Registering your company or business is very important, if you are to lay a solid foundation to be a successful entrepreneur. True success as an entrepreneur begins when you consider and go for standard business practice guided by the law. This allows you to sleep sure without having your heart in your mouth as to the outcome of a deal and be always on the right side of the law concerning whatever business you intend to do.
Many avoid this for several unwarranted reasons. Some aimed at saving cost and taking short cuts to arrive at a distant place. Rather, what one should understand is that it’s not a matter of cutting cost, but a question of due process.
In many cases too, people do not know that it might not necessarily require the services of a lawyer, a chartered accountant or a chartered secretary to register the name of a business. On the other hand you might need the service of these professional people to do a thorough job for you, even when you could approach the Corporate Affairs Commission (CAC) by yourself and pick a form. You nonetheless need to fully understand the process involved and the terms of reference.
When you visited this site, I believe you have a goal to be your own boss. And we have set the pace to get you well informed. Since ignorance is said to be no excuse in law, and considering the fact that BUSINESSWEALTH GLOBAL RESOURCES LTD wholly believes in you being your boss, you will need to grow your business under standard condition. We decided to give you a step-by-step guide on the matter.
The body whose sole responsibility is to see to it that businesses exist in accordance with set codes of business practice in Nigeria is the Corporate Affairs Commission (CAC). Established February 11, 1991, with the promulgation of companies and allied matters Decree No. 1 of 1990. The CAC was charged with the responsibility to administer the decree, including the regulation and supervision of the formation, incorporation, registration, management and winding up of companies and small business. It is also responsible for the registration and management of Business names and incorporated trustees.
There are 3 classes of business registration that are being handled by the CAC. They include:
Business Name Registration: To register a Business name, the entrepreneur may not necessarily enlist the services of a professional such as a lawyer, a chartered accountant or chartered secretary. All you needs do, is to contact availability of name, in case you wants to use an abstract name (i.e. a name other than your own personal name), buy business name form, attach two passport photographs, pay filling fees, attach a certificate of proficiency (if you are a professional such as MBA, NMA, NUJ, NIPR, ASCON, etc) and then such a business is registered and dully recognized. The availability of name is a search conducted to ensure that no one else is already using your chosen name and to avoid litigations or confusion. They search period could be within 1–2 weeks.
The only class of business an entrepreneur could register on their own or by themselves is the business name registration. As for limited liability companies (both private and public), the persons involved must necessity enlist the services of professionals such as a lawyer, a chartered accountant or a chartered secretary to handle the incorporation for them. This becomes necessary, considering the technicalities involved, which could be better handled by professionals. For instance, printing of a memorandum and articles of association, payment of stamp duties to the Federal Board of Inland Revenue (stamp duties department), attestation of form CO1 in a high court before the document goes back to the commission – all these and many more detailed technicalities are the reasons why experts are compulsorily enlisted by companies.
For incorporation of private limited companies, a minimum of two directors is required while for public, the commission requires a minimum of seven. Limited liability companies are, according to the CAC corporate entities, or artificial persons while the directors are the natural persons that operate the businesses. This implies that such a company can sue and be sued without joining the directors or without dragging the person of the directors into the fray. The only way the directors could be dragged to court by an aggrieved persons or body concerned such as the NDIC is in the cases where the matter at contention involves fraud or misappropriation of funds. In such a case, you sue both the company and the directors “to lift the veil of incorporation” to identify who the real culprits are.
On the contrary, for business name operators, anything that happens to the business affects the director/directors directly on their individual bases. The minimum share capital for private companies is one million naira (N1,000,000), other contingencies such as business equipment, premises and so on notwithstanding.
To further the way intending bodies incorporate their business, the Corporate Affair Management Directorate (CAMD), recognize three categories of professional, lawyers, chartered accountants and chartered secretaries. They are being issue with accreditation ID cards by the commissions and such accreditation are being renewed every 12 months.
Currently the CAC have a complete informative directory of companies incorporated in Nigeria since 1912. The directory contains such vital information as name of company, RC Number, date of incorporation, office address and major objects of the company in questions.
When your business is fully registered, in whatever categories it is expected to pay the required tax such as Value Added Tax (VAT) and doing this varies with location and states. All registered companies have legal obligation and responsibilities that must be adhered to. For example, an annual return of companies, business name and incorporated trustees must be known to the CAC. According to section 370 of CAMD which provides inter–alia: “Every firm, company or individual carrying on business under a registered business name, shall not later than 30th day of June in each year, except the calendar year in which the business name is registered, deliver to the commission a return in a prescribed form, showing particulars of the firm, company or individuals, the nature of business carried on and the state of the financial affairs carried on by the firm, company or individual”
Requirement for the service of Corporate Affair Commission
(1). Limited Liability Companies
(a). Service: Incorporation of a Company (private or public)
Requirement: Availability of names, printing of Memorandum and Article of Association. Completion of Statutory forms. Payment of Stamp duty. Filing of Memorandum form and payment of fees in bank draft
(b). Service: Incorporation of a Company limited by Guarantee.
Requirement: Availability of names, printing of Memorandum and Article of Association. Completion of Statutory forms. Payment of Stamp duty. Filing of Memorandum and article of Association with statutory form and payment of statutory fees in bank draft. Consent of the Attorney General of the Federation in view of section 1(5) of Degree No. 32 of 1990
(c). Service: Converting a Private to a Public Company.
Requirement: (1). Application should be accompanied by the following: Special resolution to convert and register the company on company’s letter headed paper signed by a director whose signature is known in the Commission’s record. (2). Memorandum and articles of Association as required under CAMD for Public Companies.(3).Balance sheet as at the date of resolution or the preceding six months whichever is later. (4). Statement from Directors and Secretary certified on oath stating: That the paid up capital of the company as at the date of the application is not less than 25 percent of the authorized share capital and, confirming the Company’s balance sheet as at the date of the resolution or the preceding six months whichever is later. (5). Statutory declaration in the prescribed form by a Director and the company secretary that the special resolution required by section 50 has been passed, and that the company’s net assets are not less than the aggregate of the paid up share Capital and undistributable reserves. Copy of any prospectus or statement in lieu of prospectus to be delivered within the preceding 12 months to the Securities and Exchange Commission (SEC). (6). Payment of filing fees in bank draft.
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