Guide to starting a consultancy business in Kenya

In order to register a limited company for your consultancy business, you will need to collect the following information;

Director(s) Details

• Full names – your full names as displayed on your ID/Passport will be used on the application
• Occupation – you will need to state your occupation e.g. IT Consultant, marketing consultant, finance consultancy, consultant etc. If you don’t have any occupation, don’t worry, you can simply put either businessman or businesswoman.
• Postal address – you will need to provide your postal address. If you don’t have one, you can register it with Posta Kenya.
• Physical Residential address – This information will be used on the Form CR8 to comply with the Company Act which requires all directors to provide their residential address. You’ll need to provide LR number or house number, building name (if any), street name, town name, country.
• Share Allocations – each director will need to be allocated at least 1 share. Remember that the total number of shares available for allocation is 1,000 shares. You can plan to allocate your 1,000 shares using percentages such as 60%/40%, 50%/50%. However, if you are just the sole director then you can have 100% share ownership.
  • Proof of Identity documents – you will need to provide the following documents for registration, without them your application will be rejected.
    • Copy of ID or Passport – you can scan or photocopy your identification document
    • Copy of KRA PIN certificate – all Kenyan directors/shareholders will need to provide KRA PIN, however foreigners won’t need to provide one for the registration
    • Photos – must have a clear background and show all your facial features, just like a passport photo. Please avoid submitting photos that has someone wearing sunglasses, hats; this could cause your application to be rejected by the Registrar.

  Company Details

  • Company Name Suggestions – it’s ideal to come up with 2-3 company name suggestions that you can use to check the availability of your company name, for example – “Fenesi Consultancy Ltd”, “Kiprono Consultancy Ltd”. Please note that you are only allowed to perform one name search at a time. You can perform name search at any of the Huduma Centres or visit eCitizen website. You can also instruct us to help you with it. It usually takes 1-2 days.
  • Nature of business – with the new Company Act 2015, you can now do all trade of consultancy business without any restrictions.
  • Location of business premises – you will need to provide the location details of your office including LR Number or Plot Number, Building name (if any), Street name, Town name. If you don’t have a business premises yet, then you can provide your home address then make the changes later once you have secured a business premises.

  What If I want To Upgrade My Existing Consultancy Business To Become Limited Company

  If you are looking to upgrade your sole proprietor or partnership business, then you will basically need to provide the director’s details and company details as listed above and also you will need to submit your original business certificate for your current business.

  • Business Certificate – you will need to send us the original business certificate for your sole proprietor/partnership business since this will be required in the cessation process (winding up of your business) to allow the limited company to be formed.

  What If I want To Register A Foreign Limited Company?

  There are always additional requirements that foreign owned companies need to comply with.  In the process of company registration, foreigners need to provide:

  • Identity documents – such as copy of Passport and photo
  • Alien ID – when applying for Company PIN
  • Certificate of Incorporation & Memorandum of existing foreign company – if you are looking to open a branch or subsidiary company for an existing foreign company, then you will be requested to provide the certificate of incorporation and memorandum.

   

  Company KRA PIN

  Once you have been issued with your certificate of incorporation and memorandum for your consultancy company, you can now proceed to register your company PIN online using iTax system. But before you do that, data loading will need to be performed at any iTax centers or KRA offices. Here are some of the requirements you will need to have with you;

  • Original Certificate of Incorporation
  • Original Memorandum
  • Individual KRA PIN for each director – you will need at least one individual KRA PIN for one director in order to register company PIN. If all directors are foreigners, then at least one of the directors will need to apply for Alien ID that will enable them to acquire their individual PIN.
  • Director(s) details – including KRA PIN Number, Full names, date of birth, phone number, email address etc.
  • Director(s) ID may be request for some applications.

  Company Seal & Stamp

  As you start working on getting stationery for your company, some businesses in Kenya usually opt to get a Company Seal so they can use it for signing contracts, deeds, share certificates and many more official company documents. Here is what you need to know if you are looking to get a company seal in Kenya.

  CR-12 Letter

  If your consultancy business is planning to offer services to Kenyan Government or county government, one of the company documents you will be ask to provide is CR12 letter. This letter will outline the ownership of your company, it will indicate the shareholding structure, number of directors and their names.

  AGPO certificate

  If you are looking to apply for Government Tenders as a youth, women or persons with disability, then you will need to pre-qualify your company so you can be given AGPO Certificate that will help you to bid for tenders.

  Tax Compliance Certificate

  Tax Compliance Certificate (TCC) is one of the crucial documents required when applying for a Government Tender.

  For AGPO applicants, you must have a tax compliance certificate in order to get approval by AGPO to apply for the 30% government tenders preserved for youth, women and person with disabilities.

  Business Permits

  Business permits is required by all companies who have business premises in Kenya. To apply for business permit for your consultancy business, it all depends on which county you intend to operate your business in. Some counties such as Nairobi and Mombasa counties have embraced online platforms where businesses can apply and renew their business permits.

  Business permits costs usually vary from county to county, you will need to inquire with your county government for accurate cost. Business permit rates depend on the size of business premises, number of employees working there and the type of business. Estimate cost ranges from Ksh. 5,000 per year, this could be higher or lower for some businesses.

  So what’s next after registering my consultancy company?

  Your business is now a legal entity, but you will still have further requirements to meet before you can effectively start trading in your field.

  Getting Licensed

  To comply with your industry, you will need to apply for license that can enable you to operate your businesses, for example a medical consultant will need to apply with Medical & Poison Board.

  Getting Insurance

  Depending on the type of business or type of product/service, insurance services will come in handy to protect yourself and your business from liability. Find insurance agent to see what type of insurance coverage you can get for your business.

  Getting Funding

  The next step is to determine how your business will be financed. Once you have researched your market and developed a business plan, you will have a solid background of research with which to propose your consultancy business to investors. Alternately, if you do not wish to have the involvement of investors, you may choose to remain more independent and finance the business through the bank. Either way, your company research will be essential to this process.

  Finding and Hiring labour

  You will need to identify where you can hire personnel to perform the tasks needed in the business. The best place to find people who you can hire are Fuzu.com,BrighterMonday.com.

  Business Bank Account

  While it is not a strict and enforceable requirement, you will find that a business bank account will help you in your accounting process, show your investors and customers that you are an established and professional business. Some investors will not give funding unless this is to be deposited into a business bank account.

  Annual Returns

  • Taxation – Annual Tax Returns, VAT Returns, Income Tax Return for Employees (Every June 30th), Corporate Tax.
  • Annual Returns to Company Registry

  Now that you know some of the requirements and what it takes to start a consultancy company, you can start by registering your company.

This feature was first published on FENESI