Kenya Company – LTD (Private)
As a registered LTD, a business will enjoy legitimacy and greater credibility when dealing with other companies, banks and potential partners or investors than would, for example, a sole proprietor. An LTD is recognized as a legitimate company and not as an individual engaging in business. Kenya has many advantages and a fast growing economy
Benefits of registering and incorporating a company in Kenya
Many businesses in Kenya are not registered. Statistics show that more than 80 percent of businesses in Kenya are Small Medium Enterprises (SME) but more than 60 percent of them are not registered as companies. This is because most people still think that registering a company is a “rich man’s affair.” They think that registering a company is expensive and only left for the rich.
In the last couple of years, the rules and regulations governing the registration of a company in Kenya have been made easier, and it is now a more affordable process. This means that anyone in Kenya is eligible to register a company. Registering a company in Kenya is no longer a matter of how much money one has but the interests that one hopes to achieve. For instance, previously, for one to register a company, a company had to have two or more directors. That is no longer a requirement for one can now register a company with one director. In other words, one can have a ‘one-man company’.
The advantages of having a company in Kenya are many.
Some of the advantages include:
- The business will appear credible when bidding for tenders and signing contracts.
- It is less expensive to borrow finances to expand the business due to great borrowing power when one has a registered company.
- Legal protection that separates directors from their individual finances if the company goes under.
- Companies in Kenya are required to pay corporation tax at a rate of 30% on worldwide income for local resident companies and 37.5% for foreign registered companies and their branches in Kenya with regard to income derived from Kenya.
- Shareholders in a company in Kenya have limited liability and the veil of incorporation protects shareholders from liabilities in the company’s name.
- Annual returns must be filed and so must any material changes in the company’s capital, directorship, registered address and shareholding.
- A company in Kenya can be wound up voluntarily by shareholders or members or by operation of a court order.
- There are various rules relating to requirements on companies preparing annual audited financial statements, but generally small companies with a turnover of less than KES 50M in a year are exempt from those particular provisions under the Companies Act.
Minimum Requirements for a Private Company to be Incorporated in Kenya
There must be:
- a minimum of 1 shareholder;
- a minimum of 1 director;
- a stated share capital;
- a registered address in Kenya;
- the names and contact details of the ultimate beneficial owners – who are natural persons, (required under the Companies (Beneficial Ownership Information) Regulations, 2020);
- a choice on whether the company shall be a public or private company;
- and a choice on whether the company is to be limited by shares or by guarantee.
Incorporate you Kenya Company Now