Procedure of registering a company in Kenya
Procedure of Registering a Company in Kenya: Step-by-Step Guide for Entrepreneurs
The procedure of registering a company in Kenya follows a clear process guided by the Companies Act, 2015. Knowing the required steps and documents helps you stay compliant and register your business smoothly. This guide explains the main requirements for company registration in Kenya in a simple and easy way.
1. Choose the Right Business Structure
Before anything else, decide on what type of business you want to register in Kenya. Common types include:
• Private Limited Company (Ltd): This is the most widely used company structure in Kenya. It protects shareholders by limiting their personal liability and works well for small to medium-sized businesses due to its flexible management setup.
• Company Limited by Guarantee: Commonly used by non-profit entities such as charities and foundations. Instead of shareholders, it has members who guarantee a fixed amount, and any surplus income is reinvested rather than shared among members.
• Public Limited Company (PLC): Designed for large businesses that plan to raise funds from the public. It has stricter regulatory requirements and must have a minimum of seven shareholders.
• Branch of a Foreign Company: This option allows an overseas company to conduct business in Kenya without forming a separate local company, provided it is registered with the Registrar of Companies.
• Limited Liability Partnership (LLP): Combines features of a partnership and a company by offering partners protection from personal liability while maintaining operational flexibility.
Feel free to contact us today for expert advice on the best business structure
2. Reserve Company Name
After deciding on the type of business, the next step is to reserve a company name. The name must be unique and follow the rules set by the Business Registration Service (BRS). To do this:
• Submit 3 to 5 company names according to your preference for reservation through the BRS portal on eCitizen.
• Wait 1–2 business days for approval.
Once approved, the name is reserved for 30 days and can be extended for another 30 days if needed. This step is now part of the company registration process, so the Registrar will automatically assign an available name during registration.
3. Prepare Incorporation Documents
After successfully reserving your company name, the next step in registering your business is to compile and complete all required incorporation documents. These are submitted through the eCitizen Business Registration Service (BRS) portal as part of your application to the Registrar of Companies.
Key documents you’ll need include:
• Memorandum and Articles of Association – This outlines your company’s structure, objectives, and internal governance rules. You can either adopt the model versions provided under the Companies Act or have custom versions drafted by a qualified Company Secretary or Advocate.
• Form CR1 – Application for Company Registration – This form formally applies for the company’s registration and includes basic information about the company type, directors, and registered office.
• Form CR2 – Model Memorandum – This is the standard memorandum of association for a company with share capital (used if you are not submitting a custom memorandum).
• Form CR8 – Notice of Residential Address of Directors – Used to provide the residential addresses of the company’s directors.
These forms and templates are available for download or completion on the eCitizen platform through the Business Registration Service section.
4. Register Directors and Shareholders
When incorporating a company in Kenya, you must include the details of the people who will run and own the business.
Basic Requirements
• A company must have at least one director and one shareholder, and they can be the same person in a private limited company.
• A director must be a natural person aged 18 or older.
• A private company may have up to 50 members (shareholders).
Personal and Contact Information
For each director and shareholder, you must provide:
• Full legal name.
• Residential address and physical location (used for Form CR8).
• Postal address.
• Email address and phone number.
• Valid identification: National ID for Kenyans or passport for foreigners.
• Kenya Revenue Authority (KRA) PIN certificate for tax purposes.
For Foreign Directors/Shareholders
• Valid copies of passports are typically required.
Additional Compliance Details
• Companies must disclose beneficial owners — individuals who ultimately own or control at least 10% of shares or voting rights — when submitting registration documents.
• Shareholders’ structure should include how many shares each person holds and, if applicable, the class of shares (e.g., ordinary or preference).
N/B- In Kenya, companies with a share capital exceeding Kshs. 5 million, as well as all public companies, are required to appoint a Certified Public Secretary (CPS). The CPS is responsible for ensuring the company complies with legal and corporate governance obligations.
5. Pay Statutory Fees
Registering a company in Kenya costs Kshs. 10,750 if all the forms are correctly filled. This is the official government fee.
• Fees are paid online through the eCitizen portal, usually using M-Pesa or a card.
• Extra costs may apply if you need to reserve a company name or make changes to your forms.
• You might also spend a little more if you hire someone to help with the registration.
6. Certificate of Incorporation
After submitting all forms and paying the fees, the Registrar of Companies issues a Certificate of Incorporation. The certificate will show you the following:
• The company name
• The registration number
• The date of incorporation
• The type of company (like private or public)
You can usually download it from the eCitizen portal in 3–7 business days. Once you have it, you can open a bank account, get a KRA PIN, and apply for any other licenses your business needs.
Post Registration Requirements for Company Registration in Kenya
After you register a company in Kenya, you must follow some important rules to stay legal:
a. Open a Corporate Bank Account
After your company is legally registered, the next step is opening a bank account. A business bank account helps you keep company funds separate from personal money, which is essential for proper accounting and tax compliance.
Common requirements for a corporate account in Kenya include:
• Certificate of Incorporation.
• Kenya Revenue Authority (KRA) PIN certificate for the company.
• Board resolution authorizing the opening of the account and naming signatories.
• Identification documents (national ID or passport) for directors and authorized signatories.
• Memorandum and Articles of Association.
• Proof of the business’s registered physical address.
• CR12 (official list of directors and shareholders).
• Completed bank account application forms.
Notes:
• Specific banks may require additional documents such as certified copies of IDs, references, or initial deposit evidence.
• Many Kenyan banks now support digital and multi currency business accounts, which can simplify handling local and international transactions.
b. Obtain Business Licenses and Permits
Once your company is registered and has a bank account, you must secure all necessary licenses and permits before starting operations:
Key licenses/permits you may need in Kenya:
• County Single Business Permit: A mandatory permit issued by the relevant county government where your business operates. It must be renewed annually and reflects your business activity and location.
• Sector Specific Licenses: Depending on your industry, additional regulatory approvals may be required from agencies such as:
– Kenya Bureau of Standards (KEBS) – for regulated products and quality standards.
– National Construction Authority (NCA) – for construction businesses.
– Kenya Civil Aviation Authority (KCAA) – for aviation services.
– NEMA (National Environment Management Authority) – for activities affecting the environment.
C. Ongoing Compliance for Companies in Kenya
I. Pay Taxes
• Corporate Tax: Companies pay tax on profits (usually 30%).
• VAT: If your business earns over KSh 5 million a year, you must register and pay VAT.
• PAYE: Deduct tax from employee salaries and send it to KRA every month.
• Withholding Tax: Deduct tax on certain payments like professional fees when needed.
II. File Annual Returns
• Submit yearly updates to the Registrar of Companies.
• Include changes in directors, shareholders, or company address.
• Late filing can result in fines or deregistration.
III. Keep Proper Records
• Maintain accurate books of accounts and documents.
• These help with tax filings and audits.
IV. Register Employees for Social Schemes
• NSSF: Pension contributions for employees.
• SHA: Social Health Authority
Pay monthly and keep records.
Conclusion on Procedure of registering a company in Kenya
Company registration in Kenya may seem overwhelming at first, but by following the proper procedures, the process becomes straightforward. From choosing the right company type to obtaining a Certificate of Incorporation and completing post-registration requirements, each step is vital for legal compliance and business success.
By understanding and following this procedure, you can confidently establish your business and focus on growth without legal interruptions. Contact us today for quick assistance!
