QUESTION: what is the minimum amount of shares to be registered that is extremely popular?

ANSWER: 1 Million shares

QUESTION: How many people can share that 1 Million shares in that company?:

ANSWER: 2-50 people

QUESTION: What do shares mean and precisely what does 1 million shares mean to me?

ANSWER: Shares mean the amount of rights you own in a company usually calculated in money terms. E.g if a company is said to worth 1 million shares and you have 300,000 shares out of that 1 Million shares, automatically you own 30% of that company. So when there is a profit, you get 30% of that profit and if there is a loss, you get 30% of the losses.

QUESTION: Why do people register 1 million shares? Why cant it be higher or lower?

ANSWER: Because it is easier to calculate and round up to 100%. If you register any thing lesser than 1 million shares, you still pay the price for 1 million shares and you might have to upgrade to a million or more shares in future that means paying more money for what you could have done easily today.

QUESTION: How many people can form a company and what’s the popular choices?

ANSWER: 2 or more but not less than 2 people unless it becomes a sole proprietorship or one man business.

QUESTION: These 2 or more people that form companies are called what?

ANSWER: Directors

QUESTION: Can anyone be a director?

ANSWER: NO? People of unsound mind, people declared bankrupt and Minors cannot be a director (Minors are people under 18 years)

QUESTION: But i have a 15 year old financial whiz kid that i want to form a company with. Why cant he be a director?

ANSWER: The minor can be a director in the company as long as there are 2 other Adults listed as Directors in the company e.g Daddy, Mummy and Child but not Daddy and Child alone (So 2 or more adults and Minors can follow)

QUESTION: If i am forming a 1 Million share company, does that mean that i have to have 1 Million Naira to start a company to reflect the share structure?

ANSWER: No! You dont have to have a dime but it is generally assumed that you should have at least 25% of the capital to start the business to procure furnitures, pay rent, utilities etc.

QUESTION: what then does the 1 Million shares truely worth in my company?

ANSWER: It simply means the value of how profitable and powerful the company is worth. E.g Take Nairaland for example, if Seun Registered Nairaland Nigeria Limited in 2001 for one million shares and started nairaland with just 7 members, the company then, would have been worth that 1 million shares because it is growing and anyone that wanted to buy it wouldnt have valued it beyond 1 Million Naira, but as per today that it has over 200,000 members with a lot of potentials, any one that wants to be a share holder would never value it at 1 million shares but probably 100 million shares at N1 PER SHARE and if N1 PER SHARE was equivalent to 1 Million shares and seun had 50% shares which is equals to 500,000 shares in 2001 now for you to buy a share in his company that is now worth 100 million shares, it will no longer be N1 per share but N10 per share because the company has appreciated in value over the years

QUESTION: OK! I want to form my company, what are the basic things i need to do immediately first?

ANSWER: Choose 3 Unique names for the corporate Affairs commission to choose one during the search for name


QUESTION: I have a business name that i registered in 1993 called HOLY GHOST FIRE PURSUE THEM VENTURES and i want to upgrade it to a company, what can i do? I like that name and i cant think of any other Unique name but only this one?

ANSWER: No problem, all you need to do is attach the business name certificate of Holy ghost fire Pursue them ventures with the search for name form and ask the CAC to upgrade it to Holy Ghost fire Pursue them Nigeria limited

QUESTION: I live in Manchester U.K and i have a company or business name called I DISLIKE LABOUR PARTY LIMITED and i want to operate a company in Nigeria using this same name and certificate, can i use them without registering it in Nigeria or what are the Alternatives?

ANSWER: No you cant use I DISLIKE LABOUR PARTY LIMITED U.k To establish a business here with that same certificate. You must register a new company name to reflect that it is in Nigeria it was registered

QUESTION: But i can see that Microsoft is in the U.S and U.K and also in Nigeria? Isnt it the same name they are all using?

ANSWER: No it isnt. Microsoft Ltd U.K was registered in U.K and Microsoft Nigeria Limited was registered in Nigeria. All they did was join the business name certificate of the U.S or U.K branch and attached with with the search form and wrote an application letter asking for the same name to be registered as a branch of a global company using the same name.



QUESTION: My Chosen unique company name "I HATE ABACHA NIGERIA LIMITED" was chosen and selected by the CAC but i fell sick for a while and couldnt sign the forms or continue the registration for some time what can i do?

ANSWER; Normally, once the name has been chosen, you have within 60 days to complete the whole registration process of filing and filing out forms but if after 60 days, you fail to continue the registration, you can re-apply for a new name search form to use "I HATE ABACHA NIGERIA LIMITED" again by attaching the first approved search form that approved "I HATE ABACHA NIGERIA LIMITED" with the new form. It is called Revalidation and it takes 2 weeks for CAC to accept that name and allow you to continue that registration with that name for the next 60 days but as usual it costs money as a late penalty fee for filing out of time

QUESTION: Once "I HATE ABACHA NIGERIA LIMITED" Has been chosen, can my friend or anyother person in Nigeria use that name as a business name?

ANSWER: Never! Except you have run afoul with some rules of the CAC by refusing to pay your annual returns or the company has ceased to exist

QUESTION: Okay! I understand what the search for name is all about and why i should choose 3 unique names! So what is next after the name selection?

ANSWER: The next thing is to choose your Directors wisely

QUESTION: What do you mean by choosing your directors wisely? If i get you correctly, you said earlier on that between 2-50 can register a company and if my 15 year old child wants to be a director, he can be a director as long as 2 or more adults above 18 are directors. So whats the choose wisely talk again?

ANSWER: It means most people choose directors based on sentiments. Just because they want want to keep it as a closely knitted company where they can control all the shares, they choose wrong people. Some choose fiancées, uncles, step brothers, best friends and a host of people that they are sentimentally attached to at first but later on when the complexities of the business begins to take its toll, they begin to regret why they chose that party to be a director. Being a director of a company is a very very powerful position and no matter how small that director is in terms of the number of shares he or she is holding in that company, the person can do and undo. You cannot wake up one morning and decide that a director who is a share holder should be removed as a director because the person is greedy, lazy, ineffectual or isnt contributing anything tangible and you cannot overpower that director and take over their shares abitrarily overnight.

That director no matter how ineffectual or incompetent will always be entitled to the share profits or loss that accompany the business except you buy him out or he resigns and it has some very strict procedures to be followed before the director can be removed. What about having a finacee you adore today as a director and tomorrow you hate his or her guts, whether you like it or not, you guys are still bound by that company shares until something drastic happens to terminate it. So thats why i say choose wisely.

QUESTION: Okay i get the picture. Actually i was dating this dragon lady 2 years ago and i hate her guts now and i dont want her as a director anymore and to make matters worse, the other director my best friend in University is one Bungling ineffective lazy soil and they are both weighing me down now. I have met other people who i can do business with and would love them to be directors in that company. How do i get rid of those Hacks and replace them with these Business Gurus?

ANSWER: You have to have meeting where the directors have agreed that one or more of them intends to resign. This is called a Special resolution meeting which must be drafted in a minutes form to submit to Cac. Also the Special resolution meeting would approve the appointment of the new director or directors which has to be signed by a Director and Secretary of the company to show that one director has been effectively removed and a new one replaced. Also a new filing registration of a particular form called Form C07 which is a change of directors form has to be purchased and filled and submitted to the CAC to ratify the changes. Also a letter showing that the new directors have consented to become new directors. Payment of the filing fees and the letters of resignation of the former directors with their signature.

Because a new director has been brought in, the share structure must reflect the new changes in favour of the new director, a special resolution meeting signed by at least 2 directors, payment of the filing fee for filing a new change of share structure which is called Form C02 AND THE PAYMENT OF ANNUAL RETURNS and because the new directors have to be reflected in the memorandum and Articles of Association, you have to have a special resolution meeting signed by a director and secretary to be filed within 28 days from the date of the resolution, paying filing fees again, re stamping of the Altered Memorandum at the Federal Inland Revenue Service and show evidence of up to date payment of your Annual Returns.

Now tell me whether all these unnecessary hassles are necessary? The amount of money you will spend will even surpass the original registration fees just to change a director that you sentimentally chose at the beginning who is now a torn in the flesh for your company. In fact CAC will be praying for you to choose Incompetent hacks that you will hate in future so as to bring more money for them. So choose wisely once again your directors.

QUESTION: Okay! Now i am choosing carefully who i want as my director. I have just cancelled PASUMA as one of my directors because i like his music but i am not sure we can do business together and i cant pay all these money to Cac in future. I think i will use my dear wife and Dangote only. What else do i need again?

ANSWER: The full names, ages, year of birth and residential addresses of all the directors must be supplied for filling the registration form and filing to Cac.

QUESTION: But one of the Directors lives in Iraq and the other one in Afghanistan? Can they also be directors too and their addresses be in Baghdad and Kabul?

ANSWER: Of course, as long as one of the directors lives in Nigeria with his residential address listed as a Nigerian Address. But for the sake of clarity and unnecessary Queries, all the directors should just adopt a Nigerian Address to save time and stress at the CAC.

QUESTION: Why do they want to know my age and date of Birth? Do they want to use it for witch craft?

ANSWER: No, its used to determine who is a minor and who is an Adult as directors (Its confidential)


QUESTION: Haba ! I dont have the money to rent another shop or office space. My landlord is already disturbing me for this years rent in my apartment, talkless of getting an office space in Ikoyi. We can only do that in future when money begins to flow. What can we do abeg?

ANSWER: This is not a problem per se. You can use your apartment or a known place that you feel comfortable with as your office address and contact address and register that address at the CAC as the contact address for now. No body is going to disturb you but if in future you move to a bigger and better place, you will have to notify the CAC for a change of address by purchasing and completing its application forms, Purchasing the change of address form, write an application for chAnge of address, show evidence of the payment of Annual returns till date and pay the filing fees for change of address.




Credit: Omonile Lawyer.