Nigerian laws regulate business structures and registration in Nigeria. The Companies and Allied Matters Act (CAMA) regulates the formation and operation of different types of business structures in Nigeria and establishes a regulatory body known as Corporate Affairs Commission (CAC). The CAC is saddled with the responsibility of registering companies in Nigeria.
Types Of Business Registration in Nigeria
A. Sole Proprietorship
B. Limited Partnership
C. Limited Liability Partnership
D. Private limited company
E. Public Limited company
F. Public Company Limited by Guarantee
G. Private Unlimited Company
A sole proprietorship is a type of business structure in which an individual, known as the
sole proprietor, owns and operates a business. It is the simplest and most common form of business ownership. In this kind of business, the owner of the company is the same as the company itself and is responsible for any liabilities it may incur. The business owner also benefits solely from the profit.
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A limited partnership (LP) is a business entity with at least one general partner (who has unlimited personal liability) and one limited partner (whose liability is limited to their investment in the company). The general partners are responsible for managing the business and making business decisions to achieve the stated business goals. The limited partners, also sometimes called silent partners, are responsible only for investing in the business, not running it.
Limited Liability Partnership
A Limited liability Partnership (LLP) is a separate legal entity from its members who are only liable for amount of money they invest in the business plus personal guarantees. An LLP has both elements of partnerships and corporations.
According to Section 746(1) of CAMA, “A limited liability Partnership is a body corporate formed and incorporated under this Act and is a legal entity separate from the Partners”. It is basically a hybrid business structure that fuses the features of a partnership and a limited liability company.
Private limited company
This type of corporation is regarded as a “juristic person,” meaning that it has the right to sue and be sued in its registered name. A private limited company is considered a separate legal entity distinct from its shareholders. It can own property, enter into contracts, and sue or be sued in its own name. Shareholders are the owners of the company and hold shares representing their ownership. Directors are responsible for the management of the company affairs. A private limited company has authorized share capital, which represents the maximum value of shares the company is allowed to issue. The shareholders subscribe to shares by investing capital into the company, and their ownership is determined by the number and value of shares held.
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Public limited company
A public limited company (PLC) is a type of business entity that offers shares to the
public and has its shares traded on a public stock exchange. This type of company is required by law to publish its financial records annually for transparency and accountability.
Public Company Limited by Guarantee
These types of companies are otherwise referred to as “non-profit organizations.” They
are registered not to make money but for the promotion of commerce, art, science,
religion, sports, culture, education, research, charity, or other similar objects. They may have unlimited shares, but the owners’ (shareholders’) liability is limited. They also don’t
sell their shares on stock exchanges because they aren’t in the business of making
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Private Unlimited Company
This is a type of company where its shareholders have unlimited personal liability for the company’s debts and obligations. This means that the personal assets of the shareholders can be used to settle the company’s debts.
The procedure for registering a Company In Nigeria
a. Carry out a name reservation by choosing two suitable company names and
checking for their availability with the Corporate Affairs Commission.
b. Commence the company registration with the availability code provided by the Commission after the approval of the name reservation.
c. Prepare the Memorandum of Association and all related documents based on the
objects of the companies to be registered for this. (The Commission provides a
template for this on the registration portal).
d. Fill out the registration form on the Corporate Affairs Commission (CAC) portal to
be submitted alongside other required documents such as Particulars and means
of identification of the directors and shareholders of the company, Statement of
Share Capital and Particulars of Shareholdings, Utility bill (proof of address) for
directors and shareholders, Memorandum and Articles of Association (for companies limited by shares), etc.
e. After filling out the registration form, and confirming the information provided, the filing fee and stamp duty fees are paid online via the Remita platform.
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