Starting a company in Nigeria or anyplace on the planet starts with company registration. The Corporate Affairs Commission(CAC) is the office responsible for the registration of companies in Nigeria. Company registration in Nigeria has always been carried out by CAC. These days, the method for company registration is quicker and more effective.
Aside from having its headquaters in Abuja, the CAC offices are situated in pretty much every state capital in Nigeria. The company registration process in Lagos and all the other offices around Nigeria is the same to be followed in the CAC headquaters at Abuja. There is therefore no real advantage today of registering your company in Abuja over registering in any other state.
For assistance, CAC licensed specialists or legal advisors can be reached by any individual who requires the assistance of an expert to assist with a company registration. See https://legitng.com/company-registration/
The law controlling company registration in Nigeria is the Companies and Allied Matters Act, (CAMA) Laws of the Federation of Nigeria (2004). The law provides the rules for the company organization in Nigeria and other related issues.
Unlike in the United States of America where each state has its very own company regulation and can independently enroll organizations, the company registration process in Nigeria is central and a business must be registered with the CAC no matter where it is located in the country.
Types of Companies in Nigeria
There are different types of business arrangement permitted under Nigerian company law. New businesses in Nigeria need to realize what sort of organization is most suitable for their business. A private limited liability company (LLC in the US) is the most popular kind of organization for private persons trying to begin a business in Nigeria. Having said that, it will be good to state the kinds of organizations that can be registered in Nigeria. In accordance with Section 22 of CAMA, these three sorts of organizations can be registered in Nigeria:
Private Limited Company (LTD)
Public Limited Company (PLC)
Companies limited by Guaranty and
Having stated the 4 typ of companies available for registration in Nigeria, it is important to repeat that among all the 4 kinds of organizations referenced, private limited liability companies are the most broadly used type of business organisation in Nigeria.
Private limited liability companies have several advantages, which include 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.
The procedure for foreign company registration in Nigeria is similar to 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 the minimum of N10 Million share capital.
It is clear 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.
A company is a legal entity and required to be duly incorporated. Company registration in Nigeria falls under the Companies and Allied Matters Act as earlier stated. Corporate Affairs Commission is the sole agency of government responsible for incorporation of companies in Nigeria pursuant to provisions of CAMA.
The law also requires that there must be at least 2 directors (none of which should be a child) and 2 shareholders. Share capitla for limited companies under the law starts from the minimum of 10,000 Naira but companies usually begin with 1000000 naira share capital.
The section 18 of the Companies and Allied Matters provides that it takes a minimum of 2 persons to form a limited liability company. Section 246 of the same Act mandates every company registered in Nigeria to have or maintain a minimum number of 2 directors. A single person or entity currently cannot form a company in Nigeria. However, a single parent company or foreign company seeking to form a subsidiary in Nigeria may nominate two persons as directors of the new company or subsidiary.
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 a company registration in Nigeria:
- Particulars of the name of the proposed company (two names are to be submitted by the client: the proposed name of the company and an alternative name). The proposed company’s name must not be a prohibited or restricted name under the law.
- Particulars of the type of company to incorporate, which is usually a private company limited by shares.
- Particulars of the object of the proposed company.
- Particulars of the registered office address of the proposed company.
- Particulars of the authorized share capital. (i.e. how shares will be divided among the founders)
- Particulars of the first directors of the company.
- Particulars of the first subscribers to the Memorandum and Article of Association of the proposed company.
- Particulars of alien participants, if any.
- Particulars of the matter to be provided for in the Article of Association.
- 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).
- The consultant or lawyer prepares the necessary incorporation documents and completes the incorporation forms obtained from the CAC. The incorporation documents include:
- Duly verified particulars of the director and statement of share capital known as CACForm 1.1
- Duly signed and sealed resolution of the company authorizing the subscription, where a new company’s subscriber wishes to subscribe to the memorandum and articles of association (MEMART). I.e. join in the formation of the company.
- Duly stamped Memorandum and Articles of Association
- The individual completes all the incorporation documents with the input of an accredited lawyer to duly attest to the incorporation documents.
- The payment of the prescribed fees will now be duly made online and the incorporation documents immediately stamped online.
- The stamped incorporation documents will now be duly uploaded into the CAC online portal again for the final review of the commission
- If all the incorporation documents are well completed and executed, the commission will incorporate the company and issue an incorporation number immediately online.
- Certificate of Incorporation and the Certified True Copies of the other documents will be issued by CAC and received by the consultant or lawyer, usually in less than 48 hours after the company is duly incorporated by CAC
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.
By and large, the CAC official filing fees and stamp duty for a typical new company of One Million Naira shares capital are as follows:
- Name Reservation: N500
- CAC Filing Fee: N15,000
- Stamp Duty: N8,000
The above fees are exclusive of the costs of an attestation by a legal practitioner and processing/professional fee. 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 three other types of companies stated above, there are still other forms of incorporation that can be conducted with the CAC. These types of incorporation include business name, for a small-scale business owner, which does 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.
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.
Finally, the entire process of company registration in Nigeria with CAC can be completed within 48 hours if all the necessary incorporation documents have been put in place. If you need assistance from CAC certified lawyers to register your company CLICK HERE https://legitng.com/company-registration/