TYPES OF BUSINESSES IN KENYA
Sole proprietorships
Refers to the business unit owned and run by one person. It can be either the head of a family or a person that individual operates the business by themselves. The person is responsible for the business decisions they make hence the growth of the business relies on the decision made by the person.
Partnerships
It comprises of a group of people that come together with an intention of doing business together to make more profit. A partnership is restricted to a maximum of 20 persons, each of whom is jointly and separately liable for all debts incurred. If these numbers are exceeded, the partnership must be registered under the Companies Act.
Cooperatives
They include business units that involve members coming together openly and voluntary to carry out business together and make more profit or money to gathering. Cooperatives are established under the co-operatives Societies Act. A cooperative may only be registered if it is geared towards;
(a) the promotion of the welfare and economic interests of it’s members or adherence to the principles of Islamic law; and
(b) has incorporated in its by-laws the following co-operative principles—
(i) voluntary and open membership;
(ii) democratic member control;
(iii) economic participation by members;
(iv) autonomy and independence;
(v) education, training and information;
(vi) co-operation among co-operatives; and
(vii) concern for community in general,
may be registered by the Commissioner as a co-operative society under this Act with or without limited liability provided that a co-operative union or an apex society shall not be registered except with limited liability.
Limited liability Partnerships
Limited Liability Partnership (LLP) may be formed under the Limited Liability Partnership Act, No. 42 of 2011. Upon registration, a limited liability partnership becomes a body corporate with perpetual succession with a legal personality separate from that of its partners.
A change in the partners of a limited liability partnership does not affect the existence, rights or obligations of the limited liability partnership
The partners in an LLP have limited liability but the provisions of the Partnership Act apply in all other respects
Companies
Referred to in the Business and incorporation article.
