Business Registration Framework in Nigeria
Nigeria's business registration system is governed by the Companies and Allied Matters Act (CAMA) 2020, which replaced the previous 1990 Act. The Corporate Affairs Commission (CAC) serves as the primary regulatory body responsible for business registration and corporate governance in Nigeria.
The country's strategic position within ECOWAS and its economy valued at over ₦200 trillion NGN makes it an attractive destination for business establishment, with 1,216 active job opportunities currently available in the market, indicating robust business activity.
Types of Business Entities
Private Limited Company
The most popular business structure in Nigeria, suitable for small to medium enterprises:
- Minimum of 1 shareholder, maximum of 50 shareholders
- Minimum share capital: ₦100,000 NGN (to be verified)
- Limited liability protection for shareholders
- Separate legal entity status
- Required to file annual returns
Public Limited Company
Designed for larger enterprises with public investment:
- Minimum of 2 shareholders, no maximum limit
- Minimum share capital: ₦2,000,000 NGN
- Can raise capital from the public
- Must have at least 3 directors
- Subject to stricter reporting requirements
Business Name/Sole Proprietorship
Simplest form for individual entrepreneurs:
- Single owner operation
- Unlimited personal liability
- Lower registration costs
- Simplified compliance requirements
Partnership
Governed by the Partnership Act for joint business ventures:
- 2-20 partners (unlimited for professional services)
- Joint and several liability
- Partnership agreement recommended
- No separate legal personality
Step-by-Step Registration Process
Name Reservation
The first step involves reserving your company name through the CAC portal:
- Search for name availability on www.cac.gov.ng
- Submit 3 alternative names for approval
- Pay name reservation fee: ₦500 NGN (to be verified)
- Name reservation valid for 60 days
- Processing time: 24-48 hours
Document Preparation
Required documents for company registration:
- Memorandum and Articles of Association
- Form CAC 1.1 (Application for Registration)
- Form CAC 7 (Particulars of Directors)
- Form CAC 2.1 (Statement of Share Capital and Return of Allotment)
- Evidence of payment of registration fees
- Passport photographs of directors and shareholders
- Valid identification documents
- Proof of registered office address
Registration Fees Structure
Current CAC registration fees under CAMA 2020:
- Private Limited Company:
- Share capital up to ₦1,000,000: ₦10,000 NGN
- Share capital ₦1,000,001 - ₦5,000,000: ₦15,000 NGN
- Share capital above ₦5,000,000: ₦20,000 NGN
- Business Name: ₦10,000 NGN
- Public Limited Company: ₦20,000 NGN minimum
Regulatory Compliance Requirements
Tax Registration
Mandatory tax registrations with relevant authorities:
- Federal Inland Revenue Service (FIRS): Tax Identification Number (TIN)
- State Internal Revenue Service: State tax registration
- Value Added Tax (VAT): Required for businesses with annual turnover exceeding ₦25,000,000 NGN
- Withholding Tax: Registration for applicable businesses
Statutory Obligations
Ongoing compliance requirements under CAMA 2020:
- Annual General Meeting (AGM) within 18 months of incorporation
- Filing of annual returns within 42 days of AGM
- Maintenance of statutory registers
- Board resolutions for major decisions
- Audited financial statements for qualifying companies
Sector-Specific Licenses and Permits
Professional Services
Additional registrations required for professional services:
- Legal Services: Nigerian Bar Association registration
- Medical Practice: Medical and Dental Council of Nigeria
- Engineering: Council for the Regulation of Engineering in Nigeria (COREN)
- Accounting: Institute of Chartered Accountants of Nigeria (ICAN)
Industry-Specific Permits
Various sectors require specialized permits:
- Banking/Finance: Central Bank of Nigeria (CBN) license
- Telecommunications: Nigerian Communications Commission (NCC)
- Oil & Gas: Department of Petroleum Resources (DPR) permits
- Food/Pharmaceuticals: NAFDAC registration
- Manufacturing: Standards Organisation of Nigeria (SON) certification
Post-Registration Requirements
Banking and Finance Setup
Essential financial arrangements:
- Corporate bank account opening
- Deposit of minimum share capital
- Setup of accounting systems
- Insurance coverage as required
Employment Obligations
For businesses planning to hire employees:
- Registration with Pension Fund Administrators (PFA)
- Industrial Training Fund (ITF) registration
- Nigeria Social Insurance Trust Fund (NSITF)
- Compliance with Labour Act Cap L1 LFN 2004
Recent Reforms and Digital Innovation
The CAMA 2020 introduced significant reforms including:
- Electronic filing and digital processes
- Reduced compliance burden for small companies
- Introduction of Limited Liability Partnerships (LLP)
- Enhanced corporate governance provisions
- Simplified procedures for foreign investment
The CAC's digital platform has streamlined the registration process, with most applications now processed within 24-48 hours for complete submissions. However, processing times may vary depending on application complexity and completeness of documentation.
Professional Assistance and Resources
While self-registration is possible, many entrepreneurs engage professional services:
- Corporate law firms
- Chartered accounting firms
- Business registration consultants
- CAC-accredited agents
The total cost of business registration, including professional fees and statutory requirements, typically ranges from ₦50,000 to ₦200,000 NGN depending on the business structure and professional assistance required.