Aekley Solicitors

REGISTRATION OF COMPANY IN NIGERIA

HOW TO REGISTER A COMPANY IN NIGERIA

A company is a legal entity with a separate legal personality, formed by an individual or a group of individuals for the purpose of engaging in a profit-making business. By the provision of the law in Nigeria, it is mandatory for all companies to be registered with the Corporate Affairs Commission (CAC) in accordance with the Companies and Allied Matters Act (CAMA) 2020.

It is noteworthy that, by the provisions of CAMA 2020, a single person can now register and fully own a company in Nigeria. The process for company registration in Nigeria is provided below.

HOW TO REGISTER A COMPANY IN NIGERIA

NAME AVAILABILITY AND RESERVATION

The first step to registering a company is to get its name reserved. The applicant is expected to propose two names for the company for which an availability check will be conducted, and if any of the names is available and registrable, it will be reserved accordingly.

FILLING THE ONLINE PRE-INCORPORATION FORMS

Upon reservation of the name, the applicant will be required to provide the following details and information:

  • Nature of the Business: the Company/Objects of the company
  • Details about the Director(s):(a) Full Name and Address (b) Date of Birth (c) Gender (d) Phone Number (e) Email Address (f) Occupation (g) Scanned Signature (h) Scanned Identity Card (International Passport, National ID Card, Voter’s Card, or Driver’s License)
  • Details about the shareholder (s):(a) Full Name and Address (b) Date of Birth (c) Gender (d) Phone Number (e) Email Address (f) Occupation (g) Scanned Signature (h) Scanned Identity Card (International Passport, National ID Card, Voter’s Card, or Driver’s License).
  • Particulars of the Company Secretary (This is, however, optional for a private company).
  • The Share Capital and the Percentage of Shares to be Held by Each Shareholder (It is important to consider if there is a mandatory share capital threshold applicable to the proposed company.)

PREPARATION OF DOCUMENTATION

The applicant is expected to provide the Memorandum and Articles of Association of the company (“MEMART”) for registration. Although there is a generic MEMART made available by CAC which can be adopted by the applicant, it is, however, advisable for the applicant to engage the services of a legal practitioner to draft the MEMART.

PAYMENTS & SUBMISSION

The applicant is required to make payments for stamp duties and the company registration filing fee. After payment of these fees, the applicant is required to submit the application and await registration accordingly.

CONCLUSION

Upon due registration of the company, a Certificate of Incorporation will be issued by CAC together with a copy of the duly registered MEMART and a Status Report of the company.

Conclusively, it is important to note that the incorporation process can be done by an individual applicant himself or through an accredited agent. It is, however, advisable to engage the services of an accredited agent to ensure a smooth and seamless registration process.

BUSINESS REGISTRATION IN NIGERIA: A NECESSITY OR LUXURY?

WHY SHOULD YOU REGISTER YOUR STARTUP, BUSINESS OR COMPANY IN NIGERIA?

When starting a business, one of the major considerations on the minds of the owners/ promoters is whether or not registration is needed at that material time. This, of course, may be borne of the desire to justify every expense to be incurred by a newly formed startup i.e. every penny has to provide a return on the investment. Registration of a startup may seem unnecessary at the beginning stage of a business to the owner but this should not be the case. This article will look into the registration of startups/businesses in Nigeria with a focus on the major reasons for registration and draw a conclusion on whether registration is a necessity or not.

Business structures

The legal structure chosen for a business has major implications. In choosing a structure for a business, factors such as the potential risks and liabilities of the business, the objects of the business, the costs involved in establishing and maintaining the business structure, and tax implications should be taken into consideration. The promoters/owners of a business must decide on the legal structure that best meets their needs, as this will determine the type of registration procedures that will be followed.

There are three common ways to structure a startup in Nigeria:

Sole trader: This consists of individual trading on his own. He controls and manages the business. It is the simplest business structure and easy to set up with minimal costs. A sole trader is solely responsible for the liabilities of the business and also solely enjoys the profits. The main disadvantage of this structure is that there is no protection for the personal assets of the proprietor in the event that the business fails as his assets become available to pay off creditors.

Partnership: This involves an agreement between two or more people to go into business together. Each of the partners will be jointly and severally liable for the debt of the partnership. It is not necessary for all the partners to be fully involved in the management of the business but they all share the profits or losses as the case may be. It is noteworthy that the Nigerian law now provides for Limited Liability Partnership[i].

Limited Liability Company: This is a legal entity separate from its shareholders, directors, and employees. Liability here is limited to the amount invested in the company as shares. Hence, the shareholders enjoy a form of protection on their personal assets in the event that the company goes into liquidation. It is worthy of note that the Nigerian law now provides that a single person can now register and fully own a company in Nigeria[ii].

The body generally responsible for the registration of businesses in Nigeria is the Corporate Affairs Commission (CAC)[iii].

Why register a startup/business?

  • Compliance with the law

The Law makes it mandatory for every individual, firm or corporation operating under a business name to register their business within 28 days of commencement[iv]. The Law also prescribes the manner in which companies and partnerships can be formed. Hence, in order to comply with the provisions of the Law, a business must be registered. 

The law that primarily provides for the registration of business organizations in Nigeria is the Companies and Allied Matters Act (CAMA) 2020.

  • Brand reputation and public perception

Building a reputation with new clients and customers may seem very difficult. Registration enhances the public perception of a startup and gives potential clients the confidence that they are dealing with a reputable business.  Also, there are many businesses that will not engage with an unregistered startup because of their status and reputation. 

In a nutshell, registration gives the assurance that the business is legitimate and reputable.

  • Bank Account

To open a business bank account for a startup, proof of registration is always a necessary requirement. Banks will not open a business account for an unregistered startup.  Having a business account gives a startup more credibility and trust from the customers, banks, other associated businesses and the public. The bank account also ensures that business funds are not diverted for personal use.

  • Loan Facilities

Most Financial Institutions give business loans only to registered businesses. The Institutions in order to protect their interests and to ensure repayment of loan facilities will naturally need an assurance that a business is legitimate and the facilities would be put into proper use. This assurance is easily seen in a registered startup and this is why registration is a non-negotiable requirement to qualify for such loans.

  • Brand identity Protection

Registration gives a unique identity to a startup and such is also protected under the law. By the provision of law, no two businesses should have the same name or names so identical as to confuse the public. Once a business name is registered, such name is recorded and recognized by the government and as such, no other business can register with that same name.

A registered business name enjoys the advantage of protection against competitive usage within the country.

  • Liability Protection

When a startup is registered as a limited liability entity, the business becomes a different entity for its owners. The owners cannot be personally held liable for the debt of the business. This means that no one can legally go after the personal properties of the business owners in case the business goes into liquidation or to enforce any claim against the business.

Registration as a limited liability entity protects the personal assets of the business owners.

  • Continuity

A registered startup has the ability to live longer than its owners. This means that even if the business owners become incapacitated or deceased, the business will not close down especially when a proper structure is in place.

A registered startup is an asset transferrable to the next generations.

How to register a Business

Registration of a business in Nigeria involves some processes including filling of forms and filing of some documents. It is advisable to engage the services of persons with experience in this field who can streamline the process and get the business registered within a very short period of time.

Conclusion

Registration of a startup may seem to be an investment without direct return but is similar to insurance. It will definitely cost money, time, and effort. However, this is a necessary price to pay for the protection of the business, business owners, and associated businesses. It is always advisable to register a startup in order to enjoy the benefits stated above which are indeed necessary for the smooth running and the image of the startup. Hence, it is not a luxury to register a startup but a necessity.


[i] Section 753, Companies and Allied Matters Act (CAMA) 2020

[ii] Section 18 (2), Companies and Allied Matters Act (CAMA) 2020

[iii] Section 1, Companies and Allied Matters Act (CAMA) 2020

[iv] Section 815, Companies and Allied Matters Act (CAMA) 2020.

Our Team

RAYMOND ABIONA

RAYMOND ABIONA is a Partner in the Firm. He focuses his practice on Corporate/Commercial Law, Environmental Law Practice and Regulatory Compliance Matters. He began his practice at the law office of U.N Udechukwu (SAN) & Associates before joining Aekley Solicitors. Over the years, he has advised all types of business entities and has particularly managed corporate compliance and employment issues. He has also provided advisory services to numerous clients in the Manufacturing and Construction Industry and successfully undertook the processes for obtaining permits and licenses for the multi-million Naira companies in these sectors. Raymond has handled environmental matters for national and multinational clients in the telecommunications sector with specific roles of ensuring project due diligence and adherence to national environmental policies and regulations.

Apart from being a member of the Nigerian Bar Association, Raymond is also a member of the Association for Environmental Impact Assessment of Nigeria (AEIAN).

Institutions

  • University of Ibadan, Nigeria (LL.B)
  • Nigerian Law School (BL)

ADEJORIN DAVID ABIONA

ADEJORIN D. ABIONA is an astute legal practitioner and a Partner at Aekley Solicitors. His areas of practice include Corporate and Commercial Law, Intellectual Property Law and Commercial Dispute Resolution with a focus on Litigation and Arbitration. Prior to joining Aekley Solicitors, Adejorin worked at the Transactions Practice Department of Tokunbo Orimobi LP and rose to head the Ibadan Branch, Nigeria of the Firm. He has successfully represented many reputable public and private companies and Individuals in multi-million Naira commercial litigation matters before various Courts in the Federation. He has also provided business advisory services on numerous complex transactions to various business entities and companies. Adejorin has advised both national and international clients on real estate projects and conducted legal due diligence for the sale and purchase of real properties in Nigeria.

He is a member of the Nigerian Bar Association (NBA) where he currently serves as the Assistant Secretary of the Ibadan Branch of the Association. He is also a member of the NBA Section on Business Law and an Associate Member of the Chartered Institute of Arbitrators (UK).

Institutions

  • University of Ibadan, Nigeria (LL.B)
  • Nigerian Law School (BL)

NIFEMI SOPEKAN

Nifemi Sopekan is a highly ambitious graduate of law who is highly proficient in communicating and dealing with clients.  She is an effective team player who pays strong attention to details and possesses excellent critical thinking, research and secretarial skills. Nifemi is a Paralegal at Aekley Solicitors

Institutions

  • Adeleke University, Nigeria (LL.B)

Careers

At Aekley Solicitors, we hold firmly our core values of excellence, professionalism, hard work, enthusiasm and creativity. We challenge our lawyers and support staff to meet our high standards for quality and professionalism.

Aekley Solicitors offers progressive career paths in an innovation-driven working environment and provides the platforms for young professionals to maximize their potentials. We are also committed to fostering diversity and maintaining a nondiscriminatory professional environment.

We also offer internship opportunities for law students to acquire work experience, skills and knowledge.

If you are interested in joining our team, kindly send your resume to careers@aekleysolicitors.com

SME

As our practice policy, we offer effective and reliable services to Small and Medium Scale Enterprises (SME) with the same top-notch legal representation as we offer to all our clients. Our SME unique package affords legal services and representation to SME’s in their businesses in a cost-effective manner. We are here to help SME founders achieve their vision, from business formation to business growth and eventual sustainability.

We Offer The Following Services To Small and Medium Scale Enterprises:

 

  1. BUSINESS FORMATION, STRUCTURING AND REGISTRATION

We advise SME founders on the appropriate business formation and structure, after which we register the business on their behalf with relatively lower cost.  We provide standard entrepreneur structuring advisory services to help arrive at the right business and holding structure that provides for sustainability and cost efficiency. Once a structure is put in place, we form the legal entities which can be a Partnership, Sole-Proprietorship or Limited Liability Company.

Our business formation service is timeous and unique by providing full legal and administrative services so that the SME owners may focus on their business and interface with their customers rather than focus on the tedious administrative tasks at the initial stage. Our services are budget sensitive.

2. REGULATORY COMPLIANCE

Once a business is formed, we help SME’s open files and obtain needed permits, licences and certificates at various MDA’s, depending on their line of operation. We enable SME’s carry out their day to day operations without entangling its management team in the cumbersome and tedious regulatory compliance.

3. CORPORATE GOVERNANCE

In order to ensure a lasting business with ensuing growth, we undergo corporate governance activities with the management of SME’s to make them accountable to the appropriate business and management model which the business should follow for sustainability, from the business decision makers, to shareholders and also the employees.

aekley solicitors

About Us

Aekley Solicitors is a Corporate/Commercial law firm that provides timely and cost-efficient legal services to meet the distinct needs of its clients. Our approach is to provide legal solutions that allow businesses achieve their goals. We value client intimacy and client growth by:

  • Internalising clients’ service areas in providing bespoke legal solutions to everyday challenges;
  • providing real time industry-related information to clients while protecting their businesses; and
  • drawing clients’ attention to possible expansion areas and opportunities.

In essence, our clients’ business is our business.

We also offer unique packages to support SME’s and start-ups by putting them through the legal requirements around business structure, formation, management and regulatory compliance. Our goal is to make SMEs and Start-ups sustainable in the long term.

Our Services

We offer the following services: 

1. CORPORATE AND COMMERCIAL:

Our practice at Aekley Solicitors is built on our passion for providing corporate and commercial services to businesses in Nigeria. Some of our corporate and commercial services include:

  • Business formation i.e registering Nigerian companies, and pre-business activities,
  • Business Structuring and joint venture implementation,
  • Advising on all forms of commercial transactions,
  • Conducting due diligence,
  • Drafting of commercial documents such as Sale Agreements, Memorandum of Understanding, Partnerships, Joint Ventures and Shareholders Agreements, Confidentiality Agreement etc.,
  • Dealing with Regulators on clients’ behalf (Registering copyright, trademarks, obtaing permits and certificates from Nigerian public service organizations.

 

2. IMMIGRATION AND EXPATRIATE SERVICES

We assist foreign nationals seeking to do business in Nigeria through the complex Nigerian immigration laws by providing bespoken immigration solutions.

We solve all immigration related issues and obtain necessary permits on behalf of our clients. We specialise in processing:

  • Combined Expatriate Residence Permit and Aliens Card (CERPAC) and
  • Short Term Work Permit (TWP)

3. INTELLECTUAL PROPERTY RIGHTS

We help clients protect their innovative ideas by advising on all aspects of intellectual property law and by undertaking the registration process on behalf of our clients. With the aim of helping businesses and individuals safeguard their intellectual property rights, we specialise in the registration and enforcement of:

  • Trademark,
  • Copyright and
  • Patents.

    4. TAXATION:

We provide prompt and efficient services in relation to taxation matters to our clients. Our practical experience in Nigerian Tax laws helps us provide wide range of services on cumbersome Federal, State and Local Government tax matters.

We also work with external Tax Consultants in advising our clients on tax issues like:

  • Companies Income Tax (CITA),
  • Personal Income Tax (PAYEE),
  • Petroleum Profit Tax (PPT),
  • Transfer Pricing Return (TPR),
  • Capital Gains Tax etc.

5. START-UPS:

We provide legal services and representation to start-ups, covering diverse fields such as: telecoms, software, hardware, education, fin-tech, entertainment etc. Particularly, we help founders by guiding them through foundation stage, we continue assisting through the investment process up until continued growth is sustained.

We offer the following services to start-ups:

  • Start-up Registration
  • Drafting of Founders Agreement, Equity and Vesting Agreement, Employee Stock Option Agreement etc.
  • Dispute Resolution, Arbitration and Commercial Litigation.

6. COMPANY SECRETARY

We offer wide range of secretarial services to businesses. As a firm, we internalise the operations of our clients and form a core of the management team by offering some of the following services:

  • Convene and attend Directors and general meetings of the Company, record the minutes of such meetings and maintain the Company’s Minute Book;
  • Prepare and circulate notices of board and general meetings, minutes of meetings and resolutions, together with the filing of resolutions at the CAC, Abuja in relation thereto;
  • Periodic filing of annual returns, and the returns required in connection with removal and appointment of Directors and the allotment of shares;
  • Attest to and execute all company documents on behalf of the Company as may be required by the Directors of the Company and by law;

7. COMPLIANCE and REGULATIONS

Undertake Permits, Licences and Certificates on behalf of our clients in their area of operation. We are experienced in representing clients while interfacing with various government Ministry, Department and Agencies (MDA’s) in relation to doing business in Nigeria.

Depending on the nature of your operation, we can help you obtain or renew Licence/Permits/Certificates with the following MDAs:

  • Corporate Affairs Commission
  • Federal and State Environmental Bodies
  • Department of Petroleum Resources (DPR)
  • National Pension Commission (PENCOM)
  • Nigerian Communications Commission (NCC)
  • Federal Inland Revenue Service (FIRS)
  • National Social Insurance Trust Fund (NSTIF)
  • Others include: Trademark, Patent, Copyright, NOSDRA, ITF, BPP, etc.