When establishing a Public Benefit Organization, formerly Non-governmental Organization, individuals have the option to register it either as a company limited by guarantee (CLG) or as a public benefit organization.
The distinction between the two is in the fact that a company limited by guarantee is permitted to engage in non-profit trading activities. Any profits generated from these trading activities are then reinvested back into the company’s programs and initiatives. On the other hand, Public Benefit Organizations are established for the primary purpose of benefiting the public at large and do not engage in trading activities.
A company limited by guarantee is a legal entity that does not have share capital and the liability of its members is limited by its articles to the amount that the members undertake to contribute to the assets of the company in the event of its liquidation.
During registration, the company shall lodge with the Registrar of Companies a statement of guarantee which shall state what each person who is a member undertakes to contribute to the assets of the company if the company is liquidated while they are still a member or within twelve months after they ceased to be a member.
To register a company limited by guarantee the following is required:
- 3 Proposed names of the company in order of preference.
- Articles of association can be drafted by the company itself, adopt a model provided by Business Registration Services or modify the adopted model articles.
- Objectives of the company.
- Primary business activity
- Names of the Directors of the company and their contact information.
- Residential Address of the Directors
- A Memorandum/Constitution of the company.
- Proposed physical address of the company.
In case a foreigner wants to register CLG in Kenya, they will need to have a local representative who can either be their Company Secretary or one of their directors.
Once the documents are submitted for registration to the registrar of companies, the Registrar will send them to the Director of the National Intelligence Service (NIS) for vetting of the directors. After approval by the National Intelligence Service, the documents are returned to the Registrar of Companies for the company’s registration. The registration process is finalized when the Registrar issues a Certificate of Incorporation. This certificate establishes the company as a body corporate with perpetual succession, capable of suing and being sued, and holding property in its own name.
Services that we offer after registration of a company Limited by guarantee.
- Local representative.
- Holding of Board & Annual General meetings.
- Filing annual returns.
- Filing necessary forms with regard to appointments and resignations of directors and members.
- Undertaking any changes that may arise.
