For information purpose, please, find below the basic requirements for incorporating a new Private Limited Company in Nigeria. This requirement is not for foreign nationals/shareholders (although, just a few difference apply).

1. The Proposed Company Names to be submitted at the CAC for approval. Usually, it's advisable to present two name options (option 1 and 2).

2. Full Names, Residential Address, Signature and Designation of Subscribers and Directors of the company. Minimum of 2 subscribers and directors. Any of the subscribers/directors must not be less than 18 years of age.

3. Name, Address and Signature of the Company Secretary.

4. Address of the Proposed Company.

5. Core areas of the company's business activities (Nature of business). If you engage in specialist services (Hospital, Consultancy, Schools, Media, etc), you'll need to provide a photocopy of your professional proficiency doocument. E.g. Certificate of Proficiency of a professional body/trade association, Academic Certificate, or both. We'll advice you if necessary.

6. A photocopy of Nigerian Identification (e.g. National ID card, Data Page of your National Passport, Voter's Card or Driver's License) for all the Nigerian subscribers/directors in the formation document.

7. The amount of the company's capitalization and how it will be shared among the subscribers. (E.g. N1,000,000 share capital). If there are 2 persons that formed the company, they could share it 50% each.

8. A copy of Memorandum of Understanding and Articles of Association (usually drafted by the consultant handling the process).



Should you seek more details, please call 08055981421 or email aybanky@gmail.com

If the proposed company is a joint-venture (that is, having both Nigerian and non-Nigerian as shareholders), or strictly 100% foreign-owned, the following conditions apply:

In addition to the following requirements above,...
• The foreign national will provide a valid ID; preferably the data page of his/her national ID.
• If you are incorporating a company having both Nigerians and non-Nigerians as the shareholders, you could have any amount of share capital on the documents as long as the non-Nigerian will not participate in the day-to-day affairs of the company directly here in Nigeria. For instance, you could do a 2 million naira share capital registration. Having a non-Nigerian with a Nigerian on the incorporation does not make any difference. BUT...

a. If either you plan a joint venture with a Nigerian or 100% ownership of foreign shareholders and one or all of the foreign shareholders will need to migrate to Nigeria to oversee (or work in) the company, then the law say the company must incorporate a 10 million naira share capital company.

b. You are not expected to invest N10m into the company; however it's assumed that you are investing at least 25% of that whether in cash or capital or equipment.

c. Incorporating a N10m capital company is a requirement for obtaining Business Permits for a foreign-owned company and obtaining Expartriate Quota. Expartriate Quota is the approval given to a company to employ non-Nigerians (including the share holders).

How much should my share capital be?

The Share of a company is the amount of capital it has to carry on its business. Share capital can be in form of cash or kind. There is no general legal requirement that the share capital of a company should be a specific amount. Rather, the law only specifies a minimum share capital for all companies. According to the provision, the share capital of every company must at least be N10, 000.00 (Ten Thousand Naira).

This means that the amount of share capital largely depends on the shareholders or promoters of the company: they know how much they can afford to invest in the business. But at times the law makes provisions requiring that a company engaged in a particular industry must have a ertain minimum shareholding/share capital.

For instance, a bank must have at least N25 billion Naira share capital and a life insurance company must have at least N2 billion share capital while a general insurance company must have at least N3 billion as share capital. You will need to check with your adviser or the regulator (if any) of your industry to know if any specific minimum share holding is prescribed.

Other factors to consider when deciding the share capital for your company include whether you will need to apply for certain licences and permits. For instance, Expatriate quota applications are treated more favourably if the company has a large share capital.

Whatever the share capital of a company is, the general law requires that 25% of it must be paid up. In other words while you are not required to pay up or invest the full share capital at once, at least 25% must be paid or invested. So if your share capital is N1 million (One Million Naira) you must pay up (either in cash or kind i.e. equipment e.t.c) N250, 000.00.

Again, the case may be different for companies operating in particular industries. Take the case of banks for instance, the N25 billion is also the minimum required to be paid up or invested.

Nice thread

Companies and Allied Matters Act 2004 and Company Procedure Rules 2012. It's only in there. Thanks for the info tho. I sincerely hope it isn't a coy way of soliciting or advertising. Cos i'm sure in theory NBA will frown at that.

cometozizo: Nice thread

Thank you!

Adebobs: Companies and Allied Matters Act 2004 and Company Procedure Rules 2012. It's only in there. Thanks for the info tho. I sincerely hope it isn't a coy way of soliciting or advertising. Cos i'm sure in theory NBA will frown at that.

Thank you, Adebobs.

How many people should I have on my board of directors?

Apart from instances when regulations in a particular industry specify a higher minimum, every company should have at least 2 directors. Directorship of a company is not a sentimental matter. The decision to appoint someone as a director ought to be based on a sound consideration of your business objectives, the person’s ability to contribute to your vision and his/her disposition towards you and your company. A director should be able to make time to attend to your business.

How many shareholders should I have?

The law requires that every company be incorporated with at least 2 shareholders. In the case of Private Limited Liability companies, the maximum no of shareholders/ members is 50. In the calculation of this number, the following rules apply:

Persons who are bona fide in the employment of the company or who were members while in that employment and have continued to be members after the end of their employment with the company are not reckoned in the number; Joint shareholders are counted as one.

keep it coming! nice article bro

Happy new year, Nairalanders!

Hi,

I want to reduce my share holders from 5 to 2. I feel that many share holders might impact negatively when tax returns must be shown.

Is this possible?

What is the procedure and how much should this cost me?

Thanks

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LOUDmedia:
For information purpose, please, find below the basic requirements for incorporating a new Private Limited Company in Nigeria. This requirement is not for foreign nationals/shareholders (although, just a few difference apply).

1. The Proposed Company Names to be submitted at the CAC for approval. Usually, it's advisable to present two name options (option 1 and 2).

2. Full Names, Residential Address, Signature and Designation of Subscribers and Directors of the company. Minimum of 2 subscribers and directors. Any of the subscribers/directors must not be less than 18 years of age.

3. Name, Address and Signature of the Company Secretary.

4. Address of the Proposed Company.

5. Core areas of the company's business activities (Nature of business). If you engage in specialist services (Hospital, Consultancy, Schools, Media, etc), you'll need to provide a photocopy of your professional proficiency doocument. E.g. Certificate of Proficiency of a professional body/trade association, Academic Certificate, or both. We'll advice you if necessary.

6. A photocopy of Nigerian Identification (e.g. National ID card, Data Page of your National Passport, Voter's Card or Driver's License) for all the Nigerian subscribers/directors in the formation document.

7. The amount of the company's capitalization and how it will be shared among the subscribers. (E.g. N1,000,000 share capital). If there are 2 persons that formed the company, they could share it 50% each.

8. A copy of Memorandum of Understanding and Articles of Association (usually drafted by the consultant handling the process).



Should you seek more details, please call 08055981421 or email aybanky@gmail.com

A copy of Memorandum of Understanding and Articles of
Association (usually drafted by the consultant handling the
process)..,....pls it acceptable by CAC if I draft the memorandum of understanding and Article by myself.