Are you looking to start your own business in Nigeria? If so, you will need to register a limited liability company. This can be a daunting task if you don’t know where to start. In this blog post, we will provide a step-by-step guide to registering your limited company in Nigeria. We will also offer tips on how to make the process easier and less time-consuming. Let’s get started!
A limited liability company is a body corporate or an incorporated business organization registered under the Companies Act. It is a legal entity, which means the business is separate from its owners.
All companies, whether a private company limited by shares, a private unlimited, or a company limited by guarantee, must be registered in accordance with the Companies and Allied Matters Act (CAMA), which is the principal law that regulates companies in Nigeria.
The requirements and process for registering a limited company in Nigeria are pretty simple and not complicated. The Corporate Affairs Commission (CAC) is in charge of registering a company in Nigeria.
Limited Companies are usually set up as vehicles for investment and profit-making purposes while they may also be used as an alternative mode of doing business. A registered limited company has certain advantages over other types of businesses like Sole Proprietorships (Sole Proprietors), Partnerships and Corporations because:
- It offers greater flexibility when it comes to setting up operations;
- It offers protection against liability;
- The management does not have any fiduciary duty towards its members but instead has duties on behalf of shareholders/partners;
The age limit for people who are interested in registering a limited company in Nigeria is above 18 years, and a minimum of two people will be required to register. The only time a person less than 18 years old is allowed to register is when two or more adults are involved in forming the business.
Documents Required for Company Incorporation
- Memorandum of Association
- Certificate of Incorporation or Limited Liability Partnership Agreement
- Articles of Association
- Tax Identification Number (TIN)
Procedures for Registering Your Limited Company in Nigeria
In this section, we will discuss the procedures for registering your limited company in Nigeria.
1. The name search and reservation
The name search and reservation are important steps in registering your limited company in Nigeria. It will help you to ensure that your chosen name is not already being used by another company or person, as this could lead to delays in registering your limited liability company.
The name search will let you know if any of the names available are already registered with CAC, while the reservation option allows you to reserve a particular name for a period of 30 days before any other party can register it with CAC. You are expected to choose two names as a proposition for the company name. Once this is done, the CAC will search its database if the name is available or if similar names already exist. You can do this on the CAC online portal or at a CAC office.
2: Decide on the type of entity you want to incorporate.
In registering your limited company in Nigeria, you need to decide on the type of entity you want to incorporate. When you are deciding on the type of entity to incorporate, it is important to consider the benefits and disadvantages of each type of company. You are expected to choose the type of company to be registered with. The available types include:
- Private limited company,
- Private unlimited company, or
- Company limited by guarantee.
3. Prepare the Memorandum and Articles of Association
The next step to registering your limited company in Nigeria is to prepare the necessary documents for registration. These include the Memorandum and Articles of Association, Certificate of Incorporation, and Forms CAC/RCNO-l0l (for foreign companies) and CAC/BN-l (for local companies). You will also need to provide proof of address, identity documents for the directors, and a bank reference letter.
The memorandum and articles of association are the documents that outline the rules and regulations of a company. They contain information about who will be responsible for making decisions, how much money is needed to set up the business, what assets need to be held in trust by directors or shareholders (and who will be given access), and so on.
- The business objectives must be provided, and the details on what the company intend to engage in.
- The profit-sharing formula of the company share among the shareholders.
- The particulars of the company secretary. It permits one of the directors to act as the secretary.
- Details of each of the shareholders of the company such as names, occupations, residential addresses, email addresses, mobile phone numbers and means of identification such as driver’s licenses, international passports or national identity cards. The directors can also be listed as shareholders as well.
- A resolution passed by shareholders/members authorizing the use of their name as part of your business name.
- A certified copy showing that no criminal record exists against any member/shareholder.
You are advised to appoint a professional legal practitioner to help with registering your limited company in Nigeria.
4. Payment of stamp duty charges to FIRS.
Stamp duty is payable on the value of your share capital. Stamp duty is paid to the federal inland revenue services (FIRS). The stamp duty payable on a company’s share capital and other securities is determined by the law and varies from state to state. The first installment is payable within 30 days after your company has been incorporated and registered with FIRS, while the remaining portion must be paid within 90 days thereafter.
After this, the filled forms and accompanying stamped documents are submitted to the CAC. The Certificate of Incorporation will likely be returned after about six weeks from the date of submission.
As you can see, the process of registering your limited company in Nigeria is very straightforward. However, if you do not have the correct documents or if you do not follow all the steps correctly, then it could be difficult for you to complete this task. If any of these issues arise, then it’s best to seek professional legal advice before proceeding further into the registration process.