A
TERM PAPER REPORT
ON
TYPES AND REGISTRATION OF COMPANIES
WRITTEN BY:
OLADEINDE KAYODE JOHNSON
ARC/06/9482
SBMITTED TO THE COURSE LECTURE
PROF. OLU-OLA OGUSOTE
OF
THE DEPARTMENT OF ARCHITECTURE
FEDERAL UNIVERSITY OF TECHNOLOGY, AKURE
ONDO STATE.
COURSE: PROFESSIONAL PRACTICE AND PROCEDURE 1 (ARC 807)
JUNE 2013.
TABLE OF CONTENT
1.0……….Introduction
2.0……….Company and Applied Matters Act (CAMA) Chapter 59 Laws of the Federal
Republic of Nigeria 1990
3.0……….The Corporate Affairs Commission (CAC)
3.1……….Services offered by the Commission
3.2……….How to register your business name with Corporate Affairs Commission of Nigeria
4.0……….Types of Companies
4.1……….Private Company
4.2……….Public Company
4.3……….Capacity of individual to form a company
4.4……….Minimum Share Capital for companies
4.5……….Minimum Share Subscription
4.6……….Reservation of Name
4.7……….Prohibited Names
4.8……….Restricted Names
4.9……….Names requiring consent of the Commission
4.10……...Pre-incorporation services and requirements
4.10.1........Consent to use the word Group
4.10.2........Consent to use the word Holding
4.10.3…....Consent to use the word Consortium
4.10.4…....Foreign Nationals
4.10.5……Requirement of registration of company in Nigeria
4.10.6……Exemption of foreign companies
4.11……...Post-incorporation services and requirement
4.11.1……Search
4.11.2……CTC of filed documents
4.11.3……CTC of Certificate of Registration
5.0 ………Conclusion
References
1.0
INTRODUCTION
The types and registration of companies is a serious business according to the law of Federal
Republic of Nigeria. The inefficiency and ineffectiveness of the erstwhile Company Registry,
a department within the Federal Ministry of Commerce and Tourism which was responsible
for the registration and administration of the repealed Company Act of 1968 gave birth to the
Company and Applied Matters Act (CAMA) in January 1990.
The Corporate and Affairs Commission (CAC) under Company and Applied Matters Act now
regulate the formation and management of companies in Nigeria.
2.0 COMPANY AND APPLIED MATTERS ACT (CAMA) CHAPTER 59 LAWS OF THE
FEDERAL REPULBLIC OF NIGERIA 1990
On 2nd January 1990 there was the commencement of Company and Applied Matters act
(CAMA) to establish the Corporate Affairs Commission. The establishment of the Corporate
Affairs Commission as an autonomous body was as a result of the perceived inefficiency and
ineffectiveness of the erstwhile Company Registry, a department within the Federal Ministry of
Commerce and Tourism which was then responsible for the registration and administration of the
repealed Company Act of 1968.
3.0
THE CORPORATE AFFAIRS COMMISSION (CAC)
The Corporate Affairs Commission (CAC) was established under the Company and Applied
Matters Act (CAMA), which was promulgated in 1990 to regulate the formation and
management of companies in Nigeria. The Act provides the commission for the incorporation of
companies and incidental matters, registration of business names and incorporation of trustees of
certain committees, bodies and association.
The commission is a corporate body with perpetual succession and a common seal; capable of
being suing and being sued in its corporate name; and capable of acquiring, holding or disposing
of any property, movable or immovable, for the purpose of carrying out its functions. The
Mission of the Commission is to provide Excellent Service Delivery through the best
Technology, driven by a Motivated Workforce. The Vision of the Corporate Affairs Commission
is to be a World Class Company Registry.
The headquarters of the commission is situated at Area II, Garki, P.M.B, 198, Abuja, Federal
Capital Territory. Email cacabuja@gmail.com. Phone: 09-3142916 and there is an office of the
Commission in each state of the federation.
The Commission is the Agency of Government charged with, amongst other responsibilities, the
regulations and supervision of the formation, incorporation, registration and management of
Companies, Business Names and Incorporated Trustees. The Commission also regulates and
supervises the striking off and winding up of Companies, removal of Business Names from the
register and dissolution of incorporated Trustees. It carries out its functions through accredited
members of Association of National Accountants of Nigeria, Institute of Chartered Accountant
of Nigeria, Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN) and the
Nigerian Bar Association (NBA). They are called Agents of the corporation.
The commission is made up of 10 members headed by a Registrar-General, each member
representing the respective stakeholders, like the accountancy profession, the legal profession
and the business community.
3.1
SERVICES OFFERED BY THE COMMISSION
The services offered by the Commission include the following;
 Regulations and supervision of the formation, incorporation, registration and
management of companies, Business Names and Incorporated Trustees.
 Registration of changes, amendments and alterations in particulars of companies,
Business Names and Incorporated trustees.
 Repository of for statutory records of companies, Business Names and Incorporated
Trustees including annual reports of exempted foreign companies and annual return
of companies, Business Names and Incorporated Trustees.
 Searches
 Issuance of Certified true copies of certificate and extract of filed documents.
 Enforcement of compliance of companies, Business Names and Incorporated Trustees
with the provisions of the CAMA
 Conducting investigation into the affairs of companies, Business Names or
Incorporated Trustees.
 Registration of changes in share share capital, mortgages, debentures, charges, etc.
 Registration of appointment/discharge of Receiver/Manager
 Registration of appointment of Liquidator.
 Registration and supervision of the striking off and winding up of companies,
removal of Business Names from register and dissolution of Incorporated Trustees.
 Express incorporation of Company.
 Accreditation of Lawyers, Chattered Accountants and Chattered Secretariesas direct
users of the services of the Commission.
3.2
1)
2)
3)
4)
5)
6)
HOW TO REGISTER YOUR BUSINESS NAME WITH CORPORATE
AFFAIRS COMMISSION OF NIGERIA (CAC)
Choose uncommon business name.
Have an alternative business name in case your original name has been used.
Know the business models you are registering. The N200 availability form
contains the followings: Private Limited Company, Public Limited Company
(PLC), Unlimited Company (ULTD), Change of Name, Company Limited by
Guarantee (LTD/GTE), Business Name, Incorporated Trustees.
Avoid using correcting fluid on availability form and file.
Never use a business name that requires certificate back up. Business names that
include words like Consult, Guru, Expert, Technician etc should be avoided.
Always follow up on your business name form/application. Check after 2-3 weeks
to avoid risk of business name being taken by someone who submitted after you
but was following it up more closely.
Tips
Moreover, if you have a business idea and you go ahead to register the business name, even if
you spend 2 years perfecting the plan and raising the capital for it, for those 2 years from when
the business was registered can count for you as years of experience.
Secondly, you may have discovered that people includes you and I, feel more comfortable
paying for services and product into a corporate account with the name of an organization than
paying into individual accounts. If you register your company, you can use the documents to
open a corporate account with less stress.
For one, when it comes to doing serious business, many agencies will never take you serious if
your company is not registered.
4.0
TYPES OF COMPANIES
Basically, there are 3 types of companies;
A) Companies limited by shares having the liability of its members limited by memorandum
to the amount, if any, unpaid on the shares respectively held by them.
B) Companies limited by guarantee having the liability of its members limited by the
memorandum to such amount as the members limited may respectively thereby undertake
to contribute to the assets of the company to the event if it’s being wound up.
C) Unlimited liability companies not having any limit on the liability of its members.
Each of these types of companies could either be a private or public company classified as;
I.
Private Company limited by shares
II.
Private unlimited Company
III.
Public Company limited by shares
IV.
Public unlimited company
V. Company limited by guarantee
At incorporation all the legal objects of the company must be contained in it Memorandum and
Articles of Association. The legal objects are the major business objectives of the company and
the framework which it intends to run its business within the acceptance of the law.
The operational requirement of companies are governed by Company and Applied Matters Act
(CAMA) and several other laws such as the Nigerian Investment Promotion Act, the Company
Income Tax Act, Investments and Securities Act 1999, Foreign Exchange Act of 1995 etc.
4.1
PRIVATE COMPANY
A private company is one which is stated in its memorandum to be a private company. Every
private company shall by its articles restrict the transfer of its shares. The total number of
members of a private company shall not exceed 50, not including persons who are bonafide in
the employment of the company, or were while in that employment and have continued after the
determination of that employment to be, members of the company. Where two or more persons
hold one or more shares in a company jointly, they shall be treated as a single member.
A private company shall not, unless authorized by law, invite the public to subscribe for any
shares or debentures of the company; or deposit money for fixed periods or payable at call,
whether or not bearing interest.
Some examples of Private Companies in Nigeria are; MTN Nigeria, Airtel Nigeria, Globacom,
Aba Textiles Mills Plc, Abuja Electricity Distribution Plc, Acorn Petroleum Plc, Afprint Ngeria
Plc, Ecobank Plc, Fan Milk Plc, Hallmark Bank Plc, Industrial And General Insurance Plc,
Mainstreet Bank Limited, etc.
4.2
PUBLIC COMPANY
Any company other than a private company shall be a public company and its memorandum
shall state that it is a public company. A public company may;
I.
Have membership exceeding 50 members;
II.
Invite the public to subscribe for any shares or debentures of the company;
III.
Invite the public to deposit money for fixed periods or payable at calls, whether not
bearing interest.
Some examples of Public Companies in Nigeria are; First Bank Nigeria Plc, A.G. Leventis and
Co PLC, ABC Transport PLC, Access Bank Plc, Aiico Insurance PLC, Berger Paints Nigeria
Plc, Cadbury Nigeria Plc, Conoil Plc, Dangote Cement Plc, Dangote Flour Mills Plc, Dangote
Sugar Refinery, Diamond Bank PLC, Julius Berger Nigeria Plc, Zenith Bank, Wema Bank, etc.
4.3
CAPACITY OF INDIVIDUAL TO FORM A COMPANY
1. An individual shall not join in the formation of a company if;
a) He is than 18years of age; or
b) He is of unsound mind and has been so found by a court in Nigeria or elsewhere; or
c) He is an undischarged bankrupt; or
d) He is disqualified from being a director of a company
2. A corporate body in liquidation shall not join in the formation of a company.
3. Subject to the provisions of any enactment regulating the rights and capacity of aliens to
undertake or participate in trade or business, an alien or a foreign company may join in forming a
company.
4.4
MINIMUM SHARE CAPITAL FOR COMPANIES
Private Company
N10, 000:00
Public Company
N 500,000:00
Note:
Minimum share capital for certain businesses are as prescribed by the industry rtegulation
from time to time.
4.5
MINIMUM SHARE SUBSCRIPTION
25% of authorized share capital
4.6
RESERVATION OF NAME
60 days reservation period
4.7
PROHIBITED NAMES
Any name the Commission considers;
 Capable of misleading as to the nature and extent of its activities.
 Undesirable, offensive or contrary to public policy
4.8
RESTRICTED NAMES
Any name that;
 Is identical with or similar to the name of a registered company unless the registered
company is in the course of dissolution and consents in writing.
 Contains the words Chamber of Commerce unless it is a company limited by
guarantee.
 Would violate any existing trade mark or business name unless with the consent of
the trade mark or business name owner.
 Would violate any incorporated trustee unless with consent of the trustee.
4.9
NAMES REQUIRING CONSENT OF THE COMMISSION
Names that contain any of the following words;
 Federal, National, Regional or State Government or suggest patronage of Federal or
State Government, Ministry or department.
 Municipal or Chattered or suggest connection with any municipality or other local
authority.
 Co-operative or Building society.
 Group or Holding
 Any words suggesting temporary business arrangement e.g. consortium.
4.10
PRE-INCORPORATION SERVICES AND REQUIREMENTS
4.10.1
CONSENT TO USE THE WORD GROUP
Formal application for consent accompanied by the followings;
 Evidence of not less than 3 associate companies to form the Group company
 Evidence of common membership of the associate companies.
 Resolution of the associate companies consenting to the Group Relationship.
 Statement by majority of the directors of the proposed Group Company that the share
capital of the company shall not be less than the highest share capital amongst the
associate companies.
 Updated annual returns of associate companies.
 Updated section 553, CAMA filing of associate companies where applicable.
4.10.2
CONSENT TO USE THE WORD HOLDING
Formal application for consent accompanied by the followings;
 Evidence not less than 2 subsidiary companies
 Statement by majority of the directors of the proposed Holding company that the
company shall acquire more than half in the normal value of the share capital of each
of the subsidiaries within 90 days of its incorporation.
 Updated annual returns of subsidiary companies.
 Updated section 553, CAMA filing of subsidiary companies where applicable.
4.10.3
CONSENT TO USE THE WORD CONSORTIUM
Formal application for consent accompanied by the following;
 Evidence of not less than 3 companies to form the Consortium
 Evidence of registration in home country in case of a foreign company.
 Resolution of each company in the consortium consenting to the arrangement and
stating the object of the consortium.
 Statutory declaration to wind up the consortium in the memorandum of association of
the consortium.
 Inclusion of a clause to wind up the consortium in the articles of association of the
consortium.
 Inclusion of a clause to wind up the consortium in the articles of association of the
consortium.
 Updated annual returns filing by companies forming the consortium.
 Updated section 553, CAMA filing by companies forming the consortium where
applicable.
4.10.4
FOREIGN NATIONALS
Foreign nationals may hold 100 percent equity in business enterprise and undertake any type
business in Nigeria except the followings;
 Production of arms, ammunitions, etc.
 Production of and dealing in narcotics drugs and psychotropic substances.
 Production of military and Para-military wears and accoutrement, including those of
the Police, Customs, Immigration and Prison Services.
 Such other items as the Federal Executive Council may from time to time determine
on the negative list.
Note: Foreign nationals resident in Nigeria shall require residence permit before undertaking
in part or whole any business enterprise in the country.
4.10.5
REQUIREMENT FOR REGISTRATION OF A COMPANY IN
NIGERIA
The requirements for registration of a company include the followings;
 Evidence of approval of name and address.
 Duly completed set of incorporated forms.
 Duly stamped Memorandum and Articles of Association.
 Evidence of consent letter where applicable.
 Proficiency Certificate where applicable.
 Residence permits in case of resident foreigners.
 Photocopy of duly verified particulars of Directors, statement of share capital and Return
Allotment of shares together with Memorandum and Articles of Association for
certification as true copies
 Duly signed and sealed resolution of the company authorizing the subscription where a
company subscribers to the Memorandum and Article of Association.
 An affidavit explaining circumstances where there is difference in the name on stamp
duty receipt and name on incorporation documents.
4.10.6
EXEMPTION OF FOREIGN COMPANIES
Foreign engineering consultants and technical experts or companies may apply for exemption
from the requirement of registration if they are in Nigeria;
 Upon invitation by any tier of government for specific individual projects, or
 On behalf of a donor country or international organization for the execution of
specific individual loan project, or
 As foreign government-owned companies engaged solely in export promotion
activities.
Note: An application for exemption from registration shall be forwarded to the Secretary to
the Government of the Federation.
4.11
POST-INCORPORATION SERVICES AND REQUIREMENT
4.11.1
SEARCH
Requirement for search on a company file include the following;
 Duly completed application form
 Payment of fees.
 Updated annual return filing if the application is made on behalf of the company or
any of its directors or secretary.
4.11.2
CTC OF FILED DOCUMENTS
Requirements for obtaining certified true copies of documents in the file of a company
include the followings;
 Duly completed application form
 Payment of fees.
 Updated annual return filing if the application is made on behalf of the company or
any of its directors or secretary.
4.11.3
CTC OF CERTIFICATE OF REGISTRATION
Requirement for obtaining certified true copy of certificate of registration include;
 Application for CTC of certificate of registration.
 Affidavit duly sworn to by a director of the company explainingcircumstances of the
application.
 Updated annual returns filing.
 Updated section 553, CAMA filing where applicable
 Payment of fees.
There are also post-incorporation of services and requirement for Directorship, Allotment of
Shares, Transfer of Shares, Transmission of Shares, Change in Registered Office Address,
Appointment of Change of Secretary, Annual Returns, Annual Report by Exempted Foreign
Company, Statement of Affairs, Change of Name, Increase in Share Capital, Reduction in Share
Capital, Alteration of Memorandum and Articles of Association, Memorandum of Pledge or
Hypothecation, Charges, Deed of Release or Satisfaction of Charge, Appointment of
Receiver/Manager, etc.
5.0
CONCLUSION
The paper from the above analysis highlighted that were different rules, regulations and
procedures in company regulation and different types of companies permitted to be
established by law.
REFERENCES
Ogunsote, O.O. (2013). Lecture 1: Company Registration [Microsoft Word slides].
The Federal Republic of Nigeria (1990). Companies and Allied Matters Act.
Web Search
www.ajol/index.php/naujill/72538
www.cacnigeria/.../customer_guide
www.ehow.com/how_6597979_register
www.makemoneynigeria.com/reg
www.nigeria_law.org/companiesandappliedmattersact.htm
www.onlinenigeria.com/banks/ad.asp?