Individuals interested in forming a company must first register and incorporate the entity, as well as prepare constitution documents, shareholding details (if applicable), and management details, to which at least seven of them must subscribe their names in the case of a public company and two in the case of a private company. Registration is a prerequisite for the formation of a registered company, and failure to register a proposed company would result in its legal inexistence. Companies limited by shares, limited by guarantee, unlimited companies, and subsidiary or branch companies are the four types of companies that can exist in Kenya today.
Company Registration Procedure in Kenya
In Kenya, corporations are registered online through the eCitizen site. The Kenyan government performs much of its official activity through eCitizen, an online site. It’s completely easy to use. The registration procedures are as follows:
Sign up for an eCitizen account
You’ll need to fill in your Kenyan ID number (found on government-issued identification) and your name when creating a personal account. Create an account and provide an active email address. If you are a foreign citizen living in Kenya, you can use your Foreigner Certificate number instead of your Kenyan ID number. A Kenyan firm can have directors who are not Kenyan citizens and live abroad. However, at least one of the directors must be a Kenyan citizen to use eCitizen and submit specific paperwork.
Include a passport photograph
Before registering for an eCitizen account, you must upload a recognizable passport photo of yourself. The photo you select must have been shot within six months of the day you register your business.
Go to the home page of the Business Registration Service
Make an application and select the type of business you want to start once you’ve arrived at the Business Registration Service.
Select and reserve a company name
If the name is too similar to that of an existing Kenyan company, it may be refused. Within two business days, you should hear from the Registration Service about whether or not the name is appropriate. The registrar will hold the name for 30 days if it is accepted. You’ve got this much time to finish your business registration. The name search will cost you money. The Kenyan government charges a nominal cost to potential business owners to conduct a business name search. It is possible to pay by credit card online. Once the name has been approved, the eCitizen site does not send you an email. As a result, you’ll need to check your account regularly to see if the approval was granted.
Complete the company registration paperwork
This entails filling the Form CR1, Form CR8, and Form BN6. Form CR1 is the company registration application form. Form CR8 is the notice of directors’ residential addresses and Form BN6 is the form to report your company’s nominal capital holdings.
Stamp Duty
Stamp Duty is calculated based on the amount of capital in your business. Stamp duty collection is overseen by the Kenya Revenue Authority (KRA). Once your business name has been registered, the KRA will contact you and instruct you on how to pay the Stamp Duty. They’ll ask for the Kenyan ID numbers of all employees and stockholders in your organization. The amount you pay will be equal to one percent of your company’s nominal capital, with a minimum of Kes. 2,140 based on a nominal capital of Kes. 2,000. You’ll be charged, Kes. 100 for each document (i.e., each shareholder’s personal information) that the KRA must approve as part of the Stamp Duty requirements. It should take 5–10 days to send in all of the relevant information and pay the Stamp Duty.
Make a Memorandum of Association and Articles of Association
The Kenyan government requires new enterprises to submit two documents: the Memorandum of Association and Articles of Association. Before submitting your final registration form, draft these documents. An advocate usually drafts these documents, but an administrative assistant or the company’s director can also do so. The Memorandum and other documents, such as Form CR1, Form CR8, Notice of Nominal Capital Share, and Cessation Form, will be prepared for your firm, and each director will be needed to sign these. At a Kenyan Registrar’s office, submit the completed forms and pay the money. Collect and seal the CR1, CR8, and BN6 forms, as well as the Memorandum and Articles of Association (together with any scanned and copied papers) in a big envelope. These documents should be mailed to the Registrar’s office. The Kes. 10,650, can be paid online through the eCitizen portal or in person at the Registrar’s office by check or credit card.
From the eCitizen platform, download your business certificate
The Kenyan government will review all of the forms you’ve submitted, produce scans and copies, and register your firm with the KRA in about a week. The business certificate will be uploaded online in your eCitizen portal once everything has been approved and your business has been formally registered. The duration of this process varies.
