The sale of motor vehicles (Motor cars, Vans, Jeeps, Tractors, Lorries, Bulldozers, Tippers, Trailers buses, Mopeds, Motorcycles) and their spare parts is a lucrative business in Nigeria. Given that motor vehicles are essential, serving nearly everyone directly or indirectly, regulation of this sector is crucial.
In Lagos State, the agency responsible for the regulation of this business sector is the Lagos State Motor Vehicle Administration Agency (MVAA). Specific laws Like the “Lagos State Motor Vehicle and Motor Vehicle Spare Parts Dealers Law” have been put in place to ensure only legitimate businesses operate in this space, preventing the sale of stolen vehicles and promoting accountability.
By virtue of section 2 and 8 of Lagos State Motor Vehicle and Motor Vehicle Spare Parts Dealers Law, every motor vehicle dealer and motor vehicle spare part dealer in the State are mandated to apply for registration with the Ministry of Transportation for the issue of certificate of registration which shall be renewed yearly.
It is important to note that the registration of a motor vehicle and motor vehicle spare parts retail business with the Lagos State Ministry of Transportation grants dealers the legal authority to operate their businesses throughout Lagos State. Once all registration requirements and regulations have been duly complied with, licensed motor vehicle dealers and spare parts dealers are permitted to carry out their activities without hindrance or restriction from the authorities. This ensures a legitimate, secure, and uninterrupted environment for business operations, provided all rules and ongoing compliance standards set by the Ministry are maintained.
It should be noted that a Motor Vehicle Retail business and Motor vehicle spare parts retail business can be registered as a Private limited liability company or a Business name.
A private limited liability company is the most common type of company for business undertakings in Nigeria. By virtue of section 18 of the Companies and Allied Matters Act 2020 (“CAMA”), one or more shareholders can form a small company limited by shares. A company is small if, amongst others, the turnover is less than N25,000,000 (about US$50,000) and it has no foreigner or government or government corporation as a shareholder.
What are the requirements for registering a Motor Vehicle retail business in Lagos State?
The application for registration shall be duly signed by the motor vehicle dealer and must state the following particulars-
- full particulars of the type of motor vehicle being sold;
- security or guarantee for safety in respect of the motor vehicles being sold;
- name and residential address of the motor vehicle dealer;
- name of the company whether incorporated or unincorporated and address of the place of operation (i.e. copy of certificate of incorporation shall be attached); and
- particulars of incorporation or other evidence as may be required by the Ministry or its authorised officer.
What are the requirements for registering a Motor Vehicle Spare Part business in Lagos state?
The application for registration shall be duly signed by the motor vehicle spare parts dealer and must state the following particulars-
- name and residential address of the motor vehicle spare parts dealer;
- name of the company whether incorporated or unincorporated and address of the place of operation;
- particulars of incorporation or other evidence as may be required by the Ministry of Transportation or its authorised officer; and
- number of persons under apprenticeship with him.
By virtue of section 5 and 6 of Lagos State Motor Vehicle and Motor Vehicle Spare Parts Dealers Law, Motor vehicle dealers and Spare part dealers are prohibited from carrying out their business in a residential area. Any motor vehicle dealer who contravenes the above provision will be liable on conviction to have the premises demolished or confiscated by the State Government; and bear the cost of demolition by the State Government.
What is the Cost and Timeline for registering a Motor Vehicle Dealer retail business?
The relevant costs for setting up the company may vary depending on the share capital, foreign participation and other factors. Please contact us for more information.
What is the Procedure for Registering a Motor Vehicle and Spare Parts Dealer Retail Business?
- Obtain application form for Motor Vehicle/Spare parts dealers license Form from Motor Vehicle Administration Agency (MVAA) Head Quatres or any of the 23 Dealers’ license Zonal offices.
- Fully filled application form is returned with (2) passport photograph of owner, means of identity and copy of certificate of business incorporation/registration of business (where applicable).
- Inspection of premises/shops of prospective Auto and spare parts Dealers to ensure compliance with the required standard designated. (24hours).
- Proof of payment of prescribed fees upon issuance of payment advise i.e Bank deposit slips & receipts are submitted at the nearest zonal offices.
What are the Requirements for the registration of a Motor Vehicle retail business structured as a Limited Liability Company with the SCUML?
It is worthy to note that Motor Vehicle dealers are required to register with the Special Control Unit Against Money Laundering (SCUML). The following are the requirements for the registration:
- Certificate of Incorporation
- Memorandum of Association and Articles of Association of Association
- Form CAC 1.1
- Tax Identification Number (TIN)
- BVN, Bank Name and Account Number
- Evidence of Registration with Association of Motor Dealer of Nigeria (AMDON)
What are the Requirements for the registration of a Motor Vehicle Retail Business structured as a business name with SCUML?
- Certificate of Incorporation
- Form BN-01 (Proprietor’s Particulars
- Tax Identification Number (TIN)
- BVN, Bank Name and Account Number
- Evidence of Registration with Association of Motor Dealers of Nigeria (AMDON)
