Fundraising · M&A · Corporate finance
Corporate Law, Investment and Capital Raising in Kenya
Investors and buyers do not price a business on its potential alone. They price it on what the documents show — and Kenyan due diligence has a habit of surfacing the same avoidable problems.
Corporate and transactional work we handle
- Corporate structuring and reorganisation
- Shareholder and founder agreements
- Company incorporation and corporate housekeeping
- Corporate governance and board advisory
- Startup structuring
- Startup fundraising and funding rounds
- Venture capital and private capital
and 7 further areas set out below
The value of a transaction is usually decided in due diligence rather than in the negotiation that follows it. A buyer or investor who finds that the cap table does not reconcile, that the intellectual property was never assigned to the company, or that the statutory registers have not been maintained does not usually walk away. They discount, they demand indemnities, or they hold money back.
Two problems recur in Kenyan transactions often enough to be worth naming. The first is corporate housekeeping: the Business Registration Service has been enforcing the beneficial ownership requirements under section 93A of the Companies Act, 2015 with real consequences, and in April 2025 the Registrar issued notices warning that failure to file annual returns or maintain a beneficial ownership register can lead to strike-off. A company that is not in good standing is difficult to fund and harder to sell. The second is founder arrangements never reduced to writing — equity splits, vesting, who owns what was built before incorporation.
We act on the transaction and on the work that makes the transaction possible: structuring, shareholder and founder arrangements, funding rounds, acquisitions and disposals, corporate finance and restructuring. Where a deal is not yet ready to run, we would rather spend a short period making the company diligence-ready than take it to market and lose value in the discount.
Areas of work
Corporate and transactional work we handle
Corporate structuring and reorganisation
Group structure, holding company arrangements, share capital and internal reorganisation — including restructuring undertaken ahead of an investment or a sale to put the assets in the right entity.
ExploreShareholder and founder agreements
Equity splits, vesting, reserved matters, drag and tag rights, pre-emption and deadlock mechanics. The agreement matters most in the situation nobody expects at signing: one founder leaving early.
ExploreCompany incorporation and corporate housekeeping
Incorporation, statutory registers, annual returns and the beneficial ownership filings the BRS now enforces. Unglamorous, and the most common reason a transaction timetable slips.
ExploreCorporate governance and board advisory
Directors' duties under the Companies Act, 2015, board and shareholder procedure, conflicts, and the governance upgrades institutional investors expect as a condition of investment.
Startup structuring
Getting a company investable: clean cap table, IP assigned in from founders and contractors, employee equity arrangements, and articles that will not need rewriting at the first term sheet.
ExploreStartup fundraising and funding rounds
Seed and growth rounds from term sheet to completion — SAFEs, convertible instruments, share subscription and shareholders' agreements, and the conditions precedent that decide when money actually moves.
ExploreVenture capital and private capital
Acting for founders raising from institutional investors and for funds investing into Kenyan companies, including investor protections, information rights and board composition.
ExploreMergers and acquisitions
Share and asset acquisitions, disposals and mergers: structure, due diligence, sale and purchase agreement, warranties and indemnities, and completion mechanics.
ExploreBuying a business
Buy-side advice including diligence scope, price adjustment mechanisms, warranty protection and how much of the consideration should be deferred or held in escrow.
ExploreSelling a business and founder exits
Sell-side preparation and execution: getting the company diligence-ready, managing the disclosure exercise, and negotiating the limits on post-completion liability.
ExploreTransaction due diligence
Legal diligence on a target — corporate, contractual, employment, property, IP and regulatory — reported by materiality rather than as an undifferentiated list of findings.
Corporate finance and debt capital
Facility agreements, security packages, intercreditor arrangements, project and blended finance, refinancing and the corporate authorisations a lender will require.
Restructuring and distressed situations
Debt restructuring, rescue financing and the options under the Insolvency Act, 2015 for a business under pressure — where directors' exposure changes as solvency becomes doubtful.
Merger control and regulatory approvals
Competition Authority of Kenya notification and clearance where thresholds are met, together with any sector approvals the transaction requires. These sit on the critical path and are best assessed at structuring stage.
The law that applies
The corporate law framework in Kenya
Kenyan corporate transactions run on the Companies Act and a small number of adjacent statutes. These are the provisions that most often shape a deal, and the compliance obligations that most often delay one.
Companies Act, No. 17 of 2015
The principal statute: incorporation, share capital, directors' duties, shareholder rights and remedies, and the procedural machinery for corporate decisions. It also governs schemes of arrangement and the statutory routes for reorganisation.
Companies Act, 2015 section 93A — beneficial ownership
Every company must keep a register of beneficial owners and lodge it with the Business Registration Service through eCitizen, updating it within 14 days of any change. The BRS has enforced this actively since 2024, and non-compliance also affects access to financing and eligibility for government tenders.
Failure to keep the register attracts a fine of KES 500,000 plus daily default penalties. In April 2025 the Registrar issued notices warning of strike-off under section 894 for failure to file annual returns or update beneficial ownership records.
Insolvency Act, No. 18 of 2015
Provides administration, liquidation and company voluntary arrangements, and introduced rescue procedures aimed at preserving viable businesses. Relevant to any transaction involving a distressed target, and to directors weighing their position as solvency becomes uncertain.
Competition Act, 2010
Requires notification of mergers and acquisitions to the Competition Authority of Kenya where the applicable thresholds are met, with completion prohibited before clearance. Because clearance sits on the critical path, it should be assessed when the structure is chosen rather than when the agreement is signed.
Capital Markets Act (Cap 485A)
Governs public offers, listed companies and regulated fundraising activity. Most private fundraising falls outside it, but the boundary matters: a widely marketed offer can engage the public offer rules without the company intending it.
Business Laws (Amendment) Act, 2024
In force from 27 December 2024, amending a group of business statutes including the Banking Act, the Central Bank of Kenya Act, the Microfinance Act, the Standards Act and the Special Economic Zones Act. Relevant when diligence touches a regulated target.
This page describes the legal framework in general terms and is not legal advice. Legislation and regulator practice change; the position below was reviewed on 26 August 2026. Advice on your own circumstances requires an engagement with the firm.
Who we act for
Who we act for on corporate transactions
Founders and startups
Raising a round, formalising arrangements between co-founders, or preparing for diligence a company has not been through before.
Investors and funds
Investing into Kenyan companies and needing diligence, investor protections and enforceable governance rights.
Boards and management
Governing a company through a transaction, a governance upgrade, or a period where solvency and directors' duties need careful attention.
Buyers and sellers of businesses
Acquiring or exiting a Kenyan business and needing structure, diligence and a sale agreement that allocates risk sensibly.
Established companies
Restructuring a group, raising debt, or resolving corporate housekeeping that has fallen behind and is now blocking something else.
Foreign acquirers and investors
Buying into or acquiring a Kenyan company and needing local diligence, regulatory clearance and completion mechanics handled here.
Get the company ready before the buyer looks
Whether you are raising, acquiring or selling, tell us what the transaction is and where the company currently stands. We will tell you what needs fixing first and what it will take to get there.
How we work
How a corporate transaction runs with us
- 01
Structure and readiness
We look at the transaction structure and the company's actual state — registers, filings, cap table, IP ownership — and flag what needs fixing before a counterparty sees it.
- 02
Diligence
Buy-side investigation or sell-side preparation and disclosure, reported by materiality so the commercial team can see what actually affects price or risk.
- 03
Documentation and negotiation
Term sheet through to definitive documents — subscription or sale agreement, shareholders' agreement, disclosure letter and ancillaries — negotiated against a position agreed with you in advance.
- 04
Completion and post-completion
Conditions precedent, regulatory clearances, completion mechanics, then the filings and register updates that make the transaction effective and the company compliant afterwards.
Legal insights
Further reading on corporate, investment & capital
- Company LawHow to Register a Company in Kenya: The 2026 Process, Costs and Compliance TrapsIncorporation is the easy part. The obligations that attach the moment your certificate issues are where most Kenyan companies fall out of compliance in year one.
- Company LawDirectors' Duties Under the Kenyan Companies Act: What Boards Get WrongThe Companies Act 2015 codified directors' duties that many Kenyan boards still treat as advisory. Personal liability says otherwise.
- Investment LawInvesting into Kenya: Legal Structures That Protect Foreign CapitalTreaty protection depends on where your holding company sits. That decision is made once and cannot be usefully revisited later.
- Company LawWhen a Company Registration Lawyer Actually Earns Their Fee in KenyaAnyone can file the forms. The value sits in the shareholding structure, the articles, and the founder protections that are expensive to retrofit after a raise.
- Company LawDoes Your Kenyan Company Actually Need a Company Secretary?The threshold is clearer than most directors think, and the penalty for getting it wrong is not the fine — it is the invalid resolution.
- Corporate LawBenchmarking Legal Spend: What Kenyan Corporate Work Should CostKenyan legal fees are partly statutory. Knowing which parts are fixed and which are negotiable changes the conversation.
Common questions
Questions we are asked most
Related Gracen Law Services
Work that sits alongside corporate, investment & capital
Most matters in this area touch at least one of the following. Each links through to the relevant Gracen Law practice or sector page.
- Corporate LawOwnership, capital, and governance structured for long-term value.
- Commercial LawCommercial relationships that protect revenue and reduce risk.
- Regulatory & ComplianceDecisions that withstand regulatory and stakeholder scrutiny.
- Technology, Startups, and Digital Business
- Banking, Finance, and Investments
- Foreign Investors and Diaspora Clients
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Get the company ready before the buyer looks
Whether you are raising, acquiring or selling, tell us what the transaction is and where the company currently stands. We will tell you what needs fixing first and what it will take to get there.
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Reviewed by the Gracen Law corporate, investment & capital team · Last reviewed 26 August 2026