Essential Guide: Learn How to Register a Company with the Corporate Affairs Commission in Nigeria
Introduction
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 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 or unlimited company. Any of these types of companies may either be a private or public company. The Corporate Affairs Commission (CAC) was established by the Companies and Allied Matters Act, which was promulgated in the year 1990 to regulate the formation and management of companies in Nigeria. The CAC is saddled with the responsibility of registering companies in Nigeria.
Starting a business in Nigeria requires legal recognition, and the Corporate Affairs Commission (CAC) is the primary body responsible for business registrations in Nigeria. Whether you’re a Nigerian entrepreneur, a foreign investor, or a small business owner, understanding the step-by-step process of registering a company is crucial.
This guide will walk you through:
✔ The types of businesses you can register
✔ The legal requirements
✔ The step-by-step process
✔ Common mistakes to avoid
✔ Relevant case law and legal insights
By the end, you’ll have a clear roadmap to legally setting up your company with CAC.
Why Register a Company with CAC?
Before diving into the process, it’s important to understand why company registration is necessary. Some key benefits include:
Legal Recognition – Your business becomes a separate legal entity with rights and obligations.
Limited Liability Protection – Protects owners from personal liability.
Access to Business Loans & Contracts – Most banks and investors require a registered company.
Brand Protection – A registered business name ensures no one else can use it.
Tax Advantages – A registered company can take advantage of corporate tax benefits.
Now, let’s explore the types of companies you can register with CAC.
Types of Business Structures in Nigeria
Understanding the different business structures under CAC is essential before registration. The Companies and Allied Matters Act (CAMA) 2020 recognizes the following:
1. Business Name (Sole Proprietorship & Partnership)
Best for small businesses or freelancers.
The owner(s) and business are legally the same entity.
Lower registration cost but offers no liability protection.
2. Private Limited Liability Company (LTD)
The most common and recommended business structure.
Protects owners’ personal assets.
Requires at least one shareholder and one director.
3. Public Limited Company (PLC)
Suitable for large businesses seeking to raise capital via the stock market.
Requires a minimum of 50 shareholders.
4. Incorporated Trustees (Non-Profit Organizations)
Ideal for churches, NGOs, charities, and foundations.
No profit distribution among members.
5. Companies Limited by Guarantee
Established for charitable or professional purposes.
No shareholders, only guarantors.
Now that you know the types of business structures, let’s get into the registration process.
Step-by-Step Guide on How to Register a Company with CAC
Step 1: Conduct a Name Search & Reservation
The first step is to check whether your desired business name is available:
Visit the CAC website (www.cac.gov.ng)
Click on “Public Search” to check name availability
If available, reserve the name by paying a ₦500 fee
CAC will issue a Name Reservation Approval (valid for 60 days)
Pro Tip: Choose two alternative names in case your first choice is unavailable.
Step 2: Prepare Registration Documents
After name approval, you must prepare the required documents:
Memorandum and Articles of Association (MEMART) – Governs company operations
Form CAC 1.1 – Contains company details
Proof of Address – Utility bill or rent agreement
Means of Identification – Passport, NIN, or Driver’s License of directors
Statement of Share Capital – If applicable
For foreigners, a Combined Expatriate Residence Permit and Aliens Card (CERPAC) may be required.
Step 3: Payment of CAC Registration Fees
Registration fees vary based on company structure:
Business Name – ₦10,000
Private Limited Company (LTD) – Starts from ₦20,000 (varies by share capital)
Public Limited Company (PLC) – Starts from ₦50,000
Fees can be paid online via the CAC portal or through a designated bank.
Step 4: Submission of Documents & Approval
Once payment is made:
Upload all documents to the CAC portal
CAC will review and verify the details
If successful, you’ll receive your Certificate of Incorporation
Processing time: Usually 1 to 2 weeks, but delays can occur.
Step 5: Obtain a Tax Identification Number (TIN)
After registration, you must:
Register with the Federal Inland Revenue Service (FIRS)
Obtain a Tax Identification Number (TIN)
Register for Value Added Tax (VAT) if applicable
TIP: TIN registration is free, and you can apply through the FIRS website.
Legal Cases & CAC Registration in Nigeria
To understand the legal importance of company registration, let’s look at a landmark case:
Case: First Bank of Nigeria v. Excel Plastics Ltd (2017)
The court ruled that only a registered company can sue or be sued.
Excel Plastics, an unregistered entity, could not enforce contracts.
Lesson: Without CAC registration, your business lacks legal standing in court!
Common Mistakes to Avoid During Registration
Choosing a generic business name (e.g., “Best Ventures”)
Not verifying director/shareholder details
Uploading incorrect or incomplete documents
Ignoring post-incorporation requirements (TIN, tax compliance)
Post-Registration Compliance: What’s Next?
After registration, ensure your company remains compliant:
Annual Returns Filing – Failure attracts penalties.
Tax Compliance – File company taxes yearly.
IMPORTANCE OF COMPANY REGISTRATION IN NIGERIA
1. Separate Legal Entity: Your incorporated business is deemed by law to be a separate legal entity. It has rights and privileges as a human person; can own property (it is illegal for an unregistered business to buy or sell land in Nigeria).
2. Raising significant capital: Your ability to attract investors and raise money for your business will be easier. Investors are likely to invest in a registered company rather than an unregistered business that has no formal structure in place. Also investors like to invest in Registered Company rather than unregistered company mainly because they know that there is a formal structure in place to accept their investment. A registered company gets easy access to loans and boundless opportunities.
3. Reputation and Prestige: Your business reputation and prestige is enhanced. The incorporation of your business can suggest that the business has permanence and is committed to effective and responsible management.
4. Brand Credibility: Registering your company is the first step to getting your business structured. A registered business gives client’s confidence that is dealing with a reputable organization and also enhances your brand image credibility and perception of your business.
5. Legal Protection: Once your business is registered or incorporated with the Corporate Affairs Commission, your business name is protected and nobody can use the same name or even a name that is similar to it throughout Nigeria.
PREPARED BY: CHAMAN LAW FIRM TEAM
Email: chamanlawfirm@gmail.com
Tel: 08065553671, 08024200080