Registering a company in Kenya involves adhering to specific legal and procedural requirements outlined under the Companies Act 2015 and the Company (General) Regulations. With various company structures available, understanding these requirements ensures compliance and smooth business operations. This article outlines the 10 essential requirements for registering a company in Kenya, with added insights on timelines, costs, and regulatory compliance to guide entrepreneurs and investors who want to set up a business in Kenya.
1. Choose the Appropriate Category of Company
Kenya offers multiple categories of companies tailored to different business needs:
- Private Limited Company (Ltd): The most common type of company, offering limited liability to shareholders and a flexible structure suitable for small and medium enterprises.
- Company Limited by Guarantee: Ideal for non-profit organizations, charities, and foundations. Members act as guarantors rather than shareholders, and profits cannot be distributed to them.
- Public Limited Company (PLC): Suitable for larger companies intending to raise capital from the public; requires a minimum of seven shareholders.
- Branch of a Foreign Company: Allows a foreign entity to operate in Kenya without incorporating a local subsidiary. However, it must register with the Registrar of Companies.
- Limited Liability Partnership (LLP): A hybrid structure offering partners limited liability while retaining partnership flexibility.
Having clearly defined objectives for your business can help you settle for the ideal form of the company.
2. Conduct a Name Search
Choose a unique and compliant name for your company. Use the Business Registration Service (BRS) on the eCitizen platform to verify availability. The name must not be similar to an existing business name. You must provide at least three proposed names in order of preference. The Registrar of Companies will conduct a name search to ensure that the chosen name is not already in use or is not too similar to existing company names.
3. Provide a Defined Shareholding Structure
Outline the company’s ownership by determining how shares will be distributed among shareholders.
- Minimum Requirement: At least one shareholder and one director (can be the same person).
- For credibility, declare a reasonable share capital, typically Kshs 1,000,000 or more, though the minimum required is Kshs 2,000.
Under section 14(2)(c) of the Act, the rights associated with shares in a company include:
- Voting Rights: The ability to vote on company matters, including rights that arise in specific circumstances.
- Dividends and Distributions: Entitlement to receive profits or other distributions.
- Participation in Return of Capital: Rights to partake in capital returns, including during liquidation.
- Redemption of Shares: Whether shares can be redeemed by the company or shareholder and any associated terms and conditions.
4. Identification Documents of Directors and Shareholders/ Beneficial Owners
All directors and shareholders must provide valid identification, which includes:
- For Kenyan Nationals: National ID and KRA PIN.
- For Foreign Nationals: Passport and visa details. KRA PINs can be arranged during registration.
It is also critical to provide beneficial ownership details. This natural person ultimately owns, controls, or benefits from a company, even if their name does not appear on formal documentation such as shareholder or director registers. To understand more about the beneficial ownership requirements and how to file them, please read our article titled “Disclosure of Beneficial Ownership in Kenya: A Comprehensive Guide to Compliance and the 2024 BRS Directive”
5. Registered Office Address in Kenya
Your company must have a physical and postal address within Kenya for official correspondence and tax purposes. It includes:
- Exact location (street, building, room number).
- Valid email address and contact phone number.
6. Memorandum of Association and Articles of Association
The Memorandum of Association outlines the company’s constitution and objectives.
The Articles of Association contain the rules and regulations governing the company’s internal affairs and internal management, including decision-making processes, director roles, and shareholder meetings. The shareholders prepare the documents, though they can adopt the templates provided by the Registrar of Companies with or without modifications.
7. Appoint a Local Director or Company Secretary
Foreign companies must comply with the requirement to appoint either:
- A Kenyan Director to ensure local compliance.
- A Certified Company Secretary registered with the Institute of Certified Public Secretaries of Kenya (ICPSK).
8. Pay Statutory Fees
Government fees are payable via the eCitizen portal and include:
- Name Reservation Fee: Approximately Kshs 150.
- Registration Fees: Between Kshs 10,000 and 15,000, depending on share capital.
9. Submit the Application
Upon payment of the relevant government fees, Submit the completed application forms and required documents to the Registrar of Companies through the eCitizen portal. The Company Registrar will review the documentation to ensure everything is in order; they will request a correction if something needs to be edited or provided.
10. Obtain a Certificate of Incorporation
Upon successful registration, the Registrar of Companies will issue a Certificate of Incorporation. This certificate confirms the company’s legal existence and allows it to commence operations.
11. KRA Pin Registration
For the company to be tax compliant, it is essential to register for the Kenya Revenue Authority (KRA) PIN. This certificate is necessary for tax compliance and enables the company to fulfil its tax obligations. The KRA PIN is also required to open a company bank account.
Conclusion
Registering a company in Kenya involves several essential steps and requirements. Following this guide ensures a smooth and efficient registration process, setting a solid foundation for your business. For expert legal support, partner with Njaga & Co Advocates, your trusted guide in establishing any business in Kenya.
