Introduction
Company registration is the first indicator of setting up a business in Nigeria. It encompasses the procedures one must take to ensure that companies have their records filed with the recognized body in charge of registration in Nigeria.
The sole government agency in charge of company registration in Nigeria is the Corporate Affairs Commission (CAC). Furthermore, the Companies and Allied Matters Act (CAMA 2020) regulates company registration procedures in the country.
Notably, company registration is open to every Nigerian citizen and foreigner above 18 years of age in Nigeria. The most important thing is to comply with the statutory requirements of the country during registration.
The Benefits of Registering a Company in Nigeria
- Registration of a company helps to eliminate most personal liability and risks. Personal properties cannot be confiscated to repay debts because an incorporated business is a separate legal entity.
- Company registration allows you to borrow money from commercial banks and institutional lenders to finance your business.
- Company registration also increases your chances of getting investments. This is because registration increases investors’ confidence in your company.
- Registration of companies with the relevant agency results in the client’s confidence and trust in the brand, which promotes business dealing.
- Company incorporation makes perpetual succession possible. It allows businesses to continue their activities after the death of the owner.
Minimum Share Capital to Register a Company
The minimum share capital required for company registration by a private company limited by shares is #100,000(one hundred thousand Naira), and a publicly quoted company (PLC) must-have #2,000,000 (two million naira) minimum issued share capital. For a company with foreign participation to be registered in Nigeria, it must have a minimum of N10,000,000 (ten million naira) in share capital.
Importantly, when a foreigner sets up a company in Nigeria, the foreigner can own 100% of the shares of that company. This is because CAMA 2020 does not require a local as a shareholder or director before a foreigner can incorporate in Nigeria, except for companies involved in the upstream petroleum sector.
Required Documents to Register a Company
The documents necessary for the registration of companies in Nigeria include;
- Notice the registered address of your business.
- Memorandum of Association
- Articles of Association
- Particulars, lists, and consent of the first directors of your company.
- Particulars of the company secretary (this is optional for a private company in line with CAMA 2020).
- The objects and business of the company must be provided.
- Statement of compliance by a legal practitioner
The procedure for registering a company
The processes involved in company registration in Nigeria are;
- Carry out a name reservation by choosing two suitable company names and checking for their availability with the Corporate Affairs Commission.
- Commence the company registration with the availability code provided by the Commission after the approval of the name reservation.
- Prepare the Memorandum of Association and all related documents based on the objects of the companies to be registered. It is best to consult a lawyer for this. (The Commission provides a template for this on the registration portal).
- Fill out the registration form on the Corporate Affairs Commission (CAC) portal to be submitted alongside other required documents.
- After filling out the registration form, and confirming the information provided, the filing fee and stamp duty fees are paid online via the Remita platform.
The Average Cost of Registering a Company in Nigeria
The cost of company registration in Nigeria differs depending on the type of company.
- The fee for reserving the name of your company is 500 Naira.
- The registration of private companies with share capital above 1 million to 500 million is #5,000 for every 1 million share capital.
- The registration of the private companies with share capital above 500 million is #7,500 for every 1 million share capital.
- The registration of the public companies with share capital above 1 million to 500 million is #10,000 for every 1 million share capital.
- The registration of a public company with a share capital above 500 million is #15,000 for every 1 million share capital.
N/B – The proposed industry of operation also determines the minimum share capital for a company. Some industries require a higher share capital threshold than the minimum stipulated in the Companies and Allied Matters Act for private and public companies.
How Long Does It Take To Register A New Company In Nigeria?
Depending on the Corporate Affairs Commission (CAC) workload and other factors like server downtime, company registration in Nigeria may take about a week or less.