When incorporating a Company in Kenya, the very first step is to identify and reserve the Company’s name. The Company’s name defines your business and it will create the business’s unique identity that distinguishes it from other Companies. It is therefore very important that the name is well thought out to align with the nature of your business and help customers find you easily. A suitable Company name should also be distinctive, authentic and memorable enough to set you apart from your competitors.
Registration of a Company in Kenya is done on the eCitizen online platform which requires that the applicant provides at least three (3) preferred names in order of priority. This is to enable the registrar of companies conduct a search over the names and advise whether either of them is available for reservation. The first available name will automatically be assigned to the business/company and reserved for a period of thirty (30) days pending incorporation, or for such other extended period as the registrar may allow but not exceeding sixty (60) days.
However, reservation of ones preferred Company name is not guaranteed. There are several instances where the registrar may reject the proposed names submitted. These instances include where:
i. A company name is similar to that of an existing business.
The registrar may refuse to reserve a proposed company name where the name is similar to that of a business or corporation that is already registered or similar to a name that is already reserved for another company. This includes names similar to registered trademarks.
However, the proposed similar name may be reserved for registration where the conditions set out below are met:
(a) the existing company consents, or the promoters of the proposed company, consent, to the proposed name being the name of the applicant company;
(b) the applicant company forms, or is to form, part of the same group as the existing company or the proposed company;
(c) the applicant company provides the Registrar with a copy of a statement made by that corporation specifying—
(i) the consent of the existing company or the promoters of the proposed company as referred to in subparagraph (a); and
(ii) that the applicant company forms, or is to form, part of the same group as the existing company.
In addition, kindly note that the registrar may also reject an application to reserve and register a name on the following additional grounds, that the name:
(a) is the same as a name appearing in the Registrar's Index of Limited Liability Partnerships or Partnerships;
(b) has a close phonetic resemblance to the name of company, business name, limited liability partnership or partnership that is already registered;
(c) differs from the name of another company, business name, limited liability partnership or partnership that is already registered only by the addition of the name of a place, locality or region within Kenya;
(d) is identical to or closely resembles, the name of a company or limited liability partnership that has been dissolved, or has been struck off the register of companies or register of limited liability partnerships, or the entry of a business in the register of business names or partnerships kept under the Registration of Business Names Act 2015 has been cancelled;
(e) the Registrar believes on reasonable grounds that its use would involve the commission of a criminal offence; or
(f) the Registrar believes on reasonable grounds that it is offensive or undesirable or contrary to public interest
ii. Where the name consists of abbreviations or initials not authorized under the Companies Act, 2015.
The Companies Act (General) Regulations, 2015, have clearly identified Characters that may be used in a company name. These are: alphabetical characters ‘A-Z’; numerical characters (0 - 9) and punctuation marks (such as apostrophe, brackets, exclamation mark, commas, etc.).
The regulations also provide that certain signs and symbols can be used in a company name, PROVIDED THAT they are not one of the first three characters of the company's name. These are: *; =; #; and %.
It is noteworthy to point out that the name of a company may not consist of more than 160 permitted characters.
iii. Where the registrar determines that the proposed company name is offensive or undesirable.
The Registrar is required to apply the following criteria in determining whether a particular name is offensive or undesirable or contrary to the public interest:
(a) the name includes "co-operative", "society" or "trade union "or any variant or synonym of those words;
(b) the name suggests an association with, or the patronage of, the State or any of its agencies, unless there are circumstances that justify its use;
(c) the name suggests an association with, or the patronage of, a foreign government or an embassy, high commission or consulate representing such a government in Kenya
(d) the name suggests an association with, or the patronage of, a county government;
(e) the name comprises an acronym that will render its use vague or uncertain;
(f) the name includes a name that is identical or confusingly similar to a registered trade mark unless a document signed by the owner of the trade mark and indicating consent to its use is provided; or
(g) the name is such that the Registrar believes on reasonable grounds that there is reasonable possibility that it could offend members of a particular community or ethnic or racial group.
iv. Where the approval of the registrar is to be obtained and the same has not been obtained.
The Companies Act, 2015 dictates that the approval of the Registrar is required for a company to be registered under this Act by a name that would be likely to give the impression that the company is connected with
(i) a State organ;
(ii) a county government; or
(iii) any public authority prescribed by the regulations.
HOW CAN WE HELP?
We recognize that the registrar’s rejection to reserve and subsequently register a Company name causes major delay in commencement of the business operations. To mitigate this, CM SME Club, is offering advice to SMEs on business set up and compliance with the existing laws and regulations, including how to choose the most suitable name for your Company. Subscribe today at https://cmadvocates.com/cm-sme/
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