Certain designated businesses have an industry-prescribed minimum share capital requirement in Nigeria. The corporate affairs commission notifies the general public of these requirements. These are also typically published on the websites of the various regulatory agencies in charge of regulating these industries.
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What are shares?
Shares are small pieces of ownership in a business. It represents the percentage of ownership in a company and can be a form of asset that can be given to investors in exchange for capital. The shares of a company are owned by the shareholders.
What is minimum share capital?
Minimum share capital is the minimum amount of assets a company must have. The purpose of this capital is to make sure that if a company goes bankrupt or has trouble with its finances, it has enough equity to pay its creditors. Therefore, various industries have specific minimum share capital requirements that a company must have before incorporating a business or going public.
What is a minimum issued share capital?
A company’s minimum issued share capital is the lowest amount of shares that the company can give to its shareholders. It mostly represents the monetary value of the shares that the company gives to its shareholders (which includes investors) in exchange for capital or other forms of consideration.
The major difference between the minimum share capital and the minimum issued share capital is that the former is simply the lowest value of shares the company has while the latter is the lowest value of shares that the company can or is permitted to give to its shareholders either as a gift; in exchange for capital investment; for any other form of consideration.
Minimum share capital for foreign companies in Nigeria
Foreign companies that seek to do business in Nigeria must register with the Corporate Affairs Commission and other relevant government agencies depending on the sector the company operates in. The minimum share capital requirement of a foreign-owned company in Nigeria is One Hundred million naira (100,000,000). This is in line with the revised handbook on expatriate quota administration. This is particularly the case if the foreign company would like to obtain expatriate quota for foreign staff in Nigeria.
Minimum share capital for companies in Nigeria
The Corporate Affairs Commission provides for a minimum issued share capital of N100,000 for private companies limited by shares and N2,000,000 for public companies limited by shares.
Industry-prescribed minimum share capital
Certain industries have a prescribed minimum share capital in Nigeria. The Securities and Exchange Commission (SEC), the Central Bank of Nigeria, the Corporate Affairs Commission and other regulatory authorities have listed minimum share capitals for various market operators, some of which are:
|Sector||Required Minimum Share Capital|
|1.||Agents of Foreign Airlines||1 Million|
|2.||Agricultural Seed, Productions, Processing, Marketing||10 Million|
|3.||Air Ambulance/Fumigation/Private Jet||20 Million|
|4.||Air Transport (International)||2 Billion|
|5.||Air Transport (Local)||500 Million|
|6||Air Transport (Regional)||1 Billion|
|7||Asset Management (Intangible Assets)||300 Million|
|8||Aviation (Air Transport Training Institutions)||2 Million|
|9||Aviation (Ground Handling Services)||500 Million|
|11||Bureau De Change||35 Million|
|12||Cabotage Trade||25 Million|
|13||Capital Trade Point||20 Million|
|14||Closed Pension Fund||500 Million|
|15||Commercial Bank with International Authorization||50 Billion|
|16||Commercial Bank with National Authorization||25 Billion|
|17||Commercial Bank with Regional Authorization||10 Billion|
|18||Commodities Broker||40 Million|
|19||Composite Insurance||18 Billion|
|20||Consultant (Partnership, Individual and Corporate)||2 Million, N500,000 and 5 Million respectively|
|21||Corporate Investment Adviser (Registrar)||150 Million|
|22||Corporate Investment Adviser||5 Million|
|23||Corporate/Sub Broker||5 Million|
|24||Finance Company||20 Million|
|25||Freight Forwarding||5 Million|
|26||Fund/Portfolio Manager||150 Million|
|27||General Insurance||10 Billion|
|28||General Micro-Insurance||200 Million|
|29||Individual Investment Adviser||2 Million|
|30||Insurance Broker||5 million|
|31||Issuing House||200 Million|
|32||Life Insurance||8 Billion|
|33||Life Micro-Insurance||150 Million|
|35||Market Maker||2 Billion|
|36||Merchant Bank||15 Billion|
|37||Microfinance Bank (National)||5 Billion|
|38||Microfinance Bank (State & FCT)||1 Billion|
|39||Microfinance Bank Unit (Tier 1)||200 Million|
|40||Microfinance Bank Unit (Tier 2)||50 Million|
|41||National Microinsurer||600 Million|
|42||Non-Interest Bank (National)||10 Billion|
|43||Non- Interest Bank (Regional)||5 Billon|
|44||Payment Service Bank||5 Billion|
|45||Pension Fund Administrator||1 Billion|
|46||Pension Fund/ Asset Custodian||2 Billion|
|47||Primary Mortgage Institution||2 Billion|
|48||Private Security Company/ Consultant||10 Million|
|49||Rating Agency||150 Million|
|50||Re- Insurance||20 Billion|
|51||Shipping Company/ Agent||25 Million|
|52||Sports Lottery||30 Million|
|53||State Microinsurer||100 Million|
|54||Stock Broker||200 Million|
|55||Stock Dealer||100 Million|
|56||Takaful Insurance (General and Family Takaful)||200 Million|
|60||Unit Microinsurer||40 Million|
|61||Venture Capital Manager||20 Million|
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