Business anywhere in the world is not easy to start. It is even harder in Africa. Starting a business isn’t as obvious as people who have done it over and over make it seem to be.
As of 2020, Kenya has the brightest looking markets in East Africa. Business In Kenya must be looking fruitful.
There are so many small logistics you need to know as someone who is venturing into business for the first time. Some of the things I share here will save you millions of shillings both in the short and long run.
Read to the bottom of this article. We included some fundamentals you as an entrepreneur will need in video form. Read till the bottom of this article to get the link to the video.
Come up with the Business concept:
The business concept is crucial. It is your starting point before anything is done at all. Ask yourself the relevant questions at this phase
When coming up with a concept, there are some core questions you need to ask
- What are we offering? (Which specific good or service)
- For Who?
- How are we going to get the people that need to know that we are offering this service or Good to know that we are solving a problem for them?
Once you come up with logical answers to these questions, you are well on your way towards starting your business.
Read: Business In Uganda
Registering Your Business:
Registering a business in Kenya is easy.
The registrar of companies in the country is in charge of everything to do with business enlisting. He or she controls the whole process, including the issuance of certificates of compliance and incorporation. To get such accreditation, you need the following documentations:
- National Social Security Fund (NSSF) card
- Kenya Revenue Authority (KRA) certificate
- National Hospital Insurance Fund (NHIF) membership
- A national ID or passport
In addition to the above, the following are the additional requirements to register a company in Kenya:
- An active email address
- Phone number
- A passport-sized photo in soft copy format
- Active internet connection
- Business name
- Company details such as directors Registration fee and a payment method such as a Visa card.
Opening an eCitizen account
Gather all the stated documents and follow the steps below:
1. Open your browser: Connect to the internet, double-tap on its icon to launch it.
2. Create an account.
3. Enter your national identification number: You should use a valid one. Otherwise, you will not proceed to the next stage. A company can have directors abroad. However, one of them must be in Kenya to submit the required documentation.
4. Enter your first name: Key in as it appears on your ID card.
5. Validation: Press the validate button, which is usually in blue.
6. Specify your contact details: Type in a valid email, retype it again in the text box below and give out your mobile number.
7. Set a password: Confirm it by keying in a second key similar to the first one.
8. Accept terms and conditions: Tick the box just below your screen.
9. Click on the “Continue” button: It is green in color and will take you to a new window.
10. Verify the mobile number: Initiate the verification code SMS by pressing the button shown below as soon as you confirm the phone number is correct.
Once you receive the one-time password digits, enter them in the text box shown and press the “Verify Code” button then move to the next step. Name search and reservation Now you have successfully opened an eCitizen account, and it is time to get into the actual phase. You should adhere to the following:
1. Navigate to “Business Registration Service”: Press the “Get-Service” button next to it. This option is visible on the portal homepage.
2. Start the application: Press the “Make Application” button.
3. Choose your company type: There are six types of entities in Kenya, namely:
- Private Limited Company (LTD): A company limited by shares.
- Public Limited Company (PLC): Members can transfer shares as they wish.
- Company Limited by Guarantee (LTD): Liability is limited by members’ contributions in case of a wound up.
- Limited Liability Partnership (LLP): Combines elements of a company to those of partnership.
- Foreign company: An existing corporation registered in another state other than its origin country.
- Sole proprietorship: A company owned by one individual.
4. Registration of business name: Next, you need to apply for Name Search and Reservation. All the applicants are required to undertake this procedure, which takes one day for processing. Before initiating it, it is essential to know that:
- Companies with an “Enterprise” at the end cannot use initials such as J.K, Kevo, Jonte, or even Brian.
- Names with “Foundation” suffix must be registered as Limited by Guarantee.
- Names with “Projects,” “Groups,” “Holdings,” and “Universities” should be under limited.
- Single words are rejected. For instance, you cannot name your organization, “Soko.”
- Offensive words are unacceptable regardless of whether they are in your mother tongue or vernacular.
- Political names such as “Ukambani Youth Alliance” are forbidden.
- Numbers in the name are not accepted unless it’s the current year. For example, “Anti-Locusts limited, 2020.”
- Names with a prefix “Kenya” are only used by government agencies.
- Church, ministry or ministries are unacceptable.
- Trust Foundation suffix is never allowed.
- The registrar deals with companies only and not clubs or societies.
- Welfare, organization, or association names are never accepted.
5. Specify any special instruction: If the company is affiliated or an extension of a reserved name, then you should indicate so here.
6. Describe the chosen name: Include a brief account of your company, which should be less than 185 characters long.
7. Press the “Continue” button: This is a grey button on the bottom right part of your PC screen.
8. Confirm the information provided: A brief review of your application will be shown. Go through it to ascertain if it is correct. Check the tick box just below the section and click on the “Finish” option.
9. Pay the application charges: Name Search Fee of Ksh. 100 and Convenience Fee of Ksh. 50 is payable. You can use the following methods to top up:
- Debit/Credit/Prepaid Card
- Airtel Money
- KCB Cash
- Equity Cash
Each of the mentioned methods will have a set of instructions including which account you should enter/deposit money to and pay bill numbers. You only have to specify it so that they can appear. Card payments will attract an extra handling fee of Ksh. 4.5.
After approval, you should now move to the next stage, which involves completing the stated documentation.
1. Fill in the company details on form CR1: Begin by specifying your firm’s name, location, type, and so on. Indicate whether you have articles of association or not. Specify the business start date, number of employees, and accounting period.
The contact address field is mandatory and should be filled correctly. Enter the details of all the directors and attach their KRA PIN certificates, Passport-sized pictures, and ID card. You should also make sure the company structure is well shown in the document as well as paid-up capital.
2. Specify your company’s directors: This should be captured on form CR8. This is a requirement by the Kenyan government, and each of the directors’ residence information should be included. Include their legal names, home addresses, signatures, and dates.
3. Specify your businesses’ nominal capital: This is usually on the BN6 questionnaire. The KRA requires all the new companies to declare their capital holdings. On this document, fill in your approved firm name and your name. Under the corresponding text boxes, indicate how much capital you have in Kenyan shillings. In the case of a public limited company, specify the number of shares.
4. Stamp duty payment: You need to get the above form sealed by the Kenya Revenue Authority. You will be given instructions on how to pay for the stamp duty as soon as you produce the valid Kenyan ID numbers of all your shareholders and employees. The amount paid is equivalent to 1% of your nominal capital. The minimum is Ksh. 2,140. You will also shell out Ksh. 100 for each document t that requires verification.
5. Draft the Memorandum and Articles of Association: The two outline your company’s objectives, rules, authorized capital share, and subscribers. Before filling your final paperwork, make sure these documents are well-written by an advocate or an administrative assistant.
- Memorandum of Association (MOU) details the business name, how many shareholders you have, and the value of each share.
- Article of Association entails rules and regulations. It also contains members’ liability, powers of directors, rights of shareholders, and specifies how directors are appointed and removed.
6. File complete forms and pay the registration fee: Forms CR1, CR8, and BN6, as well as MOU and Article of Association, should be collected together. Relevant copies of the needed documents should be attached. Seal all these in a large envelope and address them to the registrar of companies.
Nairobi residents should deliver it to the Business Registration Department manually for faster processing. To finish the registration phase, you need to pay Ksh. 10,650 via the eCitizen portal. Alternatively, you could use a credit card at the Registrar’s office.
The envelope should be addressed to:
The Chief Registrar of the Judiciary,
Supreme Court Building, P.O BOX 30041 – 00100, Nairobi, Kenya.
7. Download your Business registration certificate: Finally, log into your eCitizen account, follow prompts to save your certificate to your local disk. You should note that it takes around 1 week for KRA to go through all your documents and accept your application. Sometimes, this might even take close to 21 days.
Business registration service customer care contacts
In case you have any queries, uncertainties, or experiencing any technical difficulties, use the contacts below to reach out:
Phone number 1: +254 020 222 7461
Phone number 2: +254 020 225 1355
Telephone number: 0900 620 206
The procedure on how to register a company in Kenya online is that simple. You only need to create an account at ecitizen.go.ke, then search for a unique name, fill in the required information, and finally pay the registration fee.
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