Definition and regulation of a company.

A company is legal separate entity (also referred to as ‘artificial person’) formed by an individual or group of individuals (also referred to as ‘natural persons’) to engage in the commercial or industrial activities.

In the Republic of Kenya, company incorporation is the process undertaken by a promoter of a company to register a company with the registrar of companies as prescribed by the Companies Act, 2015.

Major differences between a company and other forms of business entities

A. Company registration

Requirement for company registration

In Kenya to register a company the following are the requirements:

• The proposed name of company.
• Nature of the business and the intended objectives of the company.
• Names of the proposed directors of the company.
• Names of the proposed shareholders/ members if different from the directors.
• Contact information of the directors and shareholders i.e. email address, telephone number, postal address and residential addresses.
• Proposed nominal capital of the company
• Proposed capital structure of the company.
• Class of shares being issued by the company.
• Passport photographs of the proposed directors and shareholders.
• Proposed physical address of the company.

The process of company registration in Kenya

The promoter of the company will lodge the process of incorporation with the registrar of companies by;

• Fronting at least three names of the company according to the order of their preference.
• Executing the following documents;
• Form CR1- Application for Registration Form,
• Form CR2- Model Memorandum of Association,
• Form CR6- Notice of Appointment of Directors and Particulars,
• Form CR8- Notice of Residential Address of Directors,
• Statement of Nominal Capital and,
• Statement on the proposed beneficial owners of the company.
• Making payment with the registrar of companies.
• Thereafter, the registrar confirms the name reserved.
• In completion the registrar of companies issues a certificate of incorporation.

Transfer of share(s) and change of directorship

Transfer of share(s) and change of directorship of a company is usually lodged with the registrar of companies by one of the existing director(s) of the company or by a Certified Public Secretary of Kenya (CPSK) on behalf of the company.

The process of transfer of shares and/or change of directorship occurs when the company intends to;

• Increase or decrease the number of members and/or,
• Increase or decrease the number of directors.

At MNC Consulting Group, we help our clients realize the proper procedure for their needs and facilitate in the process to ensure that process is duly lodged and completed in accordance to the law stipulated in the Companies Act, 2015.

General requirements for transfer of share(s) and change of directorship

• Copy of Certificate of Incorporation,
• The company must have filled all its annual returns for the previous years with the registrar of companies and,
• The company must file interim returns (for part of the current incomplete year).

For addition of director(s) and member(s)/shareholder(s) the following must be present;

• Minutes of the meeting in which the resolution(s) were made,
• Full name of the new officer(s) (i.e. director(s) or member(s)),
• Consent from the person(s) being appointed as director(s),
• Contact information i.e. email address, telephone number, postal address and residential addresses,
• Passport size photo for the new director(s) or member(s) and,
• Class and number of shares being issued to a new member.

For reduction of director(s) and member(s)/shareholder(s) the following must be present;

• Minutes of the meeting in which the resolution(s) were made,
• Written resignation letter and affidavit from the outgoing director(s) and,
• Parties involved i.e., the transferor(s) and transferee(s) should sign a transfer deed (Form of transfer).

Following the execution of the above stated requirements and documents, we at MNC Consulting Group follow the statutes requirements in the Stamp Duty Act, and thereafter lodge the transfer with the registrar of companies.

At MNC Consulting Group, we not only provide you with fast and reliable services for your business but also offer you fast and reliable communication. Our experienced experts have reputably given our clients confidence through excellent customer service to individuals and groups of individuals (both locals and foreign nationals) seeking to company related services in Kenya.

Follow this link to FIND OUT THE TRANSACTION COST OF COMPANY REGISTRATION, TRANSFER OF SHARES AND CHANGE OF DIRECTORSHIP

About the Author

Thank you for reading this article. The author, James Ndambiri is an avid Business Advisor and Consultant: A Tax Surgeon, Proficient Accountant, Skilled Auditor, a Guru in Financial and Investment management, Expert in Business Strategy Formulation, Business Transformation Wizard, Family Business Advisor, Lecturer, Business Coach and a Family Man.

James is the Founder, Team Leader, CEO & Managing Partner of MNC Consulting Group. MNC Consulting Group is your most trusted and respected professional business consulting firm recognized by our clients for delivering excellent business advisory and consulting services that create value to their ventures. With our focus set on value addition, we offer our clients the highest quality professional services in Accounting, Audit and assurance, Tax, Business Transformation, Investments and Financial Advisory, Family Business Advisory, Company Secretarial Services and Property Management that addresses their business needs through attracting, recruiting and retaining knowledgeable and passionate professionals who enable us to deliver superior results while contributing positively to the community in which we live and work.

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