Hi,
We have had a number of people who registered businesses or companies coming back to register even more businesses. They are what you could probably call 'serial entrepreneurs'! Or, better yet, empire builders. Then, from this observation, we noticed that most have never heard of holding companies and the enormous benefits that it presents their business empires. We therefore took it upon us to educate them and you on holding companies and how to go about registering them.
A holding company is a business that is able to own other businesses under it. Holding companies are the ones you see calling themselves, for example, the AccessKenya Group or Sameer Group of Companies (the company name ending with Group or Holdings). Holding Companies or 'Group of Companies' is a very powerful business formation. Why would we say that? Because with your holding company you join an elite club of renowned holding companies including: the TPS Group which owns Serena Hotels; Royal Media Group which owns Citizen TV, Citizen Radio and a chain of other radio stations; The Aga Khan Development Network which owns a string of blue-chip companies including
Diamond Trust Bank, Nation Media Group, Aga Khan Hospitals and schools.
Now that you know about holding companies and have seen that you can own a holding company, you must be asking what the procedure for registering it is. So, to register your holding company, the following is the 2-weeks procedure you need to follow:
1. Name search for the holding company and, on the name's availability, collection of personal details of the directors;
2. The drafting and signing of your holding company's memorandum of understanding and articles of association;
3. Issuance of your Holding Company Limited's Incorporation certificate two weeks later granting you the right to own other organizations and businesses!
Unfortunately, sole proprietorships and partnerships can't act as holding companies (but they can after upgrading to limited liability companies). The law only allows limited liability companies to proceed to become holding companies. These companies will need to have between two and fifty directors. The companies can either be private or public companies and should state in their articles of association that they are a holding company.
Then, with your holding company, you can now own your NGOs, your various Sole proprietorships and even Trusts. A very good example of a holding company that owns trusts and companies is the Equity Bank Group which owns Equity Bank Ltd and the Equity Foundation (a Trust carrying out its philanthropic agenda).
There may be a number of reasons why you should have all your businesses roofed under your holding company. The reasons vary from lower taxation to an easily manageable management structure. Or, it could even offer reprieve for your next of keen in the event of your untimely demise. But, most importantly, is because it will enable your accountants to know the exact financial position of your conglomerate of businesses with a lot more ease. An exercise that will lead to more open doors in the financial circles from banks to investors!
PayBill Systems
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