Establishing a Company Limited by Guarantee
Understanding the specific requirements for limited by guarantee company Kenya is essential for entities focused on non-profit objectives, such as charities, clubs, and professional associations. Unlike companies limited by shares, these entities do not have a share capital; instead, members guarantee a nominal amount to be paid if the company is wound up. Mwenda Njagi & Co. Advocates & Mediators specialises in guiding organisations through the intricate legal process of forming such companies under the Companies Act, 2015.
Key Legal and Statutory Requirements
To register a company limited by guarantee in Kenya, several core requirements must be met. This includes having at least two members who act as guarantors, each agreeing to contribute a specified amount (the guarantee) towards the company's liabilities upon winding up. The company must have a unique name, subject to approval by the Registrar of Companies. Crucially, the Memorandum of Association must clearly state that the company is limited by guarantee and outline its non-profit objectives. The Articles of Association will detail the governance structure, member rights, and operational procedures, ensuring compliance with regulations overseen by bodies like the NGO Coordination Board for certain types of organisations.
Documentation and Filing Procedures
The formation process involves meticulous preparation of key documents. These include the application for reservation of a company name, the Memorandum of Association, and the Articles of Association. Both documents must be signed by all initial members (guarantors). Additionally, forms such as the Statement of Nominal Capital (even though there is no share capital, a nominal amount is stated for the guarantee) and details of directors/secretaries are required. These are filed with the Business Registration Service (BRS). Mwenda Njagi & Co. Advocates & Mediators ensures all documentation is accurate and compliant, streamlining the filing process.
Legal Representation in Kenya
Mwenda Njagi & Co. Advocates provides legal advisory and court representation across Kenya and all 47 counties in Kenya.
Benefits and Legal Considerations
Companies limited by guarantee offer significant advantages, primarily their non-profit status and the limited liability of members. Profits are reinvested into the organisation's objectives, not distributed to members. However, they are subject to stringent reporting requirements and oversight. For legal guidance and to ensure all requirements are met, our firm provides expert services. Our advisory fees for setting up a limited by guarantee company typically range from KES 45,000 to KES 90,000, excluding government statutory fees. This includes comprehensive assistance with documentation and registration.
