Registering your Business in Kenya

Companies in Kenya are governed by the Companies Act No. 17 of 2015 (the Companies Act) that provides for the incorporation, registration, operation, management and regulation of companies. Part II of the Companies Act proceeds to provide for 4 types of companies; a limited company, an unlimited company, a private company or a public company.

 A limited company is one that is limited by either shares or by guarantee. A company is said to be limited by shares if the liability of its members is limited by the company’s articles to any amount unpaid on the shares held by the members. On the other hand, a company limited by guarantee does not have a share capital, liability of members is limited to the company’s articles to the amount the members undertake to contribute to the assets of the company in the event of its liquidation and its certificate of incorporation states that it is a company limited by guarantee.

 Unlike a limited company that sets a limit on the liability of its members, an unlimited company does not set a limit on its members and its certificate of incorporation states that the liability of its members is unlimited. This provision makes the incorporation of an unlimited company unfavourable in the business community as all the members are held liable and there is no limit as to the amount of money or assets one can lose.

The Companies Act also provides for private and public companies. A company is private if its articles; restrict a member’s right to transfer shares, does not invite the public to subscribe to its shares, requires consent of all members to add a new member and limits the number of members to 50. A private company is limited by shares and not guarantee and its certificate of incorporation states that it is a private company. This is different to a public company that sets no limit as to the number of members it can have, it does not prohibit invitations to the public to subscribe to its shares, its members have the right to transfer their shares in the company and its certificate of incorporation states that it is a public company.

Documents Required and The Procedure for Incorporation

In general, the following documents would be required for the incorporation of a company

1. Company registration form (Form CR1)
2. Application for reservation of a company name (Form CR14)  
3. Particulars of the directors and secretary (Form CR2and Form CR10)
4. Statement of the company’s nominal capital
5. The company’s articles of association. It should be noted that there are model articles of association for both public and private companies as provided for by the Companies (General) Regulations that a company can adopt. 
6. The residential address of directors and company secretary (Form CR8 and CR12)
7. A copy of the Kenyan national identification of each director and/or secretary or, copy of the Kenyan foreigner certificate, or in the case of a director who is not a Kenyan citizen and is not resident in Kenya, a copy of that director’s passport,
8. A passport-sized photograph of each director and/or the company secretary (where applicable)

It should be noted that it is no longer necessary for a person to manually lodge their documents rather they can incorporate a company through their e-citizen and the forms mentioned above are already embedded in e-citizen.

Once a person has filed reserved a name for their company, they will be expected to fill out the address and details of the directors, secretary, shareholders and beneficial owners. They will also provide details concerning the share capital and shares that will be issued to the respective shareholders.

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Disclaimer: Kindly note that the general information provided above does not constitute an advocate-client relationship with any reader. All information, content, and material in this article are for general informational purposes only. Readers of this article should get in touch with us/a qualified advocate to obtain legal advice with respect to any particular legal matter.