Sole Proprietor or Limited Company for a Referral Partner? (Kenya)

The verdict in three sentences

At the start, a sole proprietorship is enough: quick registration, light accounting, minimal cost. As soon as you target institutional deals (8 % commission on tickets of 5,000,000 FCFA and up), a limited company separates personal and business assets and reassures finance directors. The rule: stay simple while tickets are small, incorporate when they grow.

Two statuses, two logics

The sole proprietor favours tax and administrative simplicity. The limited company (equivalent to the OHADA SUARL) creates a separate legal person, protects your assets, and gives decisive contractual credibility with a bank, a group or an international NGO.

A partner who mostly introduces showcase sites and shops can stay a sole proprietor for years. One who lands meetings with bank CIOs is better off invoicing through a limited company.

Registration costs and timelines (2026)

Orders of magnitude vary by country and one-stop shop. Here is a 2026 estimate for Nairobi and Douala.

In Kenya, sole proprietorship on eCitizen costs the equivalent of a few thousand FCFA; a limited company much more. In Cameroon, registration through the Douala CFCE takes about 48 hours. VAT applies above the turnover threshold: watch it as commissions rise.

Kolonell referral programme: which status for which line?

The Kolonell referral scale directly guides the status choice. The higher-end the line, the more incorporation is justified.

These amounts are 2026 orders of magnitude. The 5 % recurring on showcase sites is added on each renewed maintenance contract.

Mini case study

Wanjiru, a digital referral partner in Nairobi, starts as a sole proprietor. In year one she introduces 8 showcase sites and 3 e-commerce projects: 8 × 75,000 + 3 × 240,000 = 1,320,000 FCFA. Light accounting, VAT threshold not reached, everything is smooth. In year two she lands a meeting with a hotel group for an institutional site at 10,000,000 FCFA: her commission would be 800,000 FCFA. But the finance department requires contracting with a legal entity. Wanjiru registers a limited company on eCitizen for ~KES 15,000 in a couple of days, secures the contract, and protects her assets on future large tickets. Incorporation pays off from the first institutional invoice.

FAQ

Can a sole proprietor invoice an institutional client? Technically yes, but many finance departments and banks require a legal entity for large contracts. On a 10,000,000 FCFA ticket (8 % commission = 800,000 FCFA), a limited company avoids a contracting refusal.

How much does a limited company cost in Kenya? 2026 estimate: around KES 10,000 to 25,000 via BRS on eCitizen, registered in 1 to 3 days. Sole proprietorship costs only KES 1,000 to 2,000.

When does VAT become mandatory? Above the turnover threshold set by local tax law — around KES 5M in Kenya. While your referral commissions stay modest you may avoid it; watch the threshold once you stack marketplace and institutional deals.

Does a limited company really protect my assets? Yes. Your liability is limited to your contributions, unlike a sole proprietor whose personal assets are exposed. That is decisive when signing high-stakes contracts.

Can I start as a sole proprietor and switch later? That is exactly the recommended strategy. Test referral work as a sole proprietor (75,000 FCFA per showcase site), then incorporate when marketplace and institutional tickets arrive.

Let's talk about your project. Join the Kolonell referral programme — 15 % showcase (+5 % recurring), 12 % e-commerce, 10 % marketplace, 8 % institutional — and pick the status that fits your tickets. WhatsApp +221 77 596 93 33.