Currently, the economic situation of Nigeria requires one to have a good company that is sustainable. But first, you need to know how to set up a company in Nigeria.
To seat up a good company in Nigeria, you will need to register the company with the corporate affairs commission, and this has different requirements. The requirements can be confusing sometimes, and you might get burnt.
But in this article, you will see how to set up a company in Nigeria, and other important details that you should not overlook when you intend to set up a company in Nigeria.
Before that, take a look at what is regarded as a company in Nigeria, and the types.
What is Regarded As a Company in Nigeria?
In Nigeria, a company is classified as any organization that has a structure with good legal backing, with the members sharing a common mission and vision, to achieve a goal.
The company may be a not-for-profit organization, for-profit organization, financial institution, educational institution, etc.
Types of Companies in Nigeria
As promised, this article intends to show you how to set up a company in Nigeria. But to set up one, you need to know what type of company you intend to set up in Nigeria.
The types of companies you can set up in Nigeria include the following:
1. A company limited by guarantee (CLG)
2. A company limited by shares
3. One limited by guarantee with a share capital
4. Limited liability company
5. An unlimited company with or without a share capital
Where does your company fall into any of these? Well, you will see a brief below to guide your decision as they have their own peculiarities.
1. A company limited by guarantee (CLG)
As this article intends to show you how to set up a company in Nigeria, you should first see the one that borders on humanity majorly.
This type of company is usually a non-profit organization such as a club or charity. It is usually sustained by the members and other individuals that wish to support it.
If you set up this type of company in Nigeria, you would have to assure the corporate affairs commission in Nigeria that you would be able to pay some agreed fee even when the liabilities of the company exceed the assets.
Furthermore, as a company that is limited by guarantee, you may not be able to engage in share capital. Nevertheless, with a good structure, you can get aid both locally and internationally.
2. A company limited by shares
This is the most solid example of a limited company. Like its name, in this type of company, the liability of each shareholder is limited to the amount that each individual has invested.
Because this article seeks to answer how to set up a company in Nigeria, it would help you simplify complex structures.
So, this type of company is basically owned by various individuals, who contribute a certain quota either in form of money, time, or other resources.
That is to say, when the company makes a profit, it would be split based on what each individual brings to the table, and if it takes a loss, the same would apply.
An example of such includes pension funds, hedge funds, banks, mutual funds, etc (all publicly traded companies), and then Emzor pharmaceuticals, Neimeth International pharmaceuticals, etc are all examples of a privately held company limited by shares.
3. One limited by guarantee with a share capital
This type of company is formed for non-commercial activities, but the activities carried out by the company are funded by investors, who expect a return for their investment.
4. Limited liability company
A limited liability company is a company that is managed by managers or members, and it also has a limitation on the transfer of ownership of the company.
5. An unlimited company with or without a share capital
This type of company does not allow any limit or liability on the members. In lay terms, it means that for any debt incurred by the company, the members will not be held liable
Now that you have seen the types of companies that you can set up in Nigeria, you should now see how to set up a company in Nigeria.
How To Set Up A Company in Nigeria
Before seeing how to set up a company in Nigeria, you will need to ensure that your company can be sustainable in the long run.
And by sustainability, it should be able to provide a product that people will be demanding regularly. After that, you should have a good business plan, in which you would outline all aspects of the business.
Because this article seeks to show you to set up a company in Nigeria, you can use this as a guide:
1. Decide on the business structure:
The first answer to the question of how to set up a company in Nigeria is you have to first decide on the structure you want your company to have.
As one who decides to start a company in Nigeria, you have to either be a sole proprietor of the company, be in partnership or have incorporated trustees.
This will help you with issues such as tax, costing, legal, financial and regulatory implications
2. Reserve a name:
The second thing you need to do on “how to set up a company in Nigeria” is to reserve a name. And this is necessary because no two companies can bear the same name. If such happens, a legal battle will ensue between both parties.
To be on the safe side, whatever name you choose to give your company, ensure to check with the corporate affairs commission, they would help you check if the name is available. And if the name is available, reservation can then be effected in 24 hours.
3. Register the approved name:
The third tip on how to set up a company in Nigeria is that reservation of name cannot hold for long. Hence, you will need to register the approved name.
4. Prepare and file registration and incorporation deeds:
For you to successfully set up a company in Nigeria, you will need to follow this sequence of how to set up a company in Nigeria.
After registering your company name with the corporate affairs commission, you will need to secure a Memorandum of Association and Articles of Association (MEMART).
For this, you will need the help of a solicitor to draft a MEMART that would suit your business.
This MEMART will help you with sealing your business name and partnership deed. It will also state how the business will run, and its limitations.
5. Company share structure:
To set up a company in Nigeria, you must have at least two directors who are non-employee shareholders, and not more than 50 non-employee shareholders if your company is private.
6. Register your patent and trademark:
In Nigeria, the terrain is tough. But for you to survive, you will need to fully understand how to set up a company in Nigeria.
For your brand, you may have some intellectual properties such as patents, trade secrets, copyrights, or trademarks that can be copied or stolen.
But with a solicitor, you can easily register them, and have them protected so that when another individual uses it, they can be charged in court.
7. Register and obtain a license from the relevant regulatory agency:
Most people who seek how to set up a company in Nigeria don’t know that you would need to obtain a license from some regulatory bodies, depending on what you wish to sell in Nigeria.
For example, if your company is into the production of food and drugs, it would need approval from the National Agency for Food and Drug Administration and Control (NAFDAC).
If into an investment, it would need the approval of the Nigerian Investments Promotions Commission (NIPC), etc.
8. Register with the tax authorities:
If you really seek how to set up a company in Nigeria, then you should understand that defaulting on tax is a serious issue.
For taxing, you would need to be registered with the Federal Inland Revenue Service (FIRS) and the State Board of Internal Revenue.
You need to also note that you must file your financial returns within 18 months of incorporation/registration. For better leverage on taxation issues, you can contact a good solicitor.
9. Find a business or office location:
Another important criterion you need to consider when seeking how to set up a company in Nigeria is an office location.
Even if your company would be run online, you will still need a location, where clients can have a sense of closure.
There are so many locations you can try, but none comes close to CHURCHGATE. And this is because Churchgate understands the need for a class that is all-encompassing and affordable.
Businesses that have employed the services of CHURCHGATE have never had a cause to regret. And they do get good locations after consultation.
10. Perform administrative obligations:
Now that you have seen how to set up a company in Nigeria, it is important that you know that there are obligations that you can’t be caught short of.
For example, there are obligations you must fulfill under the Companies and Allied Matters Act, Labour Act, Insurance Act, Pension Reform Act, etc. An accredited Solicitor can advise you and help you perfect these administrative obligations.
How To Set Up A Company in Nigeria For Foreigners
This article has provided all you need to know on how to set up a company in Nigeria. But what if a foreigner wishes to know how to set up a company in Nigeria?
Well, the same applies to a foreigner. Only that would need to obtain a business permit and expatriate quota.
Despite not needing work permits, expatriate employees are nonetheless required by their employer companies to get residency permits that would allow them to send money outside.
Also, work permits for foreign nationals are based on the expatriate quota (those qualifications must fulfill the criteria established for the particular quota position).
How Much Does It Cost To Set Up A Company in Nigeria?
In this article on how to set up a company in Nigeria, you would see the major factors that would require your money are Corporate affairs commission registration and location.
For you to get the best location in any part of Nigeria at a friendly and affordable rate, you will need CHURCHGATE.
Churchgate has the best properties that can sustain the test of time. They have been in the real estate business for over 5 decades and counting.
So if you need a company that is holistic with gratitude, humility, integrity, passion, and a good business ethic, then Churchgate is your best bet.
Furthermore, Churchgate places its customer first, and this is the reason why they would work with your budget to give you the best space in business-friendly environments.
General CAC Requirements For Registration of a Company
The general Corporate affairs commission requirements for setting up a company in Nigeria include
1. Reservation of Name:
In this article on how to set up a company in Nigeria, you saw that reservation of name is very vital. Well, it costs just #500.
2. Registration of business name:
After reservation of the name, the next on how to set up a company is the registration of the business name and which costs just #10,000.
3. Others:
This is not so much a criterion for how to set up a company in Nigeria. But it includes filing of forms of various kinds with CAC, and it would cost about #23,000.
Then to get a certified copy of your business name would cost about #5000, and a certified true copy of other documents would cost about #2000 per document.
And with this, you can properly plan on costs and other requirements of how to set up a company in Nigeria.
Conclusion on How To Set Up A Company in Nigeria
As promised, this article has shown you a detailed step on how to set up a company in Nigeria. It has also helped you with cost, and how to get a good location in Nigeria.
For further details, you can check out CHURCHGATE
FAQs About How To Set Up A Company in Nigeria
Can I register my company myself in Nigeria?
Yes, you can register your company by yourself without involving a lawyer. Just follow the steps on how to set up a company in Nigeria.
How long it takes to register a company in Nigeria?
All things being equal, it takes about two to seven days to register s company in Nigeria.
