How to register a Business in Nigeria

Registering a business in Nigeria is fairly easy. This is if you follow the right steps and procedures as set forth by the Company and Allied Matters Act (CAMA). The 1990 Act amended in 2004 and 2020 governs the corporate affairs of Nigeria and establishes the Corporate Affairs Commission (CAC) as the administration of the Act and the general management of companies and businesses.

Under the Act, there are different ways in which you can register your business. These include a sole proprietorship, a partnership, a company, and incorporated trustees. A sole proprietorship is run by the founder and the business is not seen as a separate legal entity, while partnerships, companies, and incorporated trustees are separate legal entities in which the liability can be limited.

Briefly, a company can be

• limited by shares
• limited by guarantee, or
• unlimited.

Both private and public companies can belong to the above classes. A partnership can also be:

• limited by shares (as set forth in the 2020 amendment) or
• unlimited.

The different types of businesses although differing slightly in requirements can be basically registered following the same process outlined below.

Requirements for Business registration in Nigeria.

1. Choose and reserve a business name
   Choosing a business name is essential to a business as it can project the image, core value proposition long before prospective customers have opportunities to speak with any member of the business. This
2. Complete the business registration forms
   Information Required
   1. The approved name of the business – This would have been previously validated by the name search
   2. Business Address
   3. Proposed Share Capital of the company
   4. Nature of business,
   5. Shareholders Details
      • Names, addresses, and occupations of the shareholders/business owners, and their signatures.
      • Occupation of SHareholders
      • Residential address
      • Mobile phone number
      • Email Address
3. Submit necessary documents
   Some of the documents required include
   • Identification Card
   • Taxpayers certificate
4. Pay the CAC filing fees
5. Submit the completed forms and documents.

This entire process provided all the required documents are available would take between two and three weeks to complete.

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For registering a company, the process outlined above differs as it is required to present the memorandum and articles of association (MEMART) of the company, share allocations/structure, the names of the directors etc.

Business Taxation in Nigeria

Every business is required to pay tax according to the rules guiding the land in which its operates in

In Nigeria, companies are taxed by the Federal Inland Revenue Service (FIRS). There are a couple of taxes that a potential founder should be aware of before starting a company. The type of tax charged can vary based on the nature of the business run by the company. The following are the main types of tax levied by the FIRS.

• Corporate income tax – charged on all profits of companies registered in Nigeria.
• Value-added tax – charged through the seller at a rate of 5%
• Capital gains tax – charged on the profits gained from trading specific types of assets known as chargeable assets.
• Education tax – charged at a rate of 2% of assessable income
• PAYE – Pay As You Earn is charged on employee income through the employer.

Personal income tax is not charged by the Federal Inland Revenue Service but rather by the State Inland Revenue Service. For more extensive coverage of Nigerian tax law visit the FIRS website.

Related: A Complete Guide to Corporate Taxation

Business Regulation in Nigeria

Depending on the nature of the business you are planning to start, you might need to register with one or more regulatory bodies. For example, if you intend to start a business that deals in consumables (food and drugs) you will need to register with the  National Agency for Food and Drug Administration and Control (NAFDAC).

Regulatory agencies related to different businesses

1. Federal Inland Revenue Service (FIRS).
   This regulating agency is in charge of assessing, collecting, and accounting for the taxes and all the sources of income that are received by the federal government. The FIRS manages the enforcement of tax laws and tax compliance by citizens. It also imposes fines and penalties on private entrepreneurs and businesses if they break the set rules. There are two taxes regulated by FIRS: value-added tax (VAT) and corporate income tax.
   
2. National Agency for Food and Drug Administration and Control (NAFDAC).
   National Agency for Food and Drug Administration and Control is the organization in charge of
   
3. Standard organization of Nigeria(SON)
   This body regulates the production of goods following standards imposed by the government due to the needs of consumers. It also manages the check of products for conformity, especially if those are intended for import to other countries. Its target mission is to improve the lives of Nigerians by providing products of better quality, which meet international requirements. This organisation is about the integrity of the products produced in your company.
   
   Other more specific regulators
4. Nigeria Communications Commission
5. National Office for Technology Acquisition and Control
6. Federal Competition and Consumer Protection Council