Kenya - Obtaining Business License for a Capital Goods Finance Company

Advertisement

Procedure

The following are the steps to follow in applying for a Capital Goods Finance Company license as shown below

Step 1 -

Approval of Name

a) Contact the Central Bank of Kenya at an early stage for a preliminary meeting to discuss licensing requirements and related issues.

b) Propose and book, in descending order of preference, at least three business names with the Registrar of Companies and Business Names.

c) Submit the proposed names to the central Bank of Kenya descending order of preference accompanied by a brief concept paper on the proposed Capital good finance company, including evidence of sources and availability of capital. This should be done before incorporation of the proposed entity as a company limited by shares.

d) The proposed name must incorporate the words Finance Company e.g. XYZ Housing Finance Company Limited

e) The name approval is valid for 12 months from the date its granted by the Central Bank of Kenya within which you should have received a license to carry out Capital goods finance Company business.

Step II -

Duly completed application form, as specified under Attachment IV of the Capital Goods Finance Business ,shall be submitted, together with all enclosures as stated herein, to Microfinance Institutions Supervision Directorate.

Step III -

Evidence of paid-up capital which includes certificate of deposits in a blocked account and evidence for valuation of contribution in kind (if any).

Step IV -

A Signed minutes of subscribers meeting with attendance sheet.with List of names, nationality, address, number and value of subscribed shares of founders to be published in newspaper.

Step V -

Articles and memorandum of associations written in Amharic and preferably in English.

Step VI -

Authenticated ownership certificate and/or lease agreement for building, land,vault, equipment, fixtures and professional services.

Step VII -

Evidence for insurance coverage for premises acquired or leased.

Step VIII -

Description of actual purchases made or proposed purchase of goods and services or lease of real estate by the capital goods finance company (under formation)from related parties and organizers.

Step IX -

Duly completed general information and propriety test questionnaires for directors, and chief executive officer as per ANNEXES I and II of the Capital Goods Finance Business.

Step X - Business plan stating at least the following

i) executive summary,

ii) introduction,

iii) macroeconomic analysis,

iv) financial sector analysis,

v) capital goods finance sector analysis,

vi) business environments,

vii) products and services,

viii) target sector and customer focus,

ix) type/category of equipments and machineries to be leased,

x) organizational chart of the company with brief description of the functions of the main organizational units,

xi) strategic and operational plans,

xii) source of capital and finances,

xiii) accounting policies,

xiv) assumptions for financial projections,

xv) financial projections for the first three years including balance sheet,income statement, cash flow projections, and

xvi) conclusion /recommendation.

Step X1 -

Evidence of payment of licensing fee.

Note

• A licensed capital goods finance company shall at all time display in a conspicuous place its valid original business license in its head office and copy of the business license in its branches.

Advertisement

Required Documents

• Business Plan
• macroeconomic analysis document
• Financial sector analysis Document
• strategic and operational plans,
• Evidence of registration of trade name from Ministry of Trade and/or Regional Trade Bureau.
• Signed minutes of first meeting of organizers along with attendance sheet.
• Submission of prospectus, which is a printed statement that describes and forecasts the course or nature of the company along with expected risks, to be distributed to prospective investors.
• Written application requesting to open blocked subscription account indicating the name of the bank(s)/branch (es) or microfinance institution.
• Duly completed application form, as specified under Attachments I and II of these Directives, for organizers and project manager.
• Properly completed propriety test questionnaire, as specified under Attachment III of these Directives, for organizers and project manager.
• Evidences of payment of investigation fee

Office Locations & Contacts

Central Bank of Kenya - Head Office
Haile Selassie Avenue
P.O Box 60000 – 00200,
Nairobi, Kenya
Tel / Fax: +254 20 286 0000
Phone: +254 20 286 1000, +254 20 286 3000, +254 709 081 000, +254 709 083 000
Email: [email protected]
CBK Contact Details

Eligibility

• A Capital Goods finance company may be established by any eligible corporate body or corporation duly licensed by the National bank of Kenya to deal in financial lease and hire purchase.
• A Capital goods finance company applicant must be of kenyan Nationality.
• All Individual or company registered for Finance lease and hire purchase Business in Kenya with the registrar of Companies.

Fees

A company applying to obtain new capital goods finance business license shall pay

• Application Fee: Ksh 5,000/=

License Fee

(a) Ksh 400,000/= granting of a license to an institution and each anniversary thereof:

(b) Ksh150,000/= for branch within municipality

(c) Branch within a town council ksh 100,000/=

(d) Branch within an urban council Ksh 30,000/=

• investigation fee of Ksh 5,000; and

• A capital goods finance company applying for renewal of its business license shall pay renewal fee of Ksh 50,000.

Validity

Valid for 3 years

Documents to Use

Please attach documents that can be used by people. e.g. links

Sample Documents

Please attach sample completed documents that would help other people.

Processing Time

Processing take 60 days

Related Videos

Videos explaining the procedure or to fill the applications. 
Attach videos using the following tag <&video type="website">video ID|width|height<&/video&> from external websites.
Please remove the "&" inside the tags during implementation.
Website = allocine, blip, dailymotion, facebook, gametrailers, googlevideo, html5, metacafe, myspace, revver, 
sevenload, viddler, vimeo, youku, youtube
width = 560, height = 340, Video ID = Can be obtained from the URL of webpage where the video is displayed.
e.g In the following url "http://www.youtube.com/watch?v=Y0US7oR_t3M" Video ID is "Y0US7oR_t3M". 
	

Instructions

• No person shall carry out a Capital good finance company business unless he/she is in possession of a Capital goods Finance Company business License.
• A person who fails to contravenes or fail to comply with section of Commercial Code of Kenya shall be guilt of any offence and shall be dealt with in accordance with law.

Required Information

• Proposed name of the capital goods finance companies (under formation)
• Name of organizing committees chairperson
• Full Name of Applicant
• Address of Applicant
• Location of capital goods Finance Business
• License Number
• A tax clearance certificate.
• Evidence of provisional tax payment
• Full names, addresses and designations of the employees of the CGFC.
• Proof of legal identification. Your national driver's license or international passport are the best for this.
• Proof of legal address. House rent receipts, and utility bills stating your house address are acceptable.
• Bank statement. Not all Authorities require this except for further verification purpose or alternatives.
• Utility Bill Receipt. Some Authorities require this to further verify your legal identity and proof of social responsibility.

Need for the Document

To operate your capital goods Finance company business legally, there are certain finance licenses and permits you will need to obtain. This procedure resources will help you understand the requirements for your Capital goods Finance company business in Kenya.

Kenya has a designed legal framework to govern the capital goods Finance company activities under commercial code of Kenya (CCK)Finance. Act of 2008. . The CGFC are licensed and regulated by the Central Bank of Kenya Financial Act of 2008. Considering the separate needs and dynamics of Capital goods financial company, Central Bank of Kenya has in place a separate regulatory and supervisory framework for CGFC.

To promote the mainstreaming of Capital goods finance company into overall financial system, Central Bank of Kenya encourages creation of new Financial lease and hire Purchase and transformation of existing operationally sustainable CGFC. The presence of a large potential market and availability of an enabling policy environment offer the opportunities for both social and commercial investors to explore this segment of the financial market.

The licensing, regulation and supervision of CGFC established under CCE Ordinance has been entrusted to Central Bank of Kenya. No institution/person can commence operations as Capital goods Finance company Bank unless granted license by the Central Bank of Kenya.

Capital Goods finance includes financial lease and hire-purchase.A Capital Goods Finance Company shall be established as share company as defined under the commercial code of Kenya.

Information which might help

Enter other informations which might help

Other uses of the Document/Certificate

Please explain what are other uses of obtaining this document/certificate.
e.g. Birth Certificate can be used as proof of identity.

External Links

http://www.globallegalinsights.com/practice-areas/banking-and-finance/banking-regulation-1st-ed/kenya

Others

More information which might help people.