Last updated on July 16th, 2023 at 08:28 pm
The formation and incorporation of a company in Nigeria involved a lot of preliminary steps,namely.
1. Securing relevant information in relation to the proposed company.. the promoter must determine the name ,nature of the object, the type of company to be incorporated
2. preparing the relevant incoporation document :section35{2}CAMA is the Corporate Affairs Commission (CAC) set out these document to include.
i ] memorandum and article of association
ii]Notice of registered office and head office ,if different from the registered office. The commission shall not accept a postal address.
iii] statement of authorized and share capital ,signed by at least one directors,and
iv] statement of list of particular and consent of first directors.
v.] other relevant documents eg. tax clearance certificate , business and resident permit ,this is in respect to alien participation
vi.] A statuary deceleration by legal practitioner that require of CAMA is the Corporate Affairs Commission (CAC). relating to registration of a company have been complied with the commission may accept such declaration as sufficient evidence of compliance .
3. The availability check and reservation of the name of the proposed company must be conducted with the Nigerian company’s registration agency, Corporate Affairs Commission (CAC).
Duly verified particulars of the director and statement of share capital known as CACForm 1.1
You can also read : Difference Between company Shares and Debentures
Duly stamped Memorandum and Articles of Association
Under the new CAC process, individuals are able to get all the required documentation from the CAC portal. However, please note that with respect to the Memorandum of Association and Articles of Association, the CAC portal only provides templates, and therefore if your line of business is one which requires special documentation, you should consider getting these drafted professionally by a lawyer.
4. Payment, Submission and Pick Up
Once you make the relevant payments online (the amount depends on the share capital of your company), you can upload all the documents and your submission is finalised. After submission, the CAC will contact you if there are any queries. If there are no queries, the CAC will inform you once the registration is complete, and then you can go to their office to pick up your certificate of incorporation.
You can check out for price lists of various business and company registration in Nigeria with orporate Affairs Commission (CAC)
Right and capacity to form a company in Nigeria.
Section 18 of the CAMA is the Corporate Affairs Commission (CAC). provide that from the commencement of the CAMA ,any two or more persons may form and incorporate a company by complying the requirement of the act in respective of the registration of such company .
However, by section 19[1] no company ,associate or partnership consisting of more than 20 persons shall be formed for the purpose of carrying on any business for profit or gain by the company,associate or partnership or by the individual members thereof. unless is registered under Corporate Affairs Commission (CAC).
The foregoing section allows the following exceptions, namely,
a] co-operative societies registered pursuant to any law in Nigeria, and
b] any partnership for the purpose of carrying on practice as legal practitioners or accountant and in each case by person who are all entitled by law to practice as legal practitioners or accountant.
Capacity of individual to form a company.
Under Corporate Affairs Commission (CAC). every individual is qualified to join the formation of a company except those disqualifies under section 20. by section 20 ,an individual shall not join the formation of a company if
a]He/she is less than 18years of age; or
b]He/she is of unsound mind and has been so found by a court in Nigeria or elsewhere;or
c] He/she is undercharge bankrupt; or
d] He/she is disqualified under section 254 of the CAMA from being a director of the company.
Please note: A person under the age of 18 years can only join in the formation of a company where there are two other qualified persons who have subscribed to the memorandum .
A body corporation in liquidation is disqualified from joining in the formation of the company.
Alien/Foreigners Participation of company formation in Nigeria
The following are the relevant stature, which regulate alien participation in business in Nigeria.
1. Immigration Act 1963
By this act an alien wishing to to do business in Nigeria must obtain the permission of the minister of internal affair ,the alien must obtain a business permit .Also where a company which to engage the service of an alien as employee, it must seek and obtain the approval of the minister in the form of approval expatriate quota
ii] Exchange control ACT 1962
By the act ,no person shall except the permission of the minister ,transfer any security or create or transfer any interest in security to or in favour of a person resident outside Nigeria
iii] Nigeria Enterprise promotion Act 1989
Under this act ,alen cannot participate in business in Nigeria or establish a business or any enterprise specified in the schedule to the act unless the capitalization involved N20 million and above .Apart from this, certain schedule enterprise are reserved by Nigerians while others not schedule are open to aliens and Nigeria alike
iv] Securities and exchange commission 1988
Nigeria Investment and Promotion Commission Act, CAP N117, LFN 2004 establishes the Nigerian Investment Promotion Commission which is the primary body responsible for encouraging, facilitating and monitoring foreign investment activity in Nigeria. A foreign investor, before commencing business is required to register with the NIPC by virtue of Section 20 of the NIPC Act.
The foreign enterprise is permitted to commence operations once it has been registered with the NIPC. Thus, the NIPC Act allows foreigners to invest and participate in the operation of any Nigerian enterprise 100 per cent without any restriction. This is however, subject to certain sectors where local content policies apply – sectors where Nigerians must own a majority shares in the companies.
However, sets out exceptions to the general rule that all foreign investors doing business in Nigeria must incorporate in Nigeria. These exceptions include companies engaged by the Federal Government to execute specific projects, companies undertaking approved loan projects on behalf of donor countries or international organisations, and foreign government owned companies engaged wholly in export promotion activities. The Corporate Affairs Commission administers the CAMA.
The relevant laws governing foreign investment in Nigeria are as follows:
1. The Companies and Allied Matters Act Cap. C20 Laws of the Federation of Nigeria 2004;
2. Nigerian Investment Promotion Commission Act Cap. NI17 LFN, 2004;
2. Immigration Act Cap. I1 LFN,2004;
3. Investments and Securities Act Cap 124, LFN, 2007;
4. Foreign Exchange [Monitoring and [Miscellaneous Provisions]Act Cap. F34 LFN, 2004;
5. Industrial Inspectorate Act Cap. I8 LFN, 2004;
6. National Office for Technology Acquisition and Promotion Act Cap. N62 LFN, 2004.
Foreign investments are initiated in Nigeria either through
Foreign Direct Investment: These are direct investments by foreign investors who invest by incorporating a Nigerian entity (either solely or with Nigerians) or acquiring or investing in an already existing one; or
Foreign Portfolio Investment: Which involves participating indirectly in business by purchasing shares in existing companies, usually through the Nigerian capital markets. It is the passive holding of securities, none of which entails active management or control by the investor.
