NIGERIA LAW AND PRACTICE Contributed by: Chinyerugo Ugoji, Tiwalola Osazuwa, Rebecca Ebokpo, Jibrin Dasun, Peretimi Akinmodun, Onyinyechi Chima and Princess Otah, ǼLEX
A private company limited by shares in Nigeria must have at least one director and a minimum issued share capital of NGN100,000, provided there are no foreign participation or sector-spe - cific capital or board composition requirements. The private company can be incorporated with a single shareholder, and its membership must not exceed 50 persons, excluding former or cur - rent employees of the company. However, where a private company has foreign participation, it is required to have a minimum of two directors and an issued share capital of at least NGN100 million. On the other hand, a public company must have a minimum of two directors and at least two shareholders, with no maximum limit on the number of shareholders. The minimum issued share capital of a public company is NGN2 mil - lion, subject to higher thresholds for certain regulated sectors. Private companies are well suited for establish - ing joint ventures, special purpose vehicles and subsidiaries of foreign entities, while public com - panies are ideal for raising capital from the public through the sale of shares on the stock market. Limited liability partnerships (LLPs) and limited partnerships (LPs) are other types of corporate vehicles available in Nigeria. LLPs are managed by the partners, and their liability is limited. Every LLP must have at least two individuals as authorised partners. LPs are managed by at least one general partner, whose liability is unlimited, while the liability of the limited part - ners is limited unless they actively participate in the partnership’s management. An LP cannot have more than 20 partners. LLPs are suitable for professional services and businesses look - ing for the flexibility of a partnership with the benefits of limited liability, whereas LPs are suit -
able for businesses where some partners want to invest capital without participating in the day- to-day management. 3.2 Incorporation Process The first step in incorporating a company is to check the availability of the proposed name and reserve the name. This is typically completed within 48 hours, except where the proposed name is not available. Thereafter, the pre-incorporation form is completed on the company registration portal of the CAC, and relevant documents are uploaded, including resolutions of the proposed shareholders. Subsequently, the filing fee and stamp duty are paid, after which the application will be submitted for the approval of the CAC. Upon approval, the certificate of incorporation and certified true copies of the memorandum and articles of association, along with a status report, can be downloaded from the portal. The incorporation process can be completed within a day or more, depending on the ability of the company to provide the necessary information and documents as well as the seamless opera - tion of the CAC’s company registration portal. 3.3 Ongoing Reporting and Disclosure Obligations Under Nigerian law, companies are required to make certain post-incorporation filings with the CAC and to ensure compliance with applicable annual renewal obligations. The law requires that the decisions of a private company regarding the following are filed with the CAC: • a change of name or address; • an alteration of the memorandum or articles of association; • the removal or appointment of directors; • an allotment or transfer of shares;
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