Kenya is the business hub of East Africa. Whether you are a local startup or a foreign investor, the first step to doing business is formal registration. However, the biggest mistake entrepreneurs make is choosing the wrong Business Vehicle.
Should you register a simple Business Name? A Private Limited Company (Ltd)? or a Limited Liability Partnership (LLP)? Your choice determines your tax obligations, your personal liability, and your ability to raise capital. In this guide, we simplify the Companies Act (2015) to help you decide.
In This Guide:
1. Choosing the Right Structure
Before you log into eCitizen, you must understand the difference between the three main business types.
| Feature | Sole Proprietorship | Limited Company (Ltd) | LLP (Partnership) |
|---|---|---|---|
| Liability | Unlimited (Risky) | Limited (Safe) | Limited (Safe) |
| Taxation | Personal Income Tax | 30% Corporate Tax | Pass-Through Tax |
| Ownership | 1 Person | Shareholders & Directors | Partners & Managers |
| Best For | Small Shops / Kiosks | Scalable Startups / SMEs | Law Firms / Doctors |
2. The 5-Step Registration Process
Thanks to the Business Registration Service (BRS), the process is now fully digital via eCitizen. Here is how we handle it for our clients:
- Step 1: Name Search: We reserve your proposed business name (e.g., "Nairobi Tech Ventures Ltd").
- Step 2: Drafting the CR1: We prepare the Memorandum & Articles of Association outlining the company's objectives.
- Step 3: Director Details: We upload KRA PINs, Passport Photos, and IDs of all directors.
- Step 4: Payment & Submission: The government fee is paid, and forms are signed digitally.
- Step 5: Certificate of Incorporation: Within 3-7 days, the Registrar issues your Certificate and CR12.
3. The "Beneficial Ownership" Rule
This is a critical update. As of 2020, every company MUST disclose its Beneficial Owners (BO)—the actual humans who own more than 10% of the company, even if they are hiding behind another company.
"Failure to file the Register of Beneficial Owners attracts a fine of up to Ksh 500,000. Do not ignore this step after registration."
4. Post-Registration Compliance
Getting the certificate is just the beginning. To operate legally, you must:
1. Open a Corporate Bank Account: Banks require the CR12 and a Director's Resolution.
2. KRA PIN Registration: The company gets its own PIN for filing taxes.
3. NHIF & NSSF: You must register as an employer if you have staff.
4. Business Permit: Obtained from the Nairobi City County (or your local county).
Start Your Business the Right Way
Avoid the headache of rejected applications and compliance fines. Let Mutea Muthuri & Associates handle your company registration from start to finish.
Ready to Register Your Company?
We can have your Certificate of Incorporation ready in 5 days.