HOW TO REGISTER A BUSINESS IN NIGERIA.

INTRODUCTION

It is everyone’s dream or ambition to have or find something doing so as to make ends meet or have a reliable source of income. Many people get into business to cater for these needs either because there are no jobs available or simply because they have a passion for doing business. Whatever your reason is, registering your business is key to the success of your business brand.

Embarking on the journey of starting a business in Nigeria can be regarded as “an impossible mountain to climb”, that certainly however does not cover the business registration as it is pretty straightforward (you can choose to do it yourself online or engage an agent). Amidst Nigeria’s vast economy and richness in raw materials and resources, navigating the labyrinth of bureaucratic protocols and processes, regulatory requirements, needed capital and so on, can pose significant challenges to both aspiring or upcoming and already established business owners.  

This article seeks to demystify the process of registering a business in Nigeria, by providing a comprehensive guide for entrepreneurs looking to establish their ventures in this dynamic landscape. From selecting the appropriate business to obtaining necessary permits and licenses, each step in the registration journey plays a crucial role in ensuring legal compliance and setting the foundation for sustainable growth.  It also hopes to empower entrepreneurs with the knowledge and resources needed to turn their visions into thriving enterprises in Nigeria and the world in general. 

Drawing from the regulations outlined by the Corporate Affairs Commission (CAC), Federal Inland Revenue Service (FIRS), and other regulatory bodies, we will outline the key steps involved in registering a business in Nigeria.

HOW TO REGISTER A BUSINESS IN NIGERIA

Business registration in Nigeria is a central process done through a federal commission,Corporate Affairs Commission (CAC). The Corporate Affairs Commission (CAC) was established by virtue of Section 1(1) of the Companies and Allied Matters Act (CAMA), 2020, and Section 1(2) helps to outline its duties which are to regulate the formation and operations of companies in Nigeria, the commission oversees the registration of companies & and businesses and post-incorporation matters. There have been various developments concerning business registration in Nigeria. Below are the requirements an applicant must provide to commence the registration of a company in Nigeria:

1. The registered address of the proposed company;
2. Email and phone number of the proposed company;
3. Forms of identification such as International Passports and driver’s licenses of the directors/ shareholders;
4. Approval note of name reservation from CAC;
5. Director(s) & shareholders(s) full names, residential address, occupation and date of birth;
6. Objects of the company;
7. Details of the company secretary (mandatory for only a foreign-owned entity;
8. Incorporation certificate and company resolution where another registered company (either local or foreign) will be a shareholder or subscriber to the proposed company;

For registration of the company, the below are the steps required;

• Submission of two desired company names for the search
• Preparation of incorporation documents

Complete the Pre-registration form and statement of share capital

• Payment of the Stamp duty and filing Fee
• Uploading relevant documents
• Submission of registration application online.

Where the registration is approved, the electronic incorporation certificates and other incorporation documents will be issued by CAC.

THE SIGNIFICANCE OF BUSINESS REGISTRATION

1. Legal Recognition: Registration grants your business legal standing and recognition in Nigeria.
2. Access to Funding: Registered businesses often find it easier to access financial support from banks or investors.

3. Brand Credibility: Registration enhances the credibility of your brand, fostering trust among clients and partners.

 

The Companies and Allied Matters Act (CAMA) stipulates that businesses should be registered within 28 days of commencing the business and failure to do so results in a default fee of NGN150 for every day in default up until the business is registered. In Nigeria, registering a business is a centralised process handled by a federal commission. Businesses  in Nigeria can be  registered as ; Business Name(Sole proprietorship, venture or enterprise), Company limited by shares, company limited by guarantee, Unlimited Company, Partnership, Incorporated trustees .

 

A private company limited by shares is the best form of incorporation for an individual looking to start a business in Nigeria. Foreigners looking to establish a business in Nigeria, either as a foreign direct investment or portfolio investment, are also advised to use this form of business venture.Nonetheless, in contrast to a corporation, a Nigerian may also register an enterprise, which is a business name that lacks the distinct legal personality of a company. If a foreigner or foreign-owned corporation wants to start a business in Nigeria, they must register an LLC, which must have at least NGN100,000,000 (one hundred million naira) in authorised share capital. Foreigners cannot register an ordinary business name. Numerous changes have occurred with regard to Nigerian business registration. Since 2021, incorporation formalities have been somewhat streamlined, and online downloadable certificates of incorporation have been introduced.

In conclusion, in registering a business, one must Consider the above named requirements and documents. Besides that the  authorised share capital needed for each business must be rigorously adhered to when completing the CAC registration. A firm that wants to operate in the maritime industry, for example, needs to have authorised share capital of at least 25 million Naira. If any foreigners are to be involved in the proposed company, the authorised share capital must be at least 100 million Naira. Before starting a business, a foreign-owned entity must, in addition to the formation procedures, register with the Nigerian Investment Promotion Commission (NIPC) and get a business permit from the Federal Ministry of Interiors.

If you need professional help registering your business, you can contact Njunkimlegal.