Let’s make it easier to register businesses in Kenya

Hi wonderful readers

A few days ago, I was helping my niece to register a new business. She wanted to register a (limited liability) company. We found someone to do it for us – the person, a lawyer, charged us Kshs 20,000/-

Now, I was just thinking. If any man/woman in the street wants to start a business and needs a company, they would need to also pay this 20,000, wouldn’t they? For many start up businesses that I have known, this amount is simply too much. The money can be better used elsewhere.

In the spirit of helping all of us become better, financially and otherwise, I was thinking if at all we can do anything to make it easier to register companies in Kenya.

The biggest hurdle is drawing up the Articles & Memorandum of Association, isn’t it? While at school, we were taught that there are draft copies of these documents at the registrar. Is that so? Are they usable?

My idea is this: can we make draft copies of these documents that can serve “any business under the sun” and make them available for free download to anyone? In my humble opinion, it would be of massive help to aspiring entrepreneurs out there.

While at it, perhaps we can also do the same for partnerships, sole proprietorships and other forms of businesses. Ama?

What do you think? I’m no lawyer so, who wants to help?

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  1. Kelvin, I agree with you that we should make business process formation simpler. However, I am not so sure I agree that limited liability companies should be the preserve of all. The fact that people want to limit their personal liabilities through company formation doesn’t really sit well with me.

    However, for partnerships and sole proprietorships the process is so easy, you can do it yourself just fill in the application forms and pay 800bob for the registration.

    • Hi mama and thanks for your insightful comment. Mama, don’t you think that details on this registration process are not available to the vast majority of people out there? That’s what I wish to see change. But how?

  2. Details on registration are available online!! (sheria house have a website). Availing articles of association to all may be a good idea- but among the documents filed for registration of a company is form 208-Declaration of compliance with the Provisions of the Companies Act, required to be SWORN by either an advocate, a company secretary or a director of the company. The director may not be conversant with the provisions of the Companies Act, so swearing as to its compliance beats the purpose of swearing (i.e. knowing it to be true). On the other hand to engage a lawyer or company secretary means having to pay their fees- (they gotta eat too!!) Pls note: even if u save during registration, if a trained person doesn’t look at it, probably you will still have to pay for changes later if for example, you deal with a bank (while looking for a loan).

    • Imagine that when we wrote this, Sheria House did not have a website and the whole process of business registration seemed like a great and costly mystery. We wanted to make it easier for guys and we did (see: http://likechapaa.com/2009/12/simple-business-registration-in-kenya/ )

      We wanted, and still do, to provide sample articles and memoranda of association following one lawyer wanting to charge us 30k for just those (and then other fees for his professional assistance). I believe that if one could access this documents and then work with a lawyer, things may be easier. Do you agree?

      • I am starting my own company. I have already submitted a name seacrh. I have drafted my own memorandum and articles of association. However, I would need the services of a lawyer to proofread it. Can one bypass this process without the intervention of a lawyer? Are there any sample articles of association one can go through?

        Thanks for your informative article.

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