County Trade Licensing Process
County Trade Licensing Process
While the County Governments Act provides the broad legal mandate for counties to
regulate trade and issue licenses, the specific details of these regulations, such as the
categories of licenses required, the procedures for application, the fees payable, and
the conditions attached to licenses, are largely determined at the level of individual
counties 13. Each of the 47 counties in Kenya often enacts its own specific Trade
Licensing Act or bylaws that tailor the licensing regime to the unique economic
activities and regulatory priorities within its jurisdiction 3. Examples of such
county-specific legislation include the Migori County Trade Licensing Act, 2016 3, the
Kericho County Trade Licensing Act, 2017 4, and the Nairobi City County Trade
Licensing Act, 2019 5. This decentralized approach to trade licensing, while allowing
counties to address their specific needs, has resulted in a fragmented regulatory
landscape across Kenya 15.
The diverse and often inconsistent nature of trade licensing regulations at the county
level presents considerable challenges for businesses, particularly those that operate
across multiple counties. The lack of a standardized, uniform approach necessitates
that businesses research and comply with the specific licensing laws of each county
in which they have a presence, leading to increased compliance costs, administrative
complexities, and potential confusion regarding the applicable requirements 17.
Recognizing this challenge, the County Licensing (Uniform Procedures) Bill, 2022 14,
was proposed with the aim of establishing a national legislative framework for
standardizing licensing procedures across all counties. This bill seeks to create
greater certainty and reduce the burden of navigating disparate licensing regimes,
although its current status and ultimate impact remain to be fully determined 2.
In addition to the primary legal framework provided by the County Governments Act
and county-specific legislation, businesses must also be aware of other relevant
national laws that may indirectly impact trade licensing. These include national
statutes such as the Public Health Act, which sets standards for hygiene and
sanitation that businesses, particularly those in the food and hospitality sectors, must
meet to obtain and maintain a trade license. Similarly, the Environmental Management
and Coordination Act (EMCA) may impose environmental regulations that certain
businesses must comply with as a condition of their trade license. Sector-specific
legislation governing industries like manufacturing, financial services, and
transportation may also contain provisions that interact with county trade licensing
requirements, creating a multi-layered regulatory environment that businesses must
navigate 19.
Upon receiving a trade license application, the county licensing authority will
undertake a thorough assessment to ensure that the applicant meets all the
stipulated criteria and complies with the relevant national and county laws,
particularly those pertaining to public health, safety standards, and land use zoning
regulations 7. As part of this assessment process, authorized county officials, such as
licensing officers or public health inspectors, may conduct physical inspections of the
business premises to verify compliance with the necessary standards and regulations
before a final decision on the license application is made 4. Following the assessment
and any required inspections, the designated licensing officer or the Directorate of
Trade Licensing within the county government will make a formal decision to either
grant the trade license, potentially with specific conditions attached, or deny the
application if the stipulated requirements are not fulfilled 5. It is important to note that
some county trade licensing laws specify statutory timelines within which the
licensing authority is expected to process and determine applications. For example,
the Nairobi City County Trade Licensing Act, 2019, sets a 14-day timeframe for this
process 5. In some instances, failure by the licensing authority to adhere to these
timelines may result in the application being deemed automatically approved 19. If the
application is successful, the county government will issue an official trade license
document to the applicant. This license typically includes essential details such as the
name of the business, its physical address, the specific type of trade or business
activity authorized, the period for which the license is valid (often a calendar year),
and any specific conditions that the business must adhere to 5. Finally, there is usually
a legal requirement for the business owner or operator to prominently display the
original trade license at the business premises in a location where it is easily visible to
both the public and authorized county officials 3.
While the general steps involved in applying for a county trade license exhibit
similarities across different counties in Kenya, there can be significant variations in the
specific required documents, the applicable fees, the methods of payment accepted,
and the statutory timelines for processing applications 3. Therefore, it is imperative for
any business seeking to obtain a trade license to consult the specific trade licensing
laws and regulations that have been enacted by the county in which they intend to
operate 25. A detailed examination of the trade licensing acts and bills of various
counties, such as Migori, Kericho, Nairobi City County, Kiambu, Baringo, and Marsabit,
reveals a common underlying structure to the application process. This structure
generally involves the submission of prescribed application forms, the provision of
specified supporting documents, the payment of applicable fees, and an assessment
of the application by the licensing authority 7. However, the precise types of
documents that are required, the exact amounts of fees payable, the accepted
methods for making payments, and the legally mandated timelines for processing
applications can differ considerably from one county to another. These variations
often reflect the unique administrative and regulatory contexts of each county, as well
as their specific economic development objectives and revenue generation strategies
9
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The principle of legality dictates that a county government, through its designated
licensing authority, must have a clear legal basis for regulating trade and issuing
licenses. This legal basis is derived from the County Governments Act, 2012, and the
specific trade licensing acts or bylaws enacted by the respective county assembly 1.
All actions taken by the licensing authority, from setting the requirements for
obtaining a license to making decisions on individual applications, must be strictly
within the scope of the powers conferred upon it by these legal instruments 10. The
concept of ultra vires is central to this principle, meaning that the licensing authority is
prohibited from acting beyond its legally granted powers. Any licensing requirement or
decision that falls outside the scope of the enabling legislation is considered unlawful
and can be challenged through judicial review. This ensures that county governments
do not arbitrarily create or enforce trade licensing regulations without a clear and
demonstrable legal mandate 2.
County bylaws on trade licensing are expected to clearly specify the particular
purposes for which trade licenses are mandated within the county 3. These purposes
can vary depending on the specific needs and priorities of the county but often
include the generation of revenue to fund county services, the regulation of specific
types of business activities to ensure compliance with established standards, the
protection of public health and safety, the management of land use and zoning
regulations, and the promotion of fair and ethical trade practices 5. In addition to
outlining the purposes of licensing, these bylaws should also explicitly define the
limits and scope of the powers that are granted to the county licensing authority,
which is typically a directorate or department within the county government 5. This
delineation of authority should clearly outline the specific actions that the licensing
body is authorized to take in the administration and enforcement of the trade
licensing regime, such as the processing of applications, the issuance of licenses, the
imposition of conditions, and the undertaking of inspections 8. Clearly defining the
purpose and limits of the licensing authority's powers within county bylaws is of
paramount importance for ensuring accountability, preventing the arbitrary exercise
of discretion by licensing officials, and providing businesses with a clear and
predictable understanding of the regulatory framework under which they are
operating 3.
County trade licensing laws typically prescribe specific and often strict timelines
within which an appeal against a denied license application must be lodged with the
relevant appeal authority 24. These timelines are usually expressed as a specific
number of days from the date on which the applicant was officially notified of the
decision to deny the license. For example, some counties may require an appeal to be
filed within 14 days, while others might allow a period of 21 or 30 days 3. It is critically
important for applicants to adhere to these statutory deadlines, as failure to lodge an
appeal within the prescribed time limit may result in the appeal being deemed invalid
or time-barred, thereby upholding the original denial decision 25.
Applicants typically base their appeals on specific grounds, arguing that the initial
denial decision was flawed in some way. Common grounds for appeal include
assertions that the county licensing authority misinterpreted or incorrectly applied the
relevant provisions of the applicable trade licensing act or bylaws, or that the decision
was based on factual errors, insufficient evidence, or a misunderstanding of the
information provided in the application 26. Applicants may also argue that the licensing
authority acted in a procedurally unfair manner, such as by failing to provide them
with an opportunity to be heard or by not giving adequate reasons for the denial 7.
Other potential grounds for appeal could include claims that the applicant met all the
legal requirements and criteria for the issuance of the trade license as outlined in the
county's legislation, or that the denial decision was unreasonable, irrational, or
disproportionate to the stated objectives of the licensing regime 24.
However, the Fair Administrative Action Act, 2015 (FAAA), plays a significant role in
influencing the appeals process for denied trade license applications at the county
level 27. The FAAA establishes minimum standards for fair administrative action that all
public bodies in Kenya, including county governments and their licensing authorities,
must adhere to when making decisions that affect the rights or interests of individuals
or businesses, such as the granting or denial of trade licenses 43. If an applicant for a
trade license believes that the county government's decision to deny their application
was unlawful, unreasonable, procedurally unfair, or violated any of the principles
enshrined in the FAAA, they have the right to seek judicial review of that decision by
the High Court of Kenya 44. This right to judicial review under the FAAA exists even
after an applicant has exhausted any internal appeals mechanisms that are provided
by the county government. Section 6 of the FAAA also imposes a crucial requirement
on administrative bodies, including county licensing authorities, to provide written
reasons for any administrative action that adversely affects a person's rights or
fundamental freedoms 32. This obligation to provide reasons is fundamental to
ensuring transparency and facilitating the ability of aggrieved applicants to
understand the basis of the denial and to formulate grounds for appeal or judicial
review 33.
The Fair Administrative Action Act thus provides a critical layer of legal protection for
applicants who have been denied a trade license by a county government 28. It
establishes fundamental principles of fair administrative action that county licensing
authorities must uphold and offers a pathway for seeking judicial review in the High
Court if these principles are violated, regardless of the specific appeals mechanisms
(or lack thereof) provided in the county's own trade licensing legislation 34. The Act's
emphasis on legality, rationality, procedural fairness, and the provision of written
reasons creates a baseline standard for administrative justice that applies to all levels
of government in Kenya 31.
As evident from the table, the initial appeal authority can vary, ranging from the CEC
responsible for a specific sector to a dedicated appeals committee. Timelines for
appeals are often specified, typically within 14 to 30 days. Some counties, like
Marsabit, explicitly provide for a further appeal to the High Court after the initial
internal appeal, while others may not detail this within their trade licensing legislation,
relying instead on the provisions of the Fair Administrative Action Act for judicial
review.
To enhance the efficiency, transparency, and fairness of the county trade licensing
system in Kenya, the following recommendations are proposed:
In conclusion, a fair, transparent, and efficient trade licensing system at the county
level is of paramount importance for fostering a conducive environment for local
economic development, encouraging entrepreneurship, and promoting overall
prosperity within Kenyan counties. By adhering to the principles of administrative law,
ensuring clarity in delegated legislation, and providing effective avenues for appeal,
county governments can create a regulatory framework that supports business
growth while upholding the rule of law.
Works cited