Want to run a company in Kenya? Today we will guide you on how to register a company in Kenya.
Establishing a company in Kenya is a strategic move that opens doors to the vibrant East African market. With its robust economy and business-friendly environment, Kenya offers numerous opportunities for entrepreneurs and investors alike. This guide provides a comprehensive overview of the company registration process in Kenya, equipping you with practical insights to navigate each step effectively.
Steps on How to Register a Company in Kenya
Choose the Appropriate Company Structure
Kenya’s legal framework accommodates various types of business entities, each tailored to specific needs:
Private Limited Company (Ltd): Ideal for small to medium-sized enterprises, offering limited liability to shareholders.
Company Limited by Guarantee: Suited for non-profit organizations, charities, and foundations, where members act as guarantors rather than shareholders.
Public Limited Company (PLC): Designed for larger enterprises intending to raise capital from the public, requiring a minimum of seven shareholders.
Branch of a Foreign Company: Allows foreign entities to operate in Kenya without incorporating a local subsidiary but mandates registration with the Registrar of Companies.
Limited Liability Partnership (LLP): A hybrid structure offering partners limited liability while retaining partnership flexibility.
Selecting the appropriate structure is crucial, as it influences legal obligations, taxation, and operational flexibility.
Conduct a Name Search – On How to Register a Company in Kenya
A unique company name is essential for legal recognition. To ensure your desired name isn’t already in use:
- Utilize the Business Registration Service (BRS): Access the eCitizen platform to verify name availability.
- Submission: Provide at least three proposed names in order of preference. The Registrar will approve the first available name from your list.
This step prevents potential legal disputes and establishes a distinct brand identity.
Define the Shareholding Structure
Clarifying ownership and share distribution is fundamental;
- Minimum Requirement: At least one shareholder, who can be an individual or a corporate entity.
- Share Classes: Decide between ordinary shares (standard rights) and preferential shares (special rights regarding dividends or voting).
- Nominal Capital: Declare the total value of shares the company is authorized to issue.
Accurate documentation of these details ensures compliance and facilitates smooth operations.
Appoint Directors
Directors are responsible for the company’s strategic direction;
- Minimum Requirement: At least one director, who can be a Kenyan citizen or a foreign national.
- Director’s Details: Provide full names, nationality, passport or ID copies, residential address, and occupation.
Transparent disclosure of directors fosters accountability and aligns with regulatory standards.
Prepare and Submit Incorporation Documents
Accurate preparation of required documents is vital;
- Memorandum and Articles of Association: Outline the company’s objectives and governance structure.
- Form CR1: Application for company registration.
- Form CR2: Model memorandum for a company with share capital.
- Form CR8: Notice of residential address of directors.
These documents must be submitted through the eCitizen platform for processing.
Obtain a Company Registration Certificate
- Upon successful review of your application:
- Issuance: The Registrar of Companies will issue a Certificate of Incorporation, signifying the company’s legal existence.
- This certificate is crucial for subsequent legal and operational activities.
Register for a Personal Identification Number (PIN)
- Tax compliance is mandatory for all businesses:
- Kenya Revenue Authority (KRA): Register for a company PIN through the KRA iTax portal.
- Requirements: Provide the Certificate of Incorporation and directors’ details.
- A KRA PIN is essential for tax filings and other statutory obligations.
Open a Corporate Bank Account
- Separating personal and business finances is a best practice:
- Documentation: Present the Certificate of Incorporation, KRA PIN, and directors’ identification documents to your chosen bank.
- A corporate account facilitates transparent financial management and builds credibility with stakeholders.
Obtain Necessary Licenses and Permits
- Depending on your industry and location:
- Business Permits: Acquire relevant permits from county authorities.
- Special Licenses: Secure additional licenses for regulated sectors (e.g., health, finance).
- Compliance with licensing requirements ensures lawful operations and avoids penalties.
Comply with Statutory Obligations
- Ongoing compliance is essential for sustainability:
- Annual Returns: File returns with the Registrar of Companies to maintain active status.
- Tax Obligations: Submit regular tax returns and remit due taxes to the KRA.
- Employee Contributions: Register with the National Social Security Fund (NSSF) and Social Health Authority (SHA) if you have employees.
