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How Much To Incorporate A Company In Nigeria

How Much To Incorporate a Company in Nigeria: A Comprehensive Guide

Starting a business in Nigeria can be an overwhelming task, especially when it comes to the legal requirements involved. One of the crucial steps to take is incorporating your company to give it a legal status and protect it from potential legal or financial liabilities. The process of incorporating a company involves several fees and expenses, some of which can be a bit confusing. This article will guide you through the cost of incorporating your company in Nigeria, giving you a clear understanding of what to expect.

What is Company Incorporation?

Incorporation is the process of legally creating a corporate entity or company. It involves registering a business with the relevant government agencies and obtaining the necessary legal documents to operate. Incorporation provides a company with a separate legal identity, which protects the owners from personal liability in the case of any legal or financial issues.

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Steps to Incorporate a Company in Nigeria

To incorporate a company in Nigeria, you need to follow certain steps. These steps include:

Step 1: Company Name Reservation

Before incorporating your company, you need to reserve your company name with the Corporate Affairs Commission (CAC). This is to ensure that your desired name is available and doesn’t conflict with an already registered company. The cost of reserving a name with the CAC is ₦500.

Step 2: Preparation of Documents

After reserving your company name, you need to prepare the necessary documents for incorporation. These documents include:

  • Memorandum of Association
  • Articles of Association
  • Form CAC 1.1 (Application for Registration of a Company)
  • Form CAC 1.2 (Statement of Share Capital and Return of Allotment)
  • Identification documents of the directors and shareholders
  • Evidence of payment of stamp duties

Step 3: Submission of Documents

Once you’ve prepared the necessary documents, you need to submit them to the CAC for review and approval. The CAC will verify the documents and ensure that they comply with the Companies and Allied Matters Act (CAMA). The cost of submitting these documents to the CAC depends on the share capital of your company.

  • For companies with a share capital of up to ₦1 million, the cost of submission is ₦10,000.
  • For companies with a share capital of between ₦1 million and ₦500 million, the cost of submission is ₦10,000 plus ₦5,000 for every ₦1 million share capital.
  • For companies with a share capital of over ₦500 million, the cost of submission is ₦25,000 plus ₦7,500 for every ₦1 million share capital.
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Step 4: Payment of Fees

After submitting your documents, you need to pay the necessary fees to the CAC. These fees include:

  • Filing fees – this covers the cost of processing your documents and ranges from ₦50 to ₦1,000
  • Stamp duties – this is a tax on legal documents and is calculated based on the share capital of your company. The stamp duty rate is 0.75% of the share capital
  • Registration fees – this covers the cost of registering your company and ranges from ₦10,000 to ₦5 million, depending on your share capital.

Step 5: Collection of Certificate

After paying the necessary fees, you can then collect your certificate of incorporation from the CAC. The certificate serves as proof that your company has been legally registered in Nigeria.

How Much Does it Cost to Incorporate a Company in Nigeria?

The cost of incorporating a company in Nigeria varies depending on several factors, including the share capital of your company, the type of company, and the legal fees involved. On average, incorporating a company in Nigeria can cost between ₦50,000 and ₦500,000.

Here is a breakdown of the costs involved in incorporating a company in Nigeria:

  • Company name reservation – ₦500
  • Preparation of documents – varies depending on the legal fees involved
  • Submission of documents – varies depending on the share capital of your company
  • Payment of fees – varies depending on the share capital of your company
  • Collection of certificate – free

Conclusion

Incorporating a company in Nigeria is an essential step in starting a business. Although the process can be a bit complicated, understanding the costs involved can help you prepare financially. The total cost of incorporating a company in Nigeria depends on several factors, including the share capital of your company and the legal fees involved. By following the steps outlined in this article, you can successfully incorporate your company and start your entrepreneurial journey.

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FAQ

Q1: Can I incorporate my company without a lawyer in Nigeria?

Yes, you can. However, it’s advisable to seek legal assistance to ensure that your documents are properly prepared and comply with the Companies and Allied Matters Act (CAMA).

Q2: How long does it take to incorporate a company in Nigeria?

The process of incorporating a company in Nigeria can take between 1 to 4 weeks, depending on the efficiency of the CAC and the completeness of your documents.

Q3: Do I need to have a physical office in Nigeria to incorporate my company?

No, you don’t. However, you need to provide a Nigerian address as your company’s registered address.

Q4: Do I need to pay any annual fees after incorporating my company in Nigeria?

Yes, you do. Every company registered in Nigeria is required to file annual returns with the CAC and pay an annual fee of ₦4,000.

Q5: Can I change the name of my company after incorporation?

Yes, you can. However, you need to follow the necessary procedures outlined by the CAC, which involves paying a fee and submitting the necessary documents.