Thursday, 29 December 2016

Tax Obligations of Sole Proprietorships, Partnerships and Incorporated Companies

It is no longer news that the Nigerian government has become increasingly keen on enforcing compliance with tax laws. Therefore, it is important for business owners to have basic knowledge of Nigerian tax system. To start with, different levels of government make laws and regulations related to taxation of businesses and individuals, respectively. Hence,  a first step will be to understand the various taxes and levies  administered by Federal, State and Local Governments in Nigeria. 

A reference point would be the Taxes and Levies (Approved List for Collection) Act CAP T2 LFN 2004. Some interesting highlights include making it unlawful for Tax Collectors to mount roadblocks for the purpose of collecting taxes. In addition, there are limits to the use of Police to enforce tax collection.
For business owners seeking to know their tax obligations under the law, provided below is a succinct guide:
 
  1. Sole Proprietorships and Partnerships
Taxation of  sole proprietorships and partnerships are somewhat similar as both are subject to the Personal Income Tax Act (PITA), which makes provision for the direct assessment of the tax liabilities of the business on the sole proprietor or partners.

“Partnership” and “Sole Proprietorship” as business entities do not pay income tax. Rather, the tax (that is, the Personal Income Tax) is levied on the owner’s  share of profit after the distribution of the profit or loss made by the business. 


For a full understanding of your tax  obligations, you can consult the Personal Income Tax Act. 
  In summary:
  • Your partnership or sole proprietorship is not ‘itself’ chargeable to tax
  • What is chargeable to tax is the share of profit from the partnership or sole proprietorship.

2. Incorporated Companies
 
An incorporated  company, for tax purposes, is treated as a separate legal entity from the owners and therefore pays taxes accordingly. Based on the Company's Income Tax Act, the income of a company on which tax is payable are  the profits of a company from whatever source and irrespective of whether such profits are distributed as dividends or not.
 
Hence, your company should do the following as far as the tax law is concerned:
  • Find out if the income accruing to your company and its line of business is chargeable under the Companies Income Tax Act. You can share your line of business with me so as to enable me give a proper advice in this regard.


  • Pay 2% of your assessable profit as annual Tertiary Education Tax. This tax represents your company’s social responsibility to the Nigerian education sector.

  • If your company does any of the lines of business stated below, and have an annual turnover of NGN100M (one hundred million naira) and above, your company will be mandated by law to pay 1% of its profit before tax or the net profit figure as disclosed in your company’s account as the National Information Technology Development (NITD) Levy. The businesses affected are:
        1. Banking and Non-Bank Financial Institutions (NBFIs) such as capital market operators, mortgage institutions and microfinance banks


        2. Insurance Services and Brokerage

        3. Cyber and Internet Services

        4. Pension Fund Administration, Pension Management and allied activities, and 

        5. GSM Services and Telecommunication.
 
  1. General Tax Duties Affecting Sole Proprietorships, Partnerships and Incorporated Companies
  • Value Added Tax (VAT):
VAT is an indirect tax imposed on the supply of services and goods in Nigeria, except for items that are exempted by the VAT Act (please consult the Value Added Tax Act for more information). VAT is calculated at 5% flat rate. 
 
Every business owner in Nigeria (whether an incorporated company, sole proprietorship or partnership) is required to be an agent of the Federal Government to collect and remit VAT (Value Added Tax). Your duty is to include 5% of the total goods and services supplied as VAT on your invoice when sending to your clients/customers. When you receive payment, the VAT should be remitted to the Federal Inland Revenue Service (FIRS) on or before the 21st day  of the month following the month the goods or services were sold. For example, VAT collected in January should be remitted on or before 21st February.
  • Capital Gains Tax:
When your company (whether incorporated company, sole proprietorship or partnership) sells an asset, it must pay 10% of the chargeable gains accruing from the sales. For purposes of computation, you must be guided by the provisions of the Capital Gains Tax Act.
  • Withholding Tax (WHT):
WHT is an advance payment of tax and is deducted at source. By implication, your company (whether an incorporated company, sole proprietorship or partnership) merely acts as collection agent for onward transmission to the appropriate tax authority. Your company should deduct at source the WHT from gross payments made to individuals, partnership, community trustees, executors, family and body of individuals in respect of the following income sources:
    • All aspects of building, construction, civil work and related activities;

    • All types of contract activities or agency arrangements other than outright sales and purchase of goods and property in the ordinary course of business;

    • Professional services;

    • Technical services; and

    • Commissions

The current rates for withholding tax are as follows:


S/N
Types of Payments
Rates
(Companies)
Rates
(Individuals/ Partnerships)
1.
Interest, Rents & Dividend
10
10
2.
Royalties
10
5
3.
Building and Construction
5
5
4.
All types of contracts and agency arrangement, other than sales in the ordinary course of business.

5

5
5.
Consultancy and Professional Services
10
5
6.
Management Services
10
5
7.
Technical Services
10
5
8.
Commission
10
5
9.
Directors Fees
10
10

A good understanding of how tax system operates in Nigeria is necessary to the long term success of your business. It is therefore imperative that you embrace the knowledge shared in this article and use it to structure your business for purposes of effective compliance with government tax regulations.

Please note that the thoughts expressed in this article are the author’s opinion. This should not be used in making business or investment decisions and is not intended to serve as a tax advise.

Tuesday, 25 October 2016

How to Incorporate a Foreign Company in Nigeria… (Basic Preliminaries)

Do you own a foreign company and you desire to launch the company in Nigeria? Have you been researching on how to go about it? This article is written just for you.

Foreign participation is a welcome development in Nigeria. As a foreign company seeking to come to Nigeria, you can have a 100% ownership of your business in Nigeria without government interference.

There are similarities in the process of registering a foreign company and a purely local company (for instance, you need two or more shareholders to register your company in Nigeria). The key difference is that there are additional requirements to register and operate a foreign company.

Back to the question “what is a foreign Company”? For the purposes of this article, a foreign company is a company validly existing under a foreign law, but with the intention of carrying on business in Nigeria takes necessary steps to register as a legal entity in Nigeria.

You may say “okay, now this definition is really long, so what does it mean?” Put in a simple way, it means that if your company wants to come to Nigeria to do business- full time, then, you must register the company as a separate entity in Nigeria.

As a foreign company seeking to operate in Nigeria, you cannot have a place of business in Nigeria neither can you do business if your company is not registered. The only thing you can do is perhaps to have a place where you can receive notices and documents that are necessary to bring your company into existence in Nigeria.

You may ask at this point “what if I want to have Nigerians in my company?” this is a welcome idea because it will reduce the cumbersome requirements needed of a wholely foreign owned company.
To operate your foreign company in Nigeria, here are some of the things that you must apply for: 

  1. Certificate of capital importation (CCI)
  2. Expatriate quota
  3. Work permit
  4. Residence permit
  5. Combined Expatriate Residence Permit and Aliens Card (CERPAC)
  6. Subject to Regularisation Visa etc.
You can engage the services of a Business Advisory Law Office to help you to register your company and also process necessary documents from the appropriate body, after which you will be able to do business in Nigeria.

Some foreign companies are allowed to operate in Nigeria without the need for registration! I hope this does not come as a surprise to you, but, yes you can actually be granted exemption from registering in Nigeria before you do business.

There are four categories of foreign companies that can be granted exemption in Nigeria, they are:

  1. Foreign companies invited into Nigeria to execute specified individual project
  2.  Foreign companies invited to execute specific individual loan project on behalf of a donor Country or international organisation.
  3. Foreign owned government company engaged solely in export promotion activities
  4. Engineering consultants and technical experts engaged in any individual specialist project under contract with government in Nigeria.
If you fall under any of the above categories, you may engage a lawyer to write an application letter on your behalf to the President of the Federal Republic of Nigeria through the Secretary to the President. Such letter ought to contain the following details:

  1. Your company’s name;
  2.  Members of your company;
  3.  Names and addresses of your Directors;
  4. Stamped photocopy of your company’s memorandum and article of association; and
  5. The details of what your company intends to do in Nigeria.
Once your application is granted, your company will be exempted from the need to register, but it will continue to have the status of an unregistered company.

Where a foreign company is exempted under any bilateral treaty with Nigeria, it will continue to remain exempted from registering locally in Nigeria.

That your company is granted exemption does not mean that it is granted a licence to operate for life in Nigeria; exception is usually for a specified period, and after it expires, you will not be able to enjoy the benefits of an exempted company again.

Other than expiration, the president has power to revoke exemption clause particularly if it conflicts with any provision of a local law.

If exemption is however granted, it must be published in a Federal Gazette by the president.
Your exempted company is expected to keep some records with the Nigerian Corporate Affairs particularly its Annual Returns. You can reach me for further details on how to file annual returns of a foreign company in Nigeria.

Once you fail to register before carrying on business in Nigeria, everything you do may not receive the support of the local laws. That is not to suggest that you will not be able to sue to recover money, but there will be limitations to what you can do or not do.

There are trades which all companies (foreign and local) are not allowed to trade in. These include:
  1. Production of arms and ammunition
  2. Production and dealing in narcotics drugs and psychotropic substances
  3. Production of military and paramilitary wears including those of police, custom, immigration and prison service wears
  4. Such other items as the Federal Executive Council may from time to time determine in the negative list.

I hinted earlier that your foreign company may choose to have 100% full ownership of your business in Nigeria, otherwise, you may choose to involve a Nigerian in the ownership. From my experience in advising stakeholders of foreign companies with interest in bringing their business to Nigeria it is easy for me to strongly warn against 100% foreign ownership for obvious reasons, one of which is that if your company is unable to obtain expatriate quota, residence and working permit for its expatriates, they will be at risk of paying fines and getting deported.


ABOUT THE AUTHOR

Joy Abina is an Associate at Attorneys’ Haven L.P. She got her LL.B Degree from Rivers State University of Science and Technology and B.L. from the Nigerian Law School. Joy is passionate about core litigation practices and she combines that seamlessly with Business Advisory. You can reach her on 08144069217 or attorneyshaven@gmail.com

Monday, 17 October 2016

Interesting Reasons Why You Should Prepare Your Will

Do you want to be there for your family and loved ones after you are gone? If yes, then you need to prepare a WILL before demise. I know you are still young and vibrant and you are not expecting to leave anytime soon. Of course nobody wants to die, but sometimes, the unexpected do happen, this is the more reason you can’t afford to shy away from this very topic. What I have done is to help you approach this topic from the very real angle and the knowledge shared is based on real life situations and the provisions of Nigerian laws on the subject.

What do we mean by ‘WILL’?

A Will is a document by which a person gives his property to a beneficiary of his/her choice to take effect after demise. A Will is capable of being edited or even discarded at any time before the demise of the maker.

The maker of a Will is regarded in legal parlance as the “testator (male) /testatrix (female)”. A person may by a Will provide for the distribution of his/her wish or even property upon demise, either to one's children, husband or wife, relatives or donation towards charitable purposes as the case may be.

When a person makes a Will, the person is said to have died testate, but where none is made, such person is said to have died intestate in which event, the person's family will have to apply to the government for a letter of administration to be able to take possession of the benefits of the demised person. 

In Nigeria majority of adults see having a Will as something for old people anticipating death. Asking a young adult in Nigeria to have a Will is considered to mean a prayer for the death of the person. You may therefore hear an answer like “God forbid bad thing”; some may even tag you an enemy of progress.

Notwithstanding the popular stigma against making a Will, It is pertinent and cheaper to have a WILL. By so doing, you will cater for future contingencies, and keep your love ones in harmonious relationship while you are away, rather than putting them in disarray and disagreements over the inheritance you left behind. You can even instruct your loved ones about the befitting things you want them to do for you. What more? You will save your loved ones from the stress of asking the government for a letter empowering them to manage your entitlements (the grant of this letter sometimes takes more than a year to process).

Having laid a foundation for what I intend to establish, below are lucid points on why you should engage your lawyer to prepare your Will without any further delay:

a.    It makes your desires clear and leaves nobody in doubt of those desires. This way, you do not leave anybody guessing about what you would have wanted, and through that, you keep your loved ones in unity.

b.    You may desire to appoint those that you wish should be in charge of carrying out your instructions after demise; they are referred to as the EXECUTORS of your Will.

c.    It is cheaper to prepare your Will than leave your loved ones to be at the mercies of the government. If you really want to value this point, ask someone who has had to process the collection of Letter of Administration from the Government. For instance, I have interviewed clients before who could not access the account balance of a demised loved one because the money in the account is almost equivalent of the amount they will use to process a letter of administration from the government.

d.    A Will can be used to provide instructions for the mode of burial that the maker wants.

e.    If you have a heart for helping people from your wealth, particularly after your demise, your best bet is to put those specific instructions down in a Will. You can even specify the particular group or person that you desire to help in your Will.

f.       The persons that you wish are in charge of your instructions can begin to carry out those instructions faster when you make a Will.

Having considered the advantages of writing a WILL, it would be important to also consider the factors that will make your Will to be valid- because it will be unfair to wish to have a Will only for the Will to become nullified at the end of the day.

One of the key factors to be considered is that the person intending to make a Will must be of sound mind. This means that as at the time of making the WILL the writer of the Will has the ability to know what he or she is doing, know the extent of his or her properties, manner in which his/her properties are to be distributed, recollect the object of his/her bounties etc.

However, some diseases such as Alzheimer’s may prevent a person from remembering immediate family members and friends. The moment there is a doubt that the maker of the Will was not of sound mind as at the time of making the Will, then the Will becomes invalid.

Another requirement for the validity of a WILL is that the maker must be 18 years and above, hence it is only at that age and above that a person can validly write a Will. Although there are instances where someone that is below 18 years can do a Will, but we might not consider them because they fall outside the purport of this write up.

Once all the requirements are met, you can have your WILL prepared under the thorough supervision of your lawyer.

Please note that you can amend your Will as many times as you desire to.

Finally, a WILL is necessary for all, to ensure that we are able to decide all our wishes for ourselves and our loves ones even after we are no more. I would encourage us, that no one is too young or too old to have a Will.

For questions or contributions, you can reach me on 08064407638 or via email at oluwafemiakinluyi@gmail.com


Saturday, 6 August 2016

Free Investors' Guide to Registering Business in Nigeria

Upon the publication of my blog 6 Practical Hints on How to Create a Registrable Business Name in Nigeria, many readers have either called or mailed to find out the different business options that are registrable in Nigeria and the differences between those forms.

If you are considering starting a business and you want to explore the business opportunities in Nigeria (as a resident or a foreign investor) you may as well register a business brand for that purpose. You must therefore know the business options available to you and the most appropriate for your business; you must also know the legal implications emanating from each option and the benefits plus liabilities which the Business options come with.

When a person walks up to me and says “I want to register my company” (someone even sent me a mail while I was preparing this article), one of the things that usually come to my mind is whether the person really understands the context of that word “company”!

What I intend to do in this article is to help you to know the different business options available if you intend to register your business, and I will also explain some of the benefits and liabilities connected with those options.

Business Options Available Under the Nigerian Law

The principal body of law regulating business start-up in Nigeria is the Companies and Allied Matters Act. There are 2 forms of business options which every business person may choose from under the Law, they are:

1.    Company.
2.    Business name.

A company is defined under the Law as:

“…a company formed and registered under this Act or, as the case may be, formed and registered in Nigeria before and in existence on the commencement of this Act.”

On the other hand, a “Business Name” is defined as:

“… the name or style under which any business is carried on whether in partnership or otherwise”



These definitions may not make the best of senses to you if you are not a lawyer, but i will try to simplify it here and you can also view my article Amazing Differences between Business Name, and Company Registration in Nigeria for a concise explanation of the two options.

Without having to go into legalese, the key difference between a company and a business name is that a company becomes a person (in the eye of the law) the moment the company certificate is issued to you, whereas, if what you registered is a business name, you merely have a licence to do business in that particular business name once a certificate of registration is issued to you. By implication, a company has a life of its own (distinct from its investors), but a business name (being a mere permission to trade in that name) does not have a life of its own as it is merely your style of trading.

A company registered in Nigeria will usually end with one of the following expressions:


  • "LTD/Limited"    Meaning that the liability of the joint owners of the company is "Limited by shares"

  • "ULTD/Unlimited"    This means that the liabilities of the joint owners of the company is unlimited. The fact that each owner's liability is unlimited makes this kind of company undesirable for investors.



  • "LGTE/Limited by Guarantee"    This expression is used to refer to a company having the liabilities of its owners limited by what each person guarantee (promise) to pay in the event that there is a call on the owners to settle the company's liabilities. Please note that this kind of company does not have share capital and is generally not allowed to be operated as a profit making venture- these factors therefore makes the consent of the Attorney General of Nigeria necessary before such company can be registered. 


While the above explanation goes for the types of company arrangement under the Nigerian Law, broadly speaking, a company will either be a PRIVATE COMPANY or a PUBLIC COMPANY.

There are many differences between a private company and a public company, but here are the key differences:


  • If you start a public company, you will be able to sell your shares "publicly" (and this includes through public adverts and the floor of the Nigerian Stock Exchange), but if your company is a private company, you can only lure people to buy shares in your company by private means including one on one marketing otherwise known as "private placement"

  • Private companies do not permit for more than 50 joint owners (except in limited instances) whereas a public company is allowed to have as many joint owners as it wishes to have.



Business Name registration is the cheapest and most convenient form of registration that is available under Nigerian law. In this arrangement, you don't need a share capital to start your business, neither do you need shareholders, directors or company secretary. A single person intending to do business alone or partners can register a Business Name to drive the business.  Where you intend to operate a partnership, i will strongly advice that you engage a competent lawyer to prepare a partnership agreement for you and your partner(s).

If you are considering starting your business in Nigeria, you may be interested in checking my blog Important things to know about registration of business in Nigeria, and if you are a foreigner intending to do business in Nigeria, please watch out for my article titled Step By Step Guide for Foreign Investors Interested in Doing Business in Nigeria.   
CONCLUSION:

This article is designed for information purposes alone and is not intended to take the place of a legal advice. Readers are therefore advised to seek proper legal advice.


For more enquiries, you can contact me on my mobile contact: 08060623454, or address a mail to me via eyitayoogunyemi@gmail.com 

Saturday, 23 July 2016

BENEFITS OF STARTING YOUR OWN BUSINESS

Culled from Covenant Capital Blog  (an Initiative of Covenant Christian Centre, Lagos, Nigeria)....

Many people desire to start their own business and they wish to gather as many information as possible on how to go about the whole process.

To start with, there are several benefits for starting up a business in Nigeria- depending on the kind of structure you decide on. Some of these benefits include:

  • Separate personality: This means you are separate from the business you set up (particularly where it is a company that is started). For example, Abimbola starts MonaMatthew Limited, but Abimbola is not MonaMatthew Limited; MonaMathew Limited can sue and be sued, it can own landed properties and so on, and it is considered to be an artificial person capable of enjoying most of the benefits of a natural person.
  • Depending on the structure of your business, it can attract investors; A fascinating business idea or an existing business can attract lots of investors based on the structure of the business. With that kind of opportunity, you can diversify and also expand your business.
  • There is limited liability connected to Value Added Tax. By implication, the tax and other obligations are on the company and not on you as a private person.
  • It affords you perpetual life. In other words, the business can outlive you. You can therefore decide to retire while the business continues because there is an established value.
  •  If what you started is a company, you will have the opportunity to add your shares and other benefits in the business to the list of benefits to be divulged or willed out upon your demise. Therefore, you can divulge shares and other benefits to your family, your children, or other persons that you desire to assist.
  • It gives you control. Where in particular the business that you started is sole proprietorship, you do not need to consult anyone before you can control your business; you have absolute control over the number of staff you want in your business; you can hire and fire staff without any consultation as such; you have control over what you want to produce, when, and where.

Having identified some of the benefits of starting your own business, you may wonder next on the kinds of business structures that are available in Nigeria, and also on your own best option. Some guides are provided below:

1.     There is sole proprietorship business: As the name implies, this kind of business refers to one man/woman ownership of the business. For sole proprietorship, you are the business and the business is you. You are the boss of the business; you have all the control you want over the business except for some interference by the government. In other words, you bear the risks alone, and you enjoy the profit alone.

2.     The partnership: if you are not capable on your own or you like to have other person(s) come together with you to run the business, you can invite one or more partners to join you in the business administration. The law gives room for 20 people entering into partnership; while in law firm or accounting firm, you can have more than 20 people. In this kind of business structure, all the risks (as well as the profit of the business) will be shared amongst the partners.

3.     Limited liability company; it could be public or private limited liability company; both are regulated based on their membership. For private limited liability company, you can only have 50 members (although, there are exceptions); but for public limited liability company, you can have as many members as you decide on. Either ways, your liability is limited only to the extent of your unpaid shares.

4.  Unlimited Liability Company: This kind of structure is uncommon. Unlike limited liability company, the liabilities of members are unlimited and they are liable separately and jointly. By implication, in the event, for instance, that the company has accrued liabilities and it is being wound-up, the creditors can go after any or all of the members together.

5.  Non-profit or Non-governmental organization: This includes charity organization, cooperative societies as we have amongst taxi drivers, farmers, and so on. The interesting thing about this kind of structure is that the aim is not to transact business and make profits.

The most common structures in Nigeria for businesses that are going to be profit making ventures are the business name, and the Limited liability Company.

The business name could either be set up as sole proprietorship or partnership.

For sole proprietorship, you must bear in mind that you are the business, everything you will do is about the business, you have complete control of the business- but it may be difficult for you as a sole proprietor to raise a substantial capital for the business, and you are not also guaranteed that your business will continue- which means succession on the business is not guaranteed as a sole proprietorship business owner.

As for partnership, financial commitments are shared amongst the partners; where you seek to operate one, you and your partners must share the load of profit and every other benefit that come out of the business and the risks. The principal issue is where dispute arises in the business and the partners are put to the test of carrying on together.

Lastly is the limited liability company structure which benefits hinge on the facts that the company is a separate legal personality from its members, it can transact business in its name, it can sue and be sued too, and there is perpetual succession of the business, plus the brain of the business which is referred to as Board of Directors. Conversely however, the tax liabilities on companies are higher, and companies are obliged to keep records and file annual papers and audited report.

From all stated, you may agree that the decision on which business structure to adopt has to be made as early as possible because not all the structures will be appropriate for the kind of business that you intend to run.




Sunday, 15 May 2016

Important things to know about registration of business in Nigeria

Many businesses are registered with the Corporate Affairs Commission, but it is also true (at least in practice) that not all businesses are registered. As a matter of fact, the common notion is that registration has little or nothing to do with the success of a start-up business.

If that is the case, does it leave anything to be desired about registering a business? Are unregistered businesses legal? Are there advantages that registered brands stand to benefit? Are there obligations attached to a registered business? When is the appropriate time to register a business? What are the requirements in registering a business? These questions and some others will be answered in this article.

Just before we start, it may be essential for you to understand the differences between a Business name registration, and company registration, I will therefore recommend that you read my article Amazing Differences between Business Name, and Company Registration in Nigeria before you continue with this.

If you need help in creating a Business name, you may view my article 6 Practical Hints on How to Create a Registrable Business Name in Nigeria

Do I need to register my business brand?

COMPANY:
BUSINESS NAME:
Yes, you must register your company. OTHERWISE, your business will not be considered as a corporate body, and will not be able to exercise the powers and functions of an incorporated company (i.e. you will not be able to enter contracts in the name of the company, sue or be sued in company’s name, neither will your unregistered company be considered as an artificial person etc.)

You must register your business name EXCEPT you are using your actual names- your surname with or without your other true names or the initials of those names- as a business name, then, it does not have to be registered.

In addition, if there is an addition that merely indicates that the business is carried on in succession to a former owner of the business; or where two or more partner have the same surname and decided to add an “s” at the end of that surname; or where the business is carried on by a receiver or manager appointed by any court, registration will not be necessary.


                                               
WHY YOU MAY NOT BE ABLE TO DO WITHOUT REGISTERING YOUR BUSINESS NAME:

1.    Banks usually request for certificate of business registration before opening a corporate account for corporate clients. By implication, you may not be able to open a corporate account.

2.    It is almost impracticable to have your name alone (without any addition) for a business name. For example “Eyitayo Ogunyemi”- looks quite absurd without any addition like “Law Office of Eyitayo Ogunyemi” “Eyitayo Ogunyemi & Co” etc.

When must I register my business brand?

Company:
Business Name:
A company must be registered before the commencement of business
Must be registered within 28 days of commencing the business in respect of which registration is required

What do I need to register my business brand?

Company:
Business Name:
After you have been given a Company name, the checklist of other requirements is as follows:

·  Details of your Directors: These include surname, other names, date of birth, Nationality, residential address, P.O.Box, E-mail, and Telephone number of each director.
You need a minimum of two (2) directors to register a company.

·    Details of Share Capital Structure: “Shares” are used to denote the extent of ownership of Shareholders of a company. Your company must have a minimum of 1,000,000 (One Million) Share Capital and at least 25% of the Share Capital must have been taken by the Shareholders.

·       Details of Shareholders: These include name, address, E-mail, number and type of Shares allotted to each Shareholder.
You need a minimum of two (2) shareholders for your company.

·       Details of Company Secretary: These include the surname, other names (or name of firm or corporation- in the event that the secretary is a firm or corporation), address, telephone number, P.O. Box, and E-mail contact of proposed Secretary.

·    Details of proposed registered address (usually the head office address):

·  Details of the Objects of your proposed company (i.e. summation of the objectives of, or statement of the businesses that your company intend to be doing)

·    You will need a legal practitioner to depose before a Commissioner of Oaths or a Notary Public that you have complied with the Companies and Allied Matters Act in respect of matters precedent to the registration of your company. That is why only a legal practitioner can help you to commence and complete the registration of your company.

After you must have conducted search for a Business name, below is a checklist of other requirements:

· Surname and other names

·  Full address of head office (and addresses of branches if there are)

· Other details are: Gender, Date of Birth, Telephone Number, Nationality, Residential Address, Occupation, and Email Address. (where it’s a partnership, you will provide similar details for other partners).

·       If the business is to be owned by a company, or a company is a partner, you will need to supply the name and registered address of the company.

· Two passport photographs of business owner(s).

·       Deposition of Affidavit before a Commissioner for Oaths

·    Statement of the general nature of your proposed business.



What are the benefits of registering my business brand?

1.    If your business name matters, then you must register it so that you can have monopoly of the use of the name.

2.  Registering your business prevents you from mistakenly using the name of another registered business to transact business.

3.  Registration makes it easy for the details of your business to be publicly accessible. Easy access to the details of the structure of your business will also help investors to decide whether your business is viable, and banks can also decide on partnering or offering you loans.

4.    Registration is a prerequisite in most banks for the opening of corporate account.

What are the obligations that accrue upon the registration of your brand?

COMPANY:
BUSINESS NAME:
a.  You must clearly display your registered company name and registration number (R.C. No) in a conspicuous position and clear letters outside of your business offices.

b.  Your company must possess a seal (metallic or rubber) on which your company name is engraved in clear characters

c.   You must publish your registered name on all business letters of the company and in all notices, advertisements, and other official publications of the company, and in all bills of exchange, promissory notes, endorsements, cheques, and others for money or goods purporting to be signed by or on behalf of the company, and in all bills or parcels, invoices, receipts, and letters of credit of the company.

d.  You must give notice of any change in the address of your company within 14 days of the change to the commission.

e.  As soon as you register your company, purchase a standard notebook to record the details of the shareholders of your new company.

The records of each member should include their names, address, extent of ownership in the company, date on which each person became a member, date on which the person ceased to be a member (i.e. where the person has ceased to be a member).

You must take inventory of the members that started the company within 28 days of registering your company, and you must take inventory of all subsequent members within 28 days of the conclusion of agreement for them to become members.

Where a person ceases to be a member, you must take record of that fact within 28 days too.

You may decide to keep your Members’ Register at your registered office, or in another office of your company (if that is the place where you make up the content of the Register), otherwise, you can keep it with your Legal Adviser/ Solicitor particularly if he/she is responsible for using his/her professional competence to manage the Register on behalf of your company.

If you prefer to keep the Register at an office other than your registered office, or with your Legal Adviser/Solicitor, make sure that either your company secretary or your Solicitor notifies the Corporate Affairs Commission of the place where the Register is kept within 28 days of the company’s decision.

f.    Where your company has more than 50 members (maybe because there are members that are joint holders of your company’s shares or for some other reasons), you may either choose to keep an Index of the members of your company in your Register of Members, or buy a separate Standard Notebook to take inventory of the Index of members.

The index of your company will contain the alphabetic list of the names of the members of your company and must, at all times, be kept at the same place with the Register of Members.

Where you make any alteration in your company’s Register of Members which makes it necessary that a consequential alteration be made in your Index of Members, you must make the consequential alteration within 14 days after the date on which the alteration is made in the register of members.

g.  Your company must hold its first annual general meeting within 18 months of its registration, and within every 15 months thereafter.

An “Annual General Meeting” is the yearly general meeting of the members of a company to deliberate on the businesses of the company. By implication, the following people are entitled to receive notice of your company’s general meeting:

Ø Every member
Ø Every person upon whom the ownership of a share devolves by reason of law
Ø Every director of your company
Ø Every auditor for the time being of your company
Ø Your company Secretary

At the Annual General Meeting, your company may present the financial statements for the year ending, present directors and auditors’ report, elect new directors in place of those retiring, appoint members of Audit Committee, declare dividends, and fix remuneration for company’s auditor etc.

Every member is entitled to a 21 days’ notice prior to the day of meeting. A shorter notice may be valid if only all the members entitled to attend and vote at the meeting agreed for a shorter date.

You may opt to engage your solicitor to prepare the notice of meeting to be sent to the members of your company or otherwise get your company secretary to prepare it.

In a similar vein, you are not allowed to discuss any issue which you have not stated in your letter of notice of general meeting, and failure to give notice of your company’s general meeting will invalidate the meeting unless the failure was an accidental omission on the part of the person(s) giving the notice.

It is therefore necessary that you seek proper legal advice while planning to hold the annual general meeting of your company. You may contact me for further information or explanation.

h.  Your company must keep minutes of its meetings. To do this effectively, I will suggest that you dedicate special notebooks for that purpose so that your minutes can be sequential and orderly.

The meetings which the Corporate Affairs Commission envisages that your company should take record of are:

Ø Proceedings of all General Meetings
Ø Proceedings of Meetings of Directors
Ø Proceedings of Meetings of Managers (where there are Managers)

i.    Your company must have at least two (2) directors. Anytime the number of Directors fall below two, your company must appoint new directors within one month, otherwise, it will be illegal to continue doing business after one month of refusal to appoint a director.

The power to appoint the directors reside in the members of your company and it may be exercised at the Annual General Meeting of the company.

The first meeting of your board of directors must be held not later than 6 months after you register your company. All other meetings may be held at any time whatsoever.

Any issue that is to be resolved at the Board of Directors’ meeting must be decided by a majority vote, and if there is an equality of votes, the chairman may have a second vote.

j.    You must buy a standard notebook to take record of your company’s directors and secretaries.

Your company is expected to file its first update with the corporate affairs commission within 14 days from the day it is registered with the corporate affairs commission, and 14 days after every subsequent change.

The Register of the Directors and Secretaries of your company is supposed to be accessible to the public.

k.   Where your company changes its registered address, you must notify the Corporate Affairs Commission within fourteen days of such change.

Your Company Secretary may purchase and file the appropriate form for that purpose, or otherwise, engage a competent Solicitor to assist with the process.

l.    Your company must prepare and submit to the Corporate Affairs Commission an annual report on matters specified in the Companies and Allied Matters Act which are applicable to your company.

The annual report is otherwise known as ANNUAL RETURNS, and if you are operating a limited company, It will usually contain your company’s registered address, address of place where the register of members is kept, summary of share capital and debenture, particulars of indebtedness of your company (if any), list of past and present members of your company, balance sheet, auditor’s report, and profit and loss account etc.

Keeping your annual returns up to date with the Corporate Affairs Commission is about the most important obligation that you must keep up with as soon as you register your company, and considering the technical nature of the task, it is important that your company secretary should be given the necessary training to handle the task, or otherwise, same should be outsourced completely.

m.   Register your company for Tax Identification Number and Value Added Tax at the Federal Inland Revenue Services (FIRS).

To apply for TIN and VAT, you may have to design your company letterhead, rubber stamp/metallic seal, and company logo.



a.  You must display your certificate of registration in a self-revealing position at your principal place of business, and likewise display photocopies that have been certified by the Corporate Affairs Commission at your other places of business.

b. You must file your annual returns not later than the 30th day of June of every year (minus the year when the business was registered).

c.  Whenever a change occurs in any of the details stated below, you must notify the Corporate Affairs Commission within 28 days of such change. The details are as follows:

o  Any change in the name of owner or any partner.

o  Address of head office (and branches if there are)

o Telephone number, nationality, residential address, occupation or Email address of owner or any of the partners.

o  Where a Business Name is owned by a company, or a company is a partner, you must communicate any change in the name, or registered address of the company.

d. Where a registered business name ceases to carry on business, the owner, or any of the partners must deliver a notice to the Corporate Affairs Commission within three months after the business has ceased to be carried on.

Where the owner(s) has passed on, the personal representative is obliged to deliver the notice stated above.

e.  In issuing your trade catalogues, trade circulars, show cards or business letters, you must provide the details of the business owner, or partners.

The details to be provided are as follows:

·       Full names (including former names) and nationality of owner or each partner (where a company is a partner or owner, you must mention the corporate name of the company);

·       The registration number of the business name.

NOTE that if the business is owned by a person under the age of 18, or the person is a partner, the word “a minor” must be added in bracket after the person’s name.


CONCLUSION:

On a final note, i will be glad to do an assessment of your business brand for free if you simply mail me the details of your business, aspects of this article that you have not been applying, and the ones that you have applied.

This article has been designed for information purposes alone and is not intended to take the place of a legal advice. Readers are therefore advised to seek proper legal advice.


For more enquiries, you can contact me on my mobile contact: 08060623454, or address a mail to me via eyitayoogunyemi@gmail.com