Registering a company in Nigeria with the Corporate Affairs Commission (CAC) is a plain and simple process without unnecessary bureaucratic red tape. You can do some of the registration processes online. And this article is a clear-cut guide on how to do so. You will also find out the changes made by the government in the registration of companies as of August 2020.
Like many countries around the world, it is a statutory requirement to register your company with the Nigerian government in order to run a legal business in the country. However, Nigeria has one of the easiest systems for investors and businesspersons to set up their brands, whether they are citizens or foreigners.
In case you’re unfamiliar with the Nigerian corporate space, the Corporate Affairs Commission (CAC) is a regulatory body established by the Companies and Allied Matters Act (CAMA). Currently, the CAC is responsible for the management, administration, and regulation of companies in Nigeria.
Prior to its establishment, the Companies Registry in the Corporate Affairs Division of the Ministry of Trade had the exclusive responsibility to regulate companies in Nigeria. Back then, both the Ministry of Trade and the Ministry of Justice had the joint responsibility of staffing and organising this extra-ministerial department.
Having said that, continue reading to find out how you can register your company with the CAC today.
Steps to Follow to Register Your Company With the CAC in Nigeria
1. Obtain an Approved Company Name
First and foremost, you must choose a name for your company, then send it to CAC to check if the company name is available. You can do this by visiting the CAC website to submit your entry.
It is advisable to choose at least two names so as to have other options in case one gets rejected. There are several reasons why CAC may reject a name. Some reasons are;
- It contains unauthorised words such as Government, National, Holdings, or Federal. Company names containing such words can only be approved if there is a legal authorisation.
- It already exists or is similar to an existing company name.
- It is confusing, misleading, or indiscriminate.
You can register a business name within a week or in some rare cases it may take longer. Upon completion of this step, you would need to prepare some legal documents.
2. Prepare a Memorandum of Association (MOA)
Now you have to prepare some legal documents such as the Memorandum of Association (MOA) and other documents that reveal the objectives of the company being established.
Information pertaining to the identity of the initial directors, subscribers, and shareholders must be revealed. Each of these directors must be of sound mind, must not be an ex-convict, and must be of legal age (18 years of age) according to the law of Nigeria.
The CAC would then verify if these directors meet the minimum requirements.
Note: On August 7, 2020, the President of Nigeria signed into law an amended Companies and Allied Matters Act (CAMA). Section 18 (2) of the new CAMA states that a private company can now have one (1) shareholder.
3. Fill the Registration Forms
Upon successfully conducting all preliminary documentation, you would have to fill some CAC forms, provide relevant information, and file the documentation with the CAC.
All public companies must appoint a company secretary who can act as an accountant or a lawyer. And this individual is mandated to submit all duly prepared documents to the CAC upon being registered.
As for private companies, the appointment of a company secretary is optional. This is in concord with the CAMA (as amended 2020), section 330, subsection 1.
The documentation process includes the following;
- A minimum of two (2) directors must fill the form appointing a Company Secretary for a public company. This is not necessary for private companies (S. 330 (1) of CAMA as amended 2020).
- One director must fill the Return of Allotment form (Form CAC 2) and Statement of Share Capital. The authorised share capital has been replaced by minimum share capital (S. 27 of CAMA as amended 2020).
- The Company Secretary and one director have to fill the Notice of Situation/Change of Registered Address form (Form CAC 3).
- CAC authorised individuals or firms can fill the Declaration of Compliance with the requirements of the Company and Allied Matters Act (CAMA) form (Form CAC 4). An alternative to the Declaration of Compliance is the Statement of Compliance. An applicant can sign their Statement of Compliance without the need of a lawyer (S. 40 (1) of CAMA as amended 2020).
- All directors shall fill the Particulars of Director form (Form CAC 7).
4. Pay Stamp Duty and Submit Required Documents
At this stage, you are required to pay stamp duty to a designated bank account of the Federal Inland Revenue Service (FIRS).
After making the payment, you have to take the filled registration forms, the duly prepared Memorandum and Articles of Association (MAA) and other documents to a department under the Federal Inland Revenue Service called the Stamp Duty Commission to get these documents stamped.
Then submit these stamped documents along with the filled forms to the CAC. You would receive your Certificate of Incorporation within six weeks of submission. It could take longer in some unprecedented circumstances.
Note: As of August 2020, the filing fees have been reduced to 0.35% of the charge.
5. Scan and Upload All Necessary Documents
In step 3, we mentioned some forms that must be filled. Now you have to scan the signed copies of these forms together with your MAA. Then upload these documents on the CAC website.
Upload the following documents for processing;
- Memorandum and Articles of Association.
- An accredited form of identification for director(s), shareholder(s) and Company Secretary (if applicable).
- Form CAC1.1.
- Evidence of payments of stamp duty and filing fee.
6. Submit the Original Copy of All Scanned Documents
You are required to submit the original copy of all scanned documents. The scanned copy of these documents must have been uploaded online, however, the commission would like to verify the authenticity of the submitted documents.
Legal Requirements for Starting a Company in Nigeria
- Minimum share capital required for private company registration in Nigeria is ₦10,000. Whereas public companies have a minimum share capital of ₦500,000.
- Members of the company must be of legal age (18 years old or above).
- Private companies can now have one member or shareholders with a maximum of 50 members.
- Members of the company must be financially stable, must be of sound mind, and must not be convicted of any crime.
The Documents You Need for Company Registration in Nigeria
In summary, the documents needed for company registration in Nigeria are;
- Memorandum and Articles of Association (MAA).
- Documentation of the directors of your company and means of identification.
- A notice of the registered address of your business.
- Receipt of payment of your stamp duties and filing fee.
- Declaration of Compliance by an attorney or Statement of Compliance by the applicant.