Business Formation Procedure

Setting up a business in Kenya involves a series of legal, administrative, and regulatory steps. Following these steps can ensure a smooth and compliant setup of your business in Kenya. Afribiz Consultancy can assist with each phase, from business formation to compliance management, to help you establish a strong foundation for success.

Below is a comprehensive guide to help navigate the process:

Procedure

1

Decide on a Business Structure

Choose the type of business entity that best suits your goals. In Kenya, common business structures include:

  • Sole Proprietorship: Ideal for small-scale businesses with a single owner.
  • Partnership: Suitable for businesses with two or more owners who share profits and responsibilities.
  • Limited Liability Company (LLC): Offers limited liability protection to shareholders, ideal for larger or growing businesses.
  • Public Limited Company (PLC): Suitable for large businesses that may want to raise capital publicly.
  • Branch Office: For foreign companies that want to operate in Kenya but don’t want to set up a new entity.
2

Name Search and Reservation and Register the Business

  • Visit the eCitizen portal and use the Business Registration Service (BRS) to start Registration Process. Business Registration is Unistep where you provide a minimum of three potential business names.
  • If the name is available, it will be reserved for a 60 days.
  • Complete Sole Proprietorship or Partnership registration online with minimal costs.

For Sole Proprietorship's and Partnerships:

  • Register your business name through the eCitizen platform. This requires basic information, including owner(s) details.
  • Sole proprietorship registration costs are typically minimal, and the process is usually straightforward.

For Limited Liability Companies (LLC):

  • Prepare Memorandum and Articles of Association outlining your company’s objectives and structure.
  • Complete the CR1 Form (company registration form) and CR2 Form (particulars of company directors and secretaries).
  • Appoint at least one director and one company secretary.
  • Submit these documents via eCitizen. The registration fee depends on the share capital of the company.
  • Once approved, you’ll receive a Certificate of Incorporation within 1-2 weeks.
3

Decide on a Business Structure

Choose the type of business entity that best suits your goals. In Kenya, common business structures include:

  • Sole Proprietorship: Ideal for small-scale businesses with a single owner.
  • Partnership: Suitable for businesses with two or more owners who share profits and responsibilities.
  • Limited Liability Company (LLC): Offers limited liability protection to shareholders, ideal for larger or growing businesses.
  • Public Limited Company (PLC): Suitable for large businesses that may want to raise capital publicly.
  • Branch Office: For foreign companies that want to operate in Kenya but don’t want to set up a new entity.