INCORPORATION OF COMPANY IN NIGERIA

To incorporate a company with the Corporate Affairs Commission you need to put the following into consideration inline with the Companies and Allied Matters Act cap C20 Laws of federation of the Federal Republic of Nigeria.

Capacity of Individual to Form Company

A person or group of individuals will lack capacity to form a company if such captured in any of the following:

(a) he is less than 18 years 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 under sections 251(Restraint of Fraudulent Persons) and 252 (Prohibition of Persons Convicted of Fraudulent Offences from being Directors of Public Company) of this Act from being a director of a company.

(2) A person shall not be disqualified under paragraph (a) of subsection (1) of this section, if two other persons not disqualified under that subsection have subscribed to the memorandum.

(3) A corporate body in liquidation shall not join in the formation of a company under this Act.

(4) 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.

Types of Companies

The following are the types of companies: 

a. Private company

b. Public company

c. Unlimited Company to have Share Capital

d. Company Limited by Guarantee

(1) An incorporated company may be a company—

(a) having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them (in this Act termed “a company limited by shares”); or

(b) 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 (in this Act termed “a company limited by guarantee”); or

(c) not having any limit on the liability of its members (in this Act termed “an unlimited company”).

(2) A company of any of the foregoing types may either be a private company or a public company.

Private Company

(1) 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 bona fide 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 for the purpose of subsection (3) of this section be treated as a single member.

(5) A private company shall not, unless authorised by law, invite the public to—

(a) subscribe for any shares or debentures of the company; or

(b) deposit money for fixed periods or payable at call, whether or not bearing interest.

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.

Unlimited Company to have Share Capital

As from the commencement of this Act, 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 97 of this Act.

Company Limited by Guarantee

(1) Where a company is to be formed for the promotion of 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 this Act, the company shall not be registered as a company limited by shares, but may be registered as a company limited by guarantee.

(2) 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 or purporting to divide the company’s undertaking into shares or interest shall be void.

(3) 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.

(4) A company registered under this section 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:

Provided that- (a) if the Commission is satisfied that the memorandum and articles of association have complied with the provisions of subsections (1) to (4) of this section, it shall cause

the application to be advertised in the prescribed form in three national daily newspapers; (b) the advertisement shall invite objections, if any, to the incorporation of the company; (c) the objection shall state the grounds on which it is made and shall be forwarded to reach the Commission within 28 days of the date of the last of the publications in the newspapers; and (d) if any objection is made the Commission shall consider it and may require the objector and applicant to furnish further information or explanation and may uphold or reject the objection as it considers fit and inform the applicant accordingly.

(5) If- (a) after the advertisement, no objection is received within the period specified in subsection (4) of this section or, where any objection is received, the same is rejected, the Commission, having regard to all the circumstances, may assent to the application or withhold its assent; and (b) the Commission assents to the application, it shall register the company and issue a certificate of incorporation.

(6) If a 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 jointly and severally be 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 penalty of N250 for every day during which it carries on such business.

(7) The total liability of a member 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 N100,000.

(8) Subject to compliance with subsection (6) of this section the articles of association of a company limited by guarantee may provide that a member can retire or be removed from membership of the company by a special resolution duly filed with the Commission.

(9) If in breach of subsection (7) of this section, the total liability of the members of any company limited by guarantee shall at any time be less than N100,000, every director and member of the company who is cognisant of the breach shall be liable to a penalty of N100.00 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 association shall be determined by the members prior to dissolution of the company.

MEMORANDUM OF ASSOCIATION

Before any incorporation of company. It is required that presenter includes the Memorandum of association of the company before the corporation can approve the incorporation of that company.

The following are the requirements with Respect to the Memorandum of a Company

(1) The memorandum of every company shall state—

(a) the name of the company;

(b) that the registered office of the company shall be situated in Nigeria;

(c) the nature of the business or businesses which the company is authorised to carry on as may be categorized by the Commission, from time to time;

(d) the restriction, if any, on the powers of the company;

(e) that the company is a private or public company, as the case may be;

(f) that the liability of its members is limited by shares or by guarantee or is unlimited, as the case may be.

(2) If the company has a share capital— (a) the memorandum shall also state the amount of authorised share capital not being less than N100,000.00 in the case of a private company and N2,000,000.00, in the case of a public company, with which the company proposes to be registered, and the division thereof into shares of a fixed amount;

(b) the subscribers of the memorandum shall take among them a total number of shares of a value of not less than 25 per cent of the authorised share capital; and

(c) each subscriber shall write opposite to his name the number of shares he takes.

(3) A subscriber of the memorandum who holds the whole or any part of the shares subscribed by him in trust for any other person shall disclose in the memorandum that fact and the name of the beneficiary.

(4) The memorandum of a company limited by guarantee shall also state that—

(a) the income and property of the company shall be applied solely towards the promotion of its objects, and that no portion thereof shall be paid or transferred directly or indirectly to the members of the company except as permitted by or under this Act; and

(b) each member undertakes to contribute to the assets of the company in the event of its being wound up while he is a member or within one year after he ceases to be a member for payment of debts and liabilities of the company, and of the costs of winding up, such amount as may be required not exceeding a specified amount and the total of which shall not be less than N100,000.

(5) The memorandum shall be signed by each subscriber in the presence of at least one witness who shall attest the signature.

(6) The memorandum shall be stamped as a deed.

Form of Memorandum

Subject to the provisions of section 27 of this Act, the form of memorandum of association of-

(a) a company limited by shares;

(b) a company limited by guarantee; and

(c) an unlimited company, shall be as prescribed by the Commission, from time to time.

NAME OF COMPANY

Name as Stated in the Memorandum

(1) The name of a private company limited by shares shall end with the word “Limited”.

(2) The name of a public company limited by shares shall end with the words “Public Limited Company”.

(3) The name of a company limited by guarantee shall end with the words “(Limited by Guarantee)” in brackets.

(4) The name of an unlimited company shall end with the word “Unlimited”.

(5) A company may use the abbreviations “Ltd”, “PLC” “(Ltd/Gte)” and “Ultd” for the words “Limited”, “Public Limited Company”, “(Limited by Guarantee)” and “Unlimited” respectively in the name of the company.

Documents of Incorporation

(1) As from the commencement of this Act, a company shall be formed in the manner set out in this section.

(2) There shall be delivered to the Commission either in hard copy or through electronic communications —

(a) the memorandum of association and articles of association complying with the provisions of this Part of this Act;

(b) the notice of the address of the registered office of the company and the head office if different from the registered office:

Provided that a postal box address or a private bag address shall not be accepted by the Commission as the registered office;

(c) a statement in the prescribed form containing the list and particulars together with the consent of the persons who are to be the first directors of the company;

(d) a statement of the authorised share capital signed by at least one director; and

(e) any other document required by the Commission to satisfy the requirements of any law relating to the formation of a company.

Registration

(1) The Commission shall register the memorandum and articles unless in its opinion— (a) they do not comply with the provisions of this Act; or

(b) the business which the company is to carry on, or the objects for which it is formed, or any of them, are illegal; or

(c) any of the subscribers to the memorandum is incompetent or disqualified in accordance with section 20 of this Act; or

(d) there is non-compliance with the requirement of any other law as to registration and incorporation of a company; or

(2) Any person aggrieved by the decision of the Commission under subsection (1) of this section, may give notice to the Commission requiring it to apply to the court for directions and the Commission shall within 21 days of the receipt of such notice apply to the court for the directions.

(3) The Commission may, in order to satisfy itself as provided in subsection (1) (c) of this section, by instrument in writing require a person subscribing to the memorandum to make and lodge with the Commission, a statutory declaration to the effect that he is not disqualified under section 20 of this Act from joining in forming a company.

(4) Steps to be taken under this Act to incorporate a company shall not include any invitation to subscribe for shares or otherwise howsoever on the basis of a prospectus.

(5) Upon registration of the memorandum and articles, the Commission shall certify under its seal—

(a) that the company is incorporated;

(b) in the case of a limited company, that the liability of the members is limited by shares or by guarantee; or

(c) in the case of an unlimited company, that the liability of the members is unlimited; and

(d) that the company is a private or public company, as the case may be.

(6) The certificate of incorporation shall be prima facie evidence that all the requirements of this Act in respect of registration and of matters precedent and incidental to it have been complied with and that the Association is a company authorised to be registered and duly registered under this Act.

(7) The Commission may withdraw, cancel or revoke certificate of registration issued under this Act where it is discovered that the certificate was fraudulently, unlawfully or otherwise improperly procured.

 Effect of Registration

As from the date of incorporation mentioned in the certificate of incorporation, the subscriber of the memorandum together with such other persons as may, from time to time, become members of the company, shall be a body corporate by the name contained in the memorandum, capable forthwith of exercising all the powers and functions of an incorporated company including the power to hold land, and having perpetual succession and a common seal, but with such liability on the part of the members to contribute to the assets of the company in the event of its being wound up as is mentioned in this Act.

The take of Samuelleke Enterprise:

Samuelleke Enterprise is keen to helping you to go through all the stress of having to registration processes while you sit at the comfort of your house or office. All you need to do is to call us and give us instructions with necessary information. Call us on 07053113102 or send a mail to us via samuellekeenterprise1@gmail.com