Aspiring business owners are often puzzled when selecting a business name, factoring in the wide pool they have to choose from.
Most look for unique names that represent their products and stand out from other businesses.
In the rush of selecting a suitable name, Kenyans may make common mistakes and end up with unregistered businesses.
"A business name is more than just words, there are many factors that play into creating an acceptable name in accordance with the Companies Act 2015," states the Business Registration Service.
According to the Companies Act 2015, the registrar may not register a company by a name that consists of or includes anything that is not permitted by the regulations.
Requirements
While selecting the business name, avoid starting with the word 'Kenya' as it is reserved for government-owned entities.
According to the Companies Act 2015, a business owner needs the registrar's approval before using a name that gives the impression that the company is connected with a State organ, a county government, or any public authority.
Characters
Business people should limit the characters of the company name to 160.
Symbols like (*, =, #. %) may be used but not as the first three letters of the company. You can also include numbers, a full stop, a comma, a semi-colon, or a hyphen in the business name.
Names
You are also prohibited from using offensive words, either in English or vernacular.
If it is a private company, the name must end with Limited or 'Ltd'. On the other hand, a public company incorporated under the 2015 Act must end with 'plc' or Public Limited Company
The name should not be identified as an already reserved name or the name of an already registered company. Also, the name should not be the same as or similar to that of a registered trademark.
Business names containing words like "co-operatives", "society", or "trade unions" are not allowed.
Notably, when a reservation of a name is made for a period of 30 days or an extended period, no other company is entitled to be registered under that name.
Mistakes
Entrepreneurs often register more than one company without verifying whether the business idea is viable.
Subsequently, some entrepreneurs fail to select partners and shareholders. This mistake ends up crippling the business venture.
The lack of enough capital and funds to run a business often results in the entrepreneur declaring bankruptcy when the business does not make expected profits.
Under the excitement fog of being a business owner, an entrepreneur might fail to define the market for the business.
