Clients are served at the Companies Registry at the State Law Office. A new law has established a business registration service. PHOTO | FILE
In September, the government passed a law that will change the manner in which business registration is carried out. The law has established a business registration service that will streamline the incorporation of companies, partnerships and firms.
It intends to provide for effective administration of the laws pertaining to companies, partnerships and other businesses in relation to incorporation, registration, operation and management.
The Business Registration Service is a State corporation that shall be headquartered in Nairobi but shall have other branches in counties. This is unlike before where incorporations and registrations were carried out in Nairobi only, greatly inconveniencing those who were not based in the capital city.
The Business Registration Service shall be responsible for formulation of policies and also shall conduct research and create awareness on its function, ensuring improvement of quality. Prior to this, the State Law Office did not formulate policies or conduct research.
The service is responsible for implementation of policies and laws regarding registration of businesses and societies, bankruptcy, hire purchase, trade unions, chattels transfers, adoptions, coat of arms, books and newspapers, the flag and emblems and names.
Each of these is regulated by separate laws and registration of the same was done via the State Law Office.
It was faster, for example, to register a sole proprietorship than it was to register a company. This created confusion in the mind of most clients, especially foreign business people who had more efficient registration systems back home.
Streamlining the registration is a good step as it provides clarity in the eyes of the service users as to the steps and time it takes to undertake the process.
One of the challenges most investors highlighted was the time and cost it took to register an entity. There was no clear time span by which an incorporation would be completed and the certificate handed over. There were many bureaucratic steps, with many offices involved.
There was also a lot of corruption in the process. If you paid more you could have your documents in a week. For those who were not able to pay the “facilitation fees”, the documents would stay unattended for up to a month.
The entity should endeavour to reach global standards in registration and incorporation. In many countries, things like name searches and incorporation can be done online, cutting costs and time spent.
I hope the entity will put in place steps that will cut cost and time for incorporation and registration. For example they can remove or minimise the number of steps and offices one has to visit before they get a certificate.
Streamlining the process will provide clarity to the end users, quicken the process and hopefully eliminate corruption by removing “brokers” who work in cohorts with some government officials.
Foreign investors look into the ease of incorporation when deciding where to invest. In Rwanda, registration and incorporation take only a few days. The entity should be able to match up to global standards.
