PROCEDURE FOR BUSINESS REGISTRATION IN NIGERIA - 2024

Business registration in Nigeria is a pivotal step in establishing a legal entity, and understanding the procedures involved is crucial for both local and foreign entrepreneurs. The Corporate Affairs Commission (CAC), established under the Companies and Allied Matters Act (CAMA) 2020, is the federal body responsible for overseeing the registration and post-incorporation matters of companies in Nigeria.

Forms of Business Entities in Nigeria

The most recommended form of incorporation for individuals and foreigners alike is a private company limited by shares. This structure not only provides limited liability for its members but is also the preferred option for foreign direct investments or portfolio investments. Alternatively, Nigerian citizens can opt for a business name registration, which lacks a separate legal personality but is suitable for smaller-scale enterprises.

Foreigners, however, cannot register a business name and must instead opt for a company registration. The authorized share capital for such a company must not be less than NGN100,000,000 (One Hundred Million Naira), emphasizing the commitment required for foreign investors.

Industry-Specific Considerations

While there is generally no requirement for foreigners to appoint local persons as shareholders or directors, some industries such as oil and gas services, mining, and gaming have specific regulations. These regulations might necessitate the involvement of locals in key positions, reflecting the government's efforts to safeguard strategic sectors.

Private Company Characteristics

A private company is defined by the liability of its members, limited by the memorandum and articles of association to the amount of shares held by them. This structure provides a legal framework for business operations and ensures accountability within the organization.

Recent Developments in Business Registration

Noteworthy improvements have occurred in recent years, streamlining the business registration process. Online incorporation certificates are now downloadable, and the overall requirements have been simplified since 2021. These changes are aimed at fostering a more business-friendly environment in Nigeria.

Requirements for Company Registration

To initiate the registration of a company in Nigeria, the applicant must provide the following:

1. Registered address of the proposed company

2. Email and phone number of the proposed company

3. Forms of identification for directors/shareholders

4. Approval note of name reservation from CAC

5. Full details of directors/shareholders (names, addresses, occupation, and date of birth)

6. Objects of the company

7. Details of the company secretary (mandatory for foreign-owned entities)

8. Incorporation certificate and company resolution (if applicable)

Steps for Company Registration

The registration process involves the following steps:

1. Submission of two desired company names for a search

2. Preparation of incorporation documents

3. Completion of the pre-registration form and statement of share capital

4. Payment of stamp duty and filing fees

5. Uploading relevant documents

6. Submission of the registration application online

Upon approval, the CAC issues electronic incorporation certificates and other necessary documents.

Business Name Registration for Local Persons

For local persons seeking to register a business name, the requirements are similar, with the addition of providing details for the proprietor(s).

Compliance with Authorized Share Capital

It's crucial to conduct the CAC registration in strict compliance with the authorized share capital requirements. For instance, businesses in specific sectors like shipping must have a minimum authorized share capital of 25 Million Naira. Foreign-invested companies must maintain an authorized share capital of at least 100 Million Naira.

Additional Requirements for Foreign-Owned Entities

Apart from the incorporation processes, foreign-owned entities must obtain a business permit from the Federal Ministry of Interiors and register with the Nigerian Investment Promotion Commission (NIPC) before commencing business operations.

Written By Chaman Law Firm – Top Corporate and Commercial Law Firm In Nigeria

If you have questions or need assistance with Company/Business Name Registration, contact us now!

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