Most MSMEs in Nigeria are often registered as either Business Names or a Private Limited Liability Companies. The agency responsible for registering both entities is the Corporate Affairs Commission (CAC) and the registration processes are explained below:
Decide on a name. First step is to perform a name availability search and reservation at the Corporate Affairs Commission (CAC). This typically takes 1-5 days. A reserved name is valid for 60 days only.
If a private limited company, the name must end with either "Limited or" Ltd."
If a Business Name, it usually ends with words like "Ventures" "Enterprise" etc.
The CAC may reject names which in its opinion are too similar to existing names, misleading, offensive, undesirable or violates existing trademarks or business marks. Certain words that may be misleading can only be used with permission. E.g. "government" "regional" "co-operative" "building society" "group" or "holding".
Complete your CAC documents. Once you have your name reserved, it is time to complete your CAC documents.
Here are the CAC documents you need to complete for a private limited liability company:
Form CAC 2 (statement of share capital & return of allotment) - Form detailing your share capital (minimum for a private limited is N10,000. Advisable minimum is N1,000,000); equity to be allotted to each initial shareholder and details (name, age, address, email, telephone number) of each initial shareholder in the company. A government issued ID must be submitted for each shareholder.
Form CAC 7 (particulars of persons who are first directors) - Details of each director (name, age, address, email, telephone number and nationality). A government issued ID must be submitted for each director.
Form CAC 3 (notice of situation of registered address) - The registered address of your business
Form CAC 5 or 2.1 (particulars of the person who is company secretary) - Although it is compulsory for every company to have a company secretary, you can register your company without appointing one. However, you will not be able to take any subsequent post-incorporation actions at the CAC until you appoint a company secretary.
Memorandum and Articles of Association - Commonly referred to as MEMART. This is the document that details the objects and corporate governance regulations of the company.
For a Business Name, only one form is required namely:
Form CAC/BN/1(Application for registration of business name) - In the form, you will provide details of your business, the proprietors of the business, and the business address. You also need to affix passport size photographs of all the proprietors on the form. Government issued IDs are to be submitted for all proprietors
One important thing to note - If the name or object of the company reflects or suggests a consulting, professional or specialist service (e.g. medicine, law, teaching, technology, financial services, advertising, engineering, consultancy etc.), when submitting your documents to the CAC, at least one director of the company must include a copy of a certificate of qualification or evidence of proficiency (e.g. Bachelors' degree certificate, masters' degree certificate, professional qualification such as ICAN, CFA, ACCA, NIIT, APTECH, COREN, APCON)
Pay your stamp duties (for private limited liability company). Once all the above documents are completed and signed, they are submitted to the Federal Inland Revenue Service (FIRS) for assessment and stamping. The FIRS assesses stamp duties based on the share capital of the company.
Depose to before a Commissioner of Oaths (for Business Name). On the Form CAC/BN/1, is an Attestation that requires deposing before a Commissioner of Oaths. The proprietor(s) would depose to this.
File at the CAC. After the documents have been duly stamped or deposed to as the case may be, they are submitted to the CAC for verification and filing. If there are no objections, in a few weeks, expect to receive your original certificate of incorporation and certified true copies of any CAC documents paid for.
Now you know the steps to incorporating a company in Nigeria, why not head to DIYlaw and get started!