Capacity to Incorporate a Company in Nigeria

Capacity to Incorporate a Company

× Capacity to form a company – the law empowers any two or more persons to form a company as long as they comply with the requirements of the CAMA.

× However, CAMA prohibits the categories of persons:

× persons that are less than 18 years of age, unless there are two other persons of full age who have already subscribed to the Memorandum of Association;

× persons of unsound mind who have been so found by a court;

× an undischarged bankrupt; and

× A person disqualified under Section 254 of CAMA from being a director of a company.

Incorporating a Company – Essentials

× Name:

× Prohibited Names - identical with an existing company; etc.

× Restricted Names – require prior consent of the Commission.

× Memorandum of Association - regulates the affairs of a company particularly as it relates to doing business with the outside world.

× Articles of Association - embodies the rules and regulations governing the internal management and administration of a company.

× Filling of prescribed form

Other Incorporation Documents

× Equally expected to be prepared and delivered to CAC are the following documents

× Form CAC 03: Notice of address of the registered office of the proposed company and head office if different from the registered office.

× Form CAC 07: A statement in the prescribed form showing the list and particulars of the first directors of the company together with their consent to be directors.

× Form CAC 02: A statement of the authorized share capital.

× Form CAC 04: A statutory declaration in a prescribe form of compliance with all requirements of the Act.

× Form CAC 01 (Reservation and Availability of Name).

× Form CAC 02A: This is the form of Return of Allotment. It is to be completed and delivered to CAC within one month of the allotment of the company’s shares.

× Other documents required to satisfy the requirements of any law relating to the formation of company

Companies with Foreign Participation

× An alien/foreign company may join in the formation of a company in Nigeria.

× However, such alien or foreign company must comply with all legislations in that regard.

× Modes or categories of alien participation in business in Nigeria are:

× Exempted companies. See S. 56 of CAMA.

× Portfolio investors having shares in a Nigerian company. See S. 26 Foreign Exchange Monitoring Act.

× Direct investors who bring in foreign currencies to do business in Nigeria.

× Legal framework to be complied with by foreign investors are:

× Companies and Allied Matters Act

× Investment and Securities Act 2007

× Nigerian Investment Promotion Commission Act

× Immigration Act

× Foreign Exchange(Monitoring) Act

× Companies Income Tax Act

× Industrial development( Income Relief) Act

× National Office of Technology Acquisition Promotion Act

Exempted companies

× These are foreign companies excluded by Law from registration as a Nigerian company.

× The class of foreign companies qualified for exemptions are:

× Foreign govt-owned companies involved exclusively in export promotion Activities

× Engineering consultants and technical experts on the invitation of the President or Government agency or individuals

× Foreign companies invited to carry out specific loan project for donor countries or international bodies

× Foreign companies on the invitation of the Govt of Nigeria to execute specific project. See S. 56(1) of CAMA.

× Exemption Order can be revoked by the President for good or sufficient reason etc.

× Foreign companies exempted are to file Annual Returns with the CAC. See S. 57 of CAMA

× The status of a foreign exempted company is an unregistered company. See S. 58 of CAMA.

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