TYPES OF COMPANIES REGISTRABLE WITH THE CORPORATE AFFAIRS COMMISSION OF NIGERIA

TYPES OF COMPANIES REGISTRABLE WITH THE CORPORATE AFFAIRS COMMISSION OF NIGERIA

In our previous posts, we have talked about registration of companies with the Corporate Affairs Commission, and today we wish to talk about the different types of companies you can register in Nigeria.

This post holds a lot of details presented in a very concise manner, and we recommend you read this over and over again to be able to capture the information that lies in it. Better still, you can bookmark the page (for PC users) or save the page (for mobile users), so you can always have access to the post for further understanding.

Types Of Companies (Section 21 Of CAMA)

1. An incorporated company may be a company:

1.  LIMITED BY SHARES: ie having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them. OR


2. LIMITED BY GUARANTEE: ie having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up.


3. UNLIMITED: ie not having any limit on the liability of its members.

A company of any of the aforementioned types may either be a PRIVATE COMPANY or a PUBLIC COMPANY.

PRIVATE COMPANY (Section 22 Of CAMA)

1. A private company is one which is stated in its memorandum to be a private company.


2. Every private company shall by its articles restrict the transfer of its shares.


3. 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.


4. Where two or more persons hold one or more shares in a company jointly, they shall be treated as a single member.


5. A private company shall not, unless authorized by law, invite the public to:

1. Subscribe for any shares or debentures of the company; OR


2. Deposit money for fixed periods or payable at call, whether or not bearing interest.

PUBLIC COMPANY (Section 24 Of CAMA)

Any company other than a private company shall be a public company and its memorandum shall state that it is a public company.

Further Information on companies....

Unlimited Company To Have Share Capital (Section 26 Of CAMA)

As from the commencement of the Company and Allied Matters Act (CAMA), an unlimited company shall be registered with a share capital; and where an existing unlimited company is not registered with a share capital, it shall, not later than the appointed day, alter its memorandum so that it becomes an unlimited company having a share capital not below the minimum share capital permitted under section 99 (Authorised minimum share capital.) of Company and Allied Matters Act (CAMA) .

Company Limited By Guarantee

1. Where a company is to be formed for promoting commerce, art, science, religion, sports, culture, education, research, charity or other similar objects, and the income and property of the company are to be applied solely towards the promotion of its objects and no portion thereof is to be paid or transferred directly or indirectly to the members of the company except as permitted by the Company and Allied Matters Act (CAMA), the company shall not be registered as a company limited by shares, but may be registered as a company limited by guarantee.


2. As from the commencement of the Company and Allied Matters Act (CAMA), a company limited by guarantee shall not be registered with a share capital and every existing company limited by guarantee and having a share capital shall, not later than the appointed day, alter its memorandum so that it becomes a company limited by guarantee and not having a share capital.


3. In the case of a company limited by guarantee, every provision in the memorandum or articles or in any resolution of the company purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member or purporting to divide the company's undertaking into shares or interests shall be void.


4. A company limited by guarantee shall not be incorporated with the object of carrying on business for the purpose of making profits for distribution to members.


5. The memorandum of a company limited by guarantee shall not be registered without the authority of the Attorney‐General of the Federation.


6. If any company limited by guarantee carries on business for the purpose of distributing profits, all officers and members thereof who are cognisant of the fact that it is so carrying on business shall be jointly and severally liable for the payment and discharge of all the debts and liabilities of the company incurred in carrying on such business, and the company and every such officer and member shall be liable to a fine not exceeding N100 for every day during which it carries on such business.


7. The total liability of the members of a company limited by guarantee to contribute to the assets of the
   company in the event of its being wound up shall not at any time be less than N10,000.


8. the articles of association of a company limited by guarantee may provide that members can retire or be excluded from membership of the company.


9. If, in breach of subsection (6) section 26 of the Company and Allied Matters Act (CAMA), also item No 6 in this list , the total liability of the members of any company limited by guarantee shall at any time be less than N10,000, every director and member of the company who is cognizant of the breach shall be liable to a fine of N50 for every day during which the default continues.


10. If, upon the winding up of a company limited by guarantee, there remains after the discharge of all its debts and liabilities any property of the company, the same shall not be distributed among the members but shall be transferred to some other company limited by guarantee having objects similar to the objects of the company or applied to some charitable object and such other company or charity shall be determined by the members prior to the dissolution of the company.

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HOW TO REGISTER AN ENGINEERING/ENGINEERING CONSTRUCTION COMPANY IN NIGERIA

HOW TO REGISTER AN ENGINEERING/ENGINEERING CONSTRUCTION COMPANY IN NIGERIA

Hello and welcome to Busco Registrars Nigeria's post on How To Register An Engineering/Engineering Construction Company In Nigeria.

If you are reading this post, then you are either a young and passionate engineering graduate or undergraduate looking to setup an engineering/engineering construction company of your own sooner or later, OR an experienced engineer who has been into private engineering practice or working for individuals, but now wishes to be able to win bigger and better contracts with the Government, private/public organizations, institutions and corporate bodies, OR simply someone who is interested in knowing the nitty-gritties of incorporating an engineering company in Nigeria.

If you are any one of these people, then you are at the right place, and we highly recommend that you carefully read down to the end of the post.

What Is An Engineering Company And What Do They Do?

An engineering company ideally, is that which after due certification by the Corporate Affairs Commission and/or any other standards regulatory organization, is found capable of carrying out the business of engineering in all it's ramifications.

Furthermore,  a registered engineering company could be allowed to operate either as a civil engineering company, mechanical engineering company, electrical engineering company, petrochemical engineering company, marine engineering company, etc, or some times as a company undertaking works from more than just one branch of engineering.

Who Can Start An Engineering Company In Nigeria?

An engineering company can be established and registered by any two or more persons who have the requisite qualification and professional certifications for carrying out engineering practice in Nigeria.
For fresh engineering graduates, college certificate/s is usually substantial for use in setting up an engineering company. But presently, engineering companies cannot be registered in Nigeria without provision of professional certificates, for e.g those offered by the Council for the Regulation of Engineering in Nigeria (COREN, established by decree 55 of 1970 and amended by decree 27 of 1992), The Nigerian Society of Engineers (NSE), The Nigerian Association of Technologists in Engineering (NATE), and other relevant professional bodies for engineering regulation in Nigeria.

These professional certificates show professionalism on the part of the engineer, and therefore anyone who wishes to establish an engineering company that would be duly registered with the Corporate Affairs Commission, should have any of these certificates.

Taking Decision About The Kind/Category Of Company To Register

Company registration is done with the Corporate Affairs Commission (CAC) under three main categories:

1.) Business Name.
2.) Limited/Unlimited (Private/Public) Company.
3.) Incorporated Trustees.

An engineering company should be registered under the Limited /Unlimited (Private/Public) Company category. This is not an option, but a necessity. More explanations has been given about this category of companies in other posts.

However, some people who offer engineering services in Nigeria, do so under the business name category. This is a VERY WRONG  approach, because there are a lot of limitations to the growth of such engineering firms.

While this may seem to be working for you at the moment (ie if you are already using a business name for engineering practice or plan to do so), there is no gainsaying the fact that you would be needing to re-register the business name as a limited liability company sooner or later, else, your company would not be awarded bigger contracts from Government bodies and/or corporate establishments, that are much more rewarding financially and otherwise, than the petty works your business name could presently afford you (unless of course you do not expect your engineering establishment to grow).

Furthermore, re-registering a business name as a limited/unlimited liability company, takes more time, effort, and money, and most times you may not get approval to use the exact same business name for the limited company perhaps because someone else now has  that name as a trademark. HOW DISASTROUS!.....?

So why not simply get it right from the very beginning, and save the inevitable hiccups that come later?

So, having gotten the fact that what you need for an engineering firm is an incorporated company, let's look at other requirements for registering such a company with the Corporate Affairs Commission.

HOW TO REGISTER AN ENGINEERING COMPANY WITH THE CORPORATE AFFAIRS COMMISSION 

Company registration does not have completely fixed procedure or requirements, things change overtime, and you need to be aware of current requirements and procedures in order not to get embarrassed and  stuck at some point, Truth Be Told!.
This is not to say that all procedures change, there are still procedures that stay exactly or nearly the same.

For engineering company registration, professional involvement is required, and therefore there may be more changes overtime due to standards regulation and perhaps other necessary considerations.

However, to register an engineering company in Nigeria, having considered and satisfied the aforementioned requirements, you need to do the following:

1. Obtain  FORM CAC 1 (Availability Check And Reservation Of Name Form) from any CAC office nearest to you. Fill-in two proposed name of the company as well as other fields in the form. Submit the form to the CAC officer in attendance. You would be told when to come back to check if the proposed name/s has been approved or denied (usually within 3-4 days if things pan-out fine).


2. After the specified time, go back to the desk where you submitted the name search form, and check if one of your proposed names has been approved of. If one of the names is approved, then move on to the next step, but if denied, then try to find out the reason/s for which your proposed names were denied, and then repeat step (1), carefully selecting names that wouldn't get denied again. Name search alone could take several weeks if you do not chose names tactfully, or do not know how to chose names that work.


3. Pay the required fees which include payment for company registration and obtainance of Certified True Copies (CTC) of incorporation documents to the CAC (fee dependent on the category of company and the company share capital), payment of stamp duty fees to the Federal Inland Revenue Service (fee also dependent on the company structure and share capital), as well as other legal and/or professional charges as requisite.


4. Pay for and obtain the following forms from the Corporate Affairs Commission; FORM CAC 7 (Particulars Of Persons Who Are First Directors Of The Company), FORM CAC 2 (Statement Of Share Capital And Return Of Allotment), FORM CAC 2.1 (Particulars Of Person Who Is The Company Secretary Of A Company Or Any Changes Therein), FORM CAC 3 (Notice Of Situation/Change Of Registered Address), FORM CAC 4 (Declaration Of Compliance With The Requirements Of CAMA, to be filled by a legal practitioner/lawyer, chartered accountant or chartered secretary, and stamped by a commissioner of oaths/notary public).


5. Prepare the Memorandum and Articles Of Association of the company and get the company directors and/or shareholders to sign where necessary.


6. Submit the Memorandum and Articles Of Association, Form CAC 2 and the receipt/teller for payment of stamp duties in favour of the Federal Inland Revenue Service (FIRS). Then afterwards you would obtain a special FIRS payment receipt/ticket, which would be used as an evidence of payment and also for stamping and putting a seal on the submitted MOA, AOA and FORM CAC 2.


7. Submit all completely filled-out forms in step (4), registration/incorporation fee receipts, Information page of the company directors (means of identification of the company directors), the documents stamped by the FIRS, certificate/s of proficiency (COMPULSORY), to the CAC for assessment, stamping and final processing.


8. If all documents as submitted in the step above are verified okay by the CAC, then the required copies of the documents would then be submitted to the CAC officer on seat. This would be used for final processing after which the certificate of incorporation and Certified True Copies of incorporation documents (as requested) would be issued to you.

Congratulations! If all the above processes are done right, then you should should smile home with the certificate and documents of incorporation of your engineering company within 2-3 weeks maximum. 

But sadly, only a handful of individuals who plunge-in headfirst to register their company by themselves get to pull it off successfully without really messing things up. TRUTH BE TOLD! 

OUR CANDID RECOMMENDATIONS ON COMPANY REGISTRATION  

1. Company registration could be done online on the CAC portal, but we at Busco Registrars Nigeria highly recommend that individuals who wish to register their company, should use the direct services of the commission to avoid the regrets that always come with wrong use of the portal. However, the portal makes for ease of incorporation processes and can only be usable IF AND ONLY IF you really know what you are doing, else you may land into a serious mess along the line (invariably).
2. Unlike BUSINESS NAME REGISTRATION, COMPANY REGISTRATION requires the assistance of ACCREDITED PROFESSIONALS. 
3. In reiteration to the recommendation above, if company incorporation is what you wish to do (other than business name registration), then we recommend you employ the services of accredited professionals who have gone through the process over and over again and who have the processes of incorporation of companies all figured out right from the very beginning. This is to save you the RISKS and REGRETS that may come up later on if things go seriously wrong.

Investigations have shown that about 86% of those who try to register their companies on their own without adequate and prior knowledge of the process or by simply reading up stuff on company registration, end up making mistakes that cost them more money, time and resources.

Most of them end up making mistakes that means they have to pay fees more than once, take a longer process that saps more money from them in the process, employ the services of an accredited professional in the middle of their mess (which means more time and much more expenses), go to quacks that claim to know it all, and even spend several months or even years trying to register one company. TRUTH BE TOLD!

SO WHY NOT GET IT RIGHT AT FIRST? 

We at BUSCO REGISTRARS NIGERIA are greatly committed to helping you with incorporation of your company of any kind/category within record time and without the usual hassles and bottlenecks involved in registering companies in Nigeria.

Click HERE to  learn about our services and contact us for a free quote. 

Wanna be among the lucky 14% who pull it off on their own? then be our guest!

Simply LIKE US ON FACEBOOK and be our fan so you can request any information you need pertaining to business name and company incorporation in Nigeria.

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A Guide On How To Start A Business In Nigeria

A Guide On How To Start A Business In Nigeria

Welcome To Busco Registrars Nigeria's guide to setting up a business right here in Nigeria.

Presently, a lot of people in Nigeria have given up the chase on white collar jobs, and have embraced entrepreneurship instead. This however, is a great movement towards improving the nation's economy and providing more and more employment opportunities for the youth.

While most people are not aware of the amazing benefits that come with owning a business, some others have established one form of business or the other, and surprisingly, even people who do white collar jobs have businesses as well.

However, most people will gladly say, "I have a business" but the question here is not whether you do one form of buying or selling, but the question is, "Do you have a brand?" 

And What Is A Brand?

A brand is a product, service, or concept that is publicly distinguished from other products, services, or concepts so that it can be easily communicated and usually marketed. A brand name is the name of the distinctive product, service, or concept.

Brands are usually protected from use by others by securing a trademark or service mark from an authorized agency, which is The Corporate Affairs Commission in this regard.

How To Create A Business That Is A Brand In Nigeria

Step 1 - Conceptualizing The Business Idea

The first step in getting started with a business is to conceptualize an idea. This may be overwhelming for the most part, but is the most vital step in trying to setup a business. There are a lot of businesses that could be done here in Nigeria, but you have to be able to identify which business suits your passion.

For any particular business idea conceptualized, you should be able to ask yourself the following questions:
*  Why do I want to start a business?
*  What kind of business do I have passion for?
*  Would my business be able to provide solutions to a particular problem?
*  Can I be able to find a market for my business?
* Can I be able to market this business effectively, and what options are available for me to achieve this purpose?

If you can effectively answer these questions for a particular business idea, then that's the business idea that would be a brand for you.

Step 2 -  Gathering The Requisite Human And Material Resources

After  having conceptualized a business idea, the next step is to put together the requisite human and material resources for the business. For instance, if you are setting up a building construction business, you should be able to have qualified personnel, an office and the required basic equipments for running a building construction business, etc.
For any particular business, once you've had this figured out, then you can move to the next very vital step.

Step 3 - Getting Registered  With The Corporate Affairs Commission

This is yet another very important aspect of setting up a business, because it is what stands your business out from the crowd and gives you a brand name.
Business registration in Nigeria can be done under the following categories/business structures, and with the Corporate Affairs Commission (CAC):

a.  SOLE PROPRIETORSHIP (Registrable under the Business Name Category) 
 

A sole proprietorship is a business venture which has only one owner. Professionals, retailers and service providers can be sole proprietors. Sole proprietorships have no separate legal standing, in other words, the business is the owner and the owner is the business. Although this fact means that sole proprietors are liable for any debts incurred by the business, many consider the benefits to outweigh the disadvantages. The major advantages that make sole proprietorships the most common form of business ownership revolve around simplicity and economics.

Sole proprietorships could be registered with the Corporate Affairs Commission under the Business Name category alone.
 

b.  PARTNERSHIP (Registrable both as a Business Name or as a Limited/Unlimited Company, Incorporated Trustees, etc) 

This is another form of business entity. A partnership is a single business where two or more people share ownership. A minimum of 2 people and a maximum of 20 people are needed to form a Partnership Business in Nigeria as per the stipulations in the Companies and Allied Matters Act (CAMA).

Each partner contributes to all aspects of the business, including money, property, labor or skill. In return, each partner shares in the profits and losses of the business.

Because partnerships entail more than one person in the decision-making process, it’s important to discuss a wide variety of issues up front and develop a legal partnership agreement. This agreement should document how future business decisions will be made, including how the partners will divide profits, resolve disputes, change ownership (bring in new partners or buy out current partners) and how to dissolve the partnership. Although partnership agreements are not legally required, they are strongly recommended and it is considered extremely risky to operate without one.

TYPES OF PARTNERSHIPS       

There are three general types of partnership arrangements:

General Partnerships: 

In general partnerships,profits, liability and management duties are divided equally among partners. If you opt for an unequal distribution, the percentages assigned to each partner must be documented in the partnership agreement.

Limited Partnerships:

This form of partnership is more complex than general partnerships. Limited partnerships give partners the leverage to have limited liability as well as limited input. These limits depend on the extent of each partner’s investment percentage or share capital.

Joint Ventures: 

This type of partnership is similar to general partnership, but for only a limited period of time or for a single project. Partners in a joint venture can be recognized as an ongoing partnership if they continue the venture, but they must make filings to that effect to the relevant authorities.

In Nigeria, partnerships can be registered as a:

Business Name:

Where the partners do not wish to state their individual inputs into the affairs of the company on a written document, or where the partners do not look forward to raising capital through issuance of shares.

Limited/Unlimited Liability Company (Private or Public):

Where the partners wish to enjoy much more legal benefits, and also where the business wish to raise funds from issuance of shares.

Incorporated Trustees:

Where the partners do not come together for the purpose of making profits. This form of partnership could be seen in churches, alumni associations, None-Governmental-Organizations, and the likes.

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