DOING BUSINESS IN NIGERIA: 10 THINGS YOU NEED TO KNOW ABOUT INCORPORATING A COMPANY IN NIGERIA

1. The Companies and Allied Matters Act (CAMA) was enacted in 1990 and is the principal legislation governing the formation and administration of business entities in Nigeria. CAMA created the Corporate Affairs Commission which is the body saddled with responsibility for the registration and regulation of Business Entities in Nigeria.
2. Under Nigerian Company Law (CAMA), the basic forms of corporate entities are:
3. Private or Public Companies.
4. Business Names/ Partnerships
5. Incorporated Trustees
6. Part A of CAMA which covers incorporation of companies can be established as either (a) private companies limited by shares, (b) private companies limited by guarantee, (c) public companies limited by shares or (d) unlimited liability companies.
7. Foreign Companies or Persons are allowed to incorporate or register a Company in Nigeriasubject to the provisions of any law regulating the rights and capacity of aliens to engage in trade and business in Nigeria. It is mandatory that any foreign entity with the intention to carry on business in Nigeria must register the Company locally. However in some cases a foreign company may apply to the Nigerian Government for exemption from local registration, these include:

• Companies invited by Nigerian Government to execute any specified  project;
• Foreign Companies, which are in Nigeria for the execution of, specified individual loan project on behalf of a  donor country or international organization.
• Foreign government owned companies engaged solely in export promotion activities
• Engineering consultants and technical experts engaged on any individual specialist project under contract with any of the governments in the federation or any of their agencies or with any other or person where such contract has been approved by the Federal Government

5. Generally, incorporation of a Company in Nigeria starts with conducting a name search for the proposed company at the Corporate Affairs Commission (“CAC” ) to confirm that the particular name is available and reserving it if it is available.
6. The memorandum and articles of association (“Memart”) of the Company is then prepared by your Lawyer which will clearly state the objectives of the Company and names of Shareholders and Directors. The law requires that every company must have at least two shareholders and at least two directors.
7. The Memart is then submitted to the CAC together with:

• A Statement of the authorized share capital of the company and return of allotment of shares
• Form CAC 2 – Allotment of share capital
• Form CAC 3- Notice of Registered Address
• Form CAC 4- A declaration, sworn to by a lawyer, confirming that all matters preliminary to the registration of the Company has been complied with
• Form CAC 2.1 – Notice of Appointment of Company Secretary
• Form CAC 7- Particulars of Directors.

8. Under Nigerian Law, only Lawyers, Chartered Accountants and Chartered Secretaries are accredited direct users of Corporate Affairs Commission and thus it is necessary to involve any of the above-mentioned professionals in getting your Company incorporated.
9. Cost of incorporating a Company in Nigeria depends on the proposed Shareholding of the Company, however the cost structure basically consists of search fees, stamp duty fees, filing fees and professional fees.
10. If the application is approved, a Certificate of Incorporation would be issued within a period of between 7 -10 days.

The content of this document is solely for information purposes only and should not in any way be construed as a legal opinion. If you require specific legal advice on Business Formation in Nigeria please contact info@ioclaw.com