STEPS FOR REGISTERING HOLDING, CONSORTIUM AND GROUP OF COMPANIES IN NIGERIA

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STEPS FOR REGISTERING HOLDING, CONSORTIUM AND GROUP OF COMPANIES IN NIGERIA

REGISTERING GROUP OF COMPANY IN NIGERIA

HOW TO REGISTER A GROUP OF COMPANIES IN NIGERIA

FORMATION OF CONSORTIUM COMPANY

A Holding, Consortium and group of companies are business structures that can be created to accomplish specific purposes. The law regulating the formation of a company in Nigeria is the Companies and Allied Matters Act (CAMA or the Act).

Generally, using the words Holding or Consortium or Group for any proposed new company is prohibited by the Act save with the consent of the Registrar General of the Corporate Affairs Commission (CAC).

Setting up a Holding Company

A Holding company is a parent company that holds more than 50% shares in another company (daughter) that act as a subsidiary with a specified purpose. The purpose of the holding company is to control, acquire assets and manage the affairs of the subsidiary company.

The law prohibits the use of the word “Holding” in registering a company unless the requisite consent of the Registrar General of the CAC is sought before the word can be included in the name of any company (either new or existing).

Requirements to register a Holding company

  1. The applicant is to bring a formal application for consent to use the word “Holding” in the name of the company.
  2. There must be evidence of nothing less than two (2) subsidiary companies, which are restricted to only Limited Liability Companies.
  3. There must be a statement by the majority of the Directors of the proposed holding company that the company shall acquire more than half in the nominal value of the share capital of each of the subsidiaries within 90 days of incorporation.
  4. The applicant is to provide evidence of updated annual returns of the existing subsidiary company.
  5. Evidence of compliance with Section 553 of the Companies and Allied Matters Act where applicable. This requirement applies to banks, insurance firms, deposit, provident or benefit societies.
  6. After consent has been obtained for use of the word “Holding”, the new company structure which is the parent company can then be registered in the usual company procedure.

Setting up a Group of Company

According to CAMA, a Group of companies comprises of three or more associated companies with common shareholders and similar names. These companies become the shareholders of the distinct “Group” company.

Just like the Holding company, the law prohibits the use of the word “Group” in the name of a company except for the requisite consent of the Registrar General of CAC is sought and gotten.

Requirements for registering a Group of company

  1. Make a formal application to the Registrar General for consent for the use of the word “Group”
  2. There must be evidence of a minimum of three (3) or more associated companies to form the Group Company, which will be the distinct entity.
  3. Evidence of similar names of associate companies with common shareholders and ownership.
  4. There must be a resolution of the associate companies indicating consent to the “Group” relationship.
  5. The updated annual returns of all associate companies must be provided.
  6. Evidence of Company secretary of associate companies.
  7. Statement by the majority of the directors of the proposed Group Company that the share capital shall not be less than the highest share capital amongst the associate companies.
  8. Evidence of compliance with S.553 CAMA where applicable. This applies to banks, insurance firms, deposit, provident or benefit societies.
  9. After consent is successfully obtained for the use of the word ‘Group’, the new entity that is the Group Company can then be registered in accordance with the usual company registration procedure.

Setting up a Consortium Company

This company structure is composed of separate and different companies that agree to pool resources and collaborate for the achievement of agreed objectives. Each company is responsible for the consortium to the extent of its obligations set out in the consortium agreement. The individual companies are usually independent and can carry on its usual operations independent of any operations relating to the consortium.

The word “Consortium” is prohibited against use by the CAC, and it requires the consent of the Registrar General of CAC before the word can be used in the name of a company, just like “Holding” and “Group”.

Requirements for registering a Consortium Company

  1. Make a payment of non-refundable application for consent fee to the CAC.
  2. Make a formal application for consent to use the word ‘Consortium’ in the name of the company.
  3. Evidence of not less than 3 different companies forming the consortium.
  4. Evidence of registration in the home country, in the case of a foreign company
  5. A Resolution of each company in the consortium indicating consent to the consortium arrangement and stating the objectives of the consortium.
  6. The statutory declaration to wind up the consortium in accordance with the provision of CAMA upon completion of the object of the consortium.
  7. Statement of the object of the consortium in the memorandum of association.
  8. Inclusion of a clause to wind up the consortium in the articles of association.
  9. Evidence of updated annual returns of component companies
  10. Evidence of appointment of company secretary of component companies.
  11. Evidence of compliance with S.553 CAMA where applicable. This applies to banks, insurance firms, deposit, provident or benefit societies.
  12. After consent is successfully obtained for the use of the word ‘Consortium’, the new entity which is the consortium company can then be registered in accordance with the usual company registration procedure.

Finally, it is worthy to mention that a single or individual company cannot use the words Holding, Group or Consortium among its names as a thing of choice. Before these names can be used, the consent of he Registrar General of the Corporate Affairs Commission must be sought, and such consent can only be given by the Registrar General upon meeting the specific thresholds or requirements for the registration.

By Corporate & Commercial Law Department at Resolution Law Firm

Email:

info@resolutionlawng.com

Tel | WhatsApp |Telegram: +2348099223322

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