NIGERIA LAW AND PRACTICE Contributed by: Chinyerugo Ugoji, Tiwalola Osazuwa, Rebecca Ebokpo, Jibrin Dasun, Peretimi Akinmodun, Onyinyechi Chima and Princess Otah, ǼLEX
also ensure that a business permit is obtained from the Ministry of Interior. The process for the registrations with the NIPC and Ministry of Interior involves completing application forms and the payment of application fees. Copies of incorporation documents, a tax clearance cer - tificate and other documents will be required for the process. The business registration with the NIPC is usually completed within 72 hours, while the business permit from the Ministry of Interior may take between five and 12 weeks (or longer) to process. It is an offence for a foreign entity to carry on business in Nigeria without incorporating a local company or obtaining exemption. Section 78 (2) of the Companies and Allied Matters Act 2020 voids any act of non-compliance with the requirement of registration of a company by a foreign investor. Section 79 of the Companies and Allied Matters Act 2020 also criminalises non-compliance by foreign entities, such that where an unregistered foreign company carries on business without applying for an exemption from registration requirements, that company and its officers and agents are liable to pros - ecution and, upon conviction, to the payment of a penalty as may be prescribed by the CAC in a Regulation. Where the offence is a continuing one, the company and every officer or agent of the company are liable to a further penalty, as the CAC shall specify by Regulation, for every day during which the default continues. 2.3 Commitments Required From Foreign Investors A foreign investor is expected to import the capi - tal for their investment into Nigeria as a form of commitment. Therefore, one of the documents required for approval of a business permit appli - cation is a copy of the company’s Certificate of Capital Importation, which is usually issued by a
commercial bank upon receipt of the capital of a foreign investor. A foreign investor also shows commitment by adhering to the regulations guid - ing foreign investment in Nigeria, which include obtaining prerequisite approvals and continuous compliance with regulatory bodies in their spe - cific sectors. 2.4 Right to Appeal Except for items on the negative list (see 2.1 Approval of Foreign Investments ), and subject to meeting the requirements for pre- and post- incorporation approvals, foreign investments are usually granted permits and approvals by the rel - evant authorities. There are no known cases of non-authorisation of a legitimate investor. While the non-authorisation of legitimate inves - tors is uncommon, the Companies and Allied Matters Act 2020 establishes the Administra - tive Proceedings Committee to address griev - ances arising from the operations of the Act. The inclusion of a provision enabling appeals to the Federal High Court creates an additional layer of recourse. This ensures that legitimate investors with an interest in any entity registered under the Act have means to seek just and fair resolution if they are displeased. 3. Corporate Vehicles 3.1 Most Common Forms of Legal Entity In Nigeria, the most common types of corporate vehicles are limited liability companies. A limited liability company is one in which the members’ liabilities are limited to the amount of unpaid shares they hold, particularly in the event of the company’s winding-up. Such companies can take the form of either a private company limited by shares or a public limited company.
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