Chances are you have always wanted register a business. Registering a business in Kenya has become very easy. This is because President Kenyatta wants Kenya to be a business hub in the years to come. Nowadays it’s possible to register a business in the comfort of your home. Therefore, there are several types of business one might decide to venture in, the most common are sole traders, partnerships and Limited companies.

1. Sole trader

A sole trader is also known as a sole proprietorship. It’s the most common form of business. All you need is to register a business as a sole trader is the business name and an individual KRA Pin. However, this business is unincorporated – the business doesn’t have limited liability or separate legal entity.

Some of the advantages include:

  • Very few legal requirement.
  • Complete control- this means that the owner doesn’t consult anyone based of decisions, off days and working hours.
  • Enjoys secrecy. It’s only the Government that knows what you’re doing.
  • Finally, they enjoy all profits alone.

The disadvantages are:

  • A sole traders finances are limited. So finance will come from owners saving, profits or bank loan.
  • Finally, After the owner dies there is no continuity.
2. Partnerships

A partnership is made up of a group of people between 2 to 50 or associations. To register a business as a partnership, there must be an agreement between the parties either verbal or written. The written agreement is called a partnership deed. This business is unincorporated and functions the same as the sole trader.

3. Limited companies

First of all, we have 2 types of companies, that is, Public and private limited company. The main difference is that a company has its own legal entity. This means that the owner(s) and the business are different. The owner buys shares into the company and therefore, they are shareholders. In order to register a business as a limited company you will need: articles of association and memorandum of understanding.

The articles of association shows how the company will be managed. It states what privileges and rights the directors enjoy, how elections are conducted, holding of official meeting and how shares will be issued.

Likewise, the Memorandum of Understanding (MoU) contains important information about the company and directors. The registered name and physical location of the business. It should also contain the amount raised and the shares to be bought by each director.

Some advantages are:
  • The issue of shares means that the business can raise more capital but it can’t sell to the general public, most likely friends and family.
  • All shareholders have limited liability.
Disadvantages include:
  • You cannot transfer you Shares unless there is an agreement.
  • The charts of accounts have to be sent to the registrar making them public.
  • The business cannot sell to the general public.

Furthermore, there are other businesses such as public limited company, Joint venture, Franchise, Co-operatives and Corporations. However, we will not dive into those now.

How to register in on Ecitizen.

In order to register a business you will first need to register on ecitizen platform.

Follow the steps below

  1. Log on to ecitizen and select create an account.
Ecitizen sign up
  1. Select ecitizen Kenyan citizen.
Ecitizen sign up
  1. Fill I your ID number and your first name.
Ecitizen sign up
  1. key in your phone number and Email (They will require you to validate them)
Ecitizen sign up

How to register a business name

  1. Once you register and log into your dashboard select business registration service.
Register a business on ecitizen
  1. Select make application
  1. Select name search and registration
Register a business on ecitizen
  1. Fill in the required fields and validate them in the next page.
Register a business on ecitizen

You will be a charged KES 150 for search for the name and if it’s available, your name will be reserved for 30 days.  

If you register a business as a limited company it will cost you KES 10,650 and if it’s a sole trader or partnership you will need KES 1,000.

In conclusion, having your own business will open for you endless opportunities. So what is the difference between an individual and a business? It involves taxation. As an individual you earn money, then you are taxed and finally you spend what is left. In contrast , a business earn money, then spends it and the government taxes the business profits.

Finally, I hope this information help you start your journey towards entrepreneurship.