How to Start a Business in Nigeria – a definitive guide. Nigeria is a land filled with opportunity. Virtually anything one can lay his or hands on could turn into money making venture.
That dream that is spinning round your head could be what you need for financial freedom. No opportunity is small. All you need is to recognize it and work towards it.
Nigerian economic environment is a very fertile and fruitful one especially due to the vast human and material resources that God has endowed us with.
We have provided in this article everything you need to bring your dream of succeeding in business come to fruition. It will guide you through the technical and lawful barrier you need to surmount if you wish to integrate and register a new firm in Nigeria.
Whether you are a foreigner who wants to establish business in Nigeria or a Nigeria who is desirous of starting and progressing in from your small business enterprise to a bigger corporations, this article will provide you with useful insights.
The Nigeria population170 million provides an available and extensive market for anybody who wants to invest his money in any form of viable business in Nigeria.
Nigeria is basically a broadminded venture country without regulations that restrict setting up of businesses apart from those regulations that useful for the interest of the nation. This makes it easy for interested individuals to establish business in Nigeria.
There are opportunities for people to establish different forms of business like one man business or sole proprietorship, partnership business, and unincorporated joint business enterprise as well as limited and unlimited liability companies.
The Company and Allied Matters Act (CAMA) of Nigeria make provision for the establishment of the form of business organization listed below:
Limited Liability Company:
This is a company where the liability of its members is limited by the memorandum of association as to the amount, if any, unpaid on the shares correspondingly held by them.
Unlimited Liability Company:
This a company not having any frontier with regards to the liability of its members.
Company limited by Guarantee:
This is a company without a share capital. Such companies are often times a not for profit organization.
Business Name registrations for
Any two or more persons may form and incorporate a company in Nigeria as long as the laid down requirements for doing so are followed. With regards to foreigners, though, there are extra requirements which ought to be met prior to the establishment of a business can be in Nigeria.
A foreigner or foreign company may take part in the formation of a company so long as any law regulating the rights and capacity of foreigners to engage and trade in business in Nigeria is followed.
By virtue of the Nigerian Investment Promotion Act of 1995, non-Nigerians can without restraint invest and take part in the operation of any company in Nigeria, excluding taking part in those business enterprises present in the negative list of the Act.
Trades included in the negative are the production (not rendering of service) of arms, ammunition, military and paramilitary wears and other items that the Federal Executive Council may from time to time determine. “To invest” means to be a shareholder, whereas to “participate in the operation” means to manage the business venture.
A foreign investor may take part in any business venture in two ways when dealing with the area of investment that is not illegal:
A foreign investor may launch a business on his/her own or in a joint business enterprise with Nigerians by forming and registering the company at the Corporate Affairs Commission (CAC) www.cac.gov.ng, and after that registering with the Nigerian Investment Promotion Commission (NIPC) -www.nipc-nigeria.org.
The NIPC serves as a liaison between the foreign venture and appropriate government departments from which the foreigner may be required to obtain definite permits.
Even though all foreign companies wishing to do business in Nigeria ought to take essential steps to acquire incorporation as a distinct entity in Nigeria, a foreign company may apply to the Federal Executive Council for exemption from registration within Nigeria if it belongs to one of the following categories:
Steps you need to take to kick start your business and get it registered with the Public Affairs Commission:
|Steps||Course of action||Average period it will take to be completed||Costs Involved|
|1||Choose an exclusive company name that hasn’t been taken by any other company at the Corporate Affairs Commission||This takes roughly 5 days to be accomplished.||NGN 500 for application form|
|Step 2||Get the essential incorporation documents ready and pay the stamp duty||7 days||0.75% stamp duty is paid on share capital in addition to NGN 500 for every additional copy of Memorandum and Articles of Association stamped (2 copies)|
|Step 3||Sign the declaration of compliance (Form CAC 4) in the presence of a Commissioner for Oaths or notary public||1 day||500 naira at the court or between 4,000 – 5,000 naira with a Notary Public|
|Step 4||Register the business at the Corporate Affairs Commission (CAC) and Pay the required fees at the bank desk of CAC||Roughly 11 days|
|Step 5||Make a company seal||1 day (concurrent with preceding procedure)||NGN 4,000|
|6||Register for income tax and VAT at the Federal Inland Revenue Service||4 days||no charge|
|Step 7||Register for personal income tax PAYE at the State Tax Office||2 days (concurrent with preceding procedure)||no charge|
|Step 8||Register business structure or office with the State Government and Pay the business structure levy at a chosen bank||1 day (concurrent with preceding procedure)||NGN 10,000 is paid at the start of the first year and NGN 5,000 should be paid in succeeding years|
Registration of Your business with the Corporate Affairs Commission of Nigeria
Registering your business name with Corporate Affairs Commission of Nigeria can be difficult if you do not know all that it entails. We have provided simple steps to help you get this accomplished without hurdles.
Select a business name that is exceptional
While planning to register your business name ensure you choose a name that hasn’t been chosen. Choosing a common name will result in your choice of name being rejected since no two business organization will answer the same name. It is very essential to do this to avoid having to pay for another form or having to go over the entire process over and over again as a result of rejection.
Provide alternative business name
In the Corporate Affairs Corporation availability form, you’ll need to submit two back up names in case the name you have chosen is already taken by another business. You may as well bear a few more names in mind in case.
Know the form of business you want to register
As you want to register your business name, make sure you’re familiar with the type of business name you’re registering with CAC.
The N200 availability form is made up of the following forms of business: Private Limited Company, Public Limited Company (PLC), Unlimited Company (ULTD), Change of name, Company Limited by Guarantee (LTD/GTE), Business Name, and Incorporate Trustees.
Since what you are doing at this time is to get your business registered, merely select the column box by the side of the business name.
Desist from making use of correction fluid on the form and file.
To correct any mistake, merely cancel it out neatly with a line. This makes your form look nice and tidy and as well saves you time and money.
Avoid making use of a business name that need certificate backing Business names that incorporate words like Consultant, Guru, Expert, and Technician ought to be avoided.
You may be required to make available a certificate backing to certify that that you’re properly trained in the area of business concerned.
If you must make use of such name make sure that you have the required certificate to authenticate that or get a partner who has all essential certificates to make use of names like that. The certificates must be from accredited institution.
Try to follow up your application
Check to ensure that the name that you have submitted hasn’t been taken up by another person who may have submitted form after you but who was following it up very much.
Registering your business name does not mean that your business must take off immediately. If you take a couple of years after registration to fully actualize your business plans.
The years you spent planning and getting ready for the proper kick off of the business may as well be counted as years of business experience for you.
Again, a registered business enjoys more credibility in the eyes of customers than when the business is not registered.
Thus people are more comfortable paying into corporate account than individual accounts when they deal in business as a safety precaution incase anything goes wrong.