You are on page 1of 5

BUSINESS REGISTRATION

12 Steps to Registering your Business 1.Company / Business Name Registration This is done at the the Registrar of Companies at the Attorney General's Chambers at Sheria House, Nairobi. The process takes 3 days and costs Kshs. 1,000 per name reservation. The reservation lasts 30 days but can be renewed for a similar period. 2. Memorandum and Articles of Association These documents describe the objectives, rules, subscribers and authorised share capital of your company. This document should also be filed with the Registrar of Companies who, upon satisfaction, issues a Certificate of Incorporation. Make a company seal after your certificate of registration or incorporation is issued. 3. Pay stamp duty at the Bank (registered companies) This costs Kshs. KES 2,005. Forms can be collected from the Kenya Revenue Authority at Times Towers. Bank handling charges cost Kshs 100. 4. Declaration of Compliance (Form 208) is signed before a Commissioner for Oaths or a Notary Public (registered companies). This can be done within a day. 5. The following documents should be filed with the Registrar of Companies:

The incorporation deed Stamped memorandum and articles of association. Statement of capital. Particulars of directors and secretary. Notice of proposed registered office. Declaration of compliance and the prescribed registration fees Copy of the company name approval

6. Register with the Kenya Revenue Authority for a Personal Identification Number (PIN), which is a number which identifies a person for purposes of transacting business with Kenya Revenue Authority, other Government agencies and service providers. This can be done within a day at no charge at Times Towers. Note that for a partnerships, where the partners are not husband and wife, PIN must be obtained. A sole proprietorship uses the proprietors individual PIN for all transactions. 7. Thereafter, register with the VAT office. Value Added Tax (VAT) is a tax on consumer expenditure. The tax is levied on consumption of taxable goods and services supplied or imported into Kenya and is collected by registered persons at designated points who then remit it to the Commissioner. This can be done within a day at no charge. 8. Apply for a business permit. The fee which is payable to the Nairobi City Council, Licensing Department, varies according type of business, number of

employees, and size of the companys premises. Applicants having obtained a business permit to operate from one local authority will not be required to obtain another business permit in another local authority. In addition, business permit applicants will have an opportunity to elect whether to apply for a 1 or 2 year permit. You will need office space prior to submitting this application. 9. Register with the National Social Security Fund. This can be done within a day at no charge. Participation is mandatory. The employer pays a standard contribution of approximately 1% of salary subject to a maximum of Shs.400 per month. One half of the contribution is deductible from the employee's salary. 10. Register with the National Hospital Insurance Fund. This is for the mandatory medical contributions for your employees. Registration can be done within a day at no charge. The employee contributes a fixed sum to the NHIF, which must be deducted by the employer from the employees' salary. The maximum contribution is Shs.320 per month. 11. Register for Pay As You Earn. 12. Congratulate yourself on your new business!

Business Incorporation COMPANIES Under the Companies Act, there are generally four categories of Companies. 1.Company with Limited Liability, known as Private Company Limited 2.Company Limited by Guarantee 3.Public Company 4.Foreign Company

Registration of limited companies is governed by CAP 486 of the Laws of Kenya. 1. Business Name Search The proposed name must be reserved pending registration. Application for reservation is made in writing and must be accompanied with the requisite fee. Names can only be reserved for thirty days. Once a name is approved the applicant should complete a statement of particulars form ( BN2). Any change in particulars of a registered business should be notified to the Registrar on the Notice of change form - BN4 and in case of cessation, Notice of Cessation Form. 2. The Memorandum and Articles of Association should be drawn by a lawyer. The documents sets out he following clauses:

The company name

Location of registered office Company objectives Share capital and share value The subscribers and their share holdings.

The document is then submitted to the Company Registry at Sheria House, Nairobi together with:

Notice of situation of registered office (Form 201) Particulars of Directors & Secretaries (Form 203) Declaration of compliance with Companies Act Requirements.(Form 208) Statement of nominal capital.

All documents should be duly filled, witnessed and executed, and the prescribed fees paid. 3. All companies must appoint a qualified certified public secretary as the company secretary. The details should be filled out in Form 203. 4. Certificate of Incorporation is processed thereafter.

Business Registration The principal types of business enterprises in Kenya are: 1. Sole Proprietorships 2. Partnerships 3. Registered Companies (Private and Public) 4. Branch offices of companies registered outside Kenya 5. Co-operatives Sole Proprietorship A sole proprietorship is a type of business entity owned by a single individual, which legally has no separate existence from its individual owner. All debts of the business are debts of the owner. Income of the firm is also taxed in hands of the sole proprietor. Partnerships Partnerships are made up by at least two individuals and personal liability of all activities rests on each of the individuals. Business income is taxed on the firm. Read about Founders Agreements

Download a sample Partnership Agreement Business Incorporation Incorporating your enterprise gives it the end tag "Limited (Ltd). Owners are deemed to have limited liability for the actions and debts of the company which in itself is viewed as a separate legal entity (separate legal person). Companies can be either private limited or public limited companies. Private limited companies are held by a number of shareholders listed in the Company's Memorandum & Articles. Whilst companies that are traded on the Nairobi Stock Exchange for example Safaricom, are public limited companies. Such companies are composed of shareholders who contribute capital to the company in the form of equity shares. In Kenya, the Companies Act governs the formation and management of companies. In order to register as company, you have to visit the Registrar of Companies at Sheria House to inquire about the availability of the proposed name of your company. After obtaining approval for your business name, the Memorandum and Articles of Association of the proposed company are filed with the Registrar of Companies for registration. On registration, a Certificate of Incorporation is issued. You should be prepared to pay the following costs:

Drafting and printing of the Memorandum and Articles of Association. Stamp duty. Registration. Legal fees.

Opening a branch office of an overseas company An overseas company wishing to open a branch office in Kenya should deliver the following to the Registrar of Companies:

A certified copy of the Statutes or Memorandum and Articles of Association of the Company, or other documents defining the constitution of the company; A list of the directors and secretary of the company; A statement of all existing charges entered into by the company affecting properties in Kenya; Names of one or more persons resident in Kenya authorised to accept, on behalf of the company, service of notices; Address of the registered or principal office of the company in its home country; and, Address of place of business in Kenya.

Foreign Investors Investing in Kenya has now been simplified through the Kenya Investment Authority (KIA). The one-stop business registration concept at KIA has halved the time it takes to register a foreign company. KIA has simplified business registration to a 5 step process:

1. Fill the "One Stop" KIA application Form. 2. Engage legal advice in Kenya. 3. Register your business 4. Submit KIA form + Certificate of Incorporation + Articles and memorandum of association to KIA 5. Issuance of the Investment License

Business Name Advice Your business name is an important marketing tool. Here are some questions for you to consider in devising your business name: Which market are you targeting? For instance a business targeting the youth would have a trendy name, compared to one targeting retirees. What is your business focus? If you are selling insurance, names can revolve around keywords such as "safe, healthy, confident". Or if you bake cakes for sale, maybe the business name could begin with descriptive keywords such as: "delicious, yummy, tasty". Who are your competitors? It is also important to know the market you intend to compete for. In this regard, it is wise to know who your competitors are and what business names they use. Your name could also tell customers how you intend to be different from your competitors. Use words such as "quality, superior" Is your business name easy to pronounce or does it sound as if it dropped from another planet? This in itself may not be a disadvantage for your enterprise. Ask anyone what the words Google, Yahoo or Ebay mean. A catchy name such as these may propel your business name to everyone's lips. Finally, your business name has to be a reflection of who you are. Don't call your motor repair business "Elegant Motors" if you spend most of your day covered in grease!