For numerous Kenyans, starting a business is a cherished aspiration. One crucial aspect of commencing your own side venture is the registration of your business name in Kenya.
By taking this step, you’ll be joining the ranks of approximately 100,000 small businesses that get incorporated each year in Kenya. Getting this process right is of utmost importance. Surprisingly, statistics reveal that over 60% of SMEs in Kenya remain unregistered.
Unfortunately, there persists a misconception among people regarding business registration. Many assume it to be a lengthy, arduous, and costly procedure, which they believe is meant only for affluent business owners.
Registered businesses in Kenya between 2020 and 2021
In recent years, there have been significant changes to the rules and regulations governing business registration in Kenya, making the process more accessible and cost-effective. As a result, anyone in Kenya can now easily register a business, and there is no longer a requirement to have two or more directors to register a company.
In the past, registering a business necessitated involving lawyers and submitting physical documents to the registrar of companies. However, the process has been streamlined, and now you have the option to register your business conveniently by visiting any Huduma center nationwide or using the government’s eCitizen platform.
So Why Should You register a business name in Kenya?
Registering a business in Kenya holds significant importance for any business owner, offering a range of benefits that are unavailable to unregistered businesses.
By registering your business name, you gain access to the following advantages:
- Credibility: A registered business earns greater credibility and trust from clients and partners. The registration instills confidence that you will fulfill your commitments and not abscond with their funds. Having a business bank account further enhances your professional image, fostering trust and encouraging more sustained business relationships. Moreover, a registered business is eligible to apply for tenders.
- Business Bank Account: Registration enables you to open a business bank account in your business’s name. This facilitates easy receipt of payments from other businesses and individuals, streamlines financial management, and simplifies bookkeeping and tax payments. Additionally, a business bank account enhances your ability to secure loans efficiently.
- Increased Borrowing Power: Registration boosts your borrowing power, making it easier for banks and financial institutions to trust your business and extend credit to you. Moreover, registered businesses in Kenya, especially SMEs, often benefit from lower loan rates.
- Legal Protection: Business owners of registered companies in Kenya enjoy legal protection in the event of their company facing financial difficulties. This protection separates personal finances from business liabilities, safeguarding directors’ assets.
- M-Pesa Business Till Number: Business name registration offers the opportunity to acquire an M-pesa business till number. This allows your customers to make fast and convenient payments to your business. You can also receive payments from other businesses and customers through the till number. Withdrawing funds is hassle-free, providing you with quick access to your money. Moreover, you can use the till number to make payments to your suppliers, reducing the need to visit a bank branch.
Overall, registering your business in Kenya not only lends legitimacy but also unlocks a range of practical advantages that can contribute to the growth and success of your venture.
What do I need to register a business name in Kenya?
To register a business name in Kenya, you will need the following:
- A unique business name: Choose a name that is distinct and not already in use by another registered business.
- Knowledge of how to use the eCitizen portal: The registration process is conducted through the government’s eCitizen platform, so familiarity with its usage is essential.
- National ID copy of the business owner: You will need a copy of your national identification card as the business owner.
- Copy of the KRA PIN Certificate of the business owner(s): Obtain a copy of the Kenya Revenue Authority (KRA) Personal Identification Number (PIN) Certificate for the business owner(s).
- Passport photos: Prepare passport-sized photos of the business owner(s).
With these requirements in hand, you can proceed with the business name registration process through the eCitizen portal in Kenya.
Steps to register a business name in Kenya
Step 1 – Choose a unique business name
Selecting the right business name holds immense significance as it becomes the primary identifier of your enterprise to the world. Therefore, it is vital to opt for a name that is straightforward, easily pronounceable, and one-of-a-kind.
When selecting your business name, it is crucial to consider its alignment with your brand and the products or services you offer. Avoid choosing a name that closely resembles a competitor’s, as this can lead to customer confusion and potential loss of business to your rivals.
Using your personal name as the business name should be avoided, particularly if it does not convey any information about your business and lacks meaning for your customers.
Opt for a scalable name that allows for future business expansion. Consider that as your business grows, you may diversify your offerings, so the chosen name should be broad enough to encompass potential future ventures. For example, if you currently sell clothes, the name should also allow for the addition of shoes and other accessories later on.
Ensure that the name you choose is available and not already in use by another entity. This is especially important if you plan to establish an online presence, as having a unique online identity is essential in today’s digital landscape.
Avoid using acronyms as a business name, as this can lead to confusion among potential customers. It is best to have a name that is clear, easily understood, and communicates the essence of your business.
Step 2- Log in to the eCitizen Portal
After finalizing your chosen business name, the next step is to register it on the eCitizen portal. Begin by visiting the eCitizen website and logging into your account. If you don’t have an account yet, you can easily create one by signing up and following the on-screen instructions provided.
To confirm your email and activate your eCitizen account, follow these simple and straightforward steps:
- Fill in your full names as they appear on your ID.
- Enter your ID number.
- Provide your email address.
- Share your phone number.
- Check your email and click on the verification link sent to you.
- Create a password for your eCitizen account.
- You will receive a confirmation message confirming the activation of your account.
- Once your account is ready, log in to begin using it.
What is the cost of registering a business name in Kenya for 2023?
It will cost you Ksh. 950. Upon payment of the filing fee, you will receive a receipt of payment.
Please be aware that you have the option to make payments directly through the website portal or via the bank, with an m-pesa payment option available. Just carefully follow the provided instructions.
To proceed with the registration, ensure you have the necessary documents ready for upload. You’ll need a signed copy of the pre-registration documents, which should be scanned and uploaded on the website for processing. These documents include copies of the national IDs of the business owners, copies of the KRA PIN Certificate of the business owners, and passport photos.
After submitting the original copies of your documents, you can expect to receive feedback on your registration within 1-2 working days.
Step 3 – Download your certificate of incorporation
After successfully completing your business registration process, an email notification will be sent to your registered email address. To check the current status of your business, simply log into your eCitizen account.
Upon approval, you will receive a Certificate of Incorporation, confirming the official registration of your business under the provided name. This certificate includes essential details, such as the registration date, solidifying your business’s legal existence.
It is crucial to download and securely store this Certificate of Incorporation, as it serves as irrefutable evidence of your business’s registration status. This document holds significant importance in various official business activities, including signing contracts, opening a business bank account, applying for funding, participating in tenders, and other essential operations.
Step 4 – Protect your business name in Kenya
Your registered business name holds significant value as your intellectual property, and it is your responsibility to safeguard it diligently. Aspiring entrepreneurs are constantly searching for suitable business names for their ventures, and if your name is not actively used and protected, there is a risk of losing it.
To ensure the protection of your business name, it is essential to take the following proactive measures:
Acquire Your Domain Name:
A domain name acts as your digital address, making it effortless for your audience to locate your business online. It serves as the identifier they type into search engines to discover your website.
To safeguard your business name effectively, obtaining a domain name is imperative. Once your domain is secured and active, exclusive rights to its use are granted solely to your business. Each domain name is distinct, ensuring that no other business can claim ownership of it. This uniqueness guarantees that your online presence remains distinct and protected.
The ideal domain name ranges from 6 to 14 characters, as shorter names offer numerous advantages. They are easily read, more likely to stick in a visitor’s memory, and take up less space on marketing materials.
To create a memorable domain name, avoid using numbers and hyphens, as they can make the name more complex and harder to recall.
Registering a Domain Name in Kenya
To purchase a domain name in Kenya, opt for a reputable domain registrar authorized by ICANN or the Communications Authority of Kenya. Some reliable options include Lensoft, Hostraha, Bluehost, and others.
To check the availability of your desired domain name, utilize a domain availability checker tool. Simply type your chosen name into the search bar, and the tool will alert you if it is available. If not, the tool will provide you with suggestions of names closest to your preference.
If the extension you desire, such as .com, is unavailable, consider other options like .net or .org that might suit your needs.
Once you find the perfect domain name, proceed to purchase it and complete the registration process. You’ll be prompted to enter your contact information, finalizing the acquisition of your desired domain name.
Create Social Media Accounts
Securing your business name on social media platforms is an effective way to protect it from unauthorized use. Once you establish accounts using your business name, no one else can claim it.
Business social media accounts offer valuable insights into user behavior and content preferences. Tracking user interactions and post engagements helps you gauge which posts resonate with your audience. Additionally, you gain access to paid and promoted posts, a feature unavailable on personal accounts, enabling you to reach a broader audience through targeted ads.
To create your business social media presence, having a dedicated business email address is key. This ensures all notifications are centralized, making organization and management more efficient.
With a business email, you can grant access to assistants, social media managers, or employees, enabling them to handle account management without accessing your personal email.
While creating your accounts, it’s unnecessary to set up profiles on every social channel available. Instead, focus on selecting a few platforms that align with your industry and target audience.
Bear in mind that each social channel has distinct rules and requirements. It is crucial to review and adhere to their specific guidelines. Fortunately, setting up accounts is a straightforward process, requiring basic business information, a logo, and a profile photo.
Create a Google My Business Profile
Google My Business is a complimentary business listing service by Google that empowers you to furnish essential details and images of your business. Through this platform, you can showcase your location, services, and products seamlessly.
By creating a Google My Business profile, you significantly enhance your online presence. Your business information may feature on Google Maps, Google Search, and even Google Shopping, expanding your reach to potential customers far and wide.
By creating a Google My Business profile, you unlock the potential to be easily discovered by individuals seeking products and services that align with your offerings. This profile acts as a guide, showcasing your business location and directions, thus boosting both local SEO and foot as well as web traffic.
Take charge of your business information with a Google My Business profile, allowing you to control and update vital details, including contact information and operating hours. It serves as a platform for posting updates on services, special offers, temporary closures, and re-openings, keeping customers informed and engaged.
Customer reviews play a crucial role in establishing trust and credibility for your business. Through your Google My Business profile, clients can leave reviews, contributing to your reputation and fostering confidence in your brand.
To begin the process, create a Google account, and visit the Google My Business website to sign in. Follow the simple prompts to provide the requested details, including your business name, location, and contact information. Verify your business to complete the process, and then personalize your profile by adding business hours, messaging preferences, a comprehensive business description, and captivating photos.
Step 5: Open a Business Bank Account
To ensure proper financial management and establish your business’s credit history, it’s vital to keep your business and personal finances distinct. Opening a dedicated business bank account is the way to achieve this. Not only does it simplify bookkeeping, but it also paves the way for potential loan facilities from banks.
With a designated business bank account, you project a more professional image to your clients and suppliers. It conveys a sense of credibility, commitment, and long-term vision for your business.
Using a personal bank account for business transactions may lead others to question the stability and legitimacy of your venture. To avoid potential misconceptions, opting for a business bank account demonstrates that you are serious about your business’s success and are committed to establishing it as a bona fide entity.
Head to your preferred bank and inquire about the process of opening a business bank account. Generally, you will be asked to provide the following documents:
- National ID Card
- Business Certificate of Incorporation
- An application form
- KRA PIN Number
By presenting these documents, you can initiate the process of setting up your business bank account efficiently.
Step 6: Apply For an M-PESA Business Till
Safaricom’s Lipa Na Mpesa service revolutionizes the way businesses receive payments for their goods and services. This convenient service is seamlessly integrated into the Safaricom Mpesa menu, simplifying business transactions.
The Till is a distinctive number assigned to businesses for receiving payments, accompanied by an SMS notification. Functioning as a dedicated SIM card, it serves the primary purpose of streamlining payment reception for businesses.
To obtain a Till Number, prepare the following documents:
- Completed and signed application form, along with the agreed-upon terms and conditions.
- Copy of Business Registration or Business Permit.
- Individual or company KRA Pin (Not Mandatory).
- Identification documents of persons opening the account, such as a copy of the National ID, Military Service Number, Passport, or Alien Certificate for Foreign Nationals.
You can get an M-Pesa Business till in 3 ways:
- From your bank: Obtaining a till number from banks is a complimentary service. By linking it to your business banking account, you can effectively manage your cash flow. To apply for a till number, ensure you have an active business and a bank account, then simply fill out the application form provided by the bank.
- From Safaricom: Acquiring a till number from Safaricom is a straightforward process. Visit their offices with the necessary documents, and their staff will guide you through the application. Alternatively, you can self-register by accessing their website. After submitting the completed form, expect to wait for 24 hours to receive the till details via SMS on the registered line.
Next, you’ll need to activate the till using the nominated number. To initiate the activation process, dial *234# on your phone and select “M-pesa Business Till.” Enter the store number you received via SMS to complete the activation.
- From Kopokopo: To obtain your till number from Kopokopo, make sure to have the following documents ready:
- Completed application form
- Copies of your National ID (front and back)
- Renewed business permit or business name certificate of registration
- Compulsory KRA PIN for businesses settling to the bank
- Bank letter or canceled cheque for merchants settling to the bank
Head to their website to access the form. Provide all the necessary details as requested and carefully follow the instructions provided. By completing the form accurately, you can efficiently secure your till number from Kopokopo.
Step 7: Set Up an Accounting System
Implementing an accounting system empowers business owners to effectively monitor their assets, liabilities, income, and cash flow. This system plays a crucial role in tracking the financial performance of the business, providing valuable insights that lead to well-informed decisions.
A well-designed accounting system allows business owners to plan ahead, identify potential challenges, recognize strengths, and demonstrate the viability of their business. By leveraging the benefits of such a system, business owners can optimize their financial management and foster long-term success.
Starting a structured accounting system from the outset facilitates the creation of vital financial reports for your business.
Collaborate with a professional to determine the most suitable tracking system tailored to your specific requirements. Personally, I recommend utilizing Zoho Books for sending quotations, invoices, recording expenses, and generating receipts.
If you require assistance in setting up Zoho Books for your business, do not hesitate to reach out. I’m here to help and ensure your accounting processes run smoothly.
Step 8: Branding & Marketing
Having laid the groundwork for your business’s success, the next step is to spread the word. Develop a comprehensive marketing plan that precisely targets your ideal customer base.
In this plan, focus on branding and marketing your business effectively. By establishing a strong brand identity, you differentiate yourself from competitors and emphasize the reasons that make your offerings a superior choice. This strategic branding approach ensures you stand out in the market and attract the right audience.
A brand serves as an authentic representation of your business and the image you strive to project to the world.
Embracing a well-defined brand enhances your business’s market value, attracting new customers, fostering employee satisfaction, and instilling trust in the marketplace.
At the core of any business lies the objective to generate revenue, and marketing serves as the catalyst for achieving this goal by effectively promoting and selling your products and services.
Through strategic marketing efforts, customers gain a deeper understanding of the value, utility, and unique aspects of your offerings, beyond what may initially meet the eye.
To delve further into the world of branding, I invite you to explore my next article, “How to Design an Attractive Business Brand Identity in Kenya.” In it, you will discover valuable insights to craft a compelling brand identity that resonates with your target audience.
How Much Does It Cost To Register A Business Name In Kenya?
The registration cost for a business in Kenya varies based on the type of business being registered. The fees can range from KES. 950 to KES. 25,000.
For the registration of a business name, the cost is KES. 950. Here’s a detailed breakdown of the registration costs for different types of businesses in Kenya:
- Business Name Registration – KES. 950
- Private Limited Company – KES. 10,650
- Public Limited Company – KES. 10,650
- Unlimited Companies – KES. 20,050
- Company Limited by Guarantee – KES. 10,000
- Limited Liability Partnership – KES. 25,000
The specific fee depends on the category of business you are registering. It is essential to consider these costs while planning to register your business in Kenya.
Registering a business name in Kenya is a crucial step towards establishing your brand identity and ensuring exclusivity for your business. By preparing all the necessary documents beforehand, you can expedite the registration process and avoid unnecessary delays. Having your business name officially registered provides legal protection, ensuring that no one else can use it, and allows you to confidently market your business without any interference or confusion in the marketplace.
Overall, taking the time to register your business name demonstrates professionalism, safeguards your unique identity, and lays a strong foundation for future growth and success in the Kenyan business landscape. With this essential process completed, you can focus on building and promoting your business with the confidence that your brand is secure and legally protected.