How To register a partnership business in Kenya is a common question for entrepreneurs.But this process is as easier as registering sole proprietorship business.
So many Kenyans think that to register a partnership company is a hectic process.This process takes at most two weeks to have your business registered and running.
Partnership business involves two or more people who share ownership, where each partner contributes to all aspects of the business. Profits and losses are shared among the partners based on the formula agreed by both parties,in the partnership deed.
The process of registering a partnership company is almost the same as sole proprietor except that in partnership business ,you must draft a partnership deed.
The following are simple steps on how to register a Partnership Business in Kenya.
The partnership deed contains the following particulars
o The name of the firm.
o The names and addresses of the partners.
o The nature of the business.
o The term or duration of partnership.
o The amount of capital to be contributed by each partner.
o The drawings that can be made by each partner.
o The interest to be allowed on capital and charged on drawings.
o Rights of partners.
o Duties of partners.
o Remuneration to partners.
o The ratio in which the profits or losses are to be shared among the partners.
o The basis for the calculation of goodwill at the time of admission, retirement, and death of a partner.
o The keeping of proper books of accounts and the preparation of Balance Sheet.
o Settlement of amount on the dissolution of the firm.
o The procedures to be adopted in the case of disputes among the partners.
o Arbitration clause.
Besides a partnership deed you MUST also provide the following documents:
o Copy of ID/Passport for each partner
o Passport photo for each partner
o Copy of College Certificate for one of the partners.
o Copy of KRA PIN Certificate for each partner
o BN2 form which you will fill in the following details:
a. Name of Business
b. Nature of Business
c. Postal Address
d. You and your partner’s full names
e. Address of the principal place of business including plot number, name of building or street.
Once you are through with application, you will wait for a maximum of two weeks to receive your partnership company certificate.
The advantage of registering a Partnership business over sole proprietorship is that in partnership, you can apply for any tender without much restrictions since your business has a KRA pin.Sole Proprietorship, on the other hand ,does not have a business pin but a personal pin.There are some tenders that you cannot be allowed to apply unless you possess a KRA pin registered with company name,which is why partnership business is important.
The only advantage of partnership is that the profits are shared among partners based on the proportion of contributions, but the biggest advantage is that you share losses too.
One thing that fascinates me about this business is that ideas from each member can greatly boost the business,unlike sole proprietorship where a single individual makes all decisions of the company.
If you are planning to register a business,do it today because time is precious.The more you wait, the faster your ideas fade away—you won’t know what tomorrow holds.
One secret I would like to reveal to you is that once you have registered your partnership company,don’t rush to register KRA Pin,unless you are compelled to.You can operate without this pin until the business starts posting profits.