REGISTRATION OF COMPANY IN NIGERIA
HOW TO REGISTER COMPANY NAME IN NIGERIA
The law guiding company formation in Nigeria is the Companies And Allied Matters Act, (CAMA) 2020. The CAMA is the guideline for any company name registration in Nigeria and other ancillary matters.
Unlike the United States of America where each state has its own company registry and can individually register companies, the company registration in Nigeria is central and a company can only be registered with the Corporate Affairs Commission (CAC) only.
The procedure for foreign-owned company registration in Nigeria is almost the same as the procedure for local company registration. However, every company with foreign participation must be capitalized with a minimum of N10 Million share capital, so as to enable such a company obtains the expatriate quota required to obtain a Nigerian work permit for all its expatriates including the directors.
Types of Companies in Nigeria
There are different types of company formation allowed under Nigeria’s company law. Several people seeking to do business in Nigeria, especially for the first time, often want to know what type of company is most suitable or appropriate in Nigeria. The answer to such a question is not far-fetched. A private limited liability limited is obviously the best type of company for private individuals seeking to start a business in Nigeria. Having said that, we will briefly state the types of companies that can be registered in Nigeria. The three types of companies that can be registered in Nigeria include:
- Private Limited Company
- Companies limited by guarantee and
- Unlimited Companies.
However, it is generally believed that it is only four types of companies that can be registered in Nigeria. Accordingly, the four types of companies that can be registered in Nigeria are as follows:
- Private Limited Company (LTD)
- Public Limited Company (PLC)
- Companies limited by guarantee and
- Unlimited Companies.
Having stated the 4 types of companies available for registration in Nigeria, it is very relevant to further restate that among all the 4 types of companies mentioned, private limited liability company is the most widely used form of business enterprise in Nigeria. A private limited liability company has several advantages, which include but limited to perpetual succession, limited liability, and separate legal personality. Above all, it is the only form of company that can easily and be swiftly registered in Nigeria.
As can be seen above, although there is another type of company that can be registered known as the public limited company(PLC), the high threshold of statutory requirements attached to its formation make it unattractive for individuals starting a new venture. Public limited liability companies are also subjected to different external laws outside the CAMA for it to fully operate. For instance, every PLC must comply with the provisions and the requirements of the Investment and Securities Act(ISA) and other SEC Rules and codes of corporate governance.
The other type of company, which is an unlimited liability company may only be recommended to be used to a parent company desiring to have such a subsidiary with unlimited risk. It is not in any way suitable for individuals who seek to start up a venture, as the major benefit of incorporating a company, which is the ability to limit one’s liability or risk does not feature in the unlimited company.
The procedure for foreign company registration in Nigeria is almost the same as the procedure for domestic company registration for Nigerians except for a legal requirement that a company with foreign participation in Nigeria must be capitalized with a minimum of N10 Million share capital to be eligible to acquire the Nigerian expatriate quotas, which will enable them to process the resident permit for their foreign directors or staff. Under the Nigerian banking regulations, a foreigner cannot be a signatory to any Nigerian bank account unless such a foreigner has Nigerian residency status.
Having regards to the above, it is no longer in doubt that the most suitable type of company that may be registered in Nigeria is the limited liability company, whose registration procedure we shall extensively focus on here.
In accordance with the provisions of the CAMA 2020, a single person may now register a limited liability company in Nigeria.
Procedure for company registration in Nigeria
The procedure for company registration in Nigeria are as follows:
- Any person proposing to register a company is advised to speak to a consultant, especially a corporate lawyer. Although CAC has made good efforts through online registration to ensure individuals are able to register companies online themselves, however, the services of accredited agents or lawyers are still requested for attestation of the incorporation documents. The following information must be furnished to proceed with company registration in Nigeria:
- Name of the proposed company (two names are to be submitted by the applicant: the proposed name of the company and an alternative name)
- Objects of the proposed company(summary of the work or business the company intends to engage in).
- Names, addresses, email, and phone numbers of the shareholder(s) and director(s)
- The percentage of share distribution among the shareholders, if the company will have more than one shareholder
- Copies of the means of identification of the shareholders and directors, such as driver license, international passports e.t.c
- The availability check and reservation of the name of the proposed company must be conducted with the Nigerian company’s registration agency, Corporate Affairs Commission (CAC).
- Complete the incorporation forms available on the CAC website. The incorporation documents include:
- Duly verified particulars of the director and statement of share capital known as CAC Form 1.1
- Duly stamped Memorandum and Articles of Association
- The payment of the prescribed fees will be duly made online and the incorporation documents immediately stamped online.
- The stamped incorporation documents will now be uploaded into the CAC online portal again for the final review by the commission.
- If all the incorporation documents are well completed and executed, the commission will incorporate the company and issue an incorporation number online.
- Certificate of Incorporation and the Certified True Copies of the other documents will be issued by CAC and can be printed online.
Cost of Company Registration in Nigeria
The cost of company registration in Nigeria depends on the number of the share capital of the proposed company to be registered. The higher the share capital of a company, the higher the filing fee and stamp duty payable to the government.
The processing or professional fees that may be charged by an accredited agent for processing the registration differs from one agent to another.
Other Types of Incorporation in Nigeria
Apart from the private limited liability company and the other types of companies stated above, there are still other forms of incorporation that can be registered with the CAC. These types of incorporation include business name, for a small-scale business owner, which does not include separate legal personality and Incorporated Trustees, also known as Non-governmental Organization(NGO), which is relevant for the religious organization, social clubs, and charitable foundation.
And pursuant to the CAMA 2020, it is also possible to register a Limited Liability Partnership. This is useful and relevant for professionals or any business associates partnering together and who want to limit their liabilities to such partnership.
In conclusion, it is very clear that it is better to register a limited liability company as against other forms of companies as it holds several benefits and easy to register.
Written by the Corporate & Commercial Law Department at Resolution Law Firm, Nigeria. Resolution Law Firm is a Licensed company registration agent in Nigeria. The Firm is accredited with the Corporate Affairs Commission.
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