- A company is a separate legal entity from its owners. Imagine birthing a newborn baby.
- A company trades by its company name.
- It’s made up of X number of shares. The owners each hold a certain number of these X shares.
Picking up where we left off, about how to stop running your business like a kiosk and how to run it like the giant corporation it can grow up to be, let’s talk about a business name and a company.
There’s a difference between registering your business as a company and as a business name.
Pay attention, good people.
A business name is a registered trade name. The owners of the business use it for trading purposes only.
One person or ten can own the business name. It doesn’t matter.
These owners are listed in a certain form at the point of registration.
When you register your business as a business name, the Registrar of Companies gives you a business certificate. Frame it and hang it up on your wall.
With your business certificate, you can (a) get a KRA PIN for the business (b) open a bank account (c) set up a Till or Paybill number for managing your sales proceeds (d) get a business stamp (but just to be fair, you can get a stamp for almost anything.)
A business certificate costs Sh3,500.
You will still need to pay up for a name search. Each name search costs between Sh200 and Sh500, depends on if you’re working with an agent or applying of the certificate directly through e-Citizen.
KRA PIN is Sh1,500.
A company is a separate legal entity from its owners. Imagine birthing a newborn baby.
A company trades by its company name.
It’s made up of X number of shares. The owners each hold a certain number of these X shares.
These shares have a nominal value assigned to them. Some have a value of Sh1, others Sh100.
These owners can be the company directors or company shareholders.
Some directors are by default also a shareholder. A shareholder, however, is not necessarily a director. Does that make sense?
A company can bring more shareholders on board by floating its shares. All it needs to do is value each share then float them to the interested people. The shareholders by these floated shares, as they are available.