• A site by BDO Kenya
  • Types of Business Entities

Overview

The main business entities in Kenya are:

  • Registered Companies (private and public)
  • Branch office of a foriegn registered company
  • Partnership
  • Limited Liability Partnership
  • Sole proprietorships
  • Societies

Public and Private Companies

The process of registering a company in Kenya may take up to four weeks and includes:

 

  1. Reservation and approval of a name by the Registrar of Companies. The company name reservation lasts 30 days and can be renewed for a similar period;

 

  1. Preparation of the Memorandum of Association and Articles of Association. A private company will require at least 1 shareholder, while a public company will require at least 7;

 

  1. There is no restriction on the nationalities of Directors and all directors must be registered as taxpayers with the Kenya Revenue Authority before being registered as a Director.

 

  1. Completion of various forms including Statement of Nominal Capital, Particulars of Directors and Shareholders, Situation of Registered Office. Directors and Secretaries (where applicable) must signify their consent to act in the respective capacities.

 

  1. Filing of the forms above

 

  1. Issue of a Certificate of Incorporation by the Registrar of Companies. For public companies, in addition to the Certificate of Incorporation, the Registrar will issue a Taxpayer’s PIN Certificate, NSSF and NHIF registrations.

Branch of an Overseas Registered Company

A company incorporated outside Kenya may carry on business in Kenya through a branch. The following documents are required to form a Branch (also referred to as a foreign company carrying on business in Kenya). All foreign companies must demonstrate that at least 30% of the company’s shareholding is held by Kenyan citizens by birth.

 

  • A certified copy of the Charter, Statutes or Memorandum and Articles of the company, or other instruments defining the constitution of the company;
  • A list of the directors and the secretary of the company;
  • A statement of all existing charges entered into by the company affecting properties in Kenya;
  • Names and postal addresses of one or more persons resident in Kenya authorised to accept, on behalf of the company, service of notices required to be served on the company;
  • Full address of the registered or principal office of the company in its home country; and
  • Full address of place of business in Kenya.

The Registrar issue a Certificate of Registration. Companies that may want to have representative or liaison offices are required to register using the above process.

 

Partnership

A partnership is restricted to a maximum of 20 persons, each of whom is jointly and separately liable for all debts incurred. If these numbers are exceeded, the partnership must be registered under the Companies Act.

 

A partnership may be formed by any kind of agreement. This need not be formal but is usually in writing. If the partnership does not trade under the names of the partners, the business names to be used by the partnership must be registered under the Registration of the Business Names Act, Chapter 499 of the Laws of Kenya.

 

A Partnership is required to file the statement of particulars form with the Registrar of Companies. The form has to be signed by all the partners. Partnership agreements do not have to be filed with the Registrar of Companies. The Registrar will then issue a Certificate of Registration.

Limited Liability Partnership

A Limited Liability Partnership (LLP) may be formed under the Limited Liability Partnership Act, 2011.  A natural person or a body corporate may be a partner in an LLP. In addition, the LLP must have a manager who must be resident in Kenya.

 

The partners in an LLP have limited liability but the provisions of the Partnership Act apply in all other respects.

Society

Societies are usually formed for the purposes of trade associations and similar organisations. They are regulated under the Societies Act.

 

A society can either be registered or exempted from registration. An exempted society is one whose procedure is the same as that of a registered society but differs in that it is not required to file Annual Returns with the Registrar of Societies as is required of registered societies.

 

The society must submit the application and the notification of registered office or postal address of the society together with the society constitution in duplicate. The application is considered by the Registrar within a statutory period of not more than 120 days. Upon registering a society or exempting it from registration, the Registrar shall issue to the society a certificate of registration or exemption in the prescribed form.

Sole Proprietorship

A sole proprietor is personally liable for all debts incurred.

 

The proprietor is required to file the Statement of Particulars form with the Registrar of Companies Where a proprietor does not trade under his personal names, the business names used by the proprietor have to be registered under the Registration of Business Names Act. The Registrar will then issue a Certificate of Registration.