Trade and Investment
DOING BUSINESS IN NIGERIA (INCORPORATING A BUSINESS ENTERPRISE: Legal Framework for Business Activities)
Methods of Conducting Business: All business enterprises must be registered
with the Registrar-General of the Corporate Affairs Commission (CAC) (Registrar
of Companies). A foreign investor wishing to set up business operation in Nigeria
should take all steps necessary to obtain local incorporation of the Nigerian branch
or subsidiary. Business activities may be undertaken in Nigeria as a :
- Private or Public limited liability company;
- Unlimited liability company;
- Company limited by guarantee;
- Foreign Company (branch or subsidiary of foreign company)
- Sole Proprietorship;
- Incorporated trustees;
- Representative office;
INCORPORATING A BUSINESS ENTERPRISE: The Companies Allied Matters Act as Legal Framework
for Business Activities
The Companies and Allied Matters Act, 1990 (the Companies Act) is the principal
law regulating the incorporation of businesses. The administration of the Companies
Act is under-taken by the CORPORATE AFFAIRS COMMISSION (CAC) and its functions include:
- the regulation and supervision of the formation, incorporation, registration, management and winding up of companies.
- the maintenance of a Companies Registry;
- the conduct of investigation into the affairs of any company in the interest of share-holders and the public.
Minimum Share Capital and Disclosures in Memorandum of Association: The minimum
authorised share capital is N10,000 in the case of private companies or N500,000
in the case of public companies. The Memorandum of Association must state inter-alia
that the subscribers "shall take amongst them a total number of shares of a value
not less than 25 per cent of the authorised capital and that each subscriber shall
write opposite his name the number of shares he takes."; The law permits and acknowledges
the roles of attorneys and other relevant professionals in facilitating business
transactions provided, of course, that this "agency arrangement is disclosed".
Membership of the Company - Prohibition of Trusts: The Companies Act prohibits "notice
of any trust, express, implied or constructive" and such shall not be entered on
the register of members or be receivable by the CAC.
All categories of company shares
to carry one vote. Shares with "weighted" voting right are prohibited. All shares
(i.e. whether ordinary or preferential) issued by a company must carry one vote
in respect of each share.Consequently, preference shareholders are entitled to receive
notices and attend all general meetings of the company and may speak and vote on
any resolution before the meeting.
Disclosures To Be Published In Company Correspondence and Business Premises:
Every company is obliged to disclose on its letterhead papers used in correspondence,
the following particulars:
- Name of the company/enterprise;
- Registration/Incorporation Number;
- Names of Directors and Alternate Directors (if any)
In addition, the law requires companies/enterprises to ensure that the Certificate
of Registration be displayed in conspicuous positions at their principal and branch
Read On Trade and Investment......