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How to Register a Business Entity in Nigeria [infographic]

how to register a company in Nigeria

If you are considering setting up a legal structure for your business in Nigeria, there are steps to take.

Registering a business entity in Nigeria can be clumsy, but it’s not rocket science. You can do so without a lawyer, but it’s in your best interest to get one. It does not cost a fortune either, especially if you get the service of a startup friendly firm.

The team at DIYlaw, the tech startup that makes it easier to get access to legal services in Nigeria, wrote 5 steps to getting the process done.

And we turned it into an infographic.

how to register a company in Nigeria

1.  Determine what legal entity you want

In Nigeria the most popular legal entities are:

  • Registered business name (usually for sole proprietorships and partnerships);
  • Limited liability company (which can be private or public)
  • Incorporated Trustees or Company Limited by Guarantee (for non-profit making entities)

Other legal entities which are not so popular are Unlimited Companies, Limited Partnerships and Limited Liability Partnerships (available only in Lagos State).

The most popular legal entity is the private limited company and that will be our focus here

2.  Decide on a name

First step is to perform a name availability search and reservation at the Corporate Affairs Commission (CAC). This typically takes 1-5 days. A reserved name is valid for 60 days only. If a private limited company, the name must end with either “Limited or” Ltd.”

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The CAC may reject names which in its opinion are too similar to existing names, misleading, offensive, undesirable or violates existing trademarks or business marks. Certain words that may be misleading can only be used with permission. E.g. “government” “regional” “co-operative” “building society” “group” or “holding”

If a private limited company, the name must end with either “Limited or” Ltd.” The CAC may reject names which in its opinion are too similar to existing names, misleading, offensive, undesirable or violates existing trademarks or business marks. Certain words that may be misleading can only be used with permission. E.g. “government” “regional” “co-operative” “building society” “group” or “holding”

3.  Complete your CAC documents

Once you have your name reserved, it is time to complete your CAC documents. Here are the CAC documents you need to complete:

Once you have your name reserved, it is time to complete your CAC documents. Here are the CAC documents you need to complete:

  • Form CAC 2 (statement of share capital & return of allotment) – Form detailing your share capital (minimum for a private limited is N10,000. Advisable minimum is N1,000,000); equity to be allotted to each initial shareholder and details (name, age, address, email, telephone number) of each initial shareholder in the company. A government issued ID must be submitted for each shareholder.
  • Form CAC 7 (particulars of persons who are first directors) – Details of each director (name, age, address, email, telephone number and nationality).  A government issued ID must be submitted for each director.
  • Form CAC 3 (notice of situation of registered address) –  The registered address of your business
  • Form CAC 5 or 2.1 (particulars of the person who is company secretary) – Although, it is compulsory for every company to have a company secretary, you can register your company without appointing one. However, you will not be able to take any subsequent post-incorporation actions at the CAC until you appoint a company secretary.
  • Memorandum and Articles of Association – Commonly referred to as MEMART. This is the document that details the objects and corporate governance regulations of the company.
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One important thing to note – If the name or object of the company reflects or suggests a consulting, professional or specialist service (e.g. medicine, law, teaching, technology, financial services, advertising, engineering, consultancy etc.), when submitting your documents to the CAC, at least one director of the company must include a copy of a certificate of qualification or evidence of proficiency (e.g. Bachelors’ degree certificate, masters’ degree certificate, professional qualification such as ICAN, CFA, ACCA, NIIT, APTECH, COREN, APCON)

4.  Pay your stamp duties

Once all the above documents are completed and signed, they are submitted to the FIRS for assessment and stamping. Stamp duties are assessed on the share capital of the company.

5.  File at the CAC

When the documents have been duly stamped, they are submitted to the CAC for verification and filing. If there are no objections, in a few weeks, expect to receive your original certificate of incorporation and certified true copies of any CAC documents paid for.

 

About DIYlaw

Legal, Simplified. DIYlaw is on a mission to be the one-stop hub for all things legal in Nigeria. The platform bring legal services closer to people in an understandable manner at affordable prices .