How to start a limited liability company in Nigeria?
A limited liability company is a private company whose owners are legally responsible for its debts only to the extent of the amount of capital they invested; that is, the owners (shareholders) are liable only to the amount they have invested (shares bought). Here is a step by step guide on how to start a limited liability company in Nigeria.
- You need a partner or partners because a minimum of two people and maximum of fifty people are required to start a company. You and your partners should agree on the amount of capital needed to operate the company, the location of the company, and at least three possible names for the company because it would be needed by the Corporate Affairs Commission (CAC) when registering the company.
- You need to hold a valid means of identification; it can be a valid ID card (National ID card or Voters card), a Driver’s License, or International passport.
- If you are going to operate a professional company like an educational institution, a medical center, a legal institution, etc, you need to provide a certificate that shows you are qualified to render the services.
- You need to hire a lawyer that would help you with all legal procedures of registering the company. Some people may not wish to hire a lawyer, but it is wise to get one who would prepare important documents you must submit at the Registrar like Memorandum and Article of Association.
When you have completed the first four steps, then you can register your company.
Where can you register your company?
In Nigeria, the Corporate Affairs Commission (CAC) is the institution in charge of registering companies. You can register your company online or by visiting a Corporate Affairs office nearby to you.
Visit the official website of the Corporate Affairs Commission, which is www.cac.gov.ng and follow these steps.
- After clicking on the website, go to the registration portal. Remember you have drafted three possible names for your company, in the registration portal search for the names to see if they are already in use or they are available and suitable. After doing this successfully, click on “Create Account” and a form will display for you to fill. Submit after filling the form.
- After two days, login your company’s registration portal account in Corporate Affairs Commission to verify if your application was approved. If it was approved, you would see the serial number or availability code, then you can go ahead and register your company.
- To begin your registration, choose the category of company, enter the availability code, your name and that of your fellow shareholders, the number of shares each person has in the company, and your state. At this point, you would get the certificate of incorporation CAC1.1, but this is not the end of the registration process.
- Make the filing payment immediately, which is about ten thousand naira. You can make the payment online or pay at any Nigerian bank. Then, you have to get stamps (which is 8000 naira) to stamp your registration form; you can do this at Federal Inland Revenue Service (FIRS). After stamping your form, print it alongside your receipt of payment on the portal.
- At this point, you have to upload your documents to the website. The documents you need to upload are –
- Certificate of incorporation CAC1.1
- Memorandum and Article of Association
- Valid means of identification for all shareholders
- Receipt to show proof of payment
- and Professional certificate, if you are going to operate a professional company.
You need to wait till the next day to get your certificate. Login your company’s registration portal account to check; once you see your Registered Company (RC) Number, it means your certificate is ready. You have come to the end of your online registration. What you would do at this point is to go to the Corporate Affairs Commission office nearby (the one you selected while registering), that is where you will collect your Certificate of incorporation and Certified true copy (CTC) of your uploaded documents. Exchange them with original uploaded documents (CAC1.1, Memorandum and Article of Association). You will give them to the CAC officials attending to you.
Apart from online registration, you can register your company by visiting a Corporate Affairs Commission office nearby to you. These are what you need to do –
- When you go to the Corporate Affairs Commission office, you will pay a sum of 500 naira for them to perform a name search for you. Give them the possible names for your company to conduct a search. You can leave now to return five days later.
- Upon your return, collect the Notice of Approval, get your registration form (costs 500 naira) and fill the form. Then make payment for filing (10,000 naira) and stamp duty (8000 naira). Go to any Nigerian bank to make payment for the filing and stamp. Then take the receipt alongside your Memorandum and Article of Association to FIRS for stamping.
- After stamping, go to the CAC office and submit the stamped documents, valid means of identification for all shareholders, receipt of payment, and Notice of Approval.
- Go back to the CAC office after one week to check if your certificate is out. If it’s out, sign and get the certificate of incorporation and Certified true copy CTC of your documents, and exchange them for the original document with you.
This is how to start a limited liability company in Nigeria. In summary, discuss with your fellow shareholders (discuss the possible company name, location, capital required), get valid means of identification for all shareholders, hire a lawyer to handle all legal procedures, visit the official website www.cac.gov.ng search for your names, fill the form, make your payments, stamp your form and documents, upload your documents, then go to the CAC office nearby to get your certificates. Or, go to a CAC office nearby, pay them to conduct the name search for you and get your form, fill it, make your payments, stamp your documents and submit them, then go to the CAC office to collect your certificate after one week.