How to Register a Company Registration in Nigeria
The registration of a company in Nigeria can be a daunting task, however, the Corporate Affairs Commission (CAC) has made the process less complex following the provision for online registration.
By registering with CAC, businesses can protect themselves from legal liabilities and disputes, and increase their credibility and trustworthiness with customers and partners.
A company is a type of corporate structure whereby the legal status of the business is separated from the proprietor or promoter of the business. Conversely, company registration otherwise CAC registration, is the incorporation of a company as a licensed and recognized business entity in Nigeria. It is a legal requirement for businesses in Nigeria, and necessary in order to operate legally and professionally.
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Why should you register your company?
There are many benefits your business stands to get upon CAC Registration. Let’s look at some below.
- Company registration affords your business a corporate entity different from the owner and can protect them from being liable in their personal capacities for the activities of the company.
- Incorporated companies enjoy some tax benefits.
- It gives your business a professional image and credibility as well as instill a sense of confidence in customers and suppliers.
- As a separate legal entity, incorporated companies survive the death or incapacitation of the owners, which ensures continuity and provides security for employees.
- Legally, only incorporated companies can raise capital through issuing their shares. Also, it can easily receive loans from the bank and the directors cannot be held personally as debtors.
- Lastly, you can easily sell your registered company in the future if you wish to exit the business.
See also: CAC registration in Nigeria
Things you should know to register a company in Nigeria
In Nigeria, the body responsible for overseeing the incorporation of a company is Corporate Affairs Commission (CAC) as established by the Companies and Allied Matters Act (CAMA), which regulates and spells out the structures, eligibility and processes of registering a company as well as its rules for operation.
Generally, there are two basic types of companies: Private and Public Companies. However, there are further classified thus; Private Liability Limited company (limited by shares or guarantee), Public Liability Limited Company, Unlimited Liability Company and Foreign Company.
For the purpose of this guide, our primary focus would be on private companies limited by shares because it is the most common in Nigeria. Notwithstanding, a private company can further be upgraded to other kinds of companies in respect to the requirements stipulated by CAMA.
It is worthy to note that the formation of a private company requires a minimum of two members and a maximum of 50 members. As stipulated by CAMA, these members must not be less than age 18 (except there are at least 2 members who have attained the age of 18), a person of unsound mind, a certified bankrupt or a person disqualified by CAMA from being a director.
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Step-by-Step Guide to Registering a Company in Nigeria
1. Choose a Company Name
This stage requires you to identify a unique name for your company, preferably two distinct names to be used as alternatives. Then proceed to check for the availability of the names or whether they are already in use.
This can be done for free using the search option in the CAC online portal here. Once your company name has been approved, you can reserve it for 60 days for a cost of 500 naira. Note that some names are restricted from being used such as “chamber of commerce”, “national”, “federal”, “government” etc.
2. Determine Share Capital
Share capital is the money invested in a company by its founders or owners in a multi-owner structure. The cost of a company’s registration depends on the number of its share capital, such that the higher the share capital, the higher the amount of payable filling fee and stamp duty. Note that there is no minimum share capital to register a private company in Nigeria.
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3. Register the details of the Stakeholders
You are required to register the information of the company directors which may include their names, residential address, occupation, email address, phone number alongside a recognized identity document such as national identity card, intentional passport, etc.
4. Registration and Incorporation
Under the new CAC registration, you can obtain all the required documents from the CAC online portal except for the memorandum of association that should be peculiar to your company, albeit the portal provides a template.
The documents required for the incorporation include:
- Memorandum of Association (this outlines the objectives, rules and regulation of the company, which must be signed by promoters before public witness).
- Notice of registered address of the business.
- Lists, Particulars and document of the initial directors to the company.
- Statement of compliance by a legal practitioner.
You may also need to obtain a Tax Identification Number (TIN) by registering with the Federal Inland Revenue Service (FIRS), which is required for tax purposes.
See also: How to Register an NGO in Nigeria
5. Payment and Submission
After you must have completed the form, calculate the total filling fee and stamp duty payable and make the necessary payments. Next, submit all the required documents together with the payment receipts to the CAC portal.
If all the incorporation documents are well completed and executed, the commission will incorporate the company and issue an incorporation certificate online. You can then proceed to print this certificate from the portal, which indicates that you have successfully registered your company.
Post Compliance Requirements
After successful registration of your company, they are certain obligation required in order to ensure compliance with extant Nigerian laws:
- Obtain a company seal which will be used to execute documents and contracts.
- If you have not, register for taxes such as Company Income Tax, Value Added Tax (VAT), and Employee PAYE (Pay As You Earn) tax.
- Depending on your industry, you may need to acquire specific permits or licenses from relevant government agencies. For instance, to operate as a financial company, you have to be license by the Central Bank of Nigeria.
- Establish a corporate bank account in the name of your company to facilitate business transactions.
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Conclusion
With the provision of CAC online registration, incorporating a company in Nigeria has become less demanding, however you may still need the services of a company secretary, a lawyer or an accountant for advice and attestation to incorporation documents.
See also: How to Register a Business Name in Nigeria
