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requirements for registering a limited company in kenya

Introduction

Registering a limited company in Kenya is a structured process governed by the Companies Act, 2015. This process ensures that businesses operate within the legal framework, providing a clear path for compliance and operational legitimacy. This guide will walk you through the requirements, steps, and legal considerations necessary for registering a limited company in Kenya.

Table of Contents

  1. Overview of Limited Companies in Kenya

  2. Legal Framework

  3. Requirements for Registering a Limited Company

    • 3.1. Minimum Requirements

    • 3.2. Necessary Documents

  4. Step-by-Step Registration Process

    • 4.1. Name Search and Reservation

    • 4.2. Preparation of Documents

    • 4.3. Submission and Payment

    • 4.4. Post-Registration Requirements

  5. Case Laws and Legal Precedents

  6. Conclusion

  7. TLDR

1. Overview of Limited Companies in Kenya

A limited company in Kenya can be either a private limited company or a public limited company. The primary distinction lies in the number of shareholders and the ability to offer shares to the public. Private limited companies are more common for small to medium-sized enterprises, while public limited companies are typically larger entities that may seek to raise capital from the public.

2. Legal Framework

The registration and operation of limited companies in Kenya are primarily governed by the Companies Act, 2015. This Act provides comprehensive guidelines on the formation, management, and dissolution of companies. It also outlines the roles and responsibilities of directors, shareholders, and other stakeholders.

Sources:

  • Companies Act, 2015 ↗

3. Requirements for Registering a Limited Company

3.1. Minimum Requirements

To register a limited company in Kenya, the following minimum requirements must be met:

  • Directors: At least one director who is over 18 years old.

  • Shareholders: At least one shareholder. The director and shareholder can be the same person.

  • Company Secretary: Required for public companies and private companies with a paid-up share capital of KES 5,000,000 or more.

  • Registered Office: A physical address in Kenya where the company’s statutory books and records are kept.

3.2. Necessary Documents

The following documents are required for the registration of a limited company in Kenya:

  • Memorandum and Articles of Association: These documents outline the company’s structure, objectives, and internal regulations.

  • 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 (if applicable).

  • Copy of ID/Passport: For all directors and shareholders.

  • Passport-sized photographs: For all directors and shareholders.

  • KRA PIN Certificate: For all directors and shareholders.

Sources:

4. Step-by-Step Registration Process

4.1. Name Search and Reservation

  1. Create an eCitizen Account: Visit the eCitizen portal and create an account if you do not already have one.

  2. Conduct a Name Search: Use the eCitizen portal to search for the availability of your desired company name. This ensures that the name is unique and not already in use.

  3. Reserve the Name: Once the name is approved, reserve it for a period of 30 days.

4.2. Preparation of Documents

  1. Draft the Memorandum and Articles of Association: These documents should be prepared in accordance with the Companies Act, 2015.

  2. Complete the Required Forms: Fill out Forms CR1, CR2, CR8, and CR10 as applicable.

  3. Gather Supporting Documents: Collect copies of ID/Passport, passport-sized photographs, and KRA PIN certificates for all directors and shareholders.

4.3. Submission and Payment

  1. Submit Documents Online: Upload the completed forms and supporting documents to the eCitizen portal.

  2. Pay the Registration Fee: The fee varies depending on the type of company and the amount of share capital. Payment can be made online through the eCitizen portal.

4.4. Post-Registration Requirements

  1. Obtain a Certificate of Incorporation: Once the application is approved, you will receive a Certificate of Incorporation.

  2. Register with the Kenya Revenue Authority (KRA): Obtain a KRA PIN for the company.

  3. Register for Statutory Obligations: This includes registration with the National Social Security Fund (NSSF) and the National Hospital Insurance Fund (NHIF).

  4. Open a Bank Account: Open a corporate bank account in the company’s name.

Sources:

5. Case Laws and Legal Precedents

Case Law 1: Canuk Holdings Limited v Lutta t/a Lutta & Company Advocates & 2 others; Tuitoek (Objector)

  • Court: High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

  • Date Delivered: 17 Feb 2023

  • Relevance: This case highlights the importance of proper legal representation and adherence to statutory requirements in company registration and operations.

Case Law 2: Habihalim Company Limited v Barclays Bank of Kenya Limited [2019] eKLR

  • Court: High Court of Kenya

  • Judge: J. K. Sergon, J.

  • Outcome: Awarded general damages of Ksh.4,000,000 for slander.

  • Relevance: This case underscores the legal protections available to companies against defamation and the importance of maintaining a good corporate reputation.

Case Law 3: United Millers Limited & another v John Mangoro Njogu Civil Appeal No. 118 of 2011 [2016] eKLR

  • Court: Court of Appeal

  • Outcome: The court held that the maxim volenti non fit injuria does not mean that a person assents to a risk merely because he knows of it.

  • Relevance: This case is significant for understanding the legal principles related to risk and liability in company operations.

Sources:

Conclusion

Registering a limited company in Kenya involves a series of well-defined steps and compliance with statutory requirements. By following the outlined process and ensuring all necessary documents are in order, you can successfully establish a legally recognized business entity. It is advisable to consult with legal professionals to navigate any complexities and ensure full compliance with the Companies Act, 2015.

TLDR

To register a limited company in Kenya, you need at least one director and one shareholder, prepare necessary documents like the Memorandum and Articles of Association, and follow a step-by-step process on the eCitizen portal. Post-registration, ensure compliance with statutory obligations such as KRA, NSSF, and NHIF registrations.

Sources:

Answered by mwakili.com