How to incorporate a Limited Liability business in Kenya: eCitizen edition

In the midst of an ongoing pandemic, entrepreneurship continued to be a key option according to data released. With the pandemic having adverse effects on employees, retrenchments, furloughing and even redundancies, it can be frustrating. Hence, with more time on their hands, a majority of people were forced to venture into business, either to supplement their income or a new path. The first step one can take involves incorporating the business.

Incorporating a business in Kenya can be done easily through the eCitizen platform. As such, incorporating a business is much faster, with no need for lawyers or specialized knowledge, just following all the requirements.

There are various ways you can incorporate your business. This includes as a proprietorship, partnership or a limited liability company. These are the most common and are not cumbersome to register.

As you take the brave step of starting your business, highlighted below are the advantages and disadvantages of incorporating a limited liability business:

Advantages of incorporating a limited liability business

• A limited liability company is a separate legal entity from you the owner and the directors. As such, this eliminates the risk to your personal assets that legal proceedings or credit issues could bring.
• A limited liability business can be able to issue and transfer shares in order to raise funds.
• A limited liability business can foster business continuity even with the exit of the founder. With that, this can give the business longevity to operate as a going concern.
• A limited liability business can be easily dissolved. There are clear guidelines and procedures when the owners want to dissolve the business as a result of adverse effects to the business impacting the ability to continue as a going concern.

Disadvantages of incorporating a limited liability business

• It can be costlier to incorporate compared to other structures such as proprietorship or a partnership.
• You are required to comply with the structure of a limited liability such as a board of directors.
• There is more complexity in managing this structure. This is from annual reports to careful accounting records.

How to incorporate in Kenya

With the knowledge on how to incorporate a business in Kenya and the merits and demerits of incorporating as a limited liability company, you can go ahead to take the next steps.