How to register a Limited Liability Partnership in Kenya
A limited liability partnership combines elements of a partnership and that of a company. It is a hybrid business entity. The term-limited liability partnership refers to the fact that the liability of each member is limited to his/her share in the partnership. A member of the partnership in a limited liability partnership is only liable for his/her share in the profits of the limited liability partnership. An ordinary partnership has no limited liability
The limit of each LLP partner‘s liability is agreed upon between the members and usually stated in a partnership agreement. This means that the liability of an LLP is limited to what the partners invest in the partnership and any personal guarantees put in place. Beyond this, the members‘ assets and finances are protected..
When it’s registered, it becomes a corporate, legal, entity separate from its members and can own property in its own name. It’s also effective from a tax perspective as the partnership income is taxed on the individual income of each partner and isn’t subject to Company Tax.
LLPs are easier to register as compared to a general partnership because the formalities in the process are considered less such as no need of a memorandum of association. Unlike a general partnership, LLPs allow for the inclusion of a body corporate as a partner. Another feature of the LLP is the requirement that a manager is appointed.
They are registered under the limited liability partnerships Act of 2011.
Requirements to register a Limited Liability Partnership in Kenya:
Three preferred names for the name search and reservation.
Name of the activities the business shall undertake.
If it is a partnership; the name of the partners in full and if it is a corporation, both the name and copies of certificates of incorporation.
Postal address for the LLP.
The proposed physical address of the partnership i.e. the name of the road, plot number, town, county, etc.
Copies of National ID or passport of the partners.
Passport photos of the partners
Copies of the PIN certificate of the partners.
Names of the manager.
National ID/ Passport number of manager.
Postal address of the manager
Consent to act as the manager.
Simple steps to register a Limited Liability Partnership in Kenya:
A name search is conducted to find out if the proposed names are available. If the name is available, then the name is reserved pending registration of the limited liability partnership which is done with the prescribed fee.
Application for registration is done where the statement of particulars (form LLP1) is filled with the relevant information and signed by the partners and the manager and eventually lodged with the Registrar.
The Certificate of registration is then processed and issued to the partners.
If the name is not available, the applicant can make alternative arrangements with the Registrar upon reopening the application for name search. This will enable the applicant to choose an alternative name. The registration of the original name can be resumed upon the successful completion of name search of the alternative name. A fee will be charged to the applicant to open a new application.