REGISTRATION OF SUBSIDIARY COMPANY IN NIGERIA
The process of registering a subsidiary company in Nigeria must be commenced by a holding company. A holding company is a parent company owning more than 50% shares in another company (subsidiary) in order to control its policies and management.
A subsidiary company is one owned and controlled by another company, known as a parent or holding company. It is a separate legal business entity registered with the Corporate Affairs Commission (CAC). It keeps its own financial records, bank accounts, assets and liabilities.
A foreign company already incorporated overseas and willing to operate in Nigeria can also incorporate a branch or subsidiary of the parent company in Nigeria.
A subsidiary company is a corporate structure with separate legal personality status. It is statutorily regulated and incorporated for the purpose of profit maximization in accordance with the Companies and Allied Matters Act (CAMA), which is the law that regulates the incorporation of companies in Nigeria.
It is worthy to note that a subsidiary company cannot be registered where no holding company is in existence.
Requirements to register a Subsidiary Company in Nigeria
- The first step required by the Holding Company is to choose two suitable proposed names for the company. Where this is done, an availability check will be conducted on the CAC online portal to find out if the name is available and not already in use.
- The objectives of the company must be provided.
- The registered principal address of the subsidiary company must also be provided.
- The details of the parent or holding company with a minimum of an additional shareholder must be provided (under the Nigerian law, a company can only be formed by minimum of two shareholders).
- The share capital and shareholding formula among shareholders will be required.
- The particulars of a minimum of two (2) Directors will be required (a copy of their means of identification such as the international passport or Driver license).
- Particulars of the company secretary must be provided.
- The Resolution of the parent or holding company authorizing the registration of the subsidiary company must be provided.
- The memorandum and Articles of association of the company to be registered, which is advisable to be drafted professionally by a Legal Practitioner.
- The copy of the certificate of incorporation of the holding company to be provided.
Other Requirements and Obligation for a Foreign Holding Company
The applicant will be required to pay filing fee to the CAC and stamp duty paid to the Federal Inland Revenue Service (FIRS).
Every foreign-owned subsidiary company in Nigeria must have a minimum of N10, 000,000 (Ten Million Naira) share capital. This capital is not mandatory to be paid up or provided at the point of registration of the company. It is only filing fees and professional fee for incorporation that may be paid at this point.
Where the filing fee has been paid, the statutory forms will be filled and submitted along with the evidence of payment and other requirements at the CAC.
In conclusion, for a subsidiary company to operate in Nigeria, it must be incorporated for that purpose. The process of registration can be commenced online on the CAC portal. It is noteworthy that a subsidiary company may appoint directors different from the directors of the parent company.
Written by the Corporate & Commercial Law Team at the Resolution Law Firm
Resolution Law Firm is licensed/ accredited Company Registration Agent in Nigeria. The Firm regularly assists foreign companies and individuals for the formation of companies in Nigeria. The Firm also offers full corporate transactions & international business set up advisory services.
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