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 Registration Steps >>>