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PROCEDURE FOR INCORPORATING A BUSINESS ENTERPRISE IN NIGERIA BY A FOREIGN INVESTOR

 

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 undertaken by the CORPORATE AFFAIRS COMMISSION (CAC) and its functions include:

  1. the regulation and supervision of the formation

  2. Incorporation, registration, management and winding Up of companies.

  3. The maintenance of a Companies Registry;

  4. The conduct of investigation into the affairs of any company in the interest of shareholders and the public.

Minimum Share Capital and Disclosures in Memorandum of Association

The minimum authorized share capital is N10, 000 in the case of private companies of 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 authorized 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, etc. 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.Shares

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:

     

  1. Name of the company/enterprises;

     

  2. Address;

     

  3. Registration/Incorporation Number;

     

  4. 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 offices.