The Guide to Business Registration in Nigeria
If you're thinking of starting a business in Nigeria, it's important to know the best ways to go about registering your company. This guide will help provide an understanding of some basic steps that are involved, and some common pitfalls you'll want to avoid along the way.
Starting up a new business can be hard enough without worrying about legal requirements and red tape getting in the way. If you're looking for guidance on how to get started with filing your application or what documentation is required, this guide should help serve as a great resource!
Understand the Legal Requirements
The Nigeria Companies and Allied Matters Act (NCAM) is a regulatory body with responsibilities for overseeing the creation of companies and ensuring the registration of businesses. They must maintain a list of companies incorporated before the relevant date, and those names must be able to be traced back to the owners of the companies. Also, it's important that companies maintain certain types of assets such as investments, properties, and rights to acquire any of those assets.
Step one is to have a brief meeting with the NCAM, which will likely be done by your lawyer. They will provide a quick overview of the different types of documents required for your business. Some of the documents will need to be officially filed in the Corporate Affairs Commission (CAC) database.
Get All of Your Paperwork Together
In Nigeria, you'll need to get documentation together before you can even submit an application. This document, known as a C-Form, is necessary before you can start the actual registration process. This form must include all information from your incorporation documents (such as the company name, stock ownership, and address), and your financial statements.
You can get this form from the CAC office in your state's capital. In order to complete it, you'll need to provide any additional information that you feel is necessary. The process of completing the C-Form is rather involved, and you'll need to make sure you know exactly what is being asked of you. You can find an easy-to-understand guide here.
Register for a Corporate Name
Registration of a company's name is a critical step that is likely to take place before you can actually get your business operational. With many companies today being registered in multiple locations, knowing whether or not your company has been assigned a corporate name is crucial.
Advantages to Having a Corporate Name
If you are working from home or on a small scale, having a corporate name allows you to differentiate yourself from other companies in your field. This is useful if you have a specific target audience in mind, or you don't want to be mistaken for another company in your sector. If you need to name your business or alter its branding, having a corporate name is the best way to go about doing so.
Find an Employer Identification Number
Each business has an Employer Identification Number (EIN) which is used by businesses when they are required to report their tax returns to the Nigerian Internal Revenue Service. However, these numbers are not issued for free, so you will need to find a company that will provide them for you.
The use of EINs is not mandatory however. If you don't want to pay for the EIN, then the IRS suggests you should register the business directly with the Federal Ministry of Industry Trade and Investment. This will free up your EIN and allow you to use it whenever you need it. It may also help avoid paying hefty fees in the future.
You can get your EIN from the Nigerian Bureau of Public Enterprise (NBOE) here.
Apply for Start-Up Funding
You can apply for a business loan, credit line, even an overdraft to support your startup, but it's always a good idea to look at your options. If you haven't already, start looking into your options for funding your business. As mentioned in our guide on Funding for Small Business, companies like Golden Gate Ventures are there to help businesses like yours get off the ground. If you're in need of cash, take a look at the options and find the best option for you!
The Guide to Starting a Business in Nigeria
These three essential steps for starting a business in Nigeria are intended to help provide an understanding of the overall process involved in starting up in the country.
Local legal firms might be able to advise you on setting up a company, but if you're not confident in being able to manage a law firm yourself, going the crowdfunding route might be a good option. There are a few different options for this, from using crowdfunding websites such as Go Fund Me to getting a loan to support your company.
Learn How to Name a Company
You don't have to name a company a name that's taken from a familiar story. There's a wide range of creative options, from using names that you've personally come up with to using a company or branding that's popular and relatable to the industry. There are numerous sites that offer suggestions for different company names, or a company logo, including sites like Company Name Generator.
Seek Business Loans
Whether you're starting a business as a sole trader, or as the head of an incorporated company, it can be hard to get funding for your venture. While you can apply for bank loans, these are typically subject to stringent conditions and stringent qualification criteria.
In contrast, non-bank loans such as business loans are much easier to get. To increase your chances of success, your personal finances should be in order and your credit score should be in excellent or good standing. You'll also want to have all the necessary documents ready to present at the time of application.
Filing your application is an exciting and important part of the process, but it shouldn't get in the way of your day-to-day work.
Consider Tax Registration
This guide will highlight some of the most common and relevant tax registries to the business sector in Nigeria. In the UK, company tax is paid by the annual profit. The profits can be determined by an individual who is the shareholder or a limited company, with the owner being responsible for paying company tax for the year of profit.
A company is formed when you register a certificate of incorporation to register the company. This is a legal document that sets up the name and rights of the company, and then formally registers them to the public by putting the company's official seal on it. This seal signifies that the company is legally established and can legally exist as an incorporated company.
Register With the Nigerian Stock Exchange
Before you can start operating your business in Nigeria, you'll need to register with the Nigerian Stock Exchange. The Stock Exchange is one of the largest, most vibrant stock exchanges in the continent, and it is responsible for trading more than $50 billion in stocks every week. You'll need to register with the Stock Exchange if you want to sell your stock, buy stock, and trade stocks, and some of the steps involved in filing your application include:
Go to http://www.naija.com/ and register with the Stock Exchange. You can only register for one year, and after you complete the process, you'll need to renew it.
With the right help, it's possible to start up a business without experiencing too many challenges along the way. While the process of getting started may be a little daunting at first, the Guide to Business Registration in Nigeria will help provide some useful information for aspiring entrepreneurs.