A business formation in Nigeria ordinarily commences with the registration of a company. A company can be referred to as a corporate entity, which upon incorporation becomes a separate legal entity with the perpetual succession and the capacity to sue and be sued. The cradle of a company is on its incorporation and this entails registration with the Corporate Affairs Commission (CAC). The law governing how to register a company in Nigeria is the Companies and Allied Matters Act (CAMA) LFN 2004.
A company may be incorporated as a company limited by shares, a company limited by guarantee and an unlimited company. Any of these types of company may either be a private or public company. This article will mainly focus on the requirements for incorporation of a private company in Nigeria either by indigenous citizens or foreigners who have the intention of carrying on business in Nigeria.
The first step towards setting up a company in Nigeria is to check for the availability of the proposed name of the new company for registration with the Corporate Affairs Commission and to reserve it. Upon approval of the proposed name, the memorandum and articles of association as well as other incorporation documents will be prepared, stamped and submitted at the CAC for registration, after which CAC will issue a Certificate of Incorporation.
The following documents are required for the incorporation at the Corporate Affairs Commission:
Furthermore, there are other registrations to be done by a company intending to carry out business in Nigeria, especially a company having a foreign shareholder that include the followings:.
Registration with NIPC is vital. This Commission among other things, co-ordinate, monitor, encourage and provide necessary assistance and guidance for the establishment and operation of enterprises in Nigeria, initiate and support measures which shall enhance the investment climate in Nigeria for both Nigerian and non-Nigerian investors among others as well as perform such other functions as are supplementary or incidental to the attainment of the objectives of NIPC Act. NIPC business registration is a major prerequisite for a business permit.
This is issued by the Ministry of Interiors, to enable foreign companies to conduct business within the government’s geographical jurisdiction.
Where the business of the company would require the company to enter into agreement(s) with any person outside Nigeria which is wholly or partially connected with the use or supply or trademarks and patents, technical/management expertise or assistance, basic or detailed engineering, machinery or plant, such agreements are required to be registered with the NOTAP.
Every company is expected to register at the Federal Inland Revenue Services (FIRS) for Income Tax and Value Added Tax (VAT) purposes within 6months of incorporation. Upon registration, a tax identification number (TIN) would be allocated to each registered company and tax file shall be opened for such company in the nearest FIRS to the company’s address. The TIN number must be inserted on all the company’s invoices. The current Companies Income Tax rate is 30% assessed on a preceding year basis.
This is consent in writing issued by the Minister of Interior on behalf of the Federal Government of Nigeria to a foreign-owned company duly registered with the Corporate Affairs Commission to employ foreign experts. The expatriate quotas are issued to the company and not to the individual
In Conclusion, it is noteworthy to state that a single individual cannot set up a company in Nigeria. Every company must be composed of the minimum of 2 members (shareholders) and directors. And pursuant to the provisions of the NIPC Act, every company with a foreign shareholder and/or director must have a minimum of N10,000,000 authorized share capital.
By Corporate & Commercial Law Department at Resolution Law Firm