What steps do you need to take when registering a company in Kenya? We answer this question and offer you a case example of starting and registering a company in Kenya:
1 – Getting Started
Before even thinking of starting or registering a company in Kenya, there are several things you need to consider. You need to know or find your purpose. Ask yourself, why do I want to start a business?
Entrepreneurs journey all begins with an idea. You need to have an idea first before starting a business. In most cases, it is ideal for your business idea to be related to your passion. Your idea should look at a problem, provide a solution and find a market.
2: Getting Registered
There are many different business entity to choose from based on your intention for starting or registering a company in Kenya. Here are some of the business structures you can setup;
I) Sole Proprietorship
Usually most business start with a single person. Start as a sole proprietor is cheaper and easier to set up. This legal structure for a business gives more control to the entrepreneur over decision making in all different parts of the business.
It can be upgraded at any-time to Limited company once registered. Here are some few articles that I think can help you understand more about Sole Proprietorship.
II) Partnership
A partnership business is usually cheaper to setup and more easier for a group of people thinking of starting a business. You need to have a minimum of 2 people and a maximum of 20 people to form a Partnership Business in Kenya.
To help you get more insight on Partnership, I have written some articles that can guide you in registering your Partnership Business.
III) Limited Company
Limited Company is by far the best business legal structure to operate with when running any business. The reason is because the liabilities are limited to the business assets and you can enjoy some tax benefits that sole proprietor business don’t.
You need to have a minimum of 1 director and up-to a maximum of 7 directors, however you can add more shareholders in the company. I have prepared some articles that will help you register your limited company in Kenya.
Example: Registering a construction company:
Information Required
To register your construction limited company, here is information that you will need to prepare to comply with the Company Act 2015;
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. engineer, web designer, accountant, consultant, teacher etc. If you don’t have any occupation, then you can simply put either businessman or businesswoman.
- Postal address – if you don’t have one, you can register it with Posta Kenya.
- Physical Residential address – 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 have 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. Please note that you are only allowed to perform one name at a time. You can perform name search at Huduma Center or eCitizen website or you can 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 business. This is good news especially for companies that would prefer to do multiple business activities. However, if you are specializing in a specific industry then you can list the business activities that you would like to be stated on the application form.
- 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 business premises yet, then you can provide your home address then make the changes later once you have secured business premises.
What If I Want To Upgrade My Existing Business To Become Limited Company?
If you are looking to upgrade your sole proprietor or partnership business, then you will need to provide all the above requirements, however, there is one additional document that you will need to provide us;
- 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. Â 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.
You can see a full step by step guide for foreign company registration here.
Company KRA PIN
Once you have been issued with your certificate of incorporation and memorandum, you will be able to apply for your company PIN. 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;
- Certificate of Incorporation
- 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.
Company Seal & Stamp
In Kenya, Company Seal is considered a useful stationery for businesses. It is used for contracts, deeds, share certificates and most importantly for setting up subsidiary companies. Here is what you need to know if you are looking to get a company seal in Kenya.
CR-12 Letter and AGPO certificate
These are additional steps that only apply to those businesses intending to go for government (national or county) tenders. In order to apply for a CR-12 letter, a letter will need to be written on your company letterhead requesting Company Registry to give you a CR-12 letter that contains a list of directors in your registered company. You will also need to attach a copy of Certificate of Incorporation on your request.
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.
Taking bank or Sacco loan? How to make it work for you regardless of amount borrowed
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.
