Doing Business Simplified
In Nigeria, a business can be registered as a Business Name, Public Limited Liability Company, Private Limited Liability Company, Company Limited by Guarantee, and an Unlimited Company.
The Private Limited Liability Company structure is typically advised because of the limited liability of the shareholders amongst other factors. It does not need a huge capital outlay and is especially useful if the company will be funded by VCs and Angel Investors.
The minimum capital requirement is N10,000 but where the company has foreigners as part of its first shareholders, it is N10,000,000. It is not required that the entire share capital be paid up. However, at least 25% of the share capital must be held by the shareholders.
To begin, the company name would need to be registered at the Corporate Affairs Commission (“CAC”) after which documents including the Memorandum and Articles of Association of the company will be filed at the CAC.
Following incorporation at the CAC, a Company with a foreign shareholder is required to register with the Nigerian Investment Promotion Council (“NIPC”).
To access the official foreign exchange market, the foreign shareholders must obtain a Certificate of Capital Importation (“CCI”) as evidence that their investment was brought into Nigeria. If expatriates are to be employed, expatriate quotas would be applied for.
Congratulations! The company is now ready to begin operations. Going forward, the company would need to adhere to regulatory requirements such as paying taxes and filing annual returns.
