How to Register a Company in Nigeria: A Step by Step GuideAbbakin
You are looking for a detailed information on how to register a company in Nigeria? Well, new business owners and startup entrepreneurs also ask the different between business name registration and business incorporation.
Regardless of your place of business, many entrepreneurs usually find themselves fixed when it comes to decisions about the business registration processes.
They are not just sure which type of business registration would work best for them. However, this article will look at the important steps on how to register a business enterprise and limited liability company in Nigeria.
It includes a step by step guide with a list of the requirements you need for registration of business names and incorporate a limited liability company with the Nigeria Corporate Affairs Commission (CAC).
The option to choose now depends on whether your business is going to be a non-profit making venture or profit oriented kind of business.
Please note that it is important that you choose the best business option that would maximize the potential of your future growth. This is because business structure matters when you are thinking of setting up a company from the scratch.
So if you are not familiar the the right choice, it is advisable that you seek guidance from reliable professionals who may be of help.
We have discussed the basic forms of business organizations and structuring; each of which has its own advantages and disadvantages. So take some time to read more about them.
How to Register a Company in Nigeria: A Step by Step Guide
Of course, if you choose to name your business as anything other than your own personal name, then you’ll need to register it with the appropriate authorities.
The requirements for registering a business name in Nigeria include the guidelines as stipulated by the Corporate Affairs Commission (CAC). And here is the details on how you can register your company in Nigeria with the relevant government authorities.
Some of such other relevant agencies that may influence your decisions about starting a business in Nigerian includes:
- the Nigeria Custom Service,
- the Nigeria Immigration Service,
- the Federal Inland Revenue Service (FIRS),
- the National Agency for Food, Drug Administration and Control (NAFDAC), and
- the Standards Organisation of Nigeria (SON).
How to Register a Company in Nigeria with Corporate Affairs Commission
The Nigerian Corporate Affairs Commission (CAC) is the regulatory body responsible for the formation, registration, control and overall monitoring of the affairs of companies in Nigeria.
The Nigerian Corporate Affairs Commission is established under Section1: (1) and (2) of the Companies and Allied Matters Act (CAMA 1990); a legal framework for the control of the activities of companies in Nigeria.
The Commission has its corporate headquarter at Abuja (the Federal Capital Territory), with branches in various state capitals in Nigeria such as: Lagos, Kano, Benin, Owerri, Jos, Enugu, etc.
If you are a resident in Abuja, the Corporate Affairs Commission office is located at plot 420, Tigris Crescent, off Aguiyi Ironsi Street, Maitama, Abuja.
But who is allowed to transact business with the CAC?
According to CAC with regards to corporate matters, only accredited legal practitioners, chartered accountants and chartered secretaries who is duly registered with the Corporate Affairs Commission are the professionals allowed to transact business with the commission.
However, individuals or partners may also have to start their business registration processes if they think its the best way to go.
The Corporate Affairs Commission (CAC) says it hopes to reduce the time spent to register a company in Nigeria from 24hours to 2hours by December 2018.
According to Azuka Azinge, the acting registrar-general, CAC, who made this known during a visit of the senate committee on trade and investment to the commission’s Lagos office in Ikeja on Thursday the 8, March.
She said the commission has created an enabling environment to allow customers register their businesses within 24 hours to improve the ease of doing business in the country. But want to reduce the 24 hours to make startup of businesses easier in Nigeria.
“We are still working and improving on the pre-registration infrastructure platform. We are hoping that as we continue to do that, the pre-registration process will also become faster, with fewer complaints from the customers.
“We want to reduce the 24 hours it takes to register a company to two hours. We are hoping to do that maybe by the end of the year or before that.” she said.
What you need to understand is that the requirements to register a Company in Nigeria will depends on the business type. Business owners in Nigeria could conveniently register their businesses online within 48 hours. The post-registration process is still manual.
So let take a look at the two most popular business types of choice for Small and Medium scale Entrepreneurs (SMEs) in Nigeria.
- The Sole Proprietorship Business and
- The Limited Liability Company (LLC).
How to Register a Sole Proprietorship Business in Nigeria
A sole proprietorship is a business that is owned and controlled by a single individual who may choose to operate under a registered business name.
If you are a small business owner thinking about registering a “Doing Business As” name or trade name in Nigeria, you can register a business name for the purpose of running a sole proprietorship business (Enterprise).
Registering a sole proprietorship business in Nigeria is simply a matter of completing a short form by indicating your name, the trade name, business location and paying a small filling fees.
Registering a Business Enterprise is therefore the process of letting the governments know that you are doing business as a name other than your personal name or the legal name of your partnership or corporation.
So your registered name helps your business to be easily identified against public imitations. However, this process should not be confused with incorporation as it does not provide trademark protection.
Steps on How to Register a Business Name in Nigeria
Step One: Search for availability of name.
Visit the CAC office nearest your state of residence and request for name reservation or name availability check.
You can also start this process online by visiting the official CAC website and downloading the Form CAC1.1 for free: Availability Check And Reservation Of Name.
If your chosen name is not already in use, it will be reserved for you for 90 days; within which you are expected to finish your registration process.
Step Two: You are to submit the duly completed statutory forms with two passport sized photographs attached to the form.
Step Three: Pay filing fees at the Corporate Affairs Commission with the application form clearly stating the name of the business.
Once you complete the name registration process, you will be issued a certificate to that effect – bearing the business name and its state identification letters.
Individual can register business names without the services of the legal practitioner, chartered accountant or chartered secretary in Nigeria.
And this period is not expected to go beyond 14 business days. However, the disadvantage of going this route is that the process may take you some time to accomplish.
There is also a chance you could mess some important details or procedures up such that you would have to do things over again and spend more money than necessary.
Nevertheless, after completing your registration processes, you will be able to open a bank account with the new business name and start conducting your business.
It is that simple!
Just know that registering this kind of business is easy, fast and very cheap. Your expenses may be the cost of the forms, the filing fees, and any other costs associated with name registration in your state.
How to Register a Limited Liability Company in Nigeria
The Limited Liability Company is the most important unit of a business organisation which is a legal entity separate from its members or owners.
Here the liability of its owners are restricted only to the amount of unpaid share capital contributed to the business. Shares are the unit of holding or right of ownership owned by an investor in a given company.
In Nigeria, a limited company can be formed by at least two (2) persons who are not less than 18 years old, and who are not bankrupt, not insane among other things.
Such registration also must be in line with the provision of the Companies and Allied Matters Act, (CAMA 1990), as amended.
Therefore, the process of setting up a company is referred to as registering or incorporating a company – which is usually costly and involves more documentation and time than other types of business structures like partnerships.
If you’re incorporating a Limited Liability Company in Nigeria, one of the first steps you must take is to prepare some specific documents, which must meet strict requirements.
You must conduct a business name check, file a memorandum of association, articles of organization and some other supporting documents at the CAC office or the state where you intend to do the business.
Some businesses (e.g those Limited by Guarantee) also require you to file an operating agreement, which is similar to a partnership agreement (detailing how the corporation will run, including the responsibilities of the shareholders, directors and officers).
Partnership is the relationship that exists between persons with a common goal of carrying out a business. To safeguard your investment you need to have a written and duly registered partnership agreement.
You can equally decide to register churches, associations, clubs and other Non Government Organizations (NGOs) if that is what you want.
Additionally, registering a Public Limited Company (PLC) will mean a higher legal, accounting, tax service costs and enough paper works.
You may be required to hold directors meetings and annual shareholders’ meetings, etc. as stated in the company formation and filling documents.
A private limited liability company end with the word LTD while a public limited liability company ends with PLC. And once you’re incorporated, be sure to follow the rules as required by law.
Steps on How to Register a Company in Nigeria (Private or Public)
Step One: Check for availability of proposed company name on the CAC website (click here).
Step Two: Reserve a new Name (click here)
Step Four: Pay the filing fees to CAC Check the Fees for Services here
Step Five: Pay Stamp duty fee to FIRS
Steps 3-5 can be completed on CAC’s COMPANY REGISTRATION PORTAL (CRP)
Step Six: Prepare the signed scan copy of your pre-registration documents for upload as follows:
- Form CAC1.1
- Memorandum and Article of Association (MEMART)
- Proficiency certificate (where applicable)
- Recognized form of identification for Director(s)/Subscriber(s) and Secretary
- Stamp duty certificate
- Evidence of payment to CAC
- Upload the scanned documents for processing. (click here)
Then Submit the original copies of the documents uploaded at step 6 (Form CAC1.1, MEMART, etc) to the CAC office you had selected in exchange for your Certificate of Incorporation and the Certified True copies of the documents.
See List of the CAC Business Registration Requirements/Documents:
Depending on the type of your business, the registrations will include meeting some of the following requirements:
- The Business Memorandum and Articles of Association.
- The proposed name of the business,
- The proposed (objects) of the business,
- Statement of the authorized share capital
- Form CAC-1, reservation and availability of name
- The names and addresses of the parties (directors) incorporating the company,
- Two (2) recent passport photographs of each director, including valid means of identification.
- Statutory declaration of compliance by a legal practitioner
- The name and address of the company secretary, and
- The address location of the business principal office.
- Filings with the Federal Inland Revenue Service (FIRS) for tax purposes.
- Any other documents or fees as required by the commission to satisfy any law or condition
Now you have it: How to Register a Company in Nigeria.
We hope these tips would help most Nigerian entrepreneurs and foreign investors who are thinking of doing business in Nigeria with detailed steps on how to register a Company in Nigeria.
It is required by law that you register your business if you wants to do legitimate business in Nigeria. Apart from the requirement of the law, there are also other great benefits of registering your business.
For example, registering your business makes customers see you as authenticity in your industry and increases your chances of bringing in joint venture partners.
Again, having a corporate image makes you more organized and work seriously towards establishing your business and brand.
With the CAC portal, your intending business partners may check if your Company is legibly Registered in Nigeria or Not.
Aside losing customers, business funding opportunities, you need to protect your business against liabilities also through such registrations.
So, how and when do you pan to register your business in Nigeria?
We recommend that you start and run your business for some period of time before formalizing the structure.
This is because you business idea may change after some time and this will definitely affect your registered name at the long run.
The minimum share capital of a private company in Nigeria is 10, 000 (ten thousand) shares while that of a public company is 500, 000 (five hundred thousand) shares.
However, there is a stipulated share capital for companies with certain objects. A company with foreigners as its first subscribers must have at least 10,000,000 (ten million) shares. And proficiency certificate is required for specialized businesses.
If you are reading this article and you are not a Nigerian, please check with your local authorities to find out the processes involved in business registration and incorporation in your own country.
The Nigerian law prevents foreign companies from being expropriated by the Government and guarantees them a right to repatriate their profits abroad.
However, in order to make indigenous companies to be competitive, there may be legislations on local content participation in some sectors.
Please connect with your attorney or visit the Department of Corporations in your state for questions about how to start your business registration processes and what this may cost you.
As a result of continuous existence of a business entity, if you have registered as a sole proprietorship business and wish to migrate to private company limited by shares, this is allowed by law as LLC is the popular and preferred legal structure to choose to carry on most business in Nigeria.
Abbakin provides business development services for startup entrepreneurs and businesses across the globe.
Such services may include niche market research and business plan services, office supplies and business registrations with relevant authorities such as the CAC, NAFDAC, and SON.
Take your business to the next level. Contact us now if you need help growing your business.
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