Relevant KYC documents for a company purchasing property in Kenya.

In Kenya, KYC requirements for property transactions involving a company are governed by regulations from institutions like the Law Society of Kenya (LSK), the Registrar of Companies, and the Ministry of Lands. Banks and advocates (lawyers) handling conveyancing will also enforce these KYC rules.

KYC Documents Required for a Company Purchasing Property in Kenya

1. Certificate of Incorporation

• Issued by the Kenya Registrar of Companies.
• Proves the legal existence of the company.

2. Company PIN Certificate (KRA)

• Issued by the Kenya Revenue Authority.
• Required for stamp duty and registration.

3. Tax Compliance Certificate (optional but recommended)

• Confirms the company is compliant with tax obligations.

4. CR12 Form (Company Registry)

• Official document listing directors and shareholders.
• Must be recent (not older than 3 months).

5. Board Resolution

• Authorizing the purchase of the specific property.
• Appoints a signatory to act on the company's behalf.

6. National ID or Passport of Directors and Authorized Signatory

• To verify the identity of those acting for the company.

7. PIN Certificates of Directors and Authorized Signatory

• Required for tax compliance checks and transactions.

8. Passport-Size Photos of Directors and Authorized Signatory

• Used for identification and registration files.

9. Company Address and Physical Location

• Utility bill, lease agreement, or business permit may be requested.

10. Company’s Constitutional Documents (Memorandum & Articles of Association or Statement of Particulars)

• Required to verify company structure and powers.

 

Additional Documents (Context-Specific)

• Letter of Offer / Sale Agreement – Often required early in the process.
• Land Control Board Consent – If agricultural land is involved.
• Power of Attorney – If someone other than a director is acting on behalf of the company.
• Loan Documentation – If the purchase is financed.

 

Other Notes

• Ensure that the authorized signatory appears in the CR12 or is granted authority by a board resolution.
• The advocate handling the transaction will conduct due diligence using these documents.
• The documents will also be needed during the land transfer process at the Ministry of Lands and for payment of stamp duty through iTax.

 

Board Resolution template for a Kenyan company purchasing property

BOARD RESOLUTION FOR PURCHASE OF PROPERTY

[Company Letterhead]

BOARD RESOLUTION OF [COMPANY NAME] LIMITED
Company Registration Number: [Insert]
PIN: [Insert]
CR12 Date: [Insert date of latest CR12]

At a meeting of the Board of Directors of [Company Name] Limited, duly convened and held at [Location] on [Date], the following resolutions were passed:

 

RESOLUTION FOR PURCHASE OF PROPERTY

IT WAS RESOLVED THAT:

1. The Company shall proceed with the purchase of property known as [Insert Property Description – e.g., Land Reference Number, Title Number, Plot Number, Location] for the consideration of KES [Insert Amount], or such other amount as may be agreed upon in writing.
2. The Company approves and authorizes the negotiation, execution, and completion of all agreements, documents, and instruments necessary for the completion of the said transaction, including but not limited to:
• The Offer Letter / Sale Agreement
• Transfer documents
• Land Control Board applications (if applicable)
• Registration documents
• Payment of stamp duty and related fees
3. [Name of Authorized Person], being a Director/Authorized Representative of the Company, holding National ID/Passport No. [Insert ID/Passport Number], and KRA PIN [Insert PIN], is hereby authorized to:
• Act on behalf of the Company in all matters relating to the purchase;
• Sign and execute all relevant documents;
• Liaise with the Advocate(s), Seller(s), and Government offices;
• Make payments as necessary to complete the transaction.
4. The Company Secretary is hereby instructed to issue certified copies of this resolution to all relevant parties upon request.

 

CERTIFIED TO BE A TRUE COPY OF THE RESOLUTION PASSED BY THE BOARD OF DIRECTORS OF [COMPANY NAME] LIMITED ON [DATE]

Signed:

 

[Name]
Director

ID No: [Insert]
Signature: ______________________

 

[Name]
Director/Company Secretary (if required)

ID No: [Insert]
Signature: ______________________

Date: [Insert Date]

 

The process of compulsory land acquisition

Compulsory acquisition process is stipulated in the Land Act 2012 and can be broken down into pre-inquiry stage, inquiry and payment stage.

Section 107-133) details the following steps to be followed when undertaking compulsory land acquisition. The elaborate process is as follows (Figure 1):

Step 1: Formal request to the Commission by Competent office indicating the purpose for which land is to be acquired. The request should prove that the land is needed for public purpose
Step 2: Consideration by the Commission and Approval i it meets the Constitutional and Statutory threshold (public purpose).

Step 3: Publication of Notice of Intention to acquire land is published in the Kenya Gazette. The Commission will undertake public sensitization and participation by holding meetings, workshops and any other appropriate fora to inform the public about the proposed project and matters pertaining to procedure, expectations and responsibilities of stakeholders in the land acquisition process.

Step 4: Ground inspections and valuation to record any improvements affected by the proposed project.

Step 5: Publication of Notice of Inquiry in Kenya Gazette, service of notice and holding of inquiry: This allows persons interested in the subject land to submit their claims.

Step 6: Issuance of an award of compensation to every person determined to have an interest in the land; Land Lord, Leaseholder (building) or Sublease Holder (Loss of profit).

Step 7: Payment upon receipt of funds.

Step 8: Issuance of Notice of Taking Possession

Step 9: Final Survey and vesting of the acquired land

Can you arrest someone who owes you money?

The most common threat is “If you don’t pay me, I’ll call police for you.”

But in law, debt is not a criminal offence. The Police have no power to arrest someone simply because they owe money.

Recovery of debt is a civil matter you go to court, not police station.

Owing money is not stealing. Only the court can enforce repayment, not the Police.

Involving the Police may only complicate issues for you as the debtor may sue you where their Fundamental right was breached.

#LawyersGuide 

On reaffirming procedural rights and limiting abuse/Balancing public interest in tax enforcement with individual constitutional rights: The Case of Robert K. Ayisi v Kenya Revenue Authority & another [2018] KEHC 6948 (KLR)

Full Case Available Here 

1. Constitutional Tension: Revenue Enforcement vs. Individual Rights

a) State Interest:

The Kenya Revenue Authority (KRA) has a statutory and constitutional mandate under Article 209 and Article 210 to collect taxes lawfully imposed. Effective enforcement mechanisms are vital to prevent revenue leakage, tax evasion, and abuse of public funds.

b) Individual Rights at Stake:

Dr. Ayisi’s case exposed how statutory powers, when exercised without restraint or judicial supervision, can infringe on constitutionally protected rights such as:

• Right to privacy (Article 31)
• Right to dignity and humane treatment (Article 28, 29)
• Right to fair administrative action (Article 47)
• Due process protections for arrested persons (Article 49)

This created a constitutional tension between public interest in tax enforcement and individual rights — especially when the public officer was acting on behalf of a public entity (Nairobi County).

2. Key Legal Doctrines & Principles Applied

a) Principle of Proportionality (Article 24 test)

Justice Odunga applied the Article 24 limitation test to assess whether the rights limitations by the Tax Procedures Act were reasonable and justifiable in an open and democratic society. The Court found that:

• Seizure and search powers without a court order (sections 44 & 60 TPA) lacked safeguards against abuse.
• Enforcement mechanisms should not become tools of intimidation or humiliation.
• Constitutional rights must not be overridden by mere statutory convenience.

b) Due Process and Procedural Fairness

• Arresting and detaining Dr. Ayisi, without formal charges or notice, violated basic procedural fairness (Article 47).
• KRA’s actions amounted to administrative overreach, not authorized by law or justified by exigency.

c) Limits on Delegated Powers

Statutory powers granted to KRA under the TPA must comply with the Constitution. The Court reaffirmed that:

"The Constitution is the supreme law; legislation cannot override it, and all public power must be exercised in conformity with it."

3. Judicial Oversight: The Role of Courts in Controlling Administrative Abuse

The Court criticized KRA’s non-transparent and forceful approach, emphasizing the judiciary's role in:

• Checking misuse of statutory authority.
• Interpreting laws in light of constitutional values, especially when rights are curtailed.

The unconstitutional provisions in the TPA were declared invalid to the extent they permitted:

• Searches without court warrants.
• Disclosure demands overriding legal privilege.
• Detentions without clear legal processes.

This ruling thus reinforced that executive enforcement must be legally bounded and subject to judicial review.

4. Practical Implications

a) For Public Officials

• Dr. Ayisi was acting in his official capacity; the Court noted the unjust targeting of a public officer for records beyond his control (held by EACC).
• This sets a precedent protecting public servants from personal liability or coercion when acting in good faith and within official limitations.

b) For KRA and Tax Agencies

• The judgment temporarily weakened KRA’s enforcement powers by striking down key investigative provisions.
• Agencies must balance enforcement with procedural fairness, and seek court supervision where rights are involved.

c) For Legal and Tax Practitioners

• The case highlighted how client–advocate privilege, privacy, and administrative accountability intersect with tax law.
• It encouraged litigation-based oversight of agencies that exceed their mandate.

5. Impact of the Appeal (Court of Appeal, 2023)

The Court of Appeal (Civil Appeal 287 of 2018):

• Reinstated sections 44 and 60 of the TPA — allowing KRA to search, seize, and enforce without a prior court order, under conditions.
• However, it maintained that Dr. Ayisi's arrest was unconstitutional, reaffirming procedural rights and limiting abuse.

Key Takeaway:

• The appellate court restored the statutory enforcement powers, but emphasized that they must be exercised with constitutional restraint, and not punitively or arbitrarily.

6. Broader Legal Significance

a) Constitutional Supremacy

This case illustrates the principle that all legislation and state action is subordinate to the Constitution — a foundational element of Kenya’s 2010 legal framework.

b) Human Rights in Administrative Law

The judgment deepened the application of human rights standards in administrative contexts, especially involving powerful government agencies.

c) Developing Kenyan Jurisprudence

Justice Odunga’s ruling contributes to:

• The growing body of constitutional administrative law.
• Judicial efforts to harmonize statutory frameworks like the TPA with constitutional rights and democratic values.

Conclusion

The Robert K. Ayisi v. KRA case is a landmark in constitutional law, demonstrating the judiciary’s crucial role in:

• Enforcing the supremacy of the Constitution.
• Protecting citizens (and officials) from arbitrary state action.
• Balancing public interest in tax enforcement with individual constitutional rights.

Even though the Court of Appeal later restored KRA’s powers, the core message of constitutional accountability and due process remains intact.

Step-by-Step Process for Registering Sectional Properties

Step 1: Preparation and Documentation

1. Draft a Sectional Plan: Engage a registered surveyor to prepare a sectional plan of the property, which includes detailed diagrams showing the boundaries of individual sections and common areas.

2. Create a Declaration of Condominium: Prepare a declaration that outlines the ownership structure, rights, and responsibilities of individual owners, and the management of common areas.

3. Develop Bylaws: Draft bylaws that govern the operation and management of the sectional property, including rules for maintenance, usage of common areas, and dispute resolution procedures.

Step 2: Obtain Necessary Approvals 

1. Consult with Local Authorities: Ensure that the sectional plan and bylaws comply with local zoning and building regulations. Obtain any necessary approvals or permits from municipal or county authorities.

2. Secure Consent from Property Owners: If the property is already occupied, obtain written consent from existing owners to proceed with the registration.

Step 3: Submit Application for Registration 

1. Prepare Registration Documents: Compile the following documents for submission to the Registrar of Titles:

• The sectional plan, certified by a registered surveyor.

• The by laws for the management of the property.

• Proof of ownership or a title deed for the property.

• Consent from existing property owners (if applicable).

2. File Application with the Registrar: Submit the completed application and supporting documents to the Registrar of Titles at the relevant land registry office. Pay the required registration fees.

Step 4: Registrar’s Review and Approval 

1. Review Process: The Registrar will review the submitted documents to ensure they comply with the Sectional Properties Act and other relevant regulations.

2. Approval and Registration: Upon approval, the Registrar will register the sectional property and issue a certificate of registration, which includes details of individual ownership sections and common areas.

Step 5: Establish Management Committee or (homeowners' association)HOA 

1. Form a Management Committee: Establish a management committee or HOA to oversee the administration and maintenance of common areas. This committee is typically elected by property owners and is responsible for enforcing bylaws and managing communal services.

2. Register the Management Committee: Register the management committee with the relevant authorities if required, and ensure it operates in accordance with the by laws.

Step 6: Issuance of Title Deeds 

1. New title deeds are issued for each sectional unit. The original register is closed, and new registers are opened for each unit.

2. Owners will not incur additional stamp duty if they paid the requisite fees during the registration of long-term leases.

Advisory: Change of Purchaser in an Agreement for Sale of Property

When a purchaser initially bought property as an individual but now intends to change ownership to a company, the process depends on whether the company already exists and at what stage the transaction is (e.g., before or after registration of the transfer). Here's how it works in Kenya:

 

Scenario A: Before Transfer Is Registered (Ideal Case)

If the transfer has not yet been registered in the purchaser’s name (i.e. the title is still in the seller’s name), the steps are relatively straightforward:

Steps:

1. Incorporate the Company
• Register the intended company via eCitizen if not already incorporated.
2. Amend the Sale Agreement (if already signed)
• Draft and execute a Deed of Assignment or Addendum to reflect that the company will now be the purchaser.
• All parties (seller, individual purchaser, and the company) must sign.
3. Update the Transfer Documents
• Prepare new transfer forms in the company's name as transferee (e.g., Form L.R. 1, transfer instrument).
4. Generate a New Stamp Duty Valuation in Company Name
• Request the stamp duty assessment through Ardhisasa under the company’s Ardhisasa ID.
5. Pay Stamp Duty
• Based on the current valuation, stamp duty (typically 4% for urban property) must be paid by the company.
6. Complete Registration of Transfer
• Submit the stamped documents and pay registration fees to the Land Registry.

 

Scenario B: After the Title Has Been Transferred to the Individual

If the individual already owns the property and now wishes to transfer it to a company, this is treated as a fresh conveyance, attracting stamp duty and transfer formalities.

Steps:

1. Incorporate the Company (if not done already)
2. Execute a Transfer of Property to the Company
• Draft a formal transfer instrument from the individual to the company.
3. Stamp Duty Payable
• Stamp duty will again be assessed based on current market value, even if no money changes hands.
4. Apply for Land Control Board Consent (if agricultural land)
5. Register the Transfer in Favour of the Company
• Submit documents for registration at the Land Registry or through Ardhisasa.

Note: KRA and the Land Registry will treat this as a sale/transfer and will require justification for the change (e.g., company ownership, internal restructuring).

 

Important Legal Considerations

• The company must be properly incorporated and have a valid Ardhisasa ID.
• If the individual and company are related, the transfer may raise capital gains tax (CGT) or tax planning implications.
• Consider consulting on Section 38 of the Stamp Duty Act (possible exemptions in restructuring, if applicable).
• The seller may need to consent to the change if it happens before registration.

 

Optional Documents Needed:

• Deed of Assignment / Addendum to Sale Agreement
• Board Resolution (if company is purchaser)
• Company Certificate of Incorporation
• KRA PIN for company
• CR12 or register of directors
• Transfer instrument in favor of company
• Application for stamp duty valuation (via Ardhisasa)