M-Wakili

CONTACT

FAQ

LOGIN

REGISTER

Ask a lawyer:
company registration requirements in kenya

Introduction

Company registration in Kenya is governed by the Companies Act, 2015. This Act provides a comprehensive framework for the incorporation, management, and regulation of companies in Kenya. The process of registering a company involves several steps and requires compliance with various legal requirements. This guide will provide a detailed overview of the requirements for company registration in Kenya, citing relevant sections of the Companies Act, 2015, and other pertinent laws.

Table of Contents

  1. Types of Companies

    • 1.1 Private Companies

    • 1.2 Public Companies

    • 1.3 Companies Limited by Guarantee

    • 1.4 Unlimited Companies

  2. Pre-Registration Requirements

    • 2.1 Name Search and Reservation

    • 2.2 Memorandum and Articles of Association

    • 2.3 Statement of Nominal Capital

    • 2.4 Registered Office

  3. Registration Process

    • 3.1 Application for Registration

    • 3.2 Submission of Documents

    • 3.3 Issuance of Certificate of Incorporation

  4. Post-Registration Requirements

    • 4.1 Tax Registration

    • 4.2 Business Permits and Licenses

    • 4.3 Compliance with Statutory Obligations

  5. Conclusion

1. Types of Companies

The Companies Act, 2015, provides for the incorporation of various types of companies. The choice of company type depends on the nature of the business and the objectives of the founders.

1.1 Private Companies

  • Definition: A private company is defined under Section 9 of the Companies Act, 2015, as a company that restricts the right to transfer its shares, limits the number of its members to fifty, and prohibits any invitation to the public to subscribe for any shares or debentures of the company.

  • Characteristics:

    • Limited number of shareholders (maximum 50).

    • Restrictions on share transfer.

    • Prohibition on public subscription of shares.

1.2 Public Companies

  • Definition: A public company, as per Section 10 of the Companies Act, 2015, is a company that does not impose restrictions on the transfer of its shares and can offer its shares to the public.

  • Characteristics:

    • No limit on the number of shareholders.

    • Shares can be freely transferred.

    • Can raise capital from the public through the issuance of shares and debentures.

1.3 Companies Limited by Guarantee

  • Definition: According to Section 7 of the Companies Act, 2015, a company limited by guarantee is one where the liability of its members is limited to the amount they undertake to contribute to the assets of the company in the event of its winding up.

  • Characteristics:

    • No share capital.

    • Members' liability is limited to a predetermined amount.

    • Commonly used for non-profit organizations.

1.4 Unlimited Companies

  • Definition: An unlimited company, as defined in Section 8 of the Companies Act, 2015, is a company where there is no limit on the liability of its members.

  • Characteristics:

    • Members have unlimited liability.

    • Less common due to the high risk involved.

2. Pre-Registration Requirements

Before proceeding with the registration of a company, certain preliminary steps must be taken to ensure compliance with the legal requirements.

2.1 Name Search and Reservation

  • Requirement: Section 48 of the Companies Act, 2015, mandates that a proposed company name must be reserved with the Registrar of Companies.

  • Process:

    • Conduct a name search to ensure the proposed name is not already in use.

    • Reserve the name by submitting Form CR14 to the Registrar of Companies.

    • The name reservation is valid for 30 days, with a possibility of extension.

2.2 Memorandum and Articles of Association

  • Requirement: Sections 22 and 23 of the Companies Act, 2015, require the preparation of the Memorandum and Articles of Association.

  • Contents:

    • Memorandum of Association: Outlines the company's objectives, the amount of share capital, and the liability of members.

    • Articles of Association: Contains the rules and regulations governing the internal management of the company.

2.3 Statement of Nominal Capital

  • Requirement: Section 12 of the Companies Act, 2015, requires a statement of nominal capital to be provided.

  • Contents:

    • The total amount of share capital the company intends to raise.

    • The division of this capital into shares of a fixed amount.

2.4 Registered Office

  • Requirement: Section 60 of the Companies Act, 2015, mandates that every company must have a registered office in Kenya.

  • Purpose:

    • The registered office is the official address for receiving legal documents and correspondence.

3. Registration Process

The process of registering a company involves the submission of various documents and compliance with specific legal requirements.

3.1 Application for Registration

  • Requirement: Section 13 of the Companies Act, 2015, requires the submission of an application for registration.

  • Contents:

    • The proposed company name.

    • The type of company.

    • The registered office address.

    • The details of the directors and shareholders.

3.2 Submission of Documents

  • Documents Required:

    • Memorandum and Articles of Association: As prepared under Sections 22 and 23.

    • Statement of Nominal Capital: As required by Section 12.

    • Form CR1: Application for company registration.

    • Form CR2: Model memorandum for a company with share capital.

    • Form CR8: Notice of residential address of directors.

    • Form CR10: Particulars of the company secretary.

3.3 Issuance of Certificate of Incorporation

  • Requirement: Section 16 of the Companies Act, 2015, provides for the issuance of a Certificate of Incorporation upon successful registration.

  • Contents:

    • The company's name.

    • The company's registration number.

    • The date of incorporation.

4. Post-Registration Requirements

After the company has been registered, there are several post-registration requirements that must be fulfilled to ensure compliance with statutory obligations.

4.1 Tax Registration

  • Requirement: The company must register for tax purposes with the Kenya Revenue Authority (KRA).

  • Process:

    • Obtain a Personal Identification Number (PIN) for the company.

    • Register for Value Added Tax (VAT) if applicable.

    • Register for Pay As You Earn (PAYE) if the company has employees.

4.2 Business Permits and Licenses

  • Requirement: Depending on the nature of the business, various permits and licenses may be required.

  • Examples:

    • Trade license from the county government.

    • Sector-specific licenses (e.g., health, environmental).

4.3 Compliance with Statutory Obligations

  • Requirement: The company must comply with ongoing statutory obligations, including:

    • Filing annual returns with the Registrar of Companies (Section 707 of the Companies Act, 2015).

    • Maintaining proper accounting records (Section 635 of the Companies Act, 2015).

    • Holding annual general meetings (Section 275 of the Companies Act, 2015).

Conclusion

Registering a company in Kenya involves a series of steps and compliance with various legal requirements as outlined in the Companies Act, 2015. From choosing the type of company to fulfilling pre-registration and post-registration requirements, it is essential to adhere to the legal framework to ensure the successful incorporation and operation of the company. By following the guidelines provided in this comprehensive overview, prospective business owners can navigate the registration process with confidence and establish a legally compliant company in Kenya.

Answered by mwakili.com