Introduction
A Company limited by guarantee is a non-profit company registered solely for promoting objectives such as art, culture, science, education, religion, etc. notwithstanding that it is a non-profit company, it is allowed to do business but whatever money the company makes is to be ploughed back into the company towards the attainment of its objectives.
The Corporate Affairs Commission (CAC) is the agency responsible for the registration and regulation of a company limited by guarantee.
Steps for Registration with CAC
- Application for consent for name reservation
- Upload of the necessary documents on the Company Registration Portal upon approval of the name by CAC.
- Application to the Attorney General of the federation for authorization to register the company within 30days. The AG is expected to approve the application where there are no objections or where there is no reasonable cause to refuse the application and where no decision is made within 30 days, the promoters of the company are expected to place an advertisement in 3 daily National Newspaper for 28 days inviting the public to object if any. Where the above requirements have been complied with, the CAC shall within 40 days of the submission of the application register the company.
- Approval by the commission and grant of incorporation documents upon successful consideration
Features of Company Limited by Guarantee
- It does not have a share capital but the members are expected to guarantee a certain sum
- There are no shareholders but the company owned by members who are referred to as guarantors who agree to pay a nominal amount in the event of the company's being wound up.
- The company has a legal entity, separate from its owners, and the personal finances of its guarantors are protected.
- It is a form of registration for a non-profit organisation.
- Profits earned by the company are re-invested into the company to help promote its objectives.
- No profit is distributed to the guarantors.
- The day-to-day activities of the company are financed by the members, plus any funding the company can generate.
- It can carry out activities in the name of the company such as employing human resources, borrowing credit, buying and sell of property and defending a lawsuit, entering into contracts.
- It has a Memorandum and articles of association
- The directors of the company can be paid sitting allowances and directors fees but this is discretional, and the director fees (if any) must be paid out of the company's fund.
- The company is required to file annual returns with the CAC just like a private limited liability company
Requirements for Registration
- Two proposed company names in order of preference
- The objectives of the company
- Address, phone number, postal address and email of the company
- Details of directors, guarantors, witness and secretary such as name, occupation, address, phone number, email, valid means of identification, passport photograph and signature. Please note that there must be at least one named guarantor and one director who is resident in Nigeria. It is acceptable for the same person to act in both capacity
- Statement of Guarantee of the proposed Company limited by guarantee. In this statement, each member declares that if the company is wound up, and if they are still a member (or within a year of them no longer being a member), then they will contribute to the assets of the company if there are debts and liabilities which were incurred by the company before it stopped being a member and there are costs and expenses that are owed for covering the process of winding up the company.
- Memorandum of Association and Articles of Association which is provided by CAC and the applicant can adopt or they can have theirs drafted.
- The consent from the Attorney-General of the Federal Republic of Nigeria
- Letter of no object from the ministry in which the company objectives is under
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