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HOW TO REGISTER BUSINESS IN NIGERIA- COST AND PROCEDURE

HOW TO REGISTER BUSINESS IN NIGERIA

Business registration in Nigeria is regulated by the Corporate Affairs Commission (CAC), established under the Companies and Allied Matters Act (CAMA). The CAC is responsible for the formation, registration, and post-incorporation activities of companies and businesses in Nigeria. 

With recent reforms, the registration process has become faster and more accessible. This registration is important for businesses to gain legal recognition, open corporate bank accounts, access financing, and bid for contracts. This article outlines the procedure, the types of businesses you can register, and the costs involved. 

Types of Business Structures in Nigeria

Before registering your business, it’s essential to select the right structure. The common business types available for registration include:

  • Business Name (Sole Proprietorship)

This is the simplest form of business registration available to Nigerians. Individuals or sole proprietors can register a business name on their own without needing to hire a lawyer or other professional services. This structure does not offer a separate legal personality, meaning the business and the owner are considered the same entity. Also, Foreigners or foreign-owned entities cannot register under a Business Name structure.

  • Partnership

A partnership is a business arrangement where two or more individuals or entities come together to manage and operate a business, sharing both profits and liabilities. Partnerships are commonly used for professional services like law firms, accounting firms, and consulting businesses. 

  • Private Limited Liability Company (LTD)

The most suitable form of incorporation for individuals seeking to start a business in Nigeria is the Private Company Limited by Shares (Ltd). This structure is recommended for both local and foreign entrepreneurs. It provides limited liability to shareholders, meaning their personal assets are protected in the event of business losses.

For foreign investors, whether through Foreign Direct Investment (FDI) or portfolio investment, a Private Limited Company is the required structure. This offers flexibility in ownership, protection of investments, and ensures compliance with Nigerian laws.

  • Public Limited Company (PLC)

A Public Limited Company (PLC) is a business structure in Nigeria that allows the company to offer its shares to the public and raise capital through the sale of shares on the stock exchange. This type of company is typically suited for large businesses looking to access public investments to fund expansion and operations. PLCs are commonly used by banks, telecommunication companies, and manufacturing firms looking to scale their operations with public investments.

  • Incorporated Trustees (NGOs and Non-Profits)

Incorporated Trustees are registered under Part F of the Companies and Allied Matters Act (CAMA) for non-profit organizations, such as Non-Governmental Organizations (NGOs), religious bodies, social clubs, and charitable organizations. This structure ensures that the organization operates legally and can engage in activities beneficial to the public without the intention of making profit.

Requirements for Business Registration in Nigeria

Registering a company in Nigeria involves several steps and documentation to comply with. Now that you know the types of business structures, below are the general requirements, whether you’re registering a Limited Liability Company (LTD), Public Limited Company (PLC), or Business Name.

The following are the essential requirements for registering different types of businesses with the Corporate Affairs Commission:

  • Two alternative business names
  • Nature of business and objectives
  • Names, addresses, passport photograph, and means of identification of the proprietor, partners, company secretary, directors, and shareholders, (depending on the business structure).
  • Share capital structure and percentage of ownership.
  • Email, phone number, state, city, street, street number, local government area of business.
  • Memorandum and Articles of Association (MEMART) (where applicable).

Requirements for registration of NGO

  • Four alternative names for the NGO.
  • Nature of the NGO (areas of focus, such as health, education, or environment).
  • Source of funding (how the NGO will generate or receive funds).
  • Constitution of the NGO (rules and guidelines for its operations).
  • Minutes of the meeting where trustees were appointed, including attendance list and resolutions adopted.
  • Minimum of two trustees (can be individuals or corporate entities).
  • Personal details for each trustee (means of ID, passport photograph, signature, and statutory declaration (a formal oath that the trustees are fit to manage the organization), date of birth, email address, phone number, and residential address.
  • Statutory Declaration Form
  • NGO Address and contact details
  • The registered address of the NGO.

Procedure for Business Registration in Nigeria

Are you ready to register your business name in Nigeria? If yes, then below is a step-by-step guide to make the process smooth and straightforward. Thankfully, the business registration process with the CAC can now be completed online. 

  • Choose a Business Name

Search for the availability of your desired business name on the CAC portal (https://pre.cac.gov.ng). If available, reserve the name on the portal which is valid for 60 days.

  •  Prepare Your Documentation

Complete Your Pre-Registration Form Depending on your chosen business structure. You will need to prepare the necessary registration documents, such as your National Identity Number (NIN) and other details as already highlighted above.

  • Pay the Registration Fees

Fees are based on the type of business and share capital (if applicable). Payment can be made online via the CAC portal.

  • Submission and Processing

After submission, the CAC will review your application. If everything is in order, your registration will be processed within 7-21 working days.

  • Collect Your Certificate

Once approved, you can download your Certificate of Incorporation and other relevant documents from the CAC portal. While it is possible to register a business yourself, hiring a lawyer offers expert guidance, ensures compliance, and reduces the risk of mistakes that could delay the process. This is especially useful for complex registrations or foreign-owned entities.

How Much Does it Cost to Register a Business in Nigeria?

The cost of company registration in Nigeria varies based on the type of company. For example, registering a private company differs from that of a public company. Additionally, if share capital is involved, the registration cost depends on the value of the company’s share capital.

A summary of the CAC filing fees includes but is not limited to:

  • Limited Liability Company: Name reservation costs ₦500, and registration fees range from ₦20,000 and above depending on the share capital.
  • Business Name: Name reservation costs N500, while registration cost ₦10,000.
  • Incorporated Trustee (NGO): Name reservation costs ₦20,000, while registration costs ₦30,000.

These are the official fees, but additional costs may apply during the process. Please note that the fees listed above do not include professional fees or consulting fees. To get a full picture of the costs, please engage our law firm for more information.

Conclusion

Registering your business establishes legitimacy and builds the trust of your customers, investors, and partners. It shows that you are committed to your venture and compliant with legal requirements. Before registering, you should carefully select the appropriate business structure, prepare the necessary documentation, and budget for the registration costs. 

With legal recognition and access to banking services, a registered business stands a better chance of growth. Therefore, start your business registration today by engaging Resolution Law Firm to handle the process on your behalf.

 

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