Your Complete Guide to Company & Business Registration in Nigeria

As a business owner or entrepreneur in Nigeria, you’ll agree with the fact that the security of your business is very important. One of the ways this security can be obtained is by the registration of your business with the right authorities. This is because it certifies your business as a legal one and also gives a shade of professionalism to your business. In 1990, the Nigerian government set up the Corporate Affairs Commission (CAC) to streamline the process of businesses in Nigeria. It is important to note that a business name registration is different from a company registration. This is because a limited liability company is a legal entity that is separate from its shareholders and directors. It can also sue and be sued in its corporate name. On the other hand, a business name doesn’t have a distinct legal personality from the owner, and it’s usually funded from the pocket of the owner.

The process is very easy, and it takes about one week to get your business name registration certificate from the Commission. However, as easy as it may seem, this may cost you a lot if you don’t know what to do, and much more if you hire the services of a lawyer. In this guide, we are going to be looking at different types of business registration steps required to register a business name with CAC and a limited liability company in Nigeria.

Different types of business registrations

Being an entrepreneur in Nigeria requires that you know the various types of businesses regulated by law under The Companies and Allied Matters Act (CAMA) 2020. It’s important that you understand the difference between the types of businesses registered in Nigeria before you decide to register your business, as they have their pros and cons. These different types of business registrations include:

1. Sole proprietorship: Also known as a “one-man’s business”, it is the oldest form of business dynamic in Nigeria. Usually, the business owner does the initial funding, and since he’s the registered owner of the business, he’s answerable to the law in case of detection of any fraud or financial crimes.

2. Private Limited Company: This is a separate legal entity established by a minimum of 2 members with a maximum number of fifty members. Members in this company are limited only to the amount they have invested, and this makes their personal assets secure from liability during an insolvency.

3. Public limited company: This company is the best kind for larger companies and is an extension of a private limited company. Unlike the latter, its shares are made public and are publicly traded in the stock market. It's made up of a minimum number of 7, and there’s no maximum limit of its members.

4. Public Company Limited by Guarantee: This type of company is also known as a “non-profit organization”. The company’s agenda is usually for a good cause and does not seek to earn profits for personal use; thus, it does not partake in the public stock exchange. The money made is only for achieving the company's goals, not for personal gain.

5. Private Unlimited Company: Unlike the private limited company, this type of legal entity allows shareholders to have unlimited liability because they have unlimited share capital.

Steps required to register a business name with CAC

If you want to legalize your firm and are seeking a reasonably priced solution, registering a business name with the Corporate Affairs Commission in Nigeria is an easy route to go. The criteria are rather simple, there aren't many technical details, and there aren't many compliance reporting requirements. A partnership or a sole proprietorship can employ this structure. Below is a step-by-step list that’ll guide you when you want to register your business name in Nigeria.

1. Get the requirements needed to register your business name: These requirements include a National Identification Number (NIN), passport photograph, valid business documents, birth certificate, driver’s license, international passport, and your permanent voter’s card.

2. Go to the Pre-incorporation portal at pre.cac.gov.ng to search for name availability: This is the first step in the registration of a Business Name. In Nigeria, two businesses cannot function if they bear the same name. You have to conduct what is called a public search to confirm that your proposed name is not being used. This search attracts a fee of ₦500.

3. Choose a business name: After a public search, you have to apply for an availability check and reservation of name by CAC to ensure your name of choice is not in use. At this stage, you are expected to submit two proposed names to the CAC and make the required payment of #500. Once it's approved, you can go ahead with the registration.

4. Go to create account and set up an account: This requires you to fill in important details such as account details, address, and means of identification.

5. Fill out the online form: At this stage, you are required to fill in the approved name, general nature of the business, full address of the principal place of business and every other subsidiary place of business, proposed date of commencement of the business, and passport size photographs of the owners.

6. Pay the required amount: You have to pay ₦10,000 to further your business registration.

7. Upload the necessary documents: You have to upload your Application form and other requested business documents. The Commission will then go through the documents, and if approved, you will get a notification of approval.

Steps required to register a limited liability company in Nigeria.

Apart from business names, the Commission is also in charge of registering all companies in accordance with the Companies and Allied Matters Act (CAMA) 2020, which regulates companies in Nigeria. A limited liability company, on the other hand, is a company where the liability of the shareholder is limited to the quantity of share capital of each shareholder if the Company ends up liquidated. In Nigeria, there are two types of limited liability companies in Nigeria. They are companies limited by guarantee and companies limited by shares. The former is established not for profit but to promote science, art and religion. The shareholder’s liability is limited to their guarantee. The latter is the liability of members limited to the amounts they contributed to form and manage the company. During liquidation, the shareholders only lose their nominal shareholding.

The requirements and process for registering a limited company in Nigeria aren’t as stringent and complicated. Below, we’ll look at the Steps required to register a limited liability company in Nigeria. However, there are some things you must keep in mind before registering a limited liability company in Nigeria. They are:

1. Only one person can register a company and act as both director and shareholder where no foreigner will be involved in the makeup of the company.

2. The minimum age of a Director of a Nigerian company is 18 years.

3. Every company must have an address in Nigeria at the point of registration.

4. Where foreigners will be involved, a minimum of two directors will be required. Where the shareholders are individual foreigners, a minimum of two persons are required to act as shareholders for the company.

5. A foreign company can register a Nigerian subsidiary and be the sole shareholder, provided such a company will appoint a minimum of two directors.

6. Nigerian citizens can register a company with any authorized share capital amount; however, a foreign-owned company must have a minimum of Ten Million Naira authorized share capital to be incorporated.

7. Where an agent or a corporate lawyer is retained for a company registration, the applicant doesn't need to travel to visit the agent before the incorporation can be completed, as the entire value chain can now be completed online.

Step-by-step guide to registering a limited liability company in Nigeria. 

1. Get your required documents for the registration: These documents include Form of Identification, Articles of Association, Certificate of Incorporation, Memorandum of Association, proficiency certificate, and Tax Identification Number (TIN). 

2. Make your choice of limited liability company here: Here, you decide if you want to register a company limited by guarantee or company limited by shares

3. Check for the availability of the company name and reserve a new name: You are expected to choose two suitable names for your company, and then you have to check the availability of the proposed name. If it’s available, You can reserve a particular name for 30 days before another party can register it with the Commission. For a company limited by guarantee, the reservation fee is #5000 while for a company limited by shares, it’s #500.

4. Fill out the pre-registration form and upload the required documents: These required documents include the Memorandum and Articles of Association, Certificate of Incorporation, and other forms. In addition, you will need proof of address, directors’ identity documents, and a bank reference letter.

5. Pay for filing fees and stamp duty: This is required before submission and they are prescribed by the Commission and the Federal Inland Revenue Service (FIRS). 

6. Submit the application for registration: Once your application is approved, your certificate and other incorporation documents can be downloaded online.

Please note that if you are registering a company limited by guarantee, the commission has the right to obtain approval of the Attorney General of the Federation before registration of the Company Limited by Guarantee.

How much does it cost to register your business with CAC?

The cost to register your business name and company varies. Below is a list of fees for the registration of business names and companies.

Conclusion

This guide covers the major things you need to know about the types of business registrations and the process for registering business names and companies so you don’t have to struggle as an aspiring or active business owner for these administrative processes.

If you are still unsure and you don’t know where to begin, contact us now to know more about business registration and company incorporation.

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