Reserve a unique company name
Agency: Corporate Affairs Commission
The Corporate Affairs Commission (CAC) online system was launched on February 2nd, 2015. This platform enables online unique name reservation as well as enabling filing the incorporation forms for the entire registration process. As of March 2017, the process of reserving the company name can only be made online at: http://services.cac.gov.ng/.
Time and cost: Less than 1 day (online procedure), NGN 500 reservation fee
Prepare the requisite incorporation documents and pay the stamp duty
Agency: FIRS e-stamping portal
As of 2016, the possibility of e-stamping became available. As such, companies can complete the stamping online.
To prepare the requisite incorporation documents, the business founders must complete the statutory forms, prepare and print the memorandum and articles of association, and have them stamped by the Federal Inland Revenue Service (FIRS) or online.
The stamp duty payable on share capital (ad valorem) is 0.75% and NGN 500 for each additional copy of Memorandum and Articles of Association stamped.
Time and cost: Less than 1 day (online procedure), 0.75% stamp duty paid on share capital + NGN 500 for each additional copy of Memorandum and Articles of Association stamped (2 copies)
Sign the declaration of compliance before a Commissioner for Oaths or a Notary Public
Agency: Notary Public or Commissioner of Oaths
The declaration by the barrister or solicitor engaged in the formation of the company may be sworn to before a Notary Public for a fee of NGN 4,000 – NGN 5,000 or at any of the recognized courts in the country (Magistrate Court, the State High Court, or the Federal High Court) before a Commissioner for Oaths for a small fee of NGN 500 usually chargeable by the respective courts.
Entrepreneurs can also use the services of a CAC appointed lawyer.
Time and cost: 1 day, NGN 500 at the court or NGN 4,000 – NGN 5,000 with a Notary Public
Register the company at the Corporate Affairs Commission, pay registration fees and receive the income tax and VAT registration number pay registration fees
Agency: Corporate Affairs Commission
As of May 2017, companies now apply for company incorporation using form CAC 1.1. This new form replaced form CAC 4: Declaration of compliance, form CAC 2: Statement of share capital and return of allotment of shares, form CAC 7: Particulars of directors, and form CAC 2.1: Particulars of the company secretary. The registration is now done entirely online.
Entrepreneurs need to submit the following documentation to register the company:
- Two copies of the stamped consolidated form (CAC Form 1.1);
- Two copies of the stamped memorandum and articles of association of the company;
- Form of identification of the directors and shareholders (drivers license or national ID or data page of international passport);
- Form of identification of the company secretary;
- Copy of name reservation of the company.
The documents are uploaded via the platform docupload.cac.gov.ng.
Incorporation fees are:
- Registration of private company: NGN 10,000 for a company whose nominal share capital is NGN 1,000,000 or less + NGN 5,000 for each subsequent NGN 1,000,000;
- NGN 3,000 for certified true copy of memorandum and articles of association;
- NGN 2,000 for certified true copy of form CAC 1.1.
Lawyers are usually hired to undertake the administrative incorporation procedures. On average, a lawyer will charge NGN 60,000 to handle the entire incorporation process in this state.
Once the registration process is completed, a TIN is automatically generated and sent to one of the business founders by email. This number is the same for Income Tax and VAT.
The payment of statutory filing fees can now be processed online through Remita, an electronic payment platform.
Time and cost: 2 days, see procedure details
Make a company seal
Agency: Sealmaker
Section 74 of the Companies and Allied Matters Act (CAMA) requires every company to have a common seal.
Time and cost: 1 day, NGN 4,000 – NGN 6,000
Register for personal income tax PAYE
Agency: State Tax Office
All employers shall register with the relevant state tax authority for income tax withholding.
The PAYE Regulations of 2003 made pursuant to the Personal Income Tax Act provides that all employers are to register with the Lagos State Board of Internal Revenue Tax Office nearest to the registered company address for the purpose of remitting income tax deducted from their employees. The employer must within 6 months of commencing a business deduct tax from emoluments of employees and remit the amount deducted to any of the designated collecting banks.
The registration requirements are as follows:
- A copy of certificate of incorporation.
- List of staff and their annual salaries.
- Letter of application for registration.
- Corporate income tax and VAT tax reference number.
Upon completion of registration, an Employer’s Identification Number will be issued.
An employer who fails or refuses to register commits an offence and is liable on conviction to pay a NGN 25,000 fine in addition to the payment of arrears of the tax due.
Time and cost: 2 days, no charge
Register business premises with the Lagos State Government and pay the business premises levy
Agency: Bank
To register the company premises with the Lagos State Government, the entrepreneur heads to any nationalized commercial bank with some evidence of the business premises (utility bills, etc.) and pays the business premise levy to the account of the Lagos Inland Revenue Services (LIRS). The bank then issues a receipt bearing the Lagos State Government logo.
Business premises in an urban area of Nigeria are required to be registered on the payment of a NGN 10,000 registration fee in the first year of registration (NGN 5,000 per annum as renewal registration fees in the subsequent years).
For rural areas, the business premises registration fees is NGN 2,000 for the first year of registration (NGN 1,000 per annum as registration renewal fees for the subsequently years).
Time and cost: 1 day (simultaneous with previous procedure), NGN 10,000
