Registration of companies in Nigeria can now be completed in 24 hours after submission. The registration process is 100% digital. So, it is important that those handling your registration process should do so with the necessary knowledge and experience of the extant company law and regulatory directives on company registration in Nigeria.
In order to register your company with the Corporate Affairs Commission (“CAC”) in Nigeria, you must have certain information or details ready. Because of the short timeline for completion of the process, it is better for all the requirements to be available at the time of instructing a lawyer to register your company and there should be clarity on the desired goals of the promoters of the company.
The mandatory requirements for company registration are listed and explained as follows:
1. Two Proposed Names of the Company: these two (2) proposed names must be submitted to CAC (using the online portal) for pre-application name search, screening and approval. One of the names may be approved by the CAC within 24 hours. Please note that both names may be rejected if they conflict with the name of an existing company or violate the provisions of the Companies and Allied Matters Act 2020 (“CAMA 2020”). It is important to let your lawyer or consultant run a background check on the names before putting them in for CAC availability check.
2. Proposed Registered Address, Email and Phone Number of the Company: Every company must have its registered address in Nigeria. Our law firm, Koriat & Co., offers its address to foreign investors seeking to set up a company in Nigeria pending when their company is able to complete the set up process. Also, it is important to submit email and phone number of the company (usually email address and phone numbers of the shareholders or directors may be used in the meantime). The registered address, email and phone numbers are also relevant for use and record of the tax authorities.
3. Details of Shareholders, Directors and Company Secretary of the Company: The old law that a company must have at least two (2) shareholders or two (2) directors has now been abolished by the CAMA 2020. Now, a company may be registered with at least one (1) shareholder, director and company secretary who must present the following details:
i. Names;
ii. Home and contact addresses;
iii. Email Addresses;
iv. Phone Numbers;
v. Date of Birth;
vi. Occupation;
vii. A copy of government-issued means of identity (preferably data page of international passport); and
viii. Electronic signatures.
Please note that some sector specific companies may be required to have more than one (1) director. For example, in order to be licensed as a money lender company, the Ministry of Home Affairs, which is the licensing authority for money lender business in Lagos State, insists that a money lender company must have at least two (2) directors, amongst other requirements for setting up a money lender company. So, even though the CAMA 2020 allows a one-director company, the sector of operation must be thoroughly reviewed in order to ensure that a higher number of director or other conditions are not otherwise required.
In addition to the above, the distribution of the company’s shares amongst shareholders (if more than one) should be set out.
4. Person of Significant Control (PSC) over the Company: A PSC is a person who has up to 5% or more shares in a company. The CAMA 2020 requires that the name(s), address(es), phone number(s) and email addresses of such person(s) must be disclosed and submitted during company registration. A PSC may be amongst the listed shareholders or some person(s) who is/are not listed as shareholders but has/have significant control over the company either through a trust or investment agreement between such person(s) and the listed shareholder(s).
5. Object of the Company: The purpose for which the company is to be set up must be set out. We usually advise that a company should be set up for a single business purpose, not multiple businesses. Please note that a single object clause company is more likely to receive quick approval for registration than a multiple object clause company.
6. Share Capital of the Company: The amount of share capital of the company must be stated during the process of registration. Under the CAMA 2020, the minimum share capital for a private limited liability company is N100,000 (One Hundred Thousand Naira) whilst that of a public limited liability company is N2,000,000 (Two Million Naira) whilst any company with foreign participation (i.e. having a foreigner as shareholder) must have a minimum of N10,000,000 share capital. However, some sector specific companies may be required (under the applicable regulatory guidelines) to be registered with a higher amount of share capital. Please note that all the shares of a company must be fully subscribed at the time of its registration. The old law which permitted a minimum of 25% subscription has been abolished by the CAMA 2020. All the shares must now be subscribed by the initial subscriber/shareholder.
7. Certificate of Proficiency (This is NOT mandatory for all companies): In registering some companies seeking to do some specialised businesses, such as hospitals, law firms, accounting firms, engineering and construction companies, etc. the CAC may require that the directors have qualifying certificates showing the proficiency of the directors in the proposed business or profession of the company. For instance, a director of a construction and engineering company must present a certificate of the Council for the Regulation of Engineering in Nigeria (COREN), an accountant must have a certificate of the Institute of Chartered Accountants of Nigeria (ICAN), etc. Please note that NOT all companies require certificates of proficiency.
The above are the basic requirements for company registration in Nigeria. The other things that need to be known are related to costs which are based on the amount of the company’s share capital; as well as the necessary post-incorporation registrations with tax authorities and other applicable regulators. We have previously written about the other requirements, costs, timeline as well other useful information on company registration in Nigeria to guide foreigners seeking to set up a company in Nigeria.
