Company Registration in Nigeria
This guide is intended to assist entrepreneurs, particularly Micro, Small, and Medium-Sized Enterprises, in navigating the legal and regulatory issues that arise while beginning a business in Nigeria. Follow the steps below to get started:
Draw a plan and area of interest
When starting a business in Nigeria, the first thing to identify is your objectives and areas of interest, as well as develop a business plan. Your company’s objectives are the things you want to accomplish. We all know that every business exists to make a difference in people’s lives and to make money, but you must specify how you intend to do so. In addition, you must define your field of interest. You need to also be convinced that you want to go into the business you have chosen.
You can go into like manufacturing, consultancy, repairs, marketing and sales, construction, training, advertisement, etc. All of these possibilities exist.
Also, determine the type of company you will like to venture in. Well, this is the first step you must take if you are thinking of how to start a company in Nigeria. Now, when you have this defined, you take the next step.
Sole proprietorship: This is a type of unincorporated business entity owned and controlled by one person. Sole proprietorship is a natural person not a legal entity.
Partnership: A partnership is a formal arrangement by two or more parties to manage and operate a business and share its profits.
Limited Liability Company (LLC): This is a private company whose owners are legally responsible for its debts only to the extent of the amount of capital invested.
Limited Liability Partnership (LLP): This is a flexible legal and tax entity that allows partners to benefit from economies of scale by working together while also reducing their liability for the actions of other partners.
Public Liability Company(PLC): This is a limited liability company whose shares may be freely sold to the public.
Now, once you define this, you take the next step.
Company Formation Processes in Nigeria
Determine your company name
The first step in starting a business is to have the name registered with the authorities. In the case of Nigeria, once you’ve be decided on a good name for your business, you should visit the CAC website to see if it’s available. In most cases, you should submit two names so that if one is picked, the other is still possible. Without specific authorization, a name can be rejected if it already exists, is confusing, or contains banned phrases such as ‘National,’ ‘Federal,’ ‘Government,’ or ‘Holdings.’ The process of registering a business name in Nigeria often takes up to a week. A Notice of Approval will be sent as a confirmation of the name availability by CAC.
Preparation of the Memorandum of Association
This will be done by a lawyer. A lawyer is the ideal person to accomplish this process. He or she is qualified to draft the Memorandum of Association (MOA) and all related paperwork depending on the goals of the business you seek to incorporate. The lawyer is responsible for obtaining the identities of the original subscribers, directors, and stockholders. Each director or subscriber must be at least 18 years old, in good health, and have never been convicted of a crime. The directors must give a form of identity to the CAC for scrutiny.
Filling of Pre-registration form
Following the completion of the requisite paperwork, you must fill out a form provided by the CAC, indicating all pertinent information, and resubmit it to the CAC, together with all required documents.
You can also hire a company secretary to function as a lawyer or accountant for your company, and they will be solely responsible for completing any paperwork with the CAC once the company has been registered.
The process of documentation is as follows:
- Copies of the Article and Memorandum of Association for the company.
- A copy of the company CAC form CO 2 & CAC form CO 7
- A copy of the company Certificate of Incorporation
- A copy of VAT registration form
- A copy of the company tax payer input form.
Pay Stamp duties and filing fees
Here, the applicant will have to pay the prescribed official stamp duties to the Federal Inland Revenue Services online or this can also be done through bank remita. After payment, an electronic stamp will be affixed to the Memorandum and Articles of Association with some of the incorporation forms before submitting to the CAC. Then, A Certificate of Incorporation will be returned 6 weeks from date of submission.
Essential Requirements to Register a Company in Nigeria
The following are some of the basic things to look out for before proceeding to register your company
- The company is allowed to have between 2 to 50 members depending on the structure.
- The members of the company must be in the age limit of 18 and above years.
- The company will not be registered if any of the members are of unsound mind, disqualified by the CAMA, or bankrupt
- Lastly, the minimum share capital required for company registration in Nigeria is NGN 10,000.
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