(FOR 2023) How To Register A Business in Kenya
On October 15, 2017, manual registration was abolished. Through the eCitizen platform, you can carry out the entire process, from name search to actual registration, at your convenience.
In Kenya, you must register your business to avoid arrest by county government officials and prosecution in a court of law. The eCitizen portal has made business registration in Kenya easy. The platform allows you to carry out the entire process, from name search to actual registration, at your convenience.
You will only be issued a business license for your business if it is duly registered. You can only be allowed to operate if your business is registered. Failure to that do that can lead to your business being closed.
You might be wondering what the benefits of registering your business are. We have listed some of them for you.
- Registering your business gives it a unique identity. A business should have a unique name not registered by another business.
- Registering your business separates you from the risks involved in doing business, and the business attracts more partners, investors, and even insured.
- The business still lives even after anything like the death of the owner. Next of kin or a business partner can take over and continue with the business.
- Once you register your business, growth will be more manageable since you can have a bank account for your business, enabling you to access credit. It will also help you separate your personal income from the businesses.
- Clients and suppliers easily develop trust in a business registered in Kenya. Once you have registered your business, it becomes legal and even open to investors.
You can register your business in Kenya whether you are a Kenyan or a foreigner.
Types of Business you can Register in Kenya.
1). Sole Proprietorship– this kind of business is owned by one person. They get to make all decisions and are also responsible for profits and losses in the business.
2). Partnership– this is a business owned and run by two or more people. They get to share the profits of the business.
3). Limited Liability Partnership (LLP)– LLPs are special business structures that protect individual partners against the negligence of other partners in the business.
4). Company (Limited Liability)
Private Company limited by shares.
A private company has a share capital, and each shareholder’s liability is limited to their shares. A private company cannot sell its shares to the public; its members are limited to fifty (50). It is funded privately by the founders or owners.
Public limited company
A public company has all or part of its business sold to the public information of shares. A public limited company raises funds by selling shares to the public. The buyers become a shareholder and are eligible to share profits and take part in the company’s decision-making.
Business Registration Requirements
The registration of both private and public companies follows the same procedure in Kenya. The following are necessary during the registration process.
1). Proposed business name
The proposed business name has to be searched to ensure it is not similar to an existing registered company.
2). Objectives of the Business
The objective of the business should be decided before registration. It should be legal and not against public policy. You will not be allowed to register a business considered illegal in Kenya.
3). Names of the Directors, contact details, and email.
The KRA requires the directors’ information to be indicated on the application for registration for transparency and accountability purposes.
4). Proof of Identification
Each director has to provide a scanned copy of valid proof of identification. A national ID in the case of a Kenyan Citizen.
5). Passport Photo
Each company’s directors should also provide a clear and recent scanned copy of a passport photograph if the director(s) is not a Kenyan citizen.
6). KRA PIN
All directors must provide scanned copies of their Kenya Revenue Authority (KRA) Personal Identification Number (PIN) Certificate copy to prove they are registered with the tax authority.
7). Form CR1
A complete registration Form CR1 can be downloaded from the eCitizen portal.
8). Form CR2
This is the Model Memorandum of the company with share capital, also referred to as a Memorandum of association.
9). Form CR8
This is the Notice of Residential address/change of address of the company directors.
10). Statement of capital
Company registration fee- Ksh 10,650
You can now register one person as the shareholder and director of the company.
Partnership and Sole proprietorship registration fee – Ksh 1000
Both of the above registration takes a week, and the certificate is ready to download on the eCitizen platform.
Steps to register a sole proprietorship in Kenya
Step 1: Log in to eCitizen
Go to the eCitizen portal and register for an account or if you already have one, log in and go to the services section and select ‘Business Registration Service’
Step 2: Business Name Reservation
After you are done with step 1, click on the ‘Make Application’ button. In this section, you will give the following details.
- Preferred Name of your Business
- Nature of the Business
- Registered office address
- Ownership information
- Application Documents.
The business name you will choose will be your business’s identity. You will pay a fee of Ksh 150 for a name search. You can pay this amount through the M-Pesa or debit/credit card. Your name search results are normally available on the portal within one to two business days.
Once your business name is approved, you can move on to registration. If the name you searched is registered, you will have to pay Ksh 150 again for a name search. After completing this step, the business name awaiting to be registered will be reserved for you for 30 days.
Proposed Business Name
Present at least 3 names just in case some of your choices have been registered already. The first name should be your top choice, and the last name will only be used if the other options are already registered.
Step 3: Nature of Business
This is a company’s overall purpose and existence within a market sector. This is all about:
- The type of products or services your company is going to offer.
- The industry of operation
- Its overall mission and purpose
- And other distinctive characteristics of the business.
Therefore you will have to state the nature of your business in one line. For instance, the public sector, service sector, private sector, manufacturing sector, the Technology sector, etc.
Step 4: Registered office address
Provide the details of the physical location of your business.
- Primary address ( county, sub-county, locality)
- Name of the building, plot No or Estate No
- Postal address
- Mobile number in this format +254…
- Company Email address
Step 5: Ownership information
- Provide the names of all the owners of the business. Click the ‘Add Proprietor’ button to add their details. The details required here include a Kenyan national identification card or Passport for non-citizens and a KRA PIn certificate number for Kenyan members.
- If you are a foreigner legally living in Kenya, click on ‘Foreign Resident’ and add your personal details as required for verification. The system will automatically fill in your full name, date of birth, and gender details if your registration details are correct.
- Add your residence details, county, sub-county, locality, and actual place of residence.
- Attach your passport photo, too, and then submit.
Step 6: Application documents
After you have prepared and submitted all the required materials, the system will automatically generate Form ‘BN 2’. Download that form, sign it and upload it back to the system.
Step 7: Submission
If you meet all the requirements in steps 1 and 2, you will now have to pay for the registration on the eCitizen website under business registration. It will take a maximum of 3-5 working days to have your application processed. The duration may, however, vary depending on the number of applications.
Step 8: Certificate
The Kenyan government issues certification for all registered businesses in the country. After approval of your application, the certificate will be available on the eCitizen platform, and you can download it anytime and anywhere. You can use your KRA PIN to get a bank account for your business.