With the amendment of the Companies and Allied Matters Act in 2020, which is the principal legislation that regulates business registration in Nigeria, there is a new and more simplified procedure for business registration in Nigeria. This new law took effect on January 1, 2021. This article shall explain briefly the updated procedure for business registration in Nigeria in Nigeria starting from January 1, 2021. The government agency in charge company registration is the Corporate Affairs Commission (CAC).
Procedure for business registration in Nigeria
The procedure involved in registering a business whether it is a private company limited by shares or a public company limited by shares, or an unlimited company will be summarized into different steps below.
- Step 1. Conduct Name Availability Check – the applicant is required to choose two unique proposed names for the company, after which he has to check for availability of the proposed names, to find out if one of the names is available and it is not already in use by another company, where it is available, it will be reserved for the applicant by the CAC.
- Step 2. Complete the Pre-registration Forms – the applicant can then proceed by himself or through an accredited agent to fill pre-incorporation forms where he will be required to provide certain important information such as:
a. The approved name and the proposed type of company (is the
company a private company, is it limited by shares, unlimited or
public company, etc.)
b. Description of principal business activity.
c. The registered office address and head office address, where it is different from the registered office address, the company's email address, and the phone number.
d. The applicant also has to prepare the Company's Memorandum and Article of Association (MEMART), it is advisable, that this be drafted professionally by a Legal Practitioner, However, the Corporate Affairs Commission has provided a generic MEMART, which can be adopted by a new company during registration.
e. Particulars of the company's secretary. For small private companies, appointment of a secretary is optional, however, if the applicant decides to appoint a company secretary, he must provide the relevant details. Private companies (other than small companies) and public companies are required to appoint at least one secretary which could either be an individual a corporate secretary.
f. The particulars of Directors such as their name, service, usual address, gender, nationality, date of birth, occupation, identity type, and phone number. It is however worthy to note that a small private company can now appoint only 1 director.
g. Particulars of shareholder(s), which shall include the name, address, phone number and email address. A single person can be shareholder of a company, but where a company is to have more than one shareholder, the shareholding ratio (percentage of shares to be held by each shareholder).
h. The Statement of issued share capital, the class and numbers of issued shares, and the rights attached to them such as voting rights, dividend distribution, capital distribution in the event of winding up, and whether the shares are liable to be redeemed or are liable to be redeemed at the option of the company or the shareholder, particulars of shareholders/subscribers and shareholding formula.
i. Particulars of Persons with Significant Control (PSC), this could either be a Natural Person or a Legal Entity. A person with significant control means any person who directly or indirectly holds at least 5% of the shares/interest or voting rights in a company, has the right to appoint or remove a majority of the directors or partners, or can actually exercise significant influence or control over the company.
- Step 3. Pay filing fee and Stamp duties – the applicant has to pay the prescribed official filing fee and stamp duties online or in bank through remita. Upon payment, an electronic stamp will be affixed to the Memorandum and Articles of Association with some of the incorporation forms.
- Step 4. Prepare and upload documents – the applicant has to scan and upload the necessary requirements, which include the valid identification of the director/shareholder & Witness; their signatures on plain sheet of papers; and any other relevant documents such as Company Resolution & Certificate of Incorporation where another company will be among the shareholders of the new company to be registered.
- Step 5. Submission for registration - the step is to submit the application for approval, where it will be reviewed by the CAC and subsequently approved if it is in order.
In conclusion, it is now easier to register a business as applicants can now complete the entire process of registering their companies online using the new company registration online portal launched by the CAC in 2021. However, a person not familiar or understand rules and regulation guiding company registration in Nigeria is advised to contact any CAC accredited agent for registration to avoid unnecessary delays. Some of the rules guiding business registration includes share capital threshold for various sectors, which mandates a minimum share capital some companies in certain business sectors must have to be registered.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.