Business

• Muna Tengi
• 8 Min Read
• 75 Views

10 Steps On How To Register A Company In Nigeria

Registering a company in Nigeria is a crucial process that officially recognizes your business as a legal entity, granting it the ability to engage in commercial activities and operate under the protection of the law. It also opens the door to many opportunities, such as access to loans, grants, partnerships, and contracts, especially with governmental and large corporate organizations. The company registration process in Nigeria is overseen by the Corporate Affairs Commission (CAC), which regulates the formation and management of companies.

In this blog post, we’ll provide a comprehensive, step-by-step guide on how to register a comparison will cover the types of companies you can register with, the requirements, how to complete the process online, and additional tips to ensure a successful registration.

Why Register a Company in Nigeria?

There are several benefits to registering your company in Nigeria. These include:

1. Legal Recognition: Registering your business means the Nigerian government recognizes it as a legal entity. This provides legal protection and allows the company to engage in various formal business operations.

2. Access to Loans and Grants: Most financial institutions require a registered business before granting loans. Similarly, some government and private sector grants are only available to registered companies.

3. Trust and Credibility: Registered companies are more likely to attract customers, investors, and business partners because they are viewed as credible and legitimate.

4. Limited Liability: If you register a limited liability company (LLC), the owners and shareholders have protection against personal liability for the company's debts or legal obligations.

5. Business Continuity: A registered company can continue to exist even if the ownership structure changes. This ensures continuity in operations and enhances the company’s ability to grow.

Types of Companies You Can Register in Nigeria

Before we dive into the process of registering a company, it’s important to understand the different types of companies you can register in Nigeria:

1. Private Limited Company (Ltd): This is the most common form of business registration in Nigeria. In a private limited company, ownership is restricted to a few individuals (minimum of 2 and maximum of 50). Shareholders enjoy limited liability, which means they are only liable for the amount they invest in the company.

2. Public Limited Company (PLC): This type of company can offer shares to the public and has a minimum share capital requirement of ₦500,000. A PLC has more stringent regulatory requirements compared to an Ltd and can have an unlimited number of shareholders.

3. Unlimited Company: In an unlimited company, the liability of the shareholders is not limited to the shares they hold. This type of company is less common in Nigeria due to its increased risk to shareholders.

4. Company Limited by Guarantee: This type of company is typically non-profit and set up to promote education, charity, or other social causes. The profits are reinvested into the company to achieve its objectives rather than being distributed to shareholders.

5. Sole Proprietorship: Although not technically a company, sole proprietorships can also be registered with the CAC. It involves a single person running and owning the business, and the liability is not limited.

6. Incorporated Trustees (NGOs/Non-Profits): Non-governmental organizations and religious or charitable bodies can register under this category.

Step-by-Step Guide to Register a Company in Nigeria

The process of registering a company in Nigeria is now streamlined and can be done mostly online through the Corporate Affairs Commission (CAC) portal. Here are the steps to follow:

Step 1: Decide on the Company Name

The first step in registering your company is choosing a unique name for your business. Your company name is your identity, so it is important to choose something that aligns with your business goals and resonates with your target market.

Key considerations when choosing a company name:

• The name must be unique and not similar to any existing company in Nigeria.

• The name should not contain prohibited or restricted words, such as "National," "Government," or any words associated with the government unless special approval is granted.

• It should not infringe on trademarks or copyrights.

• The name should align with the services or products you intend to offer.

You can check the availability of your desired name by conducting a name search on the CAC’s online portal.

Step 2: Conduct a Name Availability Search

Once you have a preferred name, the next step is to check if it is available for use. This can be done online through the CAC’s name availability search service.

How to conduct a name availability search:

1. Go to the CAC’s online portal (https://www.cac.gov.ng/).

2. Click on the "Public Search" option.

3. Enter the proposed company name and search for similar or identical names.

4. If your preferred name is available, proceed to the reservation stage.

Step 3: Reserve Your Company Name

If your chosen name is available, you can proceed to reserve it with the CAC. This ensures that no other business can use your proposed name during the registration process.

How to reserve a company name:

1. Log into the CAC online portal (you’ll need to create an account if you don’t have one).

2. Under the "Name Reservation" section, submit the desired company name and pay the applicable fee (usually ₦500).

3. After submitting the reservation, you will receive a confirmation within 24 to 48 hours. If approved, the name will be reserved for 60 days, during which you must complete the registration process.

Step 4: Complete the Pre-Incorporation Form (CAC 1.1)

Once your company name is reserved, the next step is to complete the pre-incorporation form, known as CAC 1.1. This form captures important details about your company and the individuals involved.

Key information required in the CAC 1.1 form:

• Registered company address: This will be the official address of your company. It must be a physical location within Nigeria, as post office box addresses are not accepted.

• Shareholders: Provide details of the shareholders, including their names, addresses, nationality, and percentage of ownership.

• Directors: List the directors of the company, including their details such as name, address, date of birth, nationality, and occupation. Every company must have at least two directors.

• Company secretary: A company secretary is required for public companies but optional for private limited companies. The secretary can be an individual or a corporate entity.

• Share capital: Define the total share capital and the value of each share. For a private limited company, the minimum share capital is ₦10,000.

• Objects of the company: Clearly state the purpose and objectives of the company. This can be broad or specific, depending on the nature of your business.

Step 5: Upload Required Documents

Along with the completed pre-incorporation form, you will need to upload several documents to support your application. These documents may include:

• Memorandum and Articles of Association (MEMART): This is a legal document that outlines the rules and regulations governing the operations of the company. The MEMART must be prepared and signed by the company’s subscribers (shareholders).

• Identification of directors and shareholders: Provide valid identification, such as an international passport, national ID card, or driver’s license for all directors and shareholders.

• Registered address: Upload proof of the company’s registered address, such as a utility bill or tenancy agreement.

Step 6: Pay the Applicable Fees

Once all the documents are uploaded, the next step is to pay the registration fees. The total cost of registering a company depends on the type of company and its share capital. Here’s a breakdown of some of the fees you may encounter:

• Reservation of name: ₦500

• Filing fees: Varies depending on the share capital. For a company with a share capital of ₦1 million, the filing fee is ₦10,000.

• Stamp duty: This is based on the value of the share capital. The stamp duty is typically 0.75% of the total share capital.

• Certified true copies of registration documents: If you want to certify true copies of your incorporation documents, you’ll need to pay an additional fee.

The payments can be made online through the CAC portal.

Step 7: Submit the Application

After completing the payment, submit your application for processing. The CAC will review your application, and if everything is in order, your company will be registered. This process typically takes a few days to a few weeks, depending on the volume of applications at the time.

Step 8: Obtain Your Certificate of Incorporation

If your application is approved, the CAC will issue a Certificate of Incorporation, which confirms that your company is now legally registered. The certificate will include your company’s registration number, which is necessary for tax registration and opening a corporate bank account.

Step 9: Register for a Tax Identification Number (TIN)

Once your company is registered, the next step is to obtain a Tax Identification Number (TIN) from the Federal Inland Revenue Service (FIRS). The TIN is required for tax purposes and is necessary when opening a corporate bank account, filing tax returns, and accessing government incentives.

You can apply for a TIN by visiting the FIRS office or applying online via the FIRS e-registration portal.

Step 10: Open a Corporate Bank Account

A corporate bank account is essential for managing your business finances. After obtaining your Certificate of Incorporation and TIN, you can open a corporate bank account with any commercial bank in Nigeria. You will need to provide the following documents:

• Certificate of Incorporation

• Tax Identification Number (TIN)

• Memorandum and Articles of Association (MEMART)

• Resolution of the Board of Directors authorizing the opening of the account

• Identification of the directors

Conclusion

Registering a company in Nigeria is a straightforward process, thanks to the online portal provided by the Corporate Affairs Commission (CAC). Following the steps outlined in this guide will ensure that your business is legally recognized and equipped to take advantage of the opportunities that come with being a registered entity. From conducting a name search to obtaining your Certificate of Incorporation, careful planning and preparation will make the process smoother and more efficient.

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