Kenya. Common licenses include a Single Business Permit, necessary for most commercial activities, and specialized permits for specific industries, such as health and safety permits for businesses involved in food or healthcare services.

Make sure to renew all required permits annually to avoid fines. Compliance with local regulations is essential for smooth operations and helps build trust with customers and partners. Regularly check for updates from local authorities to ensure ongoing compliance.

What are the Steps and Requirements for Locals and Foreigners to Register a Business in Kenya?

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.

How Do You Register a Branch of a Foreign Company in Kenya?

Companies incorporated outside Kenya can operate 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:

1. Application: Submit an application to the Registrar of Companies.
2. Documents: Provide necessary documents, including a certified copy of the company’s certificate of incorporation, details of directors, and a memorandum of association.
3. 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.

‍

Related: How to Access eTIMS via USSD

‍