Limited Liability Partnerships

Limited Liability Partnerships (LLPs) in Kenya are governed by the Limited Liability Partnership Act, 2012 (“the Act”). They are defined as “Any part registered in the LLP Act”. An LLP is a form of a business organization hybrid between a traditional general partnership and a limited liability company.

Establishment and Registration of LLPs

  1. The establishment can either be by express agreement or implied. Any person who wishes to register an LLP must:
  2. File a statement with the Registrar in the prescribed form LLP11 and should include the proposed name of the LLP,
  3. The objectives/ mandate of the partnership must be clearly stipulated,
  4. Required documentation: Copy of ID, Notarized Passport Bio Data section (Foreign directors), Recent coloured passport photo, Pin Certificate, P.O Box, Email, Mobile Number, Residential address for directors, the company’s physical address (Registered Address).
  5. The statement is then filed at the Companies Registry and the Registrar of Companies, at their discretion, then registers the LLP upon paying the prescribed fees of Ksh. 25,000 
  6. An LLP must be registered by two or more persons, one of whom must be the General Partner and at least one of the partners must have the mandatory requirements in line with the firm’s main objectives.
  7. Additionally, an LLP can be registered by natural persons and body corporates except for trade unions. At least one General Partner must be a natural person.

Management and Control of LLPs

  1. An LLP must have at least a General Partner and at least one General Partner must be a natural person.
  2. An LLP Agreement is used in the management of LLPs. This is an Agreement between the partners themselves and the partnership.
  3. Where there is no LLP agreement, the management and control are governed by the provisions of the First Schedule of the Act. Partners in an LLP are advised to have an LLP Agreement so that they can clearly stipulate the details on the management of the LLP.
  4. Section 29 of the Act requires an LLP to lodge with the Registrar a declaration by one of its managers that in the opinion of the manager, the partnership either appears at that date to be solvent or does not appear as at that date to be solvent. Such declaration shall be lodged no later than fifteen (15) months after the date of registration of the LLP and subsequently, once in every calendar year.

Termination of Membership in an LLP

  1. A person can cease to be a member if he gives ninety (90) days’ notice to cease or terminate membership, by an order of the court and where the requisite majority in a Partnership Agreement vote to remove him from the partnership.
  2. Where a member dies, their rights are exercised by the executor of his estate or trustee. However, a partner can transfer his interest to another person with the concurrence of all General Partners.
  3. Bankruptcy does not make one lose partnership unlike in general partnerships. The rights of such a bankrupt are subject to the provision of the Limited Liability Partnership Act.

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