Advantages of Registering a limited Company in Kenya
Advantages of registering a limited company in Kenya are many.However incorporation of a limited company involves filing some papers.This is done with the Registrar of companies(Sheria House). Where a Registration Certificate is issued as legal recognition of existence.
Limited liability means that the liability of members is limited to the amount paid to acquire shares. This can only change if the directors had traded fraudulently.Or if the company continues to trade after being struck off .
Advantages of Registering a limited Company in Kenya are as follows:
- First of all the business appear credible when bidding for tenders and signing contracts and overall bigger client pool.
- Another advantage is there is clear defined roles and responsibilities between directors, shareholders and the management.
- Most of all greater borrowing power to expand business as financing from shareholders is less expensive.
- In addition to ability to work with various agencies as division of labor is effected
- Legal protection that separates directors from their individual finances if the company goes under.
- The company obtains its own PIN No, Bank account, Assets and liabilities, employs own staff, lawyers, consultants and company secretary.
- In conclusion the tax rate is at 30% of the net Income from operations (after deductions of operating expenses from the Turnover)
However, limited company has its own challenges including;
- First of all it is now more expensive to incorporate a company.
- Dilution of power and authority as more accountability is deserves by stakeholders-(Shareholders, Employees, Suppliers, Banks and Regulators.
- Filing of company annual returns with the Registrar of companies.
While no proponents can give a straight recommendation on whether to Registering a limited company. The choice can only be derived on the risk averse of a sole trader.
In Kenya limited companies enjoy the above benefits.Hence it is prudent to register a limited company if you wish your business to expand.Finally visit our clients portfolio and see some examples.click here.