Are you an investor, an aspiring business owner, a professional or have an interest in starting a charitable/public benefit organization/religious or a welfare association?
The choice of the type of registration/incorporation of the desired entity could be determined by factors such as: – the goals of the entity, ownership structure, beneficial owners/other beneficiaries among others.
A number of laws govern the setting up and the running of the profit-making companies, NGOs/Charitable Organizations, religious groups and other entities in Kenya.
For-Profit Entities
At the lowest level, a vast majority of businesses are registered under the Business Names regime as it is fast, affordable and has only minimal requirements. Businesses under this regime are mainly sole proprietorships.
The Companies Act, 2015 provides the registration regime for-profit commercial businesses namely the Private Companies Limited by Shares and Public Limited Companies while The Partnerships Act, 2012 provides for the registration of General partnerships and Limited Partnerships, while Limited Liability Partnerships (LLPs) are governed by the Limited Liability Act of 2011.
Not-for- Profit Entities
Charitable Organizations/Foundations usually register as Companies Limited by Guarantee (CLG) under the Companies Act. Unlike companies limited by shares, a CLG does not have shareholders but has members who act as guarantors.
The other registration form for charitable organizations is through the Public Benefit Organizations Act. These organizations are commonly referred to as Non-Governmental Organizations. Both local and International NGOs must register in order to be granted the authority to operate in the country.
A Charitable Trust is anotherregistration option provided by the Trustees (Perpetual Succession) Act suitable for programmes/projects aimed at alleviating poverty, advancement of educational or any other purpose of benefit to the community.
Other Entities
The Societies Act regulates the registration of clubs, welfare associations and religious entities such as churches.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Organizations should consult us for specific legal counsel.
If you are considering registering/incorporating a business, a charity, an NGO or any other entity in Kenya, please contact us for a consultation on the most appropriate registration regime for you.