The government has clarified the cost of registering a company limited by guarantee following public uproar over the high costs of registering a business in Kenya.

The Business Registration Service (BRS) clarified that the amount needed to register such a company was revised to Sh10,000 admitting a slight after the video by digital activist Lucia Ayiela lamenting over the exorbitant charges went viral.

Ayiela, in the video, expressed outrage over hidden costs when registering a company limited by guarantee through the government’s e-Citizen platform.

“As a young and unemployed person, I decided to be proactive in creating employment for myself as we are told. Last week I begun the process to register a company limited by guarantee to operate as a non-profit for civic education and capacity development,” Ayiela said.

She said she was charged Sh3,000 at first but after making corrections in her application, she was charged an extra Sh7,000, which she felt was punitive for the many young jobless Kenyans seeking to start a company.

Read More

  1. Registrar refuses public disclosure of IPP owners citing Data Protection Act
  2. Kenyan bags Sh33 million in Jack Ma’s Africa Business Heroes awards

However, in a rejoinder, BRS Director General Kenneth Gathuma said in a statement said the change in said high fee was configured late into e-Citizen resulting in the confusing costs.

“The fee adjustment of a Company Limited by guarantee is Ksh.10,000. This is in accordance with the Companies Act (No.17 of 2015) under Part 2 “Fees Payable in Relation to Company Limited by Guarantee” that revised the fee from Ksh.3,000 to Ksh.10,000. The revised fee rate was subjected to a legislative process and a special gazette notice issued on 22nd February, 2017. The change in fee however, was configured on the eCitizen platform on 8th February 2021 as a rectification measure,” said Gathuma.

He maintained that the business registration processes do not stifle youth entrepreneurship.

“We wish to bring out clearly that a company limited by guarantee (CLG) is an alternative type of corporation used primarily for non-profit organisations that require legal personality. These types of companies are not typically used by the youth as platforms for engaging in business activities. A company limited by guarantee requires all directors and guarantors to undergo vetting before the company is registered,” he clarified.

“BRS still provides an opportunity for anyone who wishes to start a simple business under the Registration of Business Names Act, for as little as Ksh.850 in one simple step. When these businesses grow, one may consider converting the same to a limited liability company to harness further opportunities,” Gathurima concluded.