Starting a business in Kenya.

The Covid-19 wave has brought with it several challenges and adjustments to the lives of many across the globe and Kenyans are no exception. The resultant effect has been, job losses, pay-cuts, unpaid leave among others. According to a report by The East African dated June 5th 2020, over 1million people have lost their jobs in Kenya, The East African the report also revealed that some other workers have been put on indefinite unpaid leave.

As such, some have resorted to starting their own enterprises in order to boost earnings and provide for themselves and or, their families. However, not many know how to go about this and perhaps they ask themselves:

  • How does one register a business in Kenya?
  • Do you need a Lawyer to register a business in Kenya?
  • Are there fees charged for registering a business in Kenya?
  • What documents are required when registering a business in Kenya?

At Ondaba Advocates we have continually advise new and existing clients on how to set up their enterprises based on the peculiar nature and demands of each enterprise.

Quick steps involve the provision of statutory documentation i.e. National ID and KRA PIN, a recent colored passport photo as well as ECitizen credentials for locals. Foreigners are required to add copy of a validly issued Passport, dual citizenship (where required), special pass, residence permit and/or work permit. If the foreigner has not procured the above paperwork, proof of concept and funds to setting up the enterprise must be availed.
We should also be quick to add that the Companies Act, 2015 has legalized the set-up of a company to a minimum of one legal person as opposed to prior requirements of two legal persons. Keep in mind, a Legal Person in this context refers to both human individuals and registered legal entities.

Next is to determine the type of business one seeks to register. Each category requires different documentation and statutory charges which your legal counsel will advise

Here is why you need A Lawyer 

Your attorney will charge you legal fees during consultation and guidance for:

  • Business activities to be carried out
    Legal counsel are best placed to advise the pros and cons of each legal entity’s registration process. Remember, the registration of an enterprise is like birth of a baby and therefore survival heavily depends on child care thereafter. It is important to have clear objectives of the enterprise from the word-go in order to avoid unnecessary complications down the road.
  • Capital/Investment advisory
    Various enterprises will have different capital investment thresholds and therefore it is important that as investor, you get sufficient counsel on the set-up requirements of your business enterprise.
  • Tax Implications
    Tax application to the enterprises will also differ and vary based on the applicable Tax regime. In addition, periodical tax policy/regime reviews MUST be taken into consideration and where necessary procure Tax Advisory on best operational practice.
  • Conversion of a business e.g. sole proprietorship into a partnership, Limited company into a public company etc.
  • Company/Partnership resolutions e.g. retiring or resigning of a partner, dispute resolution, appointment or removal of directors
  • Drafting, validation, witnessing, amendment and dissolution of agreements and contracts
  • Ownership and shareholding as well as level of control
  • General management of the business
  • Limited Liability protection
  • Business continuity, perpetual succession and insolvency
  • Relevant operational licenses from both National and County governments.

In a nutshell, the setting up of an enterprise in Kenya has been made easy and therefore improving Ease of Doing Business index as compared to many African states. However, entrepreneurs are advised to consult legal counsel to avoid legal set-up pitfalls that often times turn nasty and cripple a promising enterprise to its knees.
Talk To Us today to get on the-go counsel on best business practices!
ENDS.

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