IMPORTANCE OF PAYMENT OF STAMP DUTY IN KENYA

Stamp Duty payment is governed by the Stamp Duty Act cap 480 of the Laws of Kenya. The Act provides that every instrument specified under the Act which relates to property situated, or to any matter or thing done or to be done, in Kenya, shall be chargeable with the stamp duty.

The instrument should be duly stamped with the proper duty before the expiration of thirty (30) days after it is first executed, or after it has been first received in Kenya in case it is first executed at any place out of Kenya, if not done within the time frame it shall attract a penalty for late payment.

Instruments executed out of Kenya not being a bill of exchange or a promissory note, should prior to being used, brought into force or registered, within Kenya, be stamped according to the rate of duty chargeable and within the time frame provided for stamping. 

In the case of Transfer of property, the purchaser/buyer is responsible for payment of stamp duty. The Payment of Stamp duty is made against the value of the property as determined by the Government valuer.

The Stamp duty rate in respect of a transfer of property within a municipality is 4% while for property located outside a municipality is 2%. So where a property x is valued as kenya shillings One Million (Kshs. 1,000,000/-) and it is located within a municipality e.g Nairobi the stamp duty payment shall be 4% of 1,000,000/- which is Kshs. 40,000/-. On the other hand the stamp duty rate in respect of Charges is 0.1%.

There are instances where instruments are exempted from payment of Stamp duty being the following:

• Transfer of property to family owned Company.
• Transfer between associated companies.
• Transfer between spouses i.e husband and wife.
• Transfer in favor of any body of persons established for charitable purposes.
• Transfer by transmission etc.

In certain instances stamp duty exemption can be allowed by one making an application to the Collector of Stamp Duty attaching the necessary supporting documents, transfer, affidavit and the Legal Notice giving effect to exemption. If the application is complete and satisfactory one will be exempted from payment of stamp duty.

NOTE: For any enquiries on the same please do not hesitate to contact us on legalserviceskenya@gmail.com

LEGALIZATION OF DOCUMENTS IN KENYA

Legalization of documents is the process  of authenticating or certifying a legal document so a foreign country's legal system will recognize it as with full legal effect.

Legalization of documents in Kenya usually takes the following steps:

• The documents together with either a National Identity Card or Passport of the individual are presented to a Notary public who seals and signs the documents.

• Once this is done, the documents are presented to the High Court of Kenya for authentication, where a letter is issued confirming that the notary public is indeed recognized as one. The fees charged for authentication at the High Court is Kenya shillings 100/- per document.

• The next step is to then present the documents for verification at the Ministry of Foreign affairs, which has a counter at Huduma Center, City Square. The fees charged is usually Kenya Shillings 500/- per seal and one receives a letter.

• The final step is to then take the documents to the relevant embassy, payment of fees usually depends on the rates fixed by the Embassy. The process usually takes 3 or more days, for authentication.

NOTE: For any enquiries on the same please do not hesitate to contact us on legalserviceskenya@gmail.com

REGISTRATION OF TRADEMARKS IN KENYA

The Constitution of Kenya under Article 40(5) provides that the state shall support, promote and protect the intellectual property rights of the people of Kenya.

A trademark, is a recognizable sign, design or expression which identifies a particular product or service from the others.

Any individual or company can register a trademark in so far as they meet the necessary requirements.

Trademark registration and protection is governed by the Trademarks Act of Kenya (Cap 506). Trademarks are registered at the Kenya Industrial Property Institute (KIPI) and the registration lasts for an initial ten(10) years which can be renewed for a further ten(10) years using Form TM10 upon payment of renewal fees.

The procedure for registering a Trademark is as below:

• Preliminary Search

Prior to registration of a Trademark one has to conduct a preliminary search to find out if the mark can be registered or not. This is a very important step for anyone who intends to register a trademark as it helps one know whether the mark is registrable or not and to avid trade mark infringement suits. The search is conducted using Form TM27.

• Application for registration

After confirmation that the trademark can be registered through the preliminary search, the next step would be to lodge an application for registration which is done using Form TM2 and TM32. In the case of foreigners who require to appoint an agent to conduct the registration on their behalf, their application has to be accompanied by Form TM1. The applicant has to also make the necessary payments required for registration.

• Examination by the registrar

The application is fully examined at this stage to determine whether the mark is registrable. Once this is determined an examination report is issued stating whether the mark has been approved for registration or not.

• Advertisement

Once the mark is approved for registration, one should pay the required advertisement fee after which the mark will be advertised in the KIPI Journal for sixty(60) days to allow for any objections to be raised,if no objection is raised then the mark can be able to proceed for registration. However, where there is an objection, Form TM6 is usually filed and proceedings in respect of the objection commence.

• Registration

If there are no objections raised, the mark is registered and the proprietor of the mark is then issued with a Trademark Certificate.

NOTE: For any enquiries on the same please do not hesitate to contact us on legalserviceskenya@gmail.com

STEP BY STEP GUIDE ON BUYING LAND IN KENYA

All persons in Kenya can hold land in Kenya however, the Constitution of Kenya, 2010 under Article 65(1)provides that a person who is not a citizen may hold land on the basis of leasehold tenure only, and any such lease, however granted, shall not exceed ninety-nine (99) years. In the case of companies they are considered a citizen only if the body corporate is wholly owned by one or more citizens.

Any person willing to buy land in Kenya should follow the following steps below:

1. Parcel identification: The buyer in this case identifies the parcel of land which suits his/her needs, this being the acreage, location etc. at this point the buyer should take a further step to visit the physical location of the property to ascertain the boundaries, ensure that there are no occupants, to avoid instances of adverse possession.
2. Preliminary investigation of Title: The buyer should obtain copy of the Title to the property and conduct an official search which is a very important step in buying land in Kenya and should not be skipped. This usually involves lodging an official search at the lands registry depending on where the property is located, paying the requisite search fees which is usually Kshs. 520/=. The search results usually takes three(3) working days and they usually ascertain ownership and any encumbrances on the property. It is also prudent to conduct a search at the Ndungu Land Report to ensure that the parcel of Land is not listed as one of the illegally and irregularly allocated land. 
3. Preparation of the Sale Agreement: This is usually done by the Seller/Vendor's advocates. The Sale Agreement usually sets out the terms agreed between the parties. The buyer or if represented the buyer's advocates should ensure that they review the Agreement for Sale to ensure that the terms are favorable. The Sale Agreement usually contains the following terms i.e the description of the parties, purchase price, deposit, warranties, termination, completion, governing law etc. Once the parties have agreed on the terms, the same is engrossed and sent for execution by the purchaser then the vendor or their powers of attorney. Once executed nominal stamp duty is paid for the Agreement.
4. Obtaining the rates and rent clearance certificates where the same are applicable: Rent clearance property is usually obtained for leasehold properties only and rates clearance certificate is obtained for properties for properties in the municipalities.
5.  Preparation of the Transfer: This is usually done by the purchaser's advocates and reviewed by the vendor's advocates, and executed by both parties.
6. Obtaining the requisite consent to transfer: Depending on whether the property is agricultural or not,consent to transfer should be obtained. In the case of Agricultural land, the consent to transfer should be obtained from the relevant Land Control Board.
7. Valuation of the property and Payment of Stamp duty: Valuation of property in Kenya is usually done by a registered Government valuer. Once one lodges a valuation for Stamp duty application at the Ministry of Lands with the accompanying documents the valuer usually contacts the party and visits the site and values the property, a report is then compiled and the value is endorsed on the transfer and then assessment of stamp duty which is usually 4% of the value of the property located in the municipalities, for agricultural property it is 2% of the value of the property. Once payment is made the documents are lodged at the lands registry for stamping where the collector of Stamp duty is fully satisfied that payment has been made.
8. Registration formalities: Booking for registration of the transfer in favor of the purchaser. The Original Title, the transfer (in triplicate), land rent and rates clearance certificate(where applicable), consent to transfer, valuation for stamp duty form, the stamp duty declaration, assessment and pay-in-slip, PIN and IDs of the purchaser and vendor are lodged for registration.
9. Post registration search: This is a very important step after registration, to ensure that the transfer of the property in favor of the purchaser is ascertained.

NOTE: This is just a brief summary of the steps required in buying property in Kenya, if you require further assistance or information, do not hesitate to send an e-mail to legalserviceskenya@gmail.com

REGISTRATION OF COMPANIES UNDER THE NEW COMPANIES ACT, 2015

Following the enactment of the New Companies Act, 2015, new forms have been introduced for registration of Companies. A person interested in forming a Company should submit the following documents to the registrar of Companies:

1. Application and reservation of Name.This is done using form CR 14, which can be lodged at any Huduma Center in the country, online using the e-citizen platform or via your mobile phone by dialing *271.
2. Application for registration of the company using form CR 1 which contains the proposed name that was reserved, the registered office of the Company, liability of members (whether limited by shares or by guarantee), the nature of the company (if private or public) and the name, consent of the initial director and secretary of the company and address of the agent if an agent is used to make the application.
3. Model memorandum for a company limited by shares (Form CR 2) OR Model memorandum for a company limited by guarantee (FORM CR 3) OR Model memorandum for a company whose liability is unlimited (FORM CR 4).
4. Duly stamped,Statement of Nominal Share Capital (this is still a requirement as had been provided under the old regime).
5. .Form CR 8 being the Notification of Directors residential address.
6. Articles of Association (if those provided in the Companies (General) Regulations, 2015 have not been adopted).
7. Application for registration attaching all identification documents i.e National Identity Card, Passport Photographs, PIN and Passport (for foreigners).

NOTE: It is always prudent to ensure that once you have registered the Company you obtain a KRA PIN for the Company and a Company Seal.

Please note that this is just a brief and one should not deter from seeking further legal advise, for any clarifications on the same do not hesitate to contact, legalserviceskenya@gmail.com

JOINT VENTURES IN THE CONSTRUCTION INDUSTRY

Land prices in Kenya have risen, hence posing a challenge to developers and land owners. This has prompted land owners and developers to enter into joint venture agreements which is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task, in this case being undertaking a development.

Since the cost of starting new projects is generally high, a Joint venturecan help to mitigate risk by sharing it across the parties as they are all equally invested in the project. They then also share the resulting profits.

The land owner contributes the land while the developer finances the project.

However it is important that the parties have a shared vision and ethos, the structure, resourcing and governance is clear from the outset.

Factors that should be taken into consideration in the Joint Venture Agreement are as below:

1. The business structure;

2. Tax matters;

3. Project consultants;

4. Change of user approvals;

5.Funding and cash extractions;

6.Profits and losses;

7.Default;

8.Dispute resolution. etc.

Please note that this is just a brief and one should not deter from seeking further legal advise, for any clarifications on the same do not hesitate to contact, legalserviceskenya@gmail.com