If you’re currently operating as a sole proprietor or partnership, you might be considering registering a private limited company for benefits such as limited liability, tax efficiency, and business credibility. In Kenya, company registration is done through the Business Registration Service (BRS), an online system under the Office of the Attorney General. Here’s a step-by-step guide on how to register your company.
Step 1: Choose the Right Type of Company
A private limited company is the most common business structure in Kenya. It is limited by shares, meaning the liability of shareholders is restricted to the amount unpaid on their shares. Other types of companies include companies limited by guarantee, which are best for non-profits, and public limited companies, which are suitable for businesses planning to raise capital from the public.
Step 2: Create an E-Citizen Account & Access BRS
Company registration in Kenya is done entirely online through the Business Registration Service (BRS) portal on eCitizen. To begin the process, you must create an eCitizen account if you don’t already have one. Once logged in, navigate to the Business Registration Service (BRS) section and select "Register a New Company." This will direct you to the online company registration process, where you will be required to enter details about your business.
Step 3: Reserve a Company Name
Your company must have a unique name that is approved by the Companies Registry. To increase your chances of approval, submit at least three name options in order of preference. It is advisable to conduct a name search on the BRS platform to check for availability before submission. Avoid names that closely resemble existing companies or contain restricted words, such as those suggesting government affiliation. Certain industries, such as financial services, may require additional regulatory approval for company names. Once your name is approved, it will be reserved for 30 days while you complete the registration process.
Step 4: Define Shareholding and Capital
Your company must declare its nominal capital in a Statement of Nominal Capital during registration. There is no minimum capital requirement for most businesses, but certain regulated industries, such as financial services, may have statutory capital thresholds. A standard company often starts with Ksh 100,000 nominal capital, divided into 1,000 shares valued at Ksh 100 each. The company must also specify its shareholders, who may be individuals or corporate entities, either local or foreign. Shares can be classified as either ordinary or preferential, depending on the voting and dividend rights associated with them.
Step 5: Appoint Directors
A private limited company must have at least one director, who may be a local or foreign national. However, a local director is often required to facilitate tax registration with Kenya Revenue Authority (KRA). It is advisable to draft a Director’s Service Agreement to clearly define their rights, responsibilities, and tenure.
Step 6: Prepare Articles of Association
The Articles of Association define how the company operates, outlining key aspects such as decision-making processes, shareholder rights, and share transfers. You may choose to use the default Companies Act articles, but for businesses with specific operational needs, custom articles drafted with legal assistance are recommended.
Step 7: Submit Registration Documents via BRS
To complete the registration process, all necessary documents must be submitted through the BRS portal on eCitizen. These documents include CR1 (directors' and shareholders' details), CR2 (shareholding structure), CR8 (directors’ residential addresses), BOF1 (ultimate beneficial owners with 10% or more shareholding), and the Statement of Nominal Capital. Once these documents are verified and approved, the Companies Registry will issue a Certificate of Incorporation and CR12, which serves as a summary of the company’s structure. The entire process typically takes between 7 to 14 days.
Step 8: Register for a KRA PIN & other Tax Obligations
Once the company is incorporated, you must comply with the tax obligations. This includes:
These registrations are mandatory and are completed through the KRA iTax portal and respective bodies.
Step 9: Obtain a Certificate of Incorporation
Once all documentation is in order and fees paid, the Registrar of Companies issues a Certificate of Incorporation. This legal document marks the formal registration of the company and includes:
The certificate is available for download via the eCitizen portal, usually within 5-7 business days
Step 10: Open a Company Bank Account
To open a company bank account, you will need notarized identification documents, including passports or ID cards of directors and shareholders, the Certificate of Incorporation, CR12, and the company KRA PIN certificate. Some banks may also require proof of a registered office address. The processing time varies between banks and can take anywhere from two days to one month.
Step 11: Ensure Ongoing Compliance
Once your company is registered, it is essential to remain compliant with statutory regulations. This includes filing annual returns with the Companies Registry, submitting corporate tax, VAT, and withholding tax returns, and renewing business permits and industry licenses where applicable. Non-compliance with these requirements can result in penalties or even deregistration of the company.
How Much Does It Cost?
At the time of writing, the government registration fee for a private limited company in Kenya is approximately KES 10,650, though this amount is subject to change. Other costs may include legal, tax advisory, and accounting fees depending on the services required during and after registration.
Transitioning to a limited company provides legal protection, tax benefits, and enhanced business credibility. However, it also comes with added compliance responsibilities. The decision to incorporate should be based on factors such as liability protection, tax efficiency, and the long-term goals of your business.
At Makabe Consulting, we help businesses register private limited companies seamlessly. Our experts also provide professional tax planning, accounting, and compliance support to ensure your business stays compliant and profitable.
Get in touch today for a free consultation and let’s set your business up for success!
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