Gov’t: ‘Revised fee rate’ to blame after video on registering business goes viral

Gov’t: ‘Revised fee rate’ to blame after video on registering business goes viral

The government through its Business Registration Service (BRS) has admitted to a costing error after public uproar on increased costs of registering business.

In a clip that went viral at the start of this week, a Kenyan woman expressed anger over hidden costs in their registration of a company limited by guarantee.

“As a young and unemployed person, I decided to be proactive in creating employment for myself as we are told. Last week I begun the process to register a company limited by guarantee to operate as a non-profit for civic education and capacity development,” she said.

“Charges were Ksh.3000 which I though were manageable, after making corrections to my application, I received an extra charge of Ksh.7000,” she added.

In its response to the uproar resulting from the clip, the BRS stated the change in fee was configured late to the e-Citizen platform leading to the confusion in costs.

— Laura Walubengo (@lwalubengo) February 10, 2021

“The fee adjustment of a Company Limited by guarantee is Ksh.10,000. This is in accordance with the Companies Act (No.17 of 2015) under Part 2 “Fees Payable in Relation to Company Limited by Guarantee” that revised the fee from Ksh.3,000 to Ksh.10,000. The revised fee rate was subjected to a legislative process and a special gazette notice issued on 22nd February, 2017. The change in fee however, was configured on the eCitizen platform on 8th February 2021 as a rectification measure,” the BRS said in a statement signed off by Director General Kenneth Gathuma.

Further, the BRS has defended its role in business registrations insisting the processes do not stifle youth entry into entrepreneurship.

“We wish to bring out clearly that a company limited by guarantee (CLG) is an alternative type of corporation used primarily for non-profit organisations that require legal personality. These types of companies are not typically used by the youth as platforms for engaging in business activities. A company limited by guarantee requires all directors and guarantors to undergo vetting before the company is registered,” the BRS added.

“BRS still provides an opportunity for anyone who wishes to start a simple business under the Registration of Business Names Act, for as little as Ksh. 850 in one simple step. When these businesses grow, one may consider converting the same to a limited liability company to harness further opportunities.”

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