Introduction

Under the Nigerian company law, the various types of companies which can be incorporated include; a private limited liability company, public limited liability company, company limited by guarantee, unlimited company, limited partnership, and limited liability partnership. The most common type used for commercial business activities and by Tech Startup is a private limited liability company.

This article is a quick guide to the incorporation process and necessary post-incorporation requirements to get your Tech Startup up and running in Nigeria.

The Incorporation Process

The first step in incorporating a company is to reserve a company name at the Corporate Affairs Commission (CAC). The proposed name must be confirmed to be available and acceptable for use by the CAC. Once a name has been reserved, such a name can be reserved for a period of 60 days.

After such approval for reservation, the Memorandum and Article of Association (MEMART) which sets out the type of business activities that the proposed company intends to engage in and the standard regulations and bye-laws for the company, along with all statutory forms will need to be subsequently filed at the CAC and also stamped at the Federal Inland Revenue Services (FIRS).

The minimum authorized share capital for a private limited liability company is the sum N10,000 (Ten Thousand Naira). Companies with foreign shareholding must have at least N10,000,000 (Ten Million Naira) as their authorized share capital in order to apply for a business permit and employ expatriates. This is mandatory for all companies with foreign shareholders. Depending on the business activities to be carried by the company, the share capital can vary based on the specific regulatory requirement of such business activity.

Generally, the Nigerian law allows private companies to have at least one (1) Director and (1) Shareholder, also, companies can be 100% foreign-owned and to have all foreign directors.

Permits and Approvals – Post Incorporation

After the successful incorporation of your company, you will need to:

1. Apply for any necessary permits and licenses required for the business activities that you wish to carry out. Some of these permits include business permits, expatriate quota approvals and immigration permits for non-Nigerian employees. Startups in the FinTech space will require industry-specific licenses from the Central Bank of Nigeria (CBN) for their various activities.
2. Procure a Certificate of Capital Incorporation (CCI) – This is in respect of equity investment in a Nigerian company, in cases where the investor is a non-Nigeria entity. The CCI is issued by a Nigerian Commercial Bank into which the funds for the equity investment are wired by the non-resident shareholder.
3. Other necessary post incorporation activities include registration for Special Control Unit against Money Laundering (SCUML) of the Federal Ministry of Industry Trade & Investment; Registration with Financial Reporting Council (FRC), Registration for Companies Income Tax and VAT with the FIRS.