Is forming a limited company in Kenya expensive?

Thinking of starting a business or already have a business that you know you should register as a limited company but for some reason, you still haven’t made up your mind to see a lawyer for more information? Or are you just wondering if forming a limited company in Kenya is expensive? NOTE that you can register a limited company in Kenya – as one person (the only director) – or with two or more people (if you want a company with more than one director) – all at a cost of 25,000 Kenyan Shillings – if you are a Kenyan.

I don’t know the current level or form your business is in right now. But if you think that incorporating your business as a limited liability company is expensive, think again.

It might be expensive in the short term but prove to be excessively cheap down the road when you are enjoying all the benefits that come with the incorporation.

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So, why do some business owners drag their feet?

Table of Contents

1 So, why do some business owners drag their feet?

1. They think their business is not big enough

There are business owners who look out there and see thousands of businesses worthy of being registered as limited liability companies.

If you ask them why they think their business isn’t worth all the hassle that comes with incorporation yet, they’ll say or do things that can be summarized in the following sentences:

my business isn’t big yet
my business is still bringing in a little profit and I don’t want to tie all that cash in the process
there are better things I can use the money for, or
registration or no registration, there won’t be any difference, especially to a tiny business like mine

2. They don’t know the benefits that come with a Limited Company –

– specifically that their business, after incorporation, will be treated, at law, as a body corporate – separate legal person or entity that can sue or be sued, own property, have contractual capacity among other things.

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If they knew all this, they wouldn’t hesitate putting some money aside for the process. The best thing a business owner in this situation can do is to find more answers to the numerous questions they may have about the pros and cons of limited companies.

See a lawyer about this and ask them as many questions as you can. The goal here is to learn more of what can help you and your business, as is expected of every business owner.

Visit their firms, talk over the phone or invite them over for lunch and simply become a sponge. Learn as much as you can.

You can also buy business books that expand on what is already provided in the Companies Act and various legislations touching on limited liability companies, partnerships, and sole proprietorship.

Meanwhile, you can jump straight to Google or Wikipedia to learn a little here and there before you pay the lawyer a visit.

3. They don’t know where and how to start

Not knowing and doing nothing doesn’t help here. If not knowing s what’s stopping you, get in the know, as soon as possible. There are thousands of professionals ready to help you every step of the way.

All you need is know what you want (incorporating your business) then go look for the people who can help you accomplish this goal, like the lawyers I told you to pay a visit.

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4. They don’t have the money to incorporate their business

What do I say to the business owners who use this as their big reason why? Take your emotions and yourself out of your business for a moment and really look at what you created.

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