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How to Register a Private Limited Company In Kenya 2024

Private Limited Company In Kenya

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Registering your Private Limited company in Kenya marks the first step towards a successful business journey. Private limited companies, often referred to as LTDs, are a common business structure in Kenya.

LTDs have a specific group of shareholders who benefit from limited liability protection, safeguarding them from personal responsibility for the company’s debts. These companies are obligated to submit their financial statements to the Kenyan government on an annual basis.

Whether you’re a resident or a foreigner, you can establish a private limited company as long as you adhere to Kenyan laws governing such entities. Despite seeming like a significant undertaking, private limited companies can be owned by a single individual.

To initiate the process of starting a private limited company in Kenya, the easiest route is to register through the government’s online service portal, eCitizen. You’ll need to create an account on the platform, or if you already have one, proceed with the registration.

For those without an eCitizen account, visit accounts.ecitizen.go.ke/en/register, providing only your ID number and a passport photo for Kenyan citizens. To ensure a smooth registration, all individuals must present valid identification documents.

Aliens should use their Alien IDs, diplomats their diplomat IDs, foreigners their foreigner IDs, and visitors their passports.

Businesses in Kenya fall into various categories, and it’s crucial to be aware of them before starting the private limited company registration process. Failing to do so may lead to consequences such as application cancellation or delays in company registration.

How to Register a Private Limited Company In Kenya

Step 1: Figure out the best type of business for you

It’s important for business owners to know the category their company belongs to before registering it. Here are some options:

  1. Limited Liability Partnership (LLP)
  2. Private Limited Company
  3. Company Limited by Guarantee.

1. Limited Liability Partnership (LLP)

An LLP is a business setup that blends the advantages of a company and a partnership. This setup ensures that the partners are not held personally accountable for the LLP’s debts or obligations, safeguarding their personal belongings.

In Kenya, the personal assets of private limited company shareholders are also shielded if the company is owed money by banks or creditors.

This business structure also comes with tax perks and losses. All profits and losses go through each partner and are taxed at their individual income tax rates.

Professionals like lawyers and accountants often choose this structure because it provides liability protection and organizational flexibility, making it a popular option.

2. Public Limited Company

A public limited company is a type of business allowed by the law to sell its shares to the public. The company can decide when and how to sell its shares, and it also has the option not to sell them.

Both shareholders and the company itself have limited liability, meaning that the personal assets of shareholders are not at risk if the company has debts. Any money the company invests is its own risk, and shareholders and directors don’t need to worry about the company’s debts affecting their personal finances.

This type of company is a separate legal entity, which means its directors and shareholders have their own responsibilities and legal rights. The debts of the company are not the personal debts of its directors and shareholders.

If you’re thinking of starting a business to expand operations and raise capital from investors, a public limited company might be the right choice. It offers high transparency, making it appealing to both investors and larger businesses.

3. Private Limited Company

A Private Limited Company (LTD) is a kind of business where a small group of people or companies own shares of the company.

Unlike public companies, LTDs can’t sell shares to everyone. The owners have limited liability, meaning their personal stuff is safe from the company’s debts. LTDs are good for changing ownership because you can easily buy or sell shares.

They’re flexible and seem more reliable, which attracts investors looking for growth and profit. LTDs have a board of directors, 2 to 50 shareholders, and are legally separate. This means the company’s problems won’t affect the owners’ personal things.

4. Company Limited by Guarantee (CLG)

A Company Limited by Guarantee (CLG) is a type of organization typically utilized by non-profits, charities, or clubs. Unlike other companies, it lacks shareholders or share capital.

Instead, it functions based on a commitment made by its members to contribute a specific amount if the company encounters financial difficulties. Members are not personally responsible for debts beyond this agreed-upon amount, protecting their personal assets.

CLGs prioritize social or charitable objectives over profit-making, relying on memberships and donations to fund their activities. Now that you’re familiar with the various business structures available in Kenya, let’s delve into the step-by-step process of registering a Private Limited Company in Kenya.

Step 2: Prepare Registration Requirements

  1. Proposed Company Names
  • Uniqueness and Originality: Provide at least three unique and unused business names.
  • Name Search Convenience: A recommended name search through the eCitizen platform to avoid conflicts.
  1. Clearly Defined Business Objectives
  • Articulate Your Business Purpose.
  • Identify Key Goods and Services.
  1. Identity Documents for Directors, Shareholders, and Beneficial Owners

Step 3: Register Your Company with eCitizen

  1. Access the eCitizen Portal at http//:accounts.ecitizen.go.ke/en/login.
  2. Navigate to Business Registration Services and select “Private Limited Company.”
  3. Complete the Application Form with details such as proposed names, articles of association, registered address, share information, and details of shareholders, beneficial owners, and directors.

Step 4: Complete the Registration Process

  1. Download and Print Registration Documents: CR1, CR2, CR8, BOF1, Statement of Nominal Capital.
  2. Sign, Scan, and Upload: Sign printed documents, scan into high-quality PDFs, and upload to eCitizen.
  3. Review, Submit, and Pay: Thoroughly review information, submit the application, and choose a payment option.
  4. Fee Schedule: The registration fee for a private limited company is KES 10,650.
  5. Approval and Issuance of Certificate: Upon verification, receive a Certificate of Incorporation through your eCitizen account.

How to Convert a Business Name to a Company

Step 1: Essential Requirements for Company Registration

  • Business name.
  • Clearly Defined Business Objectives.
  • Identity Documents, Passport-Size Photos, and Contact Information for Directors, Shareholders, and Beneficial Owners.
  • Professional Certification if applicable.

Step 2: Convert Business to Company on eCitizen

  1. Go to your eCitizen account.
  2. Click on Business Registration Services (BRS) and select the registered business name.
  3. Under business details, go to make application and choose Cessation to Change, then select changing to PVT (Private Limited Company).

What to Do After Company Registration in Kenya?

1. Buy a Company Domain Name

Buy a Company Domain Name: Purchase a unique domain name to establish your online presence and protect your business name.

Choose a short and memorable domain name, ideally between 6 to 14 characters. Short names are easier to read, stick in visitors’ memories, and require less space on marketing materials. Make it memorable by avoiding numbers and hyphens.

To buy a domain in Kenya, select a reliable registrar authorized by ICANN or the Communications Authority of Kenya, such as Creative Kigen Cloud HostPoa, DeepAfrica, KenyawebExperts, Godaddy, or Bluehost. Use a domain availability checker tool to verify if your preferred domain is available.

Simply type your desired name into the tool’s search bar. If it’s available, you’ll be alerted; if not, you’ll receive suggestions similar to your choice. If your preferred extension (e.g., .com) is unavailable, consider alternatives like .net or .org.

2. Get a Company Website

Private Limited Company In Kenya

Once you find your desired domain, purchase and complete the registration by providing your contact information.

3. Setup Company Emails

  1. Set Up Company Emails
    A company email uses your custom domain, like [email protected], enhancing professionalism and credibility. Follow the video guide below to create one easily in a few minutes.
  2. Build a Company Website
    In today’s digital era, a company website is crucial. Find a reputable web designer to create compelling content and design elements reflecting your brand identity. Ensure mobile responsiveness, implement basic SEO, bolster security, and regularly update the site. A well-designed website acts as a vital online presence, offering information and engaging potential clients effectively.

Total Cost Breakdown for a Corporate Website in Kenya:

Upfront Costs:

  • Design: Ksh 90,000 – Ksh 150,000
  • Domain: Ksh 1,000 – Ksh 2,000/year
    Total Upfront Cost: Ksh 91,000 – Ksh 152,000

Ongoing Costs:

  • Hosting: Ksh 3,500 – Ksh 6,500/year
  • Content Updates: Ksh 0 – Ksh 20,000/year
    Total Ongoing Costs: Ksh 3,500 – Ksh 26,500/year

4. Create Social Media Accounts

Private Limited Company In Kenya

Secure your company’s name by creating social media accounts. This prevents others from using your name. Social media accounts enable tracking of user interactions and preferences, allowing for the use of paid and promoted posts and ads, unavailable on personal accounts.

To set up your company’s social media accounts, you’ll need a company email address. This email will help you keep all your notifications organized in one place.

This also means that if you want to give access to an assistant, social media manager, or employee to handle your social media accounts, you won’t have to share your personal email with them.

You don’t have to create accounts on every social media platform. Just choose a few that are relevant to your industry.

Remember, each social media platform has its own rules and requirements, so make sure to go through them. Setting up accounts is easy – all you need is basic business information, a logo, and a photo.

5. Create a Google My Business Profile

Next, create a Google My Business Profile. It’s a free listing from Google where you can share details and photos of your company, including your location, services, and products.

Having a Google My Business profile can boost your online visibility, and your information may show up on Google Maps, Google Search, and Google Shopping.

Private Limited Company In Kenya

Creating this profile makes it easy for people searching for your products and services to find you. It helps them discover where your business is located and how to visit. This boosts your local SEO and increases both in-person and online traffic.

With a Google My Business profile, you can manage and update important company information, such as contact details and business hours. You can also share updates on services, special offers, and any temporary changes like closures or reopenings. Customers can leave reviews on your Google My Business profile, helping you establish trust and credibility.

To set up a Google My Business profile, you’ll need a Google account. Visit their website, sign in, and follow the steps to provide the necessary details. Enter your company name, location, and contact information, then verify your business. Customize your profile by adding business hours, messaging preferences, a description, and photos.

6: Open a Corporate Bank Account

Step 6: Open a Corporate Bank Account To open a corporate bank account in Kenya, choose a bank that fits your business needs and schedule a meeting to get started.

Private Limited Company In Kenya

Gather all the papers you need, such as:

  1. Your Certificate of Incorporation
  2. Memorandum and Articles of Association
  3. Tax PIN certificate, company seal
  4. Identification documents for directors and signatories.

Take these documents to the bank, complete the necessary forms, and follow any extra rules, like a minimum deposit and ID checks. Check and agree to the account terms before waiting for approval. Once approved, activate the account by depositing the required initial funds. Keep in mind that each bank has its own processes, so it’s best to talk directly to your chosen bank for clear instructions.

7. Set Up an Accounting System

Set up an accounting system. This helps business owners keep track of their assets, liabilities, income, and cash flow. It makes it easier to monitor the business’s financial performance, allowing for better decision-making. A good accounting system lets business owners plan, identify potential issues, recognize strengths, and show that the business is viable.

Private Limited Company In Kenya

Establishing a proper accounting system early on is crucial for generating important financial reports.

Collaborate with a professional to find the most suitable tracking system for your requirements. Personally, I use Zoho Books to manage quotations, invoices, receipts, and track expenses.

If you require assistance in setting up Zoho Books for your business, feel free to reach out.

Now that your business is ready for success, it’s time to spread the word. Develop a plan to promote your products and services to your ideal customers.

8. Branding & Marketing

You’ll also need to create a brand and market your business. Branding helps you stand out from competitors and clearly communicates why you’re the better choice.

Private Limited Company In Kenya

A brand reflects your business identity and how you want to be seen. It enhances your market value, attracts new customers, boosts employee satisfaction, and fosters trust. Ultimately, the goal of any business is to make money, and marketing plays a key role in selling products and services, driving sales.

Through marketing efforts, customers learn about product value, usage, and other essential information. To delve deeper into branding, read my upcoming article on crafting a compelling business brand identity in Kenya.

Pros of a Private Limited Company in Kenya:

  1. Limited Liability: Shareholders’ responsibility is limited to their capital contribution, safeguarding personal assets.
  2. Distinct Legal Identity: A Private Limited Company has its own legal identity, separate from owners, allowing it to own assets and engage in contracts.
  3. Continuous Existence: The company persists regardless of ownership changes, providing stability.
  4. Easy Funding: Raising capital through shares attracts external investment.
  5. Tax Benefits: Eligibility for tax benefits makes Private Limited Companies tax-efficient.
  6. Credibility and Trust: Adding “Pvt. Ltd.” to your company name builds confidence with customers, suppliers, and partners.

Cons of a Private Limited Company in Kenya:

  1. Compliance Burden: Adhering to regulatory demands, including financial reporting and audits.
  2. Complex Setup: Higher process and cost compared to simpler structures.
  3. Share Limits: Limited share transfers, max 50 shareholders in Kenya.
  4. Public Disclosure: Financial information is publicly viewable, impacting privacy.
  5. Exit Complexity: Selling or leaving is more intricate than with other structures.
  6. Slower Decisions: Involvement of shareholders and directors may slow decision-making.
  1. Cost of Registration: KES 10,650, including name search, registration fee, stamp duty, shares certificate, and annual filing fees.
  2. Starting a Company: Choose a unique business name, appoint directors and shareholders, gather required documents, submit on eCitizen or in person, pay fees, and obtain the certificate of incorporation.
  3. Registering on eCitizen: Create an account, prepare company documents, fill out forms, upload documents, make payment, and await approval.
  4. Minimum Share Capital: No minimum share capital required, but consider credibility, future growth, and necessary fees.
  5. Single-member Company: A single person can be a private limited company, but it has advantages and disadvantages.
  6. Registration Time: Takes 3 to 7 working days, depending on document readiness and accuracy.
  7. One Director: Possible for a private limited company to have one director, called a single-member company.
  8. Advantages: Limited liability, easier access to capital, reduced risks, and stability.
  9. Disadvantages: Limited liability exceptions, taxation, complex setup, limited growth potential, high administration costs, potential disputes, and exit complexity.
  10. Number of Directors: At least one director required; the number depends on the Articles of Association.
  11. Control of the Company: Directors and shareholders control a private limited company, with powers and voting rights determined by shareholding ratios.

In conclusion, registering a private limited company in Kenya is a complex process, requiring careful planning and accurate documentation. Ensure compliance with the Companies Act of 2015 and other tax regulations for a successful business journey.

  1. What is the cost of registering a private limited company in Kenya?

    Registering a private limited company in Kenya incurs a total cost of 10,650 KES. The detailed breakdown of charges includes:
    -Name search: 150 KES
    -Registration fee for a Limited Company in Kenya: 10,000 KES
    -Stamp duty: 1% of the authorized share capital of the company
    -Shares certificate: 500 KES per certificate
    -Annual filing fees: 50,000 KES

  2. How do I start a private limited company in Kenya?

    Establishing a private limited company in Kenya is a straightforward process; just follow these steps:
    1. Create a unique business name that hasn't been registered before. Check its availability on the Company Registry website.
    2. Appoint shareholders and company directors. Opt for at least one director and shareholder for your Kenyan private limited company. Directors oversee company management, while shareholders handle shares.
    3. Gather necessary documents, including Form CR14, Form CR 1, Form CR2, Form 8, and a statement of nominal capital.
    4. Submit these documents either on eCitizen or in person at the Company Registry office in Nairobi.
    5. Pay the required fees for a name search (150/=), company registration (10,000/=), and stamp duty (1% of the business share capital).
    6. Obtain the certificate of incorporation, confirming the legal registration of your private limited company in Kenya.
    7. Open a company bank account to handle your financial transactions.
    Obtain a KRA PIN certificate for the company, which can be acquired online through the KRA website.
    8. Secure a business license to operate legally.

  3. How to register a private limited company on eCitizen?

    Visit the eCitizen portal for a streamlined process of registering your private limited company. If you don't have an account yet, start by creating one at https://www.ecitizen.go.ke/.
    Gather the necessary company documents for registration, including Form CR14, Form CR1, Form CR2, Form 8, and the Statement of nominal capital. Download these forms from the portal, fill them out, and then upload them.
    Once all your forms are prepared, go to the Business Registration Service, and choose “Private Limited Company” as the business type. Carefully complete the form and upload scanned copies of the required documents.
    Conclude the process by making a payment through your preferred payment method from the options provided. Double-check your entries for accuracy before submitting. Upon submission, await approval and receive a notification, along with an electronic version of your private limited company's certificate of incorporation. Download and print the certificate for your records.

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