Limited Liability Companies are the most widely used form of business enterprise in Nigeria and they are profit oriented. Private Limited Liability Company has several advantages, which include but limited to perpetual succession, limited liability among others.
A company is a legal entity and required to be duly incorporated. Company registration in Nigeria falls under the Companies and Allied Matters Act 2004 (CAMA). Corporate Affairs Commission is the sole agency of government responsible for incorporation of companies in Nigeria pursuant to provisions of CAMA.
Section 18 of the Companies and Allied Matters provides that it takes at least 2 persons to form a company. Section 246 of same Act mandates every company registered in Niger to have at have or maintain minimum number of 2 directors.
Having regards to the above, it is very clear to state that a single entity cannot own a company in Nigeria.
The procedures 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. The following information must be furnished for a lawyer to proceed with a company registration in Nigeria:
- Particulars of the name of the proposed company (two names are to be submitted by client: the name the company is to bear 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 private or public 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 name of the proposed company will be conducted at the Corporate Affairs Commission (CAC).
- The consultant prepares the necessary Incorporation Documents and completes the Incorporation Forms obtained from the CAC. The incorporation documents includes:
- Proficiency certificate (where applicable).
- Resident permit in case of resident foreigners.
- Photocopy of duly verified particulars of director, statement of share capital and return of allotment of shares.
- 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 consultant files all the incorporation documents with the CAC and payment of the prescribed fee to complete the entire process.
- Certificate of Incorporation and the Certified True Copies of the other documents will be issued by CAC and received by the consultant.
However, the cost of company registration in Nigeria depends on the number of shares capital of the company. The higher the share capital of a company, the higher the fee/ stamp duty payable to government.
In conclusion, it is better to register a limited liability company as against other forms of companies as it holds several benefits and easy to register. More so, foreigners are allowed to fully own a company under Nigerian law.
Written by Omolade Animashaun, an Associate at Resolution Law Firm