Corporate And Commercial law
FREQUENTLY ASKED QUESTIONS ON COMPANY FORMATION AND OPERATIONS IN NIGERIA:
Under the Companies and Allied Matters Act 2020, the minimum share capital for registration of a Company is N100,000.00 for Private Companies and 2,000,000.00 for public Companies.
No. The Companies and Allied Matters Act (CAMA) 2020 is to the effect that all shares of a Company must be allotted amongst the shareholders at the incorporation stage. Where the Company intends to issue shares to new subscribers, it can do so either by an existing shareholder transferring their shares to the new subscriber, or by increasing the shares of the Company and allotting to new subscribers.
Yes, under the Companies and Allied Matters Act 2020, a person can hold 100% shares in a Company where the Company is a Private Company, and the Issued Share Capital is not more than 1,000,000.00. However, for Companies with over 1,000,000.00 Share Capital, Public Companies or Companies with foreign participation, the minimum shareholders are 2 (two).
Private Companies are not allowed to publicly offer shares to the public for subscription. Most private Companies have pre-emptive clauses which gives the existing shareholders the right of first refusal on shares held by members of the Company. Only public Companies can undertake a public offer.
Not all Companies are required to pay income tax. However, all Companies are required to file their tax returns. Companies designated as Small Companies under the Finance Act 2021 (i.e. Companies with an annual turnover less than N25,000,000.00) are not required to pay Company Income Tax (CIT). They are however required by the Act to file their monthly tax returns. Big and Large Companies on the other hand (i.e. Companies with annual turnover of 25,000,000.00 or more) are required by Law to pay and file their CIT.
Companies TIN are usually attached to the Companies Certificate of Incorporation for new Companies. However, for Companies registered before 2021, you will need to visit the nearest Federal Inland Revenue (FIRS) Office to the Company’s registered address.
No. Under CAMA 2020, the Requirement for Company Secretary is not mandatory for a Company where the Company is a Private Company, and the Issued Share Capital is not more than 1,000,000.00. However, a Company Secretary is mandatory for Companies with over 1,000,000.00 Share Capital, Public Companies or Companies with foreign participation. Also, The Secretary for Public Companies must meet some other qualifications under CAMA 2020.
Yes, A foreigner can be a director or shareholder of a Company in Nigeria. In which case, the Company will be required to register with the Nigerian Investment Promotion Commission (NIPC). For such person to live and work in Nigeria, the Company will also be required to apply for Business Permit, Expatriate Quota and the Combined Expatriate Residence Permit and Aliens Card (CERPAC).
Yes. It is a mandatory requirement under CAMA. Newly registered Companies are required to file their initial Annual Returns not later than 42 (forty two) days after its first Annual General Meeting.
Failure to file Company Annual Returns for a consecutive period of 10 (ten) years is a ground for striking the name of a Company off the Corporate Affairs Commission’s Companies Register.Meeting