CONVERSION OF BUSINESS NAME TO A LIMITED COMPANY IN KENYA.
Most start-ups in Kenya are mostly registered as business names (either a sole proprietorship or a partnership).
After a certain period of time, need arises say diversification which requires the owners to a limited company for the same business.
You need not start from scratch again but only need to convert that business name to a limited company, which enables you to enjoy the following advantages over a business name:
- Separate legal entity
The company is separate from its owners and the companies assets are also separate from the owners.
- Perpetual succession.
A company will always be in existence unless would up even upon death of the directors unlike a sole proprietorship/partnership where the death of the owners may be the end of that business.
- Sole directorship
Many entrepreneurs seek to register sole proprietorships so as to enjoy the priviledge of being the sole decision making.
Even upon converting the same remains since after the enactment of the Companies Act 2015, a company with one director is duly constituted to carry on business.
The Procedure Of Conversion.
- Linking a business if the business was registered under the manual system and not yet on boarded to the online system.
- Apply for the ‘Cessation to Convert’ where you attach the prescribed documents eg the BN2(CERTIFICATE OF REGISTRATION)
- Upon approval of cessation a certificate of cessation to convert is issued
- The process of registering the ceases business name as a company commences.(It is similar to the normal company registration only that no submission of names will be made).