How to register a company in Nigeria

How to register a company in Nigeria

This post will guide you on how to register a limited liability company in Nigeria by your self. Before you hurry to start you must learn how to register a company in Nigeria, you must decide on the name of the new company. If it is a foreign company trying to start business in Nigeria, it is advisable to chose a business name which is same as the parent company but ending with Nig. Limited. It is advisable to apply to CAC for Availability and Reservation of Name.

The following are the steps required to register a business in Nigeria or limited liability company in Nigeria :

Step 1. Check business name availability with CAC online

Completion time: 2 days
Completion cost: Naira 200 (US$1.3) application form

Note:
The Corporate Affairs Commission Online System was commissioned in June 2005. The CAC online system aids the search of unique business names after the purchase of an e-pin card from a CAC accredited bank. However, the CAC online business registration system  has been widely promoted by Corporate Affairs Commission , till now the online business registration platform is not fully functional maybe because of power instability or resulting from little availability of the pre-paid cards needed to carryout the on-line business registration transaction. In most cases, the business applicants have to physically visit the CAC office to complete this registration procedure.

Step 2. 2nd steps on how to register a company in Nigeria. Make available documents required to register a company in nigeria and pay the stamp duty

Completion time: 7 days
Completion cost: stamp duty inclusive in step 4

Note:
To prepare the necessary incorporation documents required to register a company in Nigeria, you should complete the requisite statutory forms, Make available printed memorandum/articles of association, and ensure they are stamped in the Federal Board of the Inland Revenue Service. You should draft your company Memorandum & Articles of Association.  It is advisable that the objects in the Memorandum/Articles of Association must be similar to the one of the parent company as Nigerian law will allow. Nigerian law provides that at least two persons must sign a Memorandum & Articles of Association as subscribers. The Nigerian law also entails that at least 25% of the company share be allotted on incorporation.

Step 3. Notaries the declaration of compliance (CAC 4)

Completion time: one day
Completion cost: Naira 200 (US$1.3)

Note:
The declaration by the barrister or solicitor engaged in the formation of the company may be sworn to at either the State High Court for a fee of Naira 200 (US$1.3) or at the Federal High court for a fee of Naira 20 (US$0.13).

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Step 4. Register the business with CAC & pay fees at the bank desk of Corporate Affairs Commission

Completion time: 11 days
Completion cost: Naira 60,000 (US$402) legal fees + Naira 500 incorporation forms + Naira 10,000  incorporation fees (an extra Naira 50,000 (US$335) for same day processing) + 0.75% stamp duty paid on capital + Naira 500 (US$3.3) for each additional copy of Memorandum and Articles of Association stamped + Naira 3 (US0.02)

Note:

The following incorporation documents is required to register a company in Nigeria and should be submitted:

  • Business name reservation/availability form
  • The Company Memorandum/Articles of Association. The Company Memorandum/Articles of Association must be stamped by the commissioner for stamp duties and two copies made available
  • Notice of registered address – Form CAC 3
  • Particulars of directors – Form CAC 7
  • Statement of share capital and return of allotment of shares – Form CAC 2

The cost of incorporating a company in Nigeria:

  • Naira 10,000 for a company whose nominal share capital does not exceed Naira 1,000,000 (US$6,711) and Naira 10,000 (US$67) for every Naira 1,000,000 thereafter.
  • Naira 500 incorporation forms
  • 1.5% stamp duty paid on capital
  • Naira 500 for each additional copy of Memorandum and Articles of Association stamped
  • Naira 3,000 for certified true copy of Memorandum and Articles of Association
  • Naira 2,000 for certified true copy of particulars of directors
  • Naira 2,000 for certified true copy of particulars of shareholders. Moreover, Naira 60,000 is the approximate cost of company incorporation conducted by professionals (lawyers, charted accountants of charted secretaries) accredited by CAC. The payment can be done at the bank desk at CAC.

Note: The Fees to be paid to Corporate Affairs Commission for matters under the Act are as specified in Companies and Allied Matters (Fees) Regulations 2003. The Minister of Commerce makes the regulations in exercise of the powers conferred upon the Minister by sections 16, 632, 668, and 692 of the Companies and Allied Matters Act and all other powers enabling the Minister in that behalf. The Minister may change the Regulations as and when he deems fit and the changes will be published in the official gazette.

All the payments are made in the national currency of Nigeria which is the Naira and the symbol is N  (the capital letter N double struck through) It is also denoted in international notation as NGN

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Step 5. Register with the Federal Board of Inland Revenue Department of the Ministry of Finance

The 5th steps on how to register a company in Nigeria attracts no cost

Completion time: 4 days
Completion cost: no charge

Note:
The Federal Inland Revenue Service (FIRS) requires the applicant to complete tax registration forms for corporate income tax registration as well as VAT. The company submits an application letter to the tax authority for a tax clearance certificate and, for income tax purposes, registers at the integrated tax office.

The registration process requires submitting a completed tax office-issued application (taxpayer registration input form, TRIF/2006/001 COYS) and the following documents:

  • Completed FIRS questionnaire
  • Memorandum and Articles of Association (copy)
  • Certificate of Incorporation (copy)
  • Directors’ names and addresses
  • Tax advisor’s name and address
  • Letter of appointment of a tax advisor and corresponding letter of acceptance
  • The date the company commenced business
  • Names, addresses and mobile numbers of major promoters and the chairman of the company, including their email addresses
  • Other sources of income of the chairman and the promoters of the company
  • Name and addresses of the principal officers of the company including the chairman, managing director, legal advisor and accountant

To register, the company must submit the taxpayer registration input form in triplicate, and the original certificate of incorporation must be presented for review by the controller. Upon the completed taxpayer registration input form and all other documents being received, a tax reference number is allocated. An application must be filed for the tax clearance certificate; its issuance is not automatic.

Note: Stamp Duty is payable in respect of the MeMat and the MeMat must be stamped before it is presented to CAC for filling. Stamp Duty is Chargeable by the Federal Inland Revenue Service (FIRS) and is assessed on behalf of the  FIRS by the Federal Commissioner of Stamp Duties according to a scale fixed by the Joint Tax Board.

 Step 6. Register for personal income tax PAYE at the State Tax Office. This is 6th step on how to register a company in Nigeria

Completion time: two days, simultaneous with previous procedure
Completion cost: no charge

Note:
All employers shall register with the relevant state tax authority for income tax withholding. Once the application is filed, with a copy of the certificate of incorporation attached, a reference file is opened for the company.

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Step 7. LASAA signage inspection

Completion time: seven days, simultaneous with previous procedure
Completion cost: no charge

Note:
The Lagos State Government has developed a new state law which entitles it to impose signage fees. This law is much more developed than most other state laws. The local government was divested of the power to carry out this function in January 2007 to the Lagos State Signage and Advertising Agency (LASAA).

LASAA regulates outdoor display in business premises in Lagos State. Any company that is doing business in Lagos State that has an outdoor display in the form of advertisement at the premises or any vehicle of the company must register the display with the agency. LASAA issues the questionnaire regarding the application to erect a signboard outside business premises, etc. This questionnaire is completed by newly established businesses within the state and submitted to LASAA, who will scrutinise the completed questionnaire and arrange for an inspection of the signboard at its location. The registration is done in two phases:

  • Pre-scrutiny stage: the applicant pays the sums of Naira 8,500 (US$57) and Naira 6,500 (US$43) as initial fees for assessment and survey respectively.
  • Formal application: the application fee is Naira 2500 (US$16). In addition a copy of the gazzette on the LASAA is attached to the application form for a fee of Naira 1,000 (US$6.7). After the above, the application will be forwarded to the billing and assessment department of the agency to determine the fee payable for the issuance of the permit. The amount of fee is determined by the dimension and location of the outdoor display. In most other states in Nigeria signage and related compliance issues are handled by the local government council.

Step 8.  Finally on how to register a company in Nigeria. Pay signage fees at a designated bank

Completion time: one day
Completion cost: Naira 18,500 (US$124)

DISCLAIMER: While every effort has been made to ensure the accuracy of this article on how to register a company in Nigeria, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. Also all fees stated in USD  are according to an outdated exchange rate, please refer to appropriate channels for the current USD – NGN exchange rate.

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