What is Liability Partnership?
Limited Liability Partnerships (LLPs) are a unique business structures that combines elements of a partnership and a limited liability company. In essence, it is a hybrid between a partnership and a company. It is designed to offer the benefits of both structures, providing partners with limited personal liability for the partnership’s debts and obligations, similar to shareholders of a corporation.
Limited Liability Partnerships have gained popularity as a flexible and advantageous business structure in Kenya. Combining the benefits of a partnership and a limited liability company, Limited Liability Partnerships provide a favorable framework for professionals and entrepreneurs. In Kenya, Limited Liability Partnerships are governed by the Limited Liability Partnerships Act of 2011.
Required Information for Registration
- Choose a Suitable Name
Select a unique and appropriate name for the LLP, adhering to the guidelines set under the Act. Provide three proposed names in order of priority. This ensures that alternatives are picked in case the first choice is unavailable or infringes upon existing trademarks.
- Nature of Business
Specify the nature of the LLP’s business. For professional services, attach a practicing certificate from the relevant professional body for the current year.
- Physical Address
Provide the proposed physical address of the business, including road, plot number, town, and county.
- Partners’ Details
A Limited Liability Partnership is required to have at least 2 partners. Include the full names of partners or the company if it is a body corporate. For a body corporate, provide the place and date of incorporation. Indicate the nationality, place of residence, and provide copies of the ID/passport, two passport photos and copy of tax PIN certificate for each partner.
- Manager Information
A Limited Liability Partnership is required to have at least one manger. A manger may also be a partner in the Limited Liability Partnership. Provide the full names, ID/passport number, postal address, nationality, and a signed consent to act as the manager.
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Procedure for Registration Liability Partnership
- Name Search
Conduct a name search through the e-Citizen online portal. As stated above, the proposed three names should be in order of priority. Pay the prescribed fees. The Registrar will assign the first available name from the list or move down the list until an available option is found.
- Application for Registration
Fill out the Statement of Particulars (Form LLP1) with the required information. Thereafter, sign, scan, and upload the form along with the other required documents for review and verification.
- Certificate of Registration
After reviewing the registration documents and fee payment, the Registrar will approve or decline the application. If the Registrar approves the application, you will receive a Certificate of Registration, serving as legal proof of the LLP’s formation and registration.
Benefits of Registering an LLP
- Limited Liability
Partners’ personal assets are protected from the debts and liabilities of the LLP.
- Flexibility
LLPs provide a flexible business structure, allowing partners to determine profit sharing, decision-making processes, and admission or withdrawal of partners as per the LLP agreement.
- Credibility and Professionalism
Registering an LLP enhances credibility and professionalism, enabling better access to business opportunities, contracts, and partnerships.
- Tax Advantages
LLPs enjoy favorable tax treatment, with partners being taxed individually on their respective shares of the LLP’s profits.
- Continuity and Succession
LLPs have perpetual existence, ensuring continuity even in the event of partner changes or death.
Compliance Requirements
- Notification of Changes
LLPs are required to notify the Registrar of any changes within 14 days of the occurrence. This includes changes to the LLP’s name, registered office address, partners, manager, or any other significant details.
- Minimum Number of Partners
A Limited Liability Partnership is required, during its lifetime to have at least 2 partners.
- Declaration of Solvency
LLPs in Kenya are obligated to file a declaration of solvency with the Registrar annually. This declaration confirms that the LLP is solvent and capable of meeting its financial obligations. It provides transparency and reassurance to stakeholders, including partners, creditors, and investors.
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If you need assistance or have any inquiries regarding Limited Liability Partnerships Registration in Kenya, we are here to help. Please feel free to reach out to us using the following contact information:
Telephone: 0202 148 300
Cell Phone: 0111 888 681
Email: info@dmklaws.co.ke or dmklaws@gmail.com
We are available to provide guidance, answer your questions, and offer support regarding Limited Liability Partnerships Registration. Don’t hesitate to reach out to us, and we will be glad to assist you.
