STEPS AND REQUIREMENT FOR INCORPORATING A PRIVATE COMPANY IN NIGERIA

Here are Simple Requirements for Incorporating a Private Company with CAC in Nigeria

The Companies and Allied Matters Act (CAMA) recognises 6 corporate structures in Nigeria:
1. The Business Name
2. The Private Company Limited by Shares.
3. The Public Limited Company
4. Unlimited Company
5. Company Limited by Guarantee; and
6. Incorporated Trustees.

REQUIREMENTS FOR INCORPORATING A PRIVATE COMPANY IN NIGERIA.

Irrespective of whatever you must have read elsewhere, the steps for incorporating a new company at the nation’s registry, The Corporate Affairs Commission, can be summarised in the following 10 steps:

1. Submission of the proposed Company Names to the CAC. This is the first step in the entire process. The promoters of the company must decide on a company name and submit for approval. The government officials reserve the right to approve or deny company names submitted for a number of justifiable reasons – availability, suitability, legality, similarity, etc. It takes an average of 5 business days to get availability results.

2. Details of Directors. Long story short, you will be required to provide the biodata of the Directors of the proposed company. These information include: Full Names, Residential Address, Nationality, Age, Valid Identification Document and Signature of the Directors. The minimum number of directors for a private company is 2 and maximum is 50. There is no maximum for public companies. There are statutory requirements for being a director, one of which is that the directors must not be less than 18 years old.

3. Shareholders/Subscribers. The legal minimum number of shareholders in a private company in Nigeria is 2 and a maximum of 50. The shareholders subscribe to the memorandum and articles of association and are alloted shares in the company.
PS – the shareholders can also double as the directors of the company.

4. Appoint a Company Secretary. Every Nigerian company must appoint a Nigerian Company Secretary, as it has become a legal requirement. The company secretary of a private limited company needs no formal qualifications. It is the directors responsibility to ensure he/she has the appropriate knowledge and experience to act as a Secretary of the company. The company secretary could be an in-house person or an outside consultant. Some of the roles of a company secretary include:
a. Maintaining the Statutory Registers;
b. Liaison between the company and the CAC and other relevant government agencies;
c. Providing members and auditors with notice of meetings.

5. Registered Address of the Proposed Company. The company must have a Nigerian business address. This requirement needs no much explanation and not debatable either.

6. Core Areas of the company’s business activities (Nature/Objects of company). Nigerians and Non-Nigerians are allowed to carry on all forms of business provided it’s legal and not in the “negative list”. If the company will engage in specialist services (Hospital, Consultancy, Schools, Media & Advertising, etc), the directors may need to provide an evidence of professional proficiency. E.g. Certificate of a professional body/trade association, Academic Certificate, or both.

7. Valid Identification. Although I have stated this requirement earlier. It is worthy of mention here again. A photocopy of Identification of all the directors is required. (e.g. National ID card, Data Page of your National Passport, Voter’s Card or Driver’s License).

8. The Company’s Share Capital and Allotment. In simple terms, the share capital of a company (usually in monetary terms), is the amount of capital the subscribers have to carry on the business. The minimum share capital of a private company must not be less than N10,000. However, for economic reasons, it is advisable that an average Nigerian company incorporate a N1,000,000 share capital company. A company’s share capital is also industy-dependent. For example, advertising agencies must have at least N10 million as share capital. The law also stipulates a minimum of N10 million share capital for a Nigerian company with foreign ownership. Your regulator or adviser should advice you appropriately. A minimum of 25% of the authorized sharecapital must be subscribed and paid for.

Once the issue of share capital have been decided on, then the subscribers must also decide on alloting the shares. If there are 2 persons that formed the company, they could share it 50% each.

9. Draft the Memorandum of Understanding and Articles of Association (MEMART). This is a legal document that spells out the business objectives and the framework on which the company intends to run its business within the acceptance of the law. This legal document also shows the particulars of the shareholders and their shares allotment.

10. Payment of Stamp Duty and Statutory Filling Fees. The total fees payable to the Stamp Duty office and the Corporate Affairs Commission is dependent on the company’s share capital.

These are the basic requirements for incorporating a private limited liability company in Nigeria. However, EXPATRIATES are subjected to additional requirements and laws – Nigerian Investments Promotion Act, Immigration Act, Investment and Security Act, and Foreign Exchange and Monitoring Act.

Duration of Incorporation at the Corporate Affairs Commission

As at the time of writing this blog post, the average turnaround time to receive a Certificate of Incorporation and Certified True Copies of your documents at the CAC is 3 weeks.

Although, Nigeria deserves a better business environment, Africa’s most populous nations is a thriving business destination for many investors.

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,,,, We handle your Business Registration/Incorporation process with CAC Nigeria. We take care of name searches in the CAC directory, advise you on where your business falls into, and take you through what you will need legally to start your business in Nigeria.

KEEPING NIGERIAN NATIONAL HONOURS AWARD SAFE FROM IMPUNITY

Every nation has a system of recognizing and rewarding outstanding achievements of its citizens and nation’s friends with the aim of promoting patriotism and diligence in every sphere of human endeavour. The National Honours was established on the 1^st October 1963 and duly passed and codified in the National Honours Act, 1964. This national recognition places on record public appreciation and encomiums for the contributions of those who have distinguished themselves in their respective services to the nation. Furthermore, national recognition awards tend to motivate and challenge the citizens to strive for greater heights and to contribute more actively towards promoting the nation's intellectual, socio-economic and creative societal core values.

The National Honours Acts, LFN 2004 provides for various categories of honours and mode of appointments but however failed to state indubitably and explicitly the criteria for eligibility of such awards apart from being a citizen of Nigeria and grounds of revocation of the national honour. It is noteworthy to examine the pedigree of some of the past and recent awardees which appears to be questionable as some of them either has cases bordering on corruption charges or undischarged criminal allegations leveled against them which has further advanced the menace of impunity in the Nigerian polity. For example the former governor of Bauchi State, Adamu Muazu, who was awarded CON, has corruption charges preferred against him by the Economic and Financial Crimes Commission (EFCC). We hold that act of impunity is against international norms and standards to give a national award to someone with a case to answer on alleged corrupt practices.

In the same vein, we strongly opine that the Federal Government should put in place stricter criteria and revocation modus which should discourage corrupt minds from contemplating the national honours even if nominated.

The Nigerian National Honours, in descending order of importance, are:

• Grand Commander of the Order of the Federal Republic (GCFR)
• Grand Commander of the Order of the Niger (GCON)
• Commander of the Order of the Federal Republic (CFR)
• Commander of the Order of the Niger (CON)
• Officer of the Order of the Federal Republic (OFR)
• Officer of the Order of the Niger (OON)
• Member of the Order of the Federal Republic (MFR)
• Member of the Order of the Niger (MON)

The National Honours Act empowers the President of the Federal Republic of Nigeria to make provisions for the award of honours, decorations and dignities. It established two Orders of Dignity known as the Order of the Federal Republic and the Order of the Niger. Each Order consists of four ranks; the first and highest is that of Grand Commander; the second is that of Commander; the third is that of Officer; and the fourth that of Member.

The National Committee for National Honours and Awards usually invites nominations from the office of the President, the Chief of Defence Staff, Inspector General of Police, Federal Civil Service Commission, State governments, the Chief executives of the Manufacturers Association of Nigeria (MAN) and the National Association of Chambers of Commerce, Industry, Manufacturing and Agriculture (NACCIMA). The final decision on the awards is however largely left to the discretion of the President, and the apparent criterion is meritorious and distinguished service to the nation.

Section 3 of the Honours Act conferred the power to make awards on the President. However, there had been weighty debates on whether the president should be stripped off the discretionary power to confer national awards on deserving Nigerians. Legal luminaries had argued that this presidential privilege could be abused and impunitised as this may be an opportunity for the president to reward political supporters and vituperate political opponents by depriving them of such meritorious award. The Former Governor of old Kaduna State and Chairman of the Conference of Nigeria Political Parties (CNPP), Alhaji Balarabe Musa, once said:

“The national honours award has been bastardised on political lines, friends and business associates not for the interest it was meant for. Although some merited the national honour but some are purely a political reward for friends.

“The honour should not be based on political patronage but on how people make positive changes on the lives of the people or the country.”

It is pertinent to query the rationale behind the power of the president to give or withhold his approval of nominated candidates for national awards without recourse to statutory screening by relevant anti-corruption agencies, the National Assembly and the general public to investigate and sift the shaft from the wheat amongst hundreds of honourees giving such dignifying honour only to those with corrupt-free profile, industrious revolutionists and socio-economic and religious contributors towards national development.

Section 2(1) of the Act provides that a person shall not be eligible for appointment to any rank of an Order unless he is a citizen of Nigeria. This eligibility clause appears to be the only criteria for the conferment of national honours as no provision prevents past convicts of nefarious corrupt offences or statutory provisions for revocation of such honours if honourees peradventure falls of the track of patriotism.

Also, the Nigerian National Merit Award which was established in 1979 by Act No. 53 to award prizes to citizens of Nigeria for outstanding intellectual attainment, academic performance and contribution to national development in the areas of science, technology, medicine, humanities, arts and culture and any other field considered deserving by the Board of Trustees was instituted by then Head of State, General Olusegun Obasanjo to accord recognition to outstanding and original contributions to national development.

The Nigerian National Merit Award is different from the National Honours and Awards, which are conferred on persons who have rendered meritorious service to the nation. The Merit Award is specifically designed to encourage Nigerians to be devoted to the search for solutions to the nation's problems in their various disciplines. The stated objective is to encourage Nigerians to concentrate their intellectual energies in academic work and other fields of endeavour strategic towards achievement of excellence in every sector of the nation and the world at large.

The Merit Award is administered by a Board of Trustees appointed by the President, and is largely insulated from political interference in order to ensure that it retains its enviable position as the highest national award for intellectual and academic excellence. The Board is, however, expected to take cognizance of men and women whose out-standing intellectual and academic contributions to national development have not won international accolades. Guidelines for consideration of nominees for the award are as follows:

a. The award is open to all citizens of Nigeria.
b. Selection is made from a wide range of contemporary works, which are innovative, creative, essentially Nigerian in content, and of international distinction.
c. The accomplishment (in Science and Technology), for which an award is to be made, should be qualitatively and quantitatively beneficial to the Nigerian society in particular, and to humanity in general.
d. The work should promote Nigeria's image, culture and reputation as a nation.
e. The achievement may constitute a specific breakthrough in any field, or may be of a cumulative nature.

Although, the benefits of various national awards cannot be overemphasized or dissipated but there is a dire need to check the exercise leading to this national coronation in order to circumspectly assay the profile of potential honorees bridle acts of impunities in every sector and sectional parts of the country.

In September 2012, President Goodluck Jonathan directed the National Honours Committee to     compile a list of persons conferred with National Honours whose integrity have come to question since their investiture. This directive was apparently made in deference to public opinion over the need to sanitise the national honours in view of the indictment of some of the recipients for corruption as well as the arraignment and conviction of some for fraud-related offences.

The House of Representatives Ad Hoc Committee Panel on the Near Collapse of the Capital Market, also recommended in its report endorsed by the House, stated, “That all former bank executives who are recipients of national honours and who are currently being prosecuted for crimes and unethical practices which led to the collapse of their banks be stripped of their national honours by the President and Commander-in-Chief in line with Section 7 of the National Honours Act, LFN and international norms.

It is instructive that the House did not extend this recommendation to public officers, civil servants past or present political office holders who may be

Deprivation of National Honours

Section 7 of the National Honours Act provide for the deprivation of an honour where a recipient conducts himself in a manner which the President considers to be inconsistent with the honour. It provides that if it appears to the president that after inquiry (if any) as he thinks fit, that the holder of the rank of an Order has conducted himself in a manner inconsistent with the dignity off the Order, the president may by notice in the Federal Gazette deprive him of that rank. This section had been subjected to criticisms by political analysts who posit that the president may hide under this section to either protect his political friends or witch-hunt his political opponents.

Having therefore considered the provisions of the National Awards Act, we are persuaded to propose the following pragmatic steps that can be taken to make National honours process credible and transparent.

1.      The eligibility criteria should be widely publicized and periodically reviewed. The criteria as well as nominees should be electronically accessible.

2.      The public should have a major role in nominations and government should diminish its control over who gets honoured.

3.      Serving public officers of any rank should not be eligible for the awards. Those who deserve it will be considered after they have left public office. Indeed, the Code of Conduct provisions in the 5th Schedule of the Constitution prohibit serving public officers from accepting benefits of any kind for anything done or omitted to be done by him in the discharge of his duties. This provision should apply to national honours consideration.

4.      There must be room for public objections to nominations. This means that a shortlist of nominations should be published with sufficient time to enable members of the public file objections or complaints and the process for adjudicating such objections should be clear, transparent and expeditious.

5.      There should be statutory based expeditious process for depriving undeserving recipients.

6.      The National Honours Act should be reviewed as it does not contain eligibility or explicit criteria for the qualification of the national honours.

7.      Relevant anti-corruption agencies should be allowed to scrutinize the record of nominees and their findings should be made public before ratification and confirmation by the National Assembly.

Paul Mashote,Esq.

Paul Mashote & Co.

topshaddai@gmail.com

+2348022737965