WHAT IS THE COST OF REGISTERING A COMPANY IN KENYA

WHAT IS THE COST OF REGISTERING A COMPANY IN KENYA

The cost of registering a company in Kenya is guided by the government of Kenya statutory fee. The fee differs among the different types of companies.

Types of company in Kenya

Private companies

Public companies

A company limited by guarantee

                   What is a Private Limited Company?

A private limited company, or LTD, is a type of privately held small business entity. This type of business entity limits owner liability to their shares, limits the number of shareholders to 50, and restricts shareholders from publicly trading shares. In Kenya private limited companies are done under the companies’ act of 2015 .Management of this type of companies require less capital and labour force as compared to public companies.

Advantages

Let’s look at some of the advantages of having a private limited company.

Limited Liability

 One advantage of owning a private limited company is that the financial liability of shareholders is limited to their shares. Therefore, if a private limited company was in financial trouble and had to close, shareholders would not risk losing their personal assets. Although, perpetrating a fraud related to the private limited company would negate an owner’s limited liability protection.

Restricted Trade of Shares

The restriction placed on the sale or transfer of shares may be considered an advantage or disadvantage, depending on your outlook. It is an advantage to some shareholders because shareholders who want to sell shares cannot sell them to outside buyers. Shareholders must also agree to the sale or transfer of shares; therefore, the risk of hostile takeovers is low. The restriction placed on the sale of shares is a disadvantage because shareholders have limited options for liquidating shares.

Continued Existence

Another advantage of a private limited company is its continued existence, even after the owner dies or leaves the business. Private limited companies are incorporated. When a business incorporates, it becomes an independent legal entity, meaning it is able to sue or own assets separate from the company owner. A private limited company differs from a sole proprietorship in that the latter is owned by a single individual who is personally responsible for the company’s business debts and essential to its continued existence.

                          PUBLIC COMPANIES

What Is a Public Company?

A public company is a corporation whose ownership is distributed amongst general public shareholders via the free trade of shares of stock on exchanges or over-the-counter markets. Although a small percentage of shares are initially floated to the public, daily trading in the market determines the value of the entire company.

It is considered to be “public” since shareholders, who become equity owners of the company, may be composed of anybody who purchases stock in the firm.

Company Limited by Guarantee in Kenya

Company Limited by guarantee  is most often formed by non-profit organizations such as NGO, charitable trust, foundations, sports clubs, workers’ co-operatives and membership organizations, whose owners wish to have the benefit of limited financial liability.
A company limited by guarantee does not have any shares or shareholders (like the more common limited by shares structure) but is owned by guarantors who agree to pay a set amount of money towards company debts.
Furthermore, there will generally be no profits distributed to the guarantors as they will instead be re-invested to help promote the non-profit objectives of the company. If any profits are distributed to the owners, then the company will forfeit its right to apply for a charitable status.

What are the Benefits of Company Limited by Guarantee over other forms of charitable organizations.

A company limited by guarantee is a distinct legal entity from its owners, and is responsible for its own debts.
The personal finances of the company’s guarantors are protected. They will only be responsible for paying company debts up to the amount of their guarantees.
‘Limited’ status builds trust and confidence amongst clients and sponsors – this type of professional credibility is valuable and can help a company achieve its objectives more effectively.
Can own property in its name
the functions of the company are not monitored/regulated by registration bodies.

Cost for company registration in Kenya is ksh 10,750 government statutory fee. This fee may rise when using an agent or lawyer to offer these services.

Contact us for more information on company registration services in Kenya on 0746522216 or info@oclassociates.co.ke