Despite Struggling Economy, New Company Registrations Grow For the First Time Since 2020

February 1, 2024

In 2023, Kenya experienced a notable expansion in its business landscape, with the Business Registration Service (BRS) reporting a 2.9% increase in the total number of registered business entities, reaching 141,194.

This marks an addition of 4,006 entities, a growth not witnessed in the country since 2020. In 2022, a total of 137,188 companies were registered in Kenya.

Significantly driving this growth were new private company registrations, which surged by 8.7% to 56,376 from 51,842 in 2022.

This uptick in private company formations significantly contributed to the overall increase in business registrations, despite a decline in other areas such as business names and foreign company registrations.

The data reveals a decrease in the registration of business names, typically associated with sole proprietorships, by 680 to 83,458.

Additionally, the registration of foreign companies saw a marginal drop, decreasing by three to a total of 181. Contrastingly, the registration of public companies saw a nominal increase of one.

Further analysis of the data shows a rise in registrations for companies limited by guarantee and limited liability companies, with increases of 29 and 124 respectively, culminating in totals of 506 and 582. 2023 also marked the introduction of limited partnerships by BRS, with two such entities being registered.

This move, along with the growth in limited liability companies, indicates a trend towards structures that offer protection against personal financial exposure.

Entities with limited liability attributes are designed to safeguard their owners from personal accountability for business debts or liabilities.

According to BRS, private companies are defined as those where the members’ liability is limited by shares, which means the extent of their financial liability is limited to the amount unpaid on their shares.

The BRS also highlights that private companies are restricted from inviting the public to subscribe to their shares, distinguishing them from public companies.

This growth in business entity registrations underscores a dynamic shift in Kenya’s economic fabric, with an increasing number of individuals and groups opting for business structures that offer financial security and limited personal liability.

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