How to Add or Remove a Business Partner in a Registered Business in Kenya
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The process of adding or removing a business partner in Kenya is explained through an analogy of comparing divorce to the process of removing a director or partner from a company.
Much like a wedding, in the early stages of coming up with a company, many people tend to forget that separation may occur.
As a result, most businesspeople do not come up with a partnership agreement at the beginning.
Consequently, removing that business partner becomes difficult.
“The process of removing a Partner/Director is often confusing to many and can lead to a serious breach of the law if not well executed.”
Reasons for Removing a Business Partner
An organisation may remove a business partner or director voluntarily or completely for several reasons.
First, if a director chooses to resign voluntarily without the company’s involvement in the resignation.
Second, the members may remove a director through an ordinary resolution.
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This requires a 28-day special notice to the company and the director/partner.
In some cases, a court may order a director’s removal after legal proceedings whereby a court disqualifies a director for misconduct.
Additionally, a director may be removed if they are declared of unsound mind under Kenya’s Mental Health Act.
Moreover, a director may lose their position if they are absent from directors’ meetings without permission for more than six months.
Similarly, a director’s office becomes vacant upon their death.
A director may also retire by rotation as provided in the company’s Articles of Association.
Finally, all directors cease to hold office when the company is dissolved.
Procedures for Removing a Director in a Business
To add or remove a business partner in Kenya, you must update the official registry online via the Business Registration Service (BRS) Portal on eCitizen.
The exact legal and administrative procedure depends entirely on whether your business is registered as a Business Name (Partnership) or a Limited Liability Company (LLC).
- Resignation Letter & Minutes: The exiting partner must provide a signed Resignation Affidavit or letter. The board must also sign meeting minutes formally accepting the exit.
- File Form CR9: File a Form CR9 (Notice of Cessation of Office of Director) within 14 days of resignation.
- Transfer the Shares: Fill out the Share Transfer Form to redistribute the outgoing partner’s shares to the remaining partners or a third party.
- Upload on BRS V2: Navigate to “Maintain Company” -> “Change of Particulars” / “Company Structure Update” on the portal. Upload the CR9, signed minutes, resignation letter, and proof of share transfer.
- Download Updated CR12: Pay the statutory application fee and download the official updated CR12 to verify the partner has been legally removed
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An aerial view of Nairobi CBD. PHOTO/Courtesy.