There are four different types of Kenyan registered companies:
- Private company limited by shares (Ltd). The members’ liability is limited to the amount unpaid on shares they hold
- Private company limited by guarantee – the members’ liability is limited to the amount they have agreed to contribute to the company’s assets if it is wound up
- Private unlimited company – there is no limit to the members’ liability
- Public company limited by shares (Plc) – the company’s shares are offered for sale to the general public through a stock exchange and the members’ liability is limited to the amount unpaid on shares held by them.
Other business entities include;
Partnerships – overseas investors can establish a partnership in Kenya. The partners have ‘joint and several’ liability for all debts.
- Limited Partnerships – consists of one or more persons called ‘general partners’ who are liable for all debts and one or more persons called ‘limited partners’ who contribute a sum or sums of money as capital, or property valued at a stated amount. Limited Partners are not liable for debts/obligations beyond the amount contributed.
- Limited Liability Partnership – this structure provides the benefit of limited liability but allows its members the flexibility of organizing its internal structure and tax arrangements as a traditional partnership.
You are strongly advised to seek legal advice before deciding on the best entity that suits your kind of business.