Starting and registering a company in Nigeria is not a difficult task. However, there are a number of crucial steps that must be taken to ensure a successful registration of your company in Nigeria. Although, it is highly advised to get the help of a legal professional in order to avoid mistakes in the process, you should also understand the processes to be able to follow up adequately on the process.
iDONSABI.com provides this guide to enable you as a new company owner understand all the required procedure to register a company in Nigeria and successfully register your business.
Types of Business Structure in Nigeria
There are several options on how to enter into the Nigeria Market through your business. You can decide to start a new business structure (company) or take over an existing one.
This article is focused on people who intend to start their own new business. Based on this, there are about four types of business structures are available to choose from in Nigeria. They include Sole Proprietorship, Partnerships, Incorporated Trustees and Companies. Each of these has its own tax structure, legal and financial implications peculiar to it.
Requirements for Registering a Business in Nigeria
There are conditions that make a business registerable in Nigeria. Therefore, before you can register any business, you must ensure that it meets any of these conditions;
- Limited (Ltd) or PLC
This means that the company has to be one that is limited by shares for it to be registered. This form of business structure requires a very high legal implication as well as financial and tax service costs. There is also probably more to do in terms of paper work to register a public limited company. The documents required will contain the details of formation as well as regulations on how to hold directors meetings, annual shareholders’ meetings and so on.
- Limited By Guarantee (Ltd/ Gte)
This includes companies limited by Guarantee. They are also registrable in Nigeria. For this type of company, you are expected to file an operating agreement. This document will include all details of how the company will be run and managed as well as detailed responsibilities of all shareholders, offices and directors.
- Unlimited (Ultd)
Unlimited Liability Companies
- Business Name
This heading is used to categorise business that is either a sole proprietorship or partnership company. The partnership form of business structure is one that involves more than one person usually referred to as partners. For partnership registration, a written and duly registered partnership agreement is required.
- Incorporated Trustees
This class includes companies for charitable purposes or any not-for-profit company.
This business structure is one of the most complicated forms of business structures. Under the incorporated trustees, you can register religious organisations such as churches and mosques, associations, Non-governmental organisations, clubs and so on.
Step by Step Process of Registering a Company (Public or Private) in Nigeria
The body responsible for the registration of companies in Nigeria is the Nigeria Corporate Affairs Commission also commonly referred to as CAC. There are two ways by which you can start the registration process of your company in Nigeria. The first method is the online registration
Registering Your Business Online
Step 1. Get a Business Name
This method involves visiting the CAC official website and starting the procedure known as pre-registration process. Here you will be required to submit your preferred business name which will be checked for uniqueness.
Step 2. Fill the Pre-Registration Form (CAC 1.1)
To carry out your pre-registration online, you will be required to download and fill the pre-registration form.
Step 3. Pay the Filing and Stamp Duty Fees
After filing the application form. The next step is to pay the filing fees.
Step 4. Scan and Upload your Pre-Registration Documents
These includes the Memorandum of Association, the CAC 1.1 form, and recognised form of identification for director(s) and secretary (ies) of the company as well as your evidence of payment of fees to the CAC. You are expected to provide signed copies of these documents and make them available for upload. You need to scan the documents in order for your registration process to continue.
Step 5. Submission of Documents
Usually, after the online procedure (Step 1-5), there is a post registration process which is manual and must be done offline. This is the submission of your documents to your chosen CAC office. You are expected to submit all the original copies of the aforementioned documents and submit at the CAC office where you will be given your certificate of Incorporation and Certified True copies of the document in exchange.
The second method is the offline method.
How to Register Your Company in Nigeria
Step 1. Get a Business Name
Getting a business name might sound like an easy task but this could be very tricky. To register a business, you must ensure that the name is available. You can visit a CAC office to request for a name availability check or name reservation.
Step 2. Gather all Necessary Documents
The first step to registering your business offline is the preparation of the required documents. The documents required include;
– Completely filled and signed Form CAC 1.1 ( you can get this at any CAC office )
– Proficiency certificate ( if applicable)
– Memorandum and Article of Association (MEMART)
– Stamp Duty certificate
– Evidence of CAC Payment
– Proof of Identification for Directors and Secretary
Some of these such as evidence of payment can only be obtained after you have carried out other steps.
Step 3 Pay Your Filing Fees and Stamp Duty
The nest step after having a reserved business name and collating your documents is to fill the CAC pre-registration for and pay your filing fees. The filing fees can be paid at any CAC office nearest to you.
Important Note: Be sure that you gave filled the application forms completely and accurately before paying.
You will also be required to pay a Statutory Stamp Duty fee which will be made to the Federal Inland Revenue Service (FIRS).
Step 4 File all Your Supporting Documents and Submit
After you have paid all the necessary fees, you must then file your supporting documents. You ca do this at the CAC office where you started your processing. The Memorandum of Association and all other required documents must be filed appropriately.
Once you have filed these documents, you can then submit. You will be issued a Certificate of Incorporation and be given Certified True copies of your documents.
Benefits of Registering a Business Name in Nigeria
It is of great advantage to register your company in Nigeria especially as a limited liability company. Some of these advantages include;
– It helps to gain customers trust. A registered business gives customers more sense of trust than one that is not. Also, it opens you to more business funding opportunities unlike one that is not registered
– Secondly, the owners of a registered limited liability company are protected against liabilities on their personal assets and claims as a result of business loses or debts.
Registering Your Business with the CAC in Nigeria
- It is commonly stated that the CAC has the functional and enabling environment through which people can register their business within a 24 hour period. Although, this may be possible, the duration of time to register your business will solely depend on your business/company type and your ability to meet the requirements attached to it.
- One of the most important factors that affect the registration process is the business name. You must choose a business name which is not already in use by another. If you are able to get this, then your registration can continue while the name is reserved for you for a period of 60 days by which you must have finished registration.
- Business persons who are unfamiliar with the preparation of documents are highly advised to seek the help of professional legal practitioners.
- Usually, under normal circumstances, your business registration is not expected to take longer than 14 business days. However, in a situation where documents are missing or certain discrepancies are found, the process may be delayed.
- It is also generally advised that an individual runs a business for a while before proceeding to formal registration in order to incorporate any changes in idea that may occur in the early stage of the business.
- It is very important that you carry out your tax registering by registering your company at the tax office. Tax registration is usually done under the Federal Inland Revenue Service (FIRS) after which you will be given a Tax Identification Number ( TIN)
- If you belong to an association, you must also obtain the necessary business permit. For instance, if you intend to start a pharmacy business, you should contact the Pharmacist Council of Nigeria for the necessary steps to obtain a permit or get registered with the body regulating your particular business or practice.