The most common types of business forms adopted in Kenya are private limited companies, public limited companies, general partnerships, limited partnerships and branches of foreign businesses.
In Kenya, a registered company is considered a separate entity from its shareholders thus it possesses perpetual succession (meaning it will continue to survive even after its owners/founders/shareholders are no longer a part of it), it has a common seal and can sue or be sued in their own names. The liability of the members of companies is usually limited either by shares or by guarantee; however unlimited companies can also be registered.
Partnerships on the other hand are not separate legal entities distinct from the partners which therefore means that the liability of all the partners is not limited and the partners bear the obligations of the partnership. For limited partnerships, the liability of at least one of the partners must be unlimited.
There are sole proprietorships as well whereby a single individual is solely liable for the debts of the business.
NGOs which are non-governmental organizations must be registered with the NGO Coordination Act 1990.
Thus, you need to establish what type of business you want to start and its requirements as well as implications.
Incorporation of a Company
Incorporation basically means registration of a company. In Kenya, companies are registered with the Registrar of Companies at the State Law office in Nairobi or at huduma centres countywide. Once the name has been approved by the registrar, the following documents must be provided:
Memorandum and articles of association
Statement of nominal capital of the company
The details of the directors and secretary of the company
The location of the company, that is, where they will be situated
A statutory declaration of compliance with all applicable laws
Once the company is registered, a Certificate of Incorporation is issued and this is evidence of its legal existence.
Every incorporated company must file annual returns at the Registry. These returns provide information on the company’s present status in regards to share capital, shareholding, directorship, company secretary, registered office and mortgages. These returns have to be filed after the company’s AGM is held. AGMs should not exceed 15 months between one and the next.
Incorporation of a company attracts a stamp duty on the share capital at a rate of 1%; this simply means you pay 1% of your total share capital as stamp duty. There isn’t a prescribed minimum share capital to register a company in Kenya, however for certain lines of business such as banks, insurance companies, fund managers and stockbrokerages etc., there exists a requirement for a minimum paid up share capital. It’s also necessary to apply for a company PIN.
Apply for a business permit
A business permit must be obtained by any business operator wishing to conduct business in Kenya. The fee to apply for a business permit varies by type of business, number of employees, and size of the company’s premises. The fee is payable to the County Government of Siaya, Finance Department. The County then issues a single business permit.