How To Register A Business, A Partnership And A Company In Nigeria

Do you have dreams of starting up your own company; with a marketable name of your choice? Are you tired of being duped over registration of your company? Do you want to expand your company? Are you losing customers because your business name is being imitated?  If your answer to this is YES, then you are good to take this self-help guide. A guide to protecting you and your business outfit, aid your loan and fund accessibility in financial institutions, hype your profile for contract bids, ground your locus standi in litigations and equip you with enormous rights.

 

Presently in Nigeria, you can carry on a legal business pursuit under: a Business Name, Partnership or a Company among others. In either of the forms, you have varying degrees of rights, obligations and liabilities. With regards to the Companies and Allies Matters Act 1990; the function of registering business outfits is vested on the CORPORATE AFFAIRS COMMISSION (CAC), located at plot 420, Tigris Crescent, off Aguiyi Ironsi Street, Maitama, Abuja. Corporate Affairs Commission has branches in the 36 states of the Federation. CAC equally registers churches, associations, clubs and Non Government Organisations. For a guide on how to register clubs, churches and associations, click on this link ; A GUIDE ON HOW TO REGISTER A CHURCH AND AN ASSOCIATION IN NIGERIA

Note; you can only be helped in this corporate work by a professional like a lawyer or an accountant who is duly registered with the Corporate Affairs Commission (CAC). Consequently you have to diligently make sure that your professional is duly registered else you might be giving a fisherman money to by gold for you; what a loss!

REGISTRATION OF BUSINESS NAME.

A business name is an appellation being used by an individual or partners in pursuit of their business. It helps you to be easily identified against imitations and prevents the deception of the public. If you register such under the CAC the entire public is precluded from using such or imitating it. You can sue any person that imitates your business name such that the public might be confused; same was held in the Nigerian case of  NIGER CHEMIST V. NIGERIAN CHEMIST. Then close names like “nokla”, “nokiya”, “mokia” can not be allowed when “Nokia” is a registered business name. Consequently, with such registration your products, services, customers, property, goodwill and franchise are adequately protected from piracy and undue competition.

To register your business name in the CAC Ebonyi State office,(if its principal place of business will be Ebonyi State) you have to pay N200 to obtain a “FORM CAC 1” for availability check and reservation of name. If your chosen name is not already in use, offensive, deceptive and prohibited it will be reserved for you for 90 days; within which you are expected to finish your registration. On the completion of registration of   the name, the registrar will issue a certificate to that effect bearing the business name and its distinguishing state identification letters in bracket at the end of the name. This seems to be the cheapest of all registrations, with a lesser paper works. Note that a business name that is of only the surname, forenames and initial of an individual or partners and may be with words like “& SONS and & CO.” is not obliged to be registered with the CAC. So, with this you can evade a lot of corporate disturbances.

REGISTRATION OF PARTNERSHIP.

Partnership is the relationship that exists between persons with a common goal of carrying on business and making profit therefrom. It is a known fact that no sane man carries on partnership business with an enemy although most often in Nigerian the partnership turns into enmity later. So are you in a partnership without a legally backed agreement or the registration of such; then you are on a wild goose chase. What will be your faith when your partner loots your common fund and property or you want to quit?

To safeguard your investment you ought to have your partnership agreement written and duly registered. Unlike in company, a partnership is easier to form; since its paper work and requirements are not much. A partnership agreement should contain; “the names of the partners and firm; the business or object of the partners and place of the business; capital of firm; the profits and loss sharing ratio; account of the partnership, arbitration clause; date of commencement and duration of partnership”. In partnership the act of one partner is deemed to be the act of the other; since each partner is an agent of the other. Partnership will beget continuity in business, easy access to capital and other factors of production. Partnership can choose a business name and register same to aid its business. Professionals, artisans, merchants and others alike with common business interest are advised to partner and synchronize their resources towards an unquenchable economic success, on a well outlined legal frame work. Partnership shatters the shackles of sole proprietorship where there is no continuity of business, adequate human resources, proper accounting, mega capital and expansion plans; that is corporate slavery!

Note that; a partnership can not be of more than 20 persons unless such a partnership is being formed by professionals only; like lawyers and accountants. Where a partnership, which ought to be registered, is not duly registered, such partnership is illegal.

REGISTRARION OF COMPANY

Most people do believe that their business outfit is a company while in the actual sense it is a mere business name. Not until you understand your outfit you can not ascertain your rights and duties in the corporate world.

Company is the most important unit of a business organisation for modern economic activities. In Nigeria a company can be formed by at least two (2) persons who are not less than 18 years old, not bankrupt, not insane among others and in line with the provision of the Companies and Allied Matters Act, 1990. A company is complex and in turn offers a lot of protections outweighing other forms.  Among the benefits of turning your business outfit in to a company are; business continuity, protection of members and creditors, easy transfer of shares, legal personality and right to borrow and quotation on the stock exchange and access to public fund to say but the least.

The formation of a company entails strict requirements like business name check, filing of a memorandum of association, article of association and some other supporting documents. After the formation and registration with the CAC, the Registrar-General will issue a Certificate of Incorporation and same is to be displayed at the place of its business. Henceforth, the company is now a legal corporate personality (a juristic being) that can sue and be sued; and totally different from its owners (promoters and members) with overwhelming rights and duties as seen in the cases of Salomon V. Salomon and Lee V. Lee Farming Ltd. When the owners borrow for the company, there can not be held liable jointly and separately rather the company would be held. The owners (members) stand to function as the eyes, mouth, legs and hands of the company within the powers of the company. A registered company must either be a Private or a Public company that is Unlimited or Limited in Shares or Guarantee.

A Private Company has a membership of not more than fifty members, whose shares can not be easily transferred and it is not open to the public while a Public Company just as the name implies is open to all.

A Company limited by shares has an approved share capital which has been divided into shares of a fixed amount for its members (investors) to hold. The share capital may be paid up and unpaid that is callable. Shares are the unit of holding and ownership of an investor in a given company. The liability of the company can only be paid off by its capital and property and does not extend to the company owners and their own property. A share limited company must be either a public or a private company. The share capital for a private company is N10, 000 while that of a public company is N500, 000 and not less than 25 per cent must be taken by the subscriber (promoters and investors). A private company end with the word LTD while a public ends with PLC.

Company Unlimited by shares has a share capital subscribed but the liability of its members does not end there rather members a personally liable for the debts and liabilities of the company. Such a company ends with the word ULTD.

Company limited by Guarantee has no share capital and it is not formed for profit making and distribution among members rather its for promoting commerce, art, science, religion, sports, culture, education, research, charity or other similar object. The whole liability of its members is based on a guarantee that they each would contribute to the company’s assets which shall never be less than N10, 000 in the event of a winding-up.  It can not be registered without the authority of the Attorney-General of the Federation. Such a company ends with the letter GLTD.

Finally a private or public company limited by shares stands to be the best with an avalanche of benefits and protection to keep you in business. So won’t you rather incorporate you business and smile back home; like wise men do?

Thank you.

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Onyekachi Umah

Onyekachi Umah is a husband and a private legal practitioner with amazing experience in criminal law, human rights, intellectual property, transaction and regulation advisory, corporate, commercial and investment law and energy law as well as litigation and arbitration arising from them. He is a certified arbitrator both in Nigeria and the United Kingdom. He is a member of the Chartered Institute of Arbitrators (UK) and a Certified Conflict Management Practitioner. He is a member of prestigious “Young ICSID” of International Centre for Settlement of Investment Disputes (ICSID), Washington DC. Among other, he has a certificate in Law of Contract from a program of Harvard University, a certificate in International Environmental Negotiation from United Nations Institute for Training and Research, Geneva and recently, a certificate in Conflict Management from United States Institute of Peace, Washington, D.C. He also holds a master of laws degree from University of Jos and he is a doctoral student at the faculty of law, Nassarawa State University. 

He is the managing partner of a leading law firm; Bezaleel Chambers International. He is the founder and President of a free law awareness platform known as www.LearnNigerianLaws.com that promotes awareness and understanding of rights and laws of Nigeria (#SabiLaw) and offers free daily law tips (#DailyLawTips). Understanding the challenges of Administration of Criminal Justice in Nigeria, he dedicates his daily law tips every Mondays to promoting Criminal Justice (#CriminalJusticeMonday). Recently, he started a new series on Election Laws tagged (#SabiElectionLaws) to increase legal awareness on elections laws, policies and regulations in Nigeria. He is the convener of the Sabi Law Lecture Series (#SabiLawLectureSeries), travelling around Nigeria delivering free law awareness lectures. He also organises and sponsors a quarterly competition, titled "Sabi Law Video Challenge" (#SabiLawVideoChallenge) were Nigerians win money (over $130.00 per winner) for making videos of themselves talking on any law or right as a way to promote law awareness and have fun. To further promote legal awareness among Nigerians across the world, he started a law awareness show titled "Sabi Law With Onyekachi Umah, Esq" (#SabiLawWithOnyekachiUmahEsq) showing on social media platforms via @LearnNigerianLaws.   

Mr. Umah has written over Three Hundred (300) free to access articles and materials on law with a desire to enlighten the public. He is also the Assistant Secretary of Nigerian Bar Association, Capital Bar, Abuja and a member of the Rotary Club of Abuja, Metro (RCAM), District 9125. Among others, he is serving as a member of the Advisory Committee for Law Clinics Partnership for Reforming Pre-trial Detention in Kuje Prison Project funded by the United States Department Bureau for International Narcotics and Law Enforcement. He has been featured as the Legal Personality of the Week by This Day Newspaper (a leading national newspaper) on its September 11, 2018 edition and was featured on the NigeriaLawyer.com as the Legal Personality of the Week on November 14, 2018. He has won several honours and awards for his innovative legal practise across the world. 

 

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