By Job Osazuwa
Many Nigerians usually consider registering their businesses with the Corporate Affairs Commission (CAC) a herculean task.
Questions about the appropriate office to visit, who to meet, documents to tender and the cost of everything race through the minds of prospective owners. Such posers leave them at a crossroads.
In fact, some of them believe that you need to be connected to someone occupying a high political office before you can have that ‘tall order’ of registering your business accomplished.
Hence, many business owners have fallen prey to fraudsters who pose as registered agents on CAC documentation and issuance of certificate matter. There are victims who pay through their noses before the aim is achieved. Others who are very unlucky end up being fleeced of their hard-earned money without getting their companies registered. There have been reports of how unsuspecting business owners were handed fake certificates by unscrupulous racketeers.
To answer all the questions and clear the fear, doubt and worries that you might have, a frontline legal practitioner, Dr Obinna Kalu, General Counsel and Company Secretary, takes his time to explain all that one needs to know when contemplating registering a business. The cerebral lawyer makes how to go about the different processes and procedures, right from the business conceptualisation stage to having the registration done, quite easy. Like an experienced teacher who explains, demonstrates and illustrates for easier understanding, he marshalled out the requirements, procedures and steps to be taken in having a business registered with the appropriate authorities without any hassle.
According to him, the responsibility of regulating the formation and post incorporation management of the affairs of companies in Nigeria falls squarely on the CAC.
The body, which has its corporate headquarters at Plot 420, Tigris Crescent, Off Aguiyi Ironsi Street, Maitama, Abuja, Nigeria, was established pursuant to the provisions of the Companies and Allied Matters Act (CAMA) 2020. Kalu said the Act establishes the legal and administrative framework for the registration of companies/businesses in Nigeria.
He explained that as part of the Federal Government’s effort to enhance the ease of doing business in Nigeria, the legal and administrative requirements/steps for registering a company in Nigeria have been reformed and it’s now relatively simple and straightforward.
His words: “Thus, today, it is possible to commence and conclude the process of registering a business within a few days. Some of the legal and administrative bottlenecks that characterised the registration of businesses in Nigeria in the past have been largely removed and/or made more business friendly.” Enjoy his bit-by-bit and easy guide on the requirements, procedures, and steps for business registration in Nigeria.
STAGE ONE: Choose a suitable business name and conduct name availability check
Any individual who desires to register a business or company in Nigeria should first decide on the name of the proposed company, and it must be unique. The applicant is required to choose and submit two proposed names that will be immediately submitted to the CAC via its online registration portal for availability check upon payment of the prescribed statutory fees.
The essence of the name availability check is to verify if the chosen name(s) is/are available for the applicant’s use or whether the name(s) is/are already being used by another company or to check if the name(s) is/are too similar to any name already registered by another entity such that it is capable of causing confusion in the public sphere. Where the result of the name availability check turns out positive and the name is available, it would be reserved for the applicant for a period not exceeding 60 days.
STAGE TWO: Procure and complete the pre-registration forms
When the applicant successfully gets a name approved for his use, the next step is to proceed either by himself or through an accredited agent to procure and complete the pre-incorporation forms. The information that the applicant will be required to provide includes the following:
Name of the company as approved by CAC; Type of company (This should state whether the company is limited by shares, unlimited or public company).
Registered office address of the company, e-mail and phone number. The head office should be provided where it is different from the registered office address.
Nature of the business/description of the main business activity.
Preparation of the company’s Memorandum and Articles of Association and other documents in line with the objectives of the new company being registered. It is highly advisable to seek the services of a lawyer in the preparation of these documents. All the same, the standard Memorandum and Article of Association (MEMART) supplied by the CAC in its online registration portal may be adopted by any new company.
Another item is the particulars of the company secretary. In the case of a small private company, (the turnover of a small company should not exceed N120 million; and its net asset value should not exceed N60 million). CAMA 2020 gives them the option whether to appoint a Company Secretary or not. The relevant details of the company secretary must be provided where a small company chooses to appoint one. At least, one secretary, which could either be an individual or a corporate secretary is required to be appointed by companies that are not small companies.
Also required is information on the particulars of the directors. Such information includes names, residential address, gender, nationality, phone number, e-mail address, scanned signatures of directors, means of identification of directors (e.g. Passport, National Identity card, permanent voters card, drivers licence etc). It is instructive to note that a small private company is permitted to appoint only one director. Membership of a private company shall not exceed 50.
There must be particulars of shareholder(s) which will cover the following areas: name, means of identification, residential address, phone number, email address, scanned signature of shareholders, the shareholding ratio/structure where the shareholders of the new company are to be more than one.
Issued share capital statement, the class and numbers of issued shares.
Particulars of persons with significant control (This could be either natural person or legal entity). A person with a significant control over a company is a person who directly or indirectly hold at least five per cent of the shares or interest; directly or indirectly holds at least five per cent of the voting right; directly or indirectly holds the right to appoint or remove a majority of the directors; has the right to exercise significant influence or control over a company.
STAGE THREE: Make payment for filing fees and stamp duty
The next stage after the completion of pre-incorporation forms is to make approved payment for filing and stamp duties. The applicant is expected to either use the bank or pay through remittal. If the payment is received successfully, an electronic stamp will be affixed to some of the incorporation documents like the Memorandum and Articles of Association.
STAGE FOUR: Process and upload documents to CAC registration portal
All the relevant registration documents and requirements highlighted under step two above should be scanned and uploaded to the CAC online registration portal.
STAGE FIVE. Submit the application to the CAC for review and possible approval
With all the above steps carefully followed without jumping the gun, you can be 99 per cent sure of getting your business registered in no time.