STEPS TAKEN IN REGISTERING A PRIVATE COMPANY LIMITED BY SHARES.
Companies are legal entities which are distinct and separate from the persons of which they consist. A company may be created by registration under the Companies and Allied Matters Act or by Act of Parliament. It is essential that a company be registered under the law; however, there are several essential steps that must be taken before a company can be registered.
A company may consist of thousands of members (public companies) or of few persons (private companies). There are three types of private companies and they are: private company limited by shares; private companies limited by guarantee and private unlimited company. In Nigeria, the majority of businesses are private companies limited by shares.
In registering a private company limited by shares, the first step is to get its name registered and in Nigeria, after choosing a suitable name for your company it should be promptly submitted to the Corporate Affairs Commission website to check for its availability.
It is preferable to submit two names such that if one has been taken, the other might be available. A name can be rejected if it already exists, is vague and ambiguous, or it includes prohibited words such as ‘National’, ‘Federal’, ‘Government’ or ‘Holdings’ without special permission. The duration for the completion of the processing of the business name registration in Nigeria is usually a week.
Next is the registration of the details of the shareholders. In a private company, the shareholders must be a minimum of 2 members and a maximum of 50 shareholders. The founding members must not be less than 18 years old, unless at least 2 other shareholders are above 18. They must not be of unsound mind, disqualified by the Companies and Allied Matters Act or bankrupt.
After this has been done, the next step is preparing the Memorandum of Association. This step is best done by a lawyer. He/she is qualified for preparing the Memorandum of Association (MOA) and all the related documents based on the objectives of the company you wish to register. It is the lawyer’s responsibility to request the names of the initial subscribers, directors as well as the shareholders.
Each director or subscriber must be above the age of 18, of sound mind, and must not have been convicted of any crime. The directors are required to provide a means of identification for inspection by the Companies Affairs Commission (CAC).
After the documents have been duly prepared, you are required to fill a pre-registration form by the Companies Affairs Commission (CAC), mentioning all the necessary details, and submit it to the CAC again, together with all the required documents.
The documents required for company registration is a notice of the registered address of your business; the Memorandum and Articles of Association (MAA); the receipt of payment of your stamp duties; particulars, list, and consent of the first directors of your company and a statement of compliance by a legal practitioner.
The process of documentation is as follows: All directors must fill the Particulars of Director form ; One director must fill the Statement of Share Capital and Return of Allotment form ; One director and the Company Secretary have to fill the Notice of Situation/Change of Registered Address form; An individual or firm accredited by the CAC can fill the Declaration of Compliance with the Requirements of the Company and Allied Matters Act (CAMA) form; At least 2 directors have to fill the form appointing a Company Secretary for the company
After filling the registration form together with the preparation of the Memorandum of Association, the next stage is the payment of stamp duty done at an arm of the Federal Inland Revenue Services. The stamp duty is usually paid at a designated bank into the account of the Federal Inland Revenue Services. After the payment, the applicant proceeds to the Stamp Duty Commission, where the Memorandum and Articles of Association (MAA) with some of the incorporation forms are stamped.
After this, the filled forms and accompanying stamped documents are submitted to the CAC. The Certificate of Incorporation will likely be returned after about six weeks from the date of submission. The next step is to prepare the signed scan copy of your pre-registration documents mentioned above. . It must be further uploaded online as follows:
- Memorandum and Articles of Association
- Recognized form of identification for Director(s)/Subscriber(s) and Secretary
- Evidence of payment to CAC
The final step is to upload all the originals of the documents which have been scanned and after submission to the Companies Affairs Commission, the Companies Affairs Commission would inform you if there are any queries and if there is none, you will be informed once the registration had been completed and then you can proceed to receive your certificate.
WRITTEN BY: CHAMAN LAW FIRM TEAM
TEL: 08065553671, 08024230080