The setting up of a private security company in Nigeria involves incorporation by the Corporate Affairs Commission (“CAC”) and licensing by the Nigeria Security and the Civil Defense Corps (“NSCDC”). The full details of the setting up process are provided below:
INCORPORATION STAGE: What are the requirements for incorporating a private security company?
Apart from any special requirements (which should be noted from the information below), the general requirements for setting up a company in Nigeria are as follows:
i. Two proposed names for the company;
ii. A proposed registered address of the company in Nigeria;
iii. Names, resident address, email address, phone number and means of identification (preferably international passport) of the shareholders and directors. Please note that a private security company is required to be registered with at least three (3) directors, all of whom must be Nigerians and, at least, one (1) of the directors must be retired military or paramilitary personnel, from the rank of Major or Commissioner;
iv. The amount of share capital (please note that the share capital of a private security company must not be less than 10 million share capital);
v. The division of the company’s shares amongst the shareholders,
vi. The description of business which must be solely for provision of private security services;
vii. Memorandum and Articles of Association (“MEMART”). The CAC has a generic MEMART for applicants to adopt when incorporating a new company. However, there are specific provisions relevant to private security business which may need to be inserted in the generic MEMART available on CAC portal.
viii. The details of Company Secretary;
ix. Signatures of shareholders and directors (each of the shareholders and directors need to sign on a separate paper and scan for online submission);
x. Any other documents (such as work permit or business permit, etc.);
What are the Applicable Costs for Incorporating a Private Security Company?
A company’s incorporation cost/expense is dependent on the amount of share capital of the company. In Nigeria, share capital of a company attracts stamp duty charge in addition to the official charges by the CAC.
The total of incorporation cost of a private security company in Nigeria is about N490,312 (Four Hundred and Ninety Thousand, Three Hundred and Twelve Naira). The foregoing sum entails the CAC Registration Cost and Stamp Duty chargeable by Federal Inland Revenue Service (“FIRS”).
The CAC Registration costs about N55,000 (at N10,000 for the first 1 million of the 10 million share capital and, then, N5,000 for every subsequent N1million of the remaining 9 million share capital, i.e. N5,000 multiplied by 9, plus N10,000). Also, a stamp duty of N75,000 is payable to the FIRS on the 10,000,000 share capital (at 0.75% of 10,000,000). Please note that the above payments are non-refundable.
LICENSING STAGE: What are the requirements for obtaining a Private Security License from NSCDC?
Upon incorporation of a private security company by the CAC, the next step is to apply to the NSCDC for operational license. It is important to note that there are two (2) categories of a private security license based on their capacities:
Category A: Where the private company’s guards are above 3,000, then, the license fee is ₦3,000,000 (Three million Naira Only).
Category B: Where the private company’s guards are less than 3,000, then, the license fee is ₦2,500,000 (Two Million, Five Hundred Thousand Naira Only).
An application for a private guard license addressed to the Commandant General of the NSCDC enclosing the following:
i. Evidence of registration of the private security company with the required minimum of share capital and directors;
ii. Certified true copy of the company’s MEMART (2 copies);
iii. Photocopies of the company’s certificate of incorporation (2 copies);
iv. Letter from the company’s legal adviser;
v. Letter from the company’s auditor;
vi. Proposed training program for the company’s private guards;
vii. Proposed salary structure of the junior and management employees;
viii. Veterinary certificate (optional) for security company set up to protect animals;
ix. Payment of prescribed fees;
x. Tax Clearance Certificate;
xi. Statement of account;
xii. Letter from bankers
xiii. Personal History Statement (“PHS”) forms. All directors must obtain a PHS and fill it appropriately without leaving any column blank. All PHS forms must be appropriately filled to reflect Nil or Not Applicable to portions of the form that the Directors intend not to answer, as no column should be left unfilled.
xiv. Credentials of directors (2 copies) to be attached with PHS form.
xv. Eight (8) passport photographs of each of the directors.
xvi. Eight (8) full photographs (postcard 5 x7 inches) of each of the directors with a white background, with five (5) fingers print and signature signed at the back of the postcard (photograph) in the presence of NSCDC Officers.
xvii. Photocopy of the signature page of the directors’ International passports or National ID Cards or Driver’s Licenses to be stapled to the back cover of the file jacket.
xviii. Attestation letters from the referees for each director.
xix. One (1) uniform sample with two (2) photographs of a guard in the uniform. The uniform and accoutrement must not have semblance of any government agency or any existing private guards’ company.
What are the applicable costs of obtaining the private security company’s license?
Depending on the category of license a private guards’ company seeks to obtain, the total costs applicable to the licensing (payable to the Federal Government of Nigeria through Remita) are as follows:
1. Application Fee is N500,000 (Five Hundred Thousand Naira);
2. Personal History Statement (PHS) – ₦100,000 for each of the three (3) mandatory directors, which totals ₦300,000 (Three Hundred Thousand Naira).
3. Licence fee for a company with 3,000 guards and above is ₦3,000,000 (Three Million Naira), whilst a company with less than 3,000 guards is ₦2,500,000 (Two Million Five Hundred Thousand Naira).
What is the timeline for obtaining the private security company’s license?
The estimated timeline for obtaining a private security company’s license is about one (1) month after submission of all documents to the NSCDC.
What is the lifespan of a private security company’s license?
A private security company’s license has a two-year lifespan after which it expires. An expired license is subject to renewal. A private guard company will be required to renew its license at least three (3) months before its date of expiration.
Where a private security company fails to renew its operational license within the specified period, the license shall be deemed to have been revoked and the company shall cease to operate as a private security service provider.
For more information or clarification, contact KORIAT & CO. via admin@koriatlaw.com or 09067842241
