The first step required from every person or entity doing business in Nigeria is registering a company in Nigeria. Nowadays, the business registration process can easily be carried out online via CAC company online registration portal with the assistance of an accredited lawyer to attest to the requisite incorporation documents.
An individual seeking to engage in a little business venture may also register a Business Name in Nigeria. However, it is important to note that a Business Name cannot acquire a separate legal personality, and the risks and liabilities of any failed venture registered as Business Name in Nigeria may also be extended to its owner. A Business Name is not considered as a company under Nigeria Law. Therefore, the procedure of how to register a business name in Nigeria has a lot of distinction with how to register a business in Nigeria. An individual seeking to register a small business in Nigeria different from a business name may also register a limited liability company. Although Corporate Affairs Commission has made good attempts to simplify all the business registration processes through the commission’s online portal, it is still advised that individuals seeking to register a company should use the services of accredited lawyers for smoother incorporation process.
Therefore, it follows that the best means of doing business in Nigeria is through a company’s registration since a company automatically acquires a separate legal personality immediately after its formation.
Meanwhile, the Corporate Affairs Commission (CAC) is the government agency responsible for registering companies in Nigeria. The brief explanation here is to further expatiate the procedure of company’s formation and how to register a business in Nigeria
TYPES OF COMPANIES
Under Section 21 Companies and Allied Matters Act, there are six types of companies that can be registered in Nigeria. These are:
PRIVATE COMPANY LIMITED BY SHARES
Although there are different types of corporations that can be formed in Nigeria, the most used one among them is a private company limited by shares.
The private company limited by shares is most sought after because it is the most suitable and appropriate form of a company by which a business can be formed by more than two persons with a limited risk. The simplicity of forming a private company limited by shares also couple to its efficiency as purpose vehicle for business within Nigeria and every other part of the world.
Subject to the provisions of the Nigerian Companies And Allied Matters Act LFN 2004(CAMA), every private company must be comprised of A minimum of two members (shareholders) and two directors. It is not mandatory for the directors of a private company to also own or hold share from the same company. Furthermore, an infant or a bankrupted person is not qualified to be a director of a company as well.
Additionally, under Nigerian law, foreigners can fully own a company 100%
The following are the requirements needed for the incorporation of a company in Nigeria:
The Corporate Affairs Commission through several efforts and in line with the government’s directives on easing the process of doing business in Nigeria has simplified a means by which a business can be registered in Nigeria. How to register a business in Nigeria nowadays, compared to how it is used to be registered few years again shows significant improvements the CAC has been able to achieve about the entire process of business registration in Nigeria.
Incorporation of business can now be commenced and processed online, from the availability search to the registration level, through the website of the CAC.
The CAC has made an audacious attempt to cut off or reduce the influence of the third party in company’s registration in Nigeria. However, an incorporation of a company can still not be concluded unless an accredited agent has duly certified such application for registration.
Moreover, a company incorporation expert may also help to draft the Memorandum and Articles of Incorporation of the new company proposed for registration, properly put the entire application together and duly attested to it in line with the statutory provisions.
Written by Corporate & Commercial Law Department at Resolution Law Firm
Note: Resolution Law Firm engages in Business Registration in Nigeria. The Firm can be contacted for assistance via the abode contact details