Home» Registering a limited liability company in Kenya involves the following steps and fees

Registering a limited liability company in Kenya involves the following steps and fees
(Excerpted from Doing Business 2011, World Bank Group)


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Procedure

Duration

Associated Costs

1

State registration of legal entity, statistical, and tax registration with the Center for Public Registration

The company name reservation lasts 30 days but can be renewed for a similar period.


3 days

KES 100 per name reservation

2

Stamp the memorandum and articles and a statement of the nominal capital

Effective January 1, 2005, the Kenya Revenue Authority (KRA) took over stamp duty collection from the Ministry of Lands and Housing. As an administrative requirement, the KRA now requires the personal identification numbers (PINs) of all parties on whose behalf duty-stamped documents are submitted. Documents must be first assessed by the Stamp Duty Office before payment can be processed by the KRA-designated banks. The process has lengthened initially to about 2 weeks because the Stamp Duty Office waited to receive confirmation of bank payment after clearance of funds. However, the time has reduced in 2008 as a result of better communication between the Ministry of Lands and housing and Kenya Revenue Authority (KRA) to 5-10 days. Bank handling charges of KES 100 for each transaction are also due.


5 days

1% of nominal capital + KES 2,020, stamp duty on Memorandum and Articles of Association

3

Pay stamp duty at bank

1 day (included in the previous procedure)

KES 100 bank commission

4

Declaration of compliance (Form 208) is signed before a Commissioner of Oaths /notary public

According to the Companies Act (Cap. 486), An advocate engaged in the formation of the company or a director or company secretary named in the Articles must sign Form 208, the declaration of compliance, which accompanies the registration documents to be submitted to the Registrar of Companies. (Simuletanous with procedure 2)


1 day

KES 200

5

File deed and details with the Registrar of Companies at the Attorney General's Chambers in Nairobi

The founder must file the incorporation deed and the required documents and forms (listed below) with the Registrar of Companies, which includes:
- Stamped memorandum and articles of association.
- Statement of capital.
- Form 201, Notice of Situation of Registered Office.
- Form 203, Particulars of Directors and Secretary.
- Form 208, Declaration of compliance with the Companies Act.
- Copy of the company name approval

Fee schedule for registration:

- For the first KES 100,000: KES 2,800.
- For every KES 20,000 after the first KES 100,000: KES 120, subject to a maximum of KES 60,000.
- Filing fee for three forms: KES 600.


7- 14 days

KES 6360

6

Register with the Tax Department for a PIN and VAT online 

Registration for a personal and a company identification number (PIN) is required to register for the VAT (PIN certificates of at least two directors or 2 shareholders or a director and the secretary are required), the local service tax, and the pay-as-you-earn (PAYE) tax. The founder must file the certificate of registration and a copy of the memorandum and articles of association. IDue to new online reforms, the application for a PIN and VAT registration can now be done concurrently on-line. Unless the KRA has already received confirmation of incorporation of the company from the Companies Registry, one must still submit the Certificate of Incorporation and receive log-in details from the KRA for the purpose of applying for a PIN and VAT registration.


1 - 2 days

No Charge

7

Apply for a business permit

The fee to apply for a business permit varies by type of business, number of employees, and size of the company’s premises. The fee is payable to the Nairobi City Council , Licensing Department. The City Council will issue a business permit.

Fee schedule for business permit:
- Medium trader, shop, or retail service from 5 to 20 employees and/or premises 50–300 sq. m. (fair location): KES 5,000.
-Mid-size business of 50 employees and premises 300 sq. m.: about KES 20,000 to KES 50,000, depending on the nature of the business.

The Licensing Laws (Repeals and Amendments) Act , 2006 (enacted in December of 2006 and came into effect on May, first, 2007), amends the Local Government Act (Cap. 265) by reducing the number of business permits required for a distributor of goods or provider of services to carry on its business activities. Applicants having obtained a business permit to operate from one local authority will not be required to obtain another business permit in another local authority. In addition, business permit applicants will have an opportunity to elect whether to apply for a 1- or 2-year permit. The 2006 law also eliminated the requirement to obtain a trading license in addition to the permit.


5 days

KES 5,000

8

Register with the National Social Security Fund (NSSF)

The National Social Security Fund  provides the employee with a lump-sum retirement benefit. Historically, the rate of return paid by the state is considerably less than that achieved by private schemes, but participation is mandatory. The employer pays a standard contribution of about 1% of salary, subject to a maximum of KES 400 per month. Half the contribution is deductible from the employee’s salary. The precise amount of the contribution (where less than the maximum) is determined by reference to salary bands.


1 day

No Charge

9

Register with the National Hospital Insurance Fund (NHIF)

The employee contributes a fixed sum to the National Hospital Insurance Fund  (NHIF), which must be deducted by the employer from the employees’ salary. The maximum contribution is KES 320 per month. The contributions are used to offset the costs of medical treatment, but they only cover a fraction of actual costs. Hence, most companies provide employees with medical insurance.

 

1 day

No Charge

10

Register for PAYE 

1 day

No Charge

11

Make a company seal after a certificate of incorporation has been issued

Seals are made by private entities who require sight of a copy of the certificate of incorporation.


2 days