How to Register a Company in Kenya: A Comprehensive Guide

No. 1 Guide To Register a Company in Kenya

Setting up a business in Kenya is an exciting venture that offers opportunities for growth and success.

Before you dive into operations, the first step is legally registering your company.

This comprehensive guide will walk you through the entire process of how to register a company in Kenya so you can establish your business with confidence.

Understanding Types of Business Registration in Kenya

In Kenya, you have several options for registering your business, each with unique structures and requirements:

  • Sole Proprietorship: Owned and operated by a single person. This is the simplest and most affordable option for small businesses.
  • Partnership: Owned and operated by two or more individuals. Partners share profits, losses, and decision-making responsibilities.
  • Limited Liability Company (LLC): Offers limited liability protection to its owners (shareholders). This means owners’ personal assets are shielded from business debts and liabilities.
  • Branch of a Foreign Company: A company headquartered outside Kenya can establish a branch to operate within the country.

Carefully consider the nature of your business, its size, and your growth projections when choosing a suitable business type.

Step-by-Step Guide to Company Registration

Let’s break down the company registration process into easy-to-follow steps:

  1. Name Search and Reservation: Generating a unique business name is crucial. Use the eCitizen portal to conduct a name search and pay a fee to reserve your preferred name. Remember to keep the word “Limited” at the end of your name if registering a limited company.
  2. Preparation of Memorandum and Articles of Association (MAA): These legal documents lay out the internal policies, rules, and objectives of your company. You can consult a lawyer or find templates online to assist in drafting them.
  3. Preparation of Company Registration Forms: These forms include:
    • CR1 (Reservation of Name): Confirms you’ve reserved your chosen name.
    • CR2 (Statement of Nominal Capital): Outlines the company’s share capital.
    • CR8 (Notice of Consent to Act as Director): Confirms the directors agree to serve.
    • CR14 (Particulars of Directors and Shareholders): Provides details about shareholders and directors.
  4. eCitizen Online Registration: The Business Registration Service (BRS) mandates online registration via the eCitizen portal. Create an account, upload completed forms, pay the registration fees, and submit your application.
  5. Certificate of Incorporation: Upon successful registration, the Registrar of Companies will issue a Certificate of Incorporation, signaling your company’s official legal existence.
  6. Obtain Company PIN: The Kenya Revenue Authority (KRA) requires you immediately register for a Company PIN. You’ll need this for tax-related and compliance purposes.
  7. Business Permit and Licenses: Contact your local County Government to secure an appropriate business permit and any additional licenses specific to your sector of operations.

How to register a company in Kenya using citizen

To register a company in Kenya using eCitizen, follow these steps:

Step 1: Create an eCitizen Account:

  • Visit the eCitizen portal and click on “Create an account.”
  • Enter your Kenyan ID number or Foreigner Certificate number, email address, and upload a passport photo.

Step 2: Choose Business Type:

  • Select the Business Registration Service on eCitizen.
  • Choose the type of business entity you want to register, such as a Private Limited Company or Business Name.

Step 3: Propose Company Names:

  • Add at least 3 proposed company names in order of priority.
  • Ensure the names are unique to avoid rejection.

Step 4: Fill Out Details:

  • Provide Articles of Association details, business nature, primary activity, start date, and other required information.

Step 5: Add Registered Address:

  • Specify the registered address details including county, street, postal code, and contact information.

Step 6: Download and Sign Documents:

  • Download the registration documents, review for accuracy, sign them, and upload scanned copies.
  • Make the necessary payment for registration.

Step 7: Wait for Approval:

  • The registrar will approve the company within 7 days or less.
  • Once approved, download your company registration certificate and Form Cr 12 showing shareholder details.

Step 8: Post-Registration Steps:

  • After registering your company, complete other important tasks like tax registration, opening a bank account, NHIF and NSSF registration, and obtaining a business premises license.

Foreigners are allowed to register companies in Kenya without ownership restrictions in most industries. Shareholders can be local or foreign individuals or companies.

The registration process typically takes about a week for approval after submitting the necessary documents.

Key Requirements and Documents

For a successful company registration in Kenya, prepare these key documents:

  • National ID or Passport Copies: Required for all directors and shareholders.
  • Passport-sized Photographs: Needed for directors and shareholders.
  • Physical Address of the Company: This is where your official business premises will be located.
  • Email Addresses and Phone Numbers: Essential for ongoing communication with the registrar.

Additional Considerations

  • Share Capital: Define the company’s divided shares among shareholders in the statement of nominal capital.
  • Professional Assistance: For complex setups, consult with a lawyer or company secretary to ensure a smooth and error-free process.

Why Register a Company in Kenya?

Here are some compelling reasons to formalize your business through registration:

  • Legal Recognition and Protection: Your company gains legal status and protection for its assets and operations.
  • Access to Funding: Registered companies have greater access to loans, grants, and investor financing.
  • Contracts and Tenders: Participation in formal agreements and government tenders often requires formal company registration.
  • Enhanced Credibility: Registration establishes a sense of professionalism and trustworthiness, aiding with attracting clients and partnerships.

Company Registration Costs in Kenya

Be prepared for certain expenses associated with how to register a company in Kenya. These costs typically include:

  • Name Search Fee: A nominal fee charged by BRS for conducting the name search.
  • Registration Fees: These vary based on your company type and share capital. Refer to the BRS website for updated fee schedules.
  • Stamp Duty: A tax levied on legal documents. It’s calculated based on your company’s nominal share capital.
  • Professional Fees: If using a lawyer’s or company secretary’s services, additional fees will apply.

Post-Registration Requirements

Once your business is registered, focus on these ongoing compliance requirements:

  • Tax Filings: Adhere to tax deadlines set by KRA, including income tax, VAT, and any other relevant taxes.
  • Annual Returns: Submit updates about changes in directors, shareholders, or company address to the Registrar of Companies annually.
  • Statutory Filings: Companies must file any changes to their MAA, as well as necessary resolutions, with the Registrar of Companies.
  • Record Maintenance: Maintain accurate records of your business activities, financial statements, and meeting minutes.

How many days does it take to register a company in Kenya?

To register a company in Kenya, the process typically takes between 5 to 10 days, but it can vary and may require up to about 21 days.

Can I register a company alone in Kenya?

Yes, you can register a company alone in Kenya. The Companies Act in Kenya allows for a minimum of 1 director/shareholder in a company, meaning you can be the sole director and shareholder of a company in Kenya.

Whether you are a local individual, foreign individual, local company, or foreign company, you can undertake the registration process and own 100% of the Kenyan company.

The process involves steps such as choosing a business type, submitting required documents like the proposed company name, business objectives, director and shareholder details, and paying the registration fee which starts at USD 100.

After approval, you will receive a Certificate of Incorporation within approximately 7 days.

Additionally, it is important to note that foreigners wishing to register and own a company in Kenya may need to appoint a local Kenyan director or a local certified company secretary to comply with certain regulations in specific industries like banking and financial institutions.

How to register a company in Kenya as a youth

To register a company in Kenya as a youth, you can follow these steps outlined in the search results:

  1. Make an eCitizen Account: Gather your Kenyan ID and create an eCitizen account online, which is the platform for official government business in Kenya.
  2. Choose a Business Name: Enter the desired name for your business, ensuring it is unique and not too similar to existing Kenyan businesses. The name approval process typically takes about 2 business days.
  3. Draft Memorandum and Article of Association: Prepare these documents outlining your business objectives, rules, subscribers, and authorized share capital before filing your final registration paperwork.
  4. Submit Forms and Pay Fees: Fill out forms like CR1, CR8, and BN6 along with the Memorandum and Article of Association. Pay the necessary fees at a Kenyan Registrar’s office or online through the eCitizen portal.
  5. Wait for Approval: The processing time for submitting required information and paying Stamp Duty can take between 5 to 10 days.
  6. Receive Certificate of Incorporation: Upon successful submission and approval, you will receive a Certificate of Incorporation within approximately 7 days, officially registering your company.
  7. Register for Tax: After company registration, proceed to register for tax compliance with the Kenya Revenue Authority (KRA), which usually takes about 7 working days.
  8. Open Bank Account: Finally, open a corporate bank account in Kenya to start operating your business effectively.

Note that as a youth registering a company in Kenya, you have the opportunity to own and operate your business independently following the streamlined registration process facilitated by the Kenyan government.

Tips for a Smooth Registration Process

  • Choose Your Company Name Wisely: Pick a memorable and distinctive name relevant to your business. Avoid names too similar to existing registered companies.
  • Plan your Share Capital Carefully: Assess your funding needs at the outset to allocate shares appropriately among shareholders.
  • Organize Your Documents: Double-check that all paperwork is error-free, complete, and properly signed before submission.
  • Utilize the eCitizen Portal: Maximize the portal’s convenience for faster turnaround times.
  • Seek Help When Needed: If uncertain, consult a professional for guidance.

Navigating Company Registration in Kenya

While how to register a company in Kenya follows a structured process, it’s wise to remain informed about any updates to regulations or the BRS online platform. Stay updated by regularly visiting these websites:

Final Thoughts

Registering a company in Kenya unlocks numerous benefits while laying the groundwork for a thriving enterprise.

Following the steps outlined, arming yourself with the right information, and staying organized will transform your business idea into a formal and legally recognized entity.

Congratulations on your business journey!

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