Business registration in Nigeria is a central process done through a federal commission. The Corporate Affairs Commission (CAC) was established by virtue of the Companies and Allied Matters Act (CAMA) 2020 to regulate the formation and operations of companies in Nigeria, the commission oversees the registration of companies & businesses and post-incorporation matters.
The most suitable form of incorporation for persons for person seeking to start a business in Nigeria is a private company limited by shares, it is also the most suitable form of business venture recommended for any foreigners seeking to establish a business in Nigeria, either as a foreign direct investment or portfolio investment.
However, a Nigerian citizen can also register a business name, which does not possess the characteristic of a separate legal personality, unlike a company. Foreigners cannot register a business name, foreigners seeking to commence a business in Nigeria must register a company, which is not less than N10 Million authorized share capital. Generally, there is no requirement for foreigners seeking to establish a business in Nigeria to appoint local persons as either shareholders or directors except for a few industries such as oil and gas services, mining, and gaming.
A private company is any company having the liability of its members limited by the memorandum and articles of association to the amount unpaid on the shares respectively held by them or a company having the liability of its members limited by the memorandum of association to such amount as the members undertake to contribute to the assets of the company in the event of its being wound up.
There have been various developments with respect to company registration in Nigeria. Incorporation certificates downloadable online have been introduced, and the requirements for incorporation have been simplified.
Requirements for Registration of Company in Nigeria
Below are the requirements an applicant must provide to commence the registration of a company in Nigeria:
- The registered address of the proposed company
- Email and phone number of the proposed company
- Forms of identification such as National Identity Cards, International Passports, and Driver’s licenses of the directors and shareholders.
- Approval note of name reservation from CAC
- Director(s) & shareholders(s) full names, residential address, occupation, and date of birth.
- Objects of the company
- Details of the company secretary (mandatory for only a foreign-owned entity)
- Incorporation certificate and company resolution where another registered company (either local or foreign) will be a shareholder or subscriber to the proposed company.
For registration of the company, the below are the steps required:
- Submission of two desired company names for the search
- Preparation incorporation documents
- Complete the Pre-registration form and statement of share capital
- Payment of the Stamp duty and filing Fee
- Uploading relevant documents
- Submission of registration application online.
- Where the registration is approved, the electronic incorporation certificates together with the Tax Identification Number and other incorporation documents will be issued by CAC.
Finally, the CAC registration must be carried out strictly in compliance with the authorized share capital required for each business. For instance, a company intending to engage in a shipping business must have a minimum of 25 Million Naira authorized share capital, and where any foreigner is to be involved in the proposed company, the authorized share capital must not be less than Ten Million Naira. Apart from incorporation, a foreign-owned entity must also obtain a business permit from the Federal Ministry of Interiors and register with the Nigerian Investment Promotion Commission (NIPC) before the commencement of business.
By Resolution Law Firm Corporate & Commercial Team