Legal checklist for new business ventures

Here are a couple of things to look out for when venturing into a new business.

Know the  legal form/structure your business will assume

This is important because you will know the limitations of your business and what liabilities your business may incur.

Founder’s  Collaboration/ Partnership Agreement

Ensure that the agreement with your business partners is put into writing, and more importantly it addresses  the key issues such as management of the business/company, its operation, shareholders’ rights and mode of dispute resolution. This will save you a lot of headache in future.

Tax Registration

To register for Value Added Tax (threshold at Ksh 5M per year), local service tax and Pay As You Earn (PAYE) tax, one needs:

  • Personal tax identification number(PIN)

  • PIN certificates of at least two signatories

  • Company tax identification number


Businesses  in Kenya have to acquire one or more licenses and permits, based on the type of business.  There are usually two types of business licenses:

Sector-specific licenses –  these licenses are issued by the agencies mandated with regulating those sectors to firms operating in a specific line of business for instance; banking.

Non-sector specific, or cross-cutting licenses – these licenses are issued to firms that fall across many business types but are still  subject to regulation for example environmental permits.

Additionally, businesses in Kenya are required to obtain a Single Business Permit, which is issued by the local government authority where the business is situated.

Intellectual Property Rights

The business should have full ownership of Intellectual Property assets so as to protect the value of the business . This can be achieved by entering into Assignment of intellectual property rights.


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