Introduction
In Kenya, a Limited Liability Partnership (LLP) is an excellent business structure for professionals and small businesses looking to grow while managing risk. An LLP combines the flexibility of a partnership with the liability protection of a company.
This article breaks down everything you need to know about Limited Liability Partnerships in Kenya.
What Is a Limited Liability Partnership?
A Limited Liability Partnership is a legal business structure that combines features of both partnerships and private limited companies. It allows partners to operate the business while protecting their personal assets from business debts or lawsuits.
LLPs in Kenya are governed by the Limited Liability Partnerships Act, No. 42 of 2011, and regulated by the Business Registration Service (BRS).
Key Features of an LLP
LLPs offer the following features:
- Separate legal personality: The LLP exists independently of its partners.
- Limited liability: Partners are not personally liable for the debts of the LLP.
- Perpetual succession: The LLP can continue to exist even if partners leave or pass away.
- Minimum two partners: An LLP must have at least two partners, but can have an unlimited number.
- Corporate body: It can own property, enter into contracts, and sue or be sued in its name.
Legal Framework of Limited Liability Partnerships in Kenya
The Limited Liability Partnerships Act sets out the rules for registration, governance, financial disclosures, and dissolution of LLPs in Kenya. Key provisions include:
- Section 4: Provides for registration with the Registrar of LLPs.
- Section 6: Defines the powers and liabilities of the LLP.
- Section 18: Outlines duties of designated partners.
- Section 32: Governs conversion from a general partnership to an LLP.
Formation and Registration Process
To register an LLP in Kenya:
- Name Search – Reserve a unique business name via the eCitizen portal.
- Prepare LLP Agreement – Set out the rights and duties of each partner.
- Register with BRS – Upload documents through the online system.
- Pay Registration Fees – Currently KES 25,000 (subject to change).
- Receive Certificate of Registration – Confirms your LLP is legally formed.
Required Documents:
- A Partnership Agreement
- Identity documents (ID and KRA PIN) of all partners
- Registered office address
- Statement of compliance
Benefits of a Limited Liability Partnership
LLPs offer a strategic balance of flexibility, liability protection, and credibility.
Key Advantages:
- Limited liability: Protects personal assets of partners.
- Tax transparency: LLPs are taxed as partnerships, not companies.
- Ease of formation: Relatively straightforward process compared to limited companies.
- Flexible management: No requirement to hold AGMs or appoint a company secretary.
Disadvantages of an LLP
LLPs are not without downsides. Consider these before registering:
- Public Disclosure: Certain information must be filed and is publicly accessible.
- Compliance Obligations: Must file annual returns and keep financial records.
- Limited Recognition by Some Investors: Many investors prefer company structures.
- No Share Capital: Limits certain funding options.
LLP vs. General Partnership vs. Private Company
| Feature | LLP | General Partnership | Private Company |
|---|---|---|---|
| Legal status | Separate legal entity | No separate entity | Separate legal entity |
| Liability | Limited | Unlimited | Limited |
| Perpetual succession | Yes | No | Yes |
| Registration | With BRS | Optional | With BRS |
| Governance | Flexible | Flexible | Formal board |
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Compliance, Maintenance and Tax Obligations
LLPs must stay compliant with the law to avoid penalties. Key requirements:
- File Annual Returns – Must be submitted through BRS.
- Maintain Books of Accounts – Accurate records of all transactions.
- Ensure a Minimum of Two Partners – An LLP must maintain at least two partners.
- Update Changes in Partners – Any admission or exit must be reported.
- Adhere to Tax Compliance – Register for a KRA PIN and file taxes accordingly.
Conversion to or from Other Business Structures
You can convert an existing general partnership or sole proprietorship to an LLP. Likewise, an LLP can later convert to a company if your business grows.
Requirements for Conversion
Before conversion, ensure that you have:
- Consent of all partners
- Statement of conversion
- Register the conversion with the Registrar of Companies
Common Use Cases for LLPs in Kenya
Limited Liability Partnerships are ideal for:
- Law firms
- Accounting firms
- Architectural and engineering practices
- Consultancy businesses
They provide the right balance of flexibility, reputation, and legal protection.
Common Pitfalls to Avoid
- Failing to draft a clear LLP agreement
- Assuming all tax treatment is automatic, consult a tax advisor
- Not updating changes in partnership promptly
Avoid these issues by engaging a legal professional from the start.
How We Can Help
At Wacu Mureithi & Co. Advocates, we help you register and structure your LLP efficiently. Our team will:
- Advise you on the best structure and ways to cover your specific circumstances
- Draft and/or review your LLP agreement
- Handles the entire BRS registration
- Provides ongoing compliance support
Schedule A Consultation with our team, Email Us or fill out the form on our Contact Us page for more personalized assistance and
Set up and manage your business with confidence.
Frequently Asked Questions (FAQS)
1. Can one person form an LLP in Kenya?
No. You need at least two partners to form an LLP.
2. Is an LLP better than a limited company?
It depends. LLPs offer flexibility and tax benefits, while companies are better for raising capital.
3. Can foreigners be partners in an LLP?
Yes. Foreign nationals can be partners, subject to immigration and legal requirements.
4. How long does registration take?
Usually 3–5 business days if all documents are in order.
5. Is an LLP required to have a company secretary?
No. LLPs do not need a company secretary under Kenyan law.