The following vehicles of investment may be considered for establishing a business enterprise in Nigeria.
i.SOLE PROPRIETORSHIP: This form of enterprise is for use by an individual doing business on his own account. Its statutory requirement is the registration of a business name. (Ref 1)
ii.PARTNERSHIPS: This form of enterprise is usually established between joint owners of a business who are personally liable for the obligations and debts of t...he firm. A partnership may be ordinary or limited. (Ref 1)
iii.INCORPORATED COMPANIES: An incorporated company may be incorporated with unlimited liability, limited by shares or limited by guarantee. By the provisions of the Companies and Allied Matters Act (CAMA) (Ref 2), foreign companies intending to do business in Nigeria must be incorporated as a local entity in Nigeria. (Ref 3)
Accordingly, it is usual for foreigners intending to do business in Nigeria to incorporate limited liability companies in Nigeria. This type of company limits the liability of its members to the amounts
which is unpaid on the respective shares held by them. The advantages of registering a limited liability company include the limitation of the personal liability of its owners, perpetual succession of the company, the possibility of a 100% foreign ownership and the restriction on the transfer of shares. (Ref 1)
To register a limited liability company, a minimum share capital of N10,000,000.00 (Ten Million Naira) would be required by a foreign investor. Personal details of the investors would be required and various statutory fees payable. Registration is to be done at the Corporate Affairs Commission (CAC) and may be done by a legal practitioner on behalf of the investor. A certificate of incorporation is issued by the CAC upon completion of the incorporation process. Also, companies are expected to comply with the provisions of the Companies and Allied Matters Act (CAMA) (Ref 2) after incorporation. Such provisions include statutory meetings to be held by the company, filing of annual returns and board resolutions and the keeping of statutory books and accounts.
As part of its development efforts, the Corporate Affairs Commission now offers a 24 hours registration service which is known as “special registration” for the registration of companies. (Ref 4) With the payment of a higher fee, investors can register a Nigerian company within 24 hours as opposed to the regular registration which takes an average of 5 days.
i.SOLE PROPRIETORSHIP: This form of enterprise is for use by an individual doing business on his own account. Its statutory requirement is the registration of a business name. (Ref 1)
ii.PARTNERSHIPS: This form of enterprise is usually established between joint owners of a business who are personally liable for the obligations and debts of t...he firm. A partnership may be ordinary or limited. (Ref 1)
iii.INCORPORATED COMPANIES: An incorporated company may be incorporated with unlimited liability, limited by shares or limited by guarantee. By the provisions of the Companies and Allied Matters Act (CAMA) (Ref 2), foreign companies intending to do business in Nigeria must be incorporated as a local entity in Nigeria. (Ref 3)
Accordingly, it is usual for foreigners intending to do business in Nigeria to incorporate limited liability companies in Nigeria. This type of company limits the liability of its members to the amounts
which is unpaid on the respective shares held by them. The advantages of registering a limited liability company include the limitation of the personal liability of its owners, perpetual succession of the company, the possibility of a 100% foreign ownership and the restriction on the transfer of shares. (Ref 1)
To register a limited liability company, a minimum share capital of N10,000,000.00 (Ten Million Naira) would be required by a foreign investor. Personal details of the investors would be required and various statutory fees payable. Registration is to be done at the Corporate Affairs Commission (CAC) and may be done by a legal practitioner on behalf of the investor. A certificate of incorporation is issued by the CAC upon completion of the incorporation process. Also, companies are expected to comply with the provisions of the Companies and Allied Matters Act (CAMA) (Ref 2) after incorporation. Such provisions include statutory meetings to be held by the company, filing of annual returns and board resolutions and the keeping of statutory books and accounts.
As part of its development efforts, the Corporate Affairs Commission now offers a 24 hours registration service which is known as “special registration” for the registration of companies. (Ref 4) With the payment of a higher fee, investors can register a Nigerian company within 24 hours as opposed to the regular registration which takes an average of 5 days.
References
1 “Investment in Nigeria”, 3rd Edition, September 2002 by KPMG Professional Services
2 Cap. C20, Laws of the Federation of Nigeria, 2004
3 See Section 54 of the Companies and Allied Matters Act and Section 19 of the Nigerian Investment
Promotion Commission Act, Cap. N117, Laws of the Federation of Nigeria, 2004
4 See the Corporate Affairs Commission website
1 “Investment in Nigeria”, 3rd Edition, September 2002 by KPMG Professional Services
2 Cap. C20, Laws of the Federation of Nigeria, 2004
3 See Section 54 of the Companies and Allied Matters Act and Section 19 of the Nigerian Investment
Promotion Commission Act, Cap. N117, Laws of the Federation of Nigeria, 2004
4 See the Corporate Affairs Commission website
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