Photo Credit – Proshare
Each country in the world has a set of laid down business laws and policies which enables its citizens engage in business transactions and Nigeria is no exception. The primary law governing companies and businesses in Nigeria is the Company and Allied Matters Act (CAMA). It deals with the various types of company structures, eligibility, process for registration, and rules for operation.
On the other hand, the regulatory body that is in charge of implementing the provisions of the CAMA is the Corporate Affairs Commission (CAC).
The Corporate Affairs Commission was established by the Companies and Allied Matters Act, which was promulgated in 1990 to regulate the formation and management of companies in Nigeria.
The establishment of the Corporate Affairs Commission as an autonomous body was as a result of the perceived inefficiency and ineffectiveness of the erstwhile Company Registry, a department within the Federal Ministry of Commerce and Tourism which was then responsible for the registration and administration of the repealed Companies Act of 1968.
FUNCTIONS OF THE COMMISSION
The functions of the Commission as set out in section 7 of the Companies and Allied Matters Act, includes the following:
- To administer the Act, including the regulation and supervision of the formation, incorporation, management and winding up of companies
- To establish and maintain company’s registry and offices in all the states of the Federation suitably and adequately equipped to discharge its functions under the Act or any law in respect of which it is charged with responsibility
- Arrange and conduct an investigation into the affairs of any company where the interests of the shareholders and the public so demand
- To undertake such other activities as are necessary or expedient for giving full effect to the provisions of the Act.
- The Commission also registers Business Names, and Incorporated Trustees as well as provides a wide range of ancillary services.
The various business structures allowed in Nigeria are – registered business name, company limited by shares, company limited by guarantee, unlimited company (all companies may be private or public), and incorporated trustees.
For the purposes of this guide, we will deal with only a private company limited by shares.
What are the requirements?
A company must have a minimum of 2 members, and a maximum of 50 members.
Founding members must not be – under the age of 18 years old (unless at least 2 other members are over the age of 18), of unsound mind, an undischarged bankrupt, or disqualified by CAMA from being a Director.
The current minimum share capital of a company to be registered in Nigeria is N10, 000.
What documents are needed for incorporation?
- Memorandum and Articles of Association.
- Notice of registered address of the business.
- List, particulars, and consent of the first Directors of the company.
- Statement of compliance by legal practitioner.
- Upon successful registration, the company is presented with a Certificate of Incorporation. Under Nigerian business laws, only accredited individuals/companies can incorporate companies. So, businessmen need to hire the services of accredited companies/individuals for this process. The only professionals eligible for accreditation are Lawyers, Chartered Accountants and Chartered Secretaries.
For more information on the legal implications of doing business/business laws in Nigeria do visit LawsandLoans.com. We keep you updated!