Requirements for Companies Registration in Nigeria…….According to Section 18 of CAMA 1990, two or more persons may form and incorporate a company by complying within requirements of the act. It also specifies the category of people that can come together to form a company. Section 20 states that anyone in these categories is not qualified:
- he is less than eighteen years of age;
- he is of unsound mind and has been so found by a court in Nigeria or elsewhere;
- he is an undischarged bankrupt;
- he is disqualified under Section 254 – which says a person is convicted by a High Court of any offence in connection with the promotion formation or management of a company,
Types of Companies: three types of companies can be identified
- Limited by shares
- Limited by guarantee
- An unlimited company.
A company is said to be limited by shares, if the liability of its members limited by the memorandum to the amount, if any unpaid on the shares respectively held by them.
A company is said to be limited by guarantee if the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up.
A company is said to be unlimited when the members do not have any limit on the liability of its members.
Private liability Companies
The private liability company can be formed by minimum of two persons and maximum of fifty persons excluding employees of the company both past and present (according to Section 22 Subsection 3). The total number of members of a private company shall not exceed fifty, not including persons who are bonafide in the employment of the company or were while in that employment and have continued after the determination of that employment to be, members of the company. The articles of the private company must restrict the transfer of its shares, i.e. the share of the company is not transferable through public offer for subscription. The law also requires the name of private company to end with the word “limited”. R
equirements for Companies Registration in Nigeria
The public liability company is a company where the shareholders are members of the public. The shares are generally freely transferable. Public companies are large trading concerns with minimum membership of two but no maximum. The name of a public company is expected to end with Public Limited Company (PLC).
o Explain limited liability companies?
- Limited liability companies are companies incorporated or registered in Nigeria that is regarded as an artificial person, such company can sue and be sued. They can take the form of private or public
Legal Requirement for Registration of Companies
The Companies and Allied Matter Acts specified the documents of incorporation, in section 35 of the acts to include:
- Memorandum of Association;
- Articles of Association;
- Notice of the address of the registered office and head office;
- Statement of the lists and particulars of the first directors of the company;
- Statutory declaration of compliance with the provisions of the acts
- Any other document that may be required by the Corporate Affairs Commission (CAC), e.g. tax certificate of the directors,
If the promoters have met the requirements of the CAC, a certificate of incorporation or certificate of registration would be issued and immediately the company becomes an artificial person or legal entity.
Memorandum and Articles of Association: These two documents constitute the basic constitution of a company. They are in fact the main incorporation documents. The provision of the Articles of Association is subsidiary to that of the Memorandum of Association. In other words, Memorandum of Association is superior to the Articles of Association. Wherever there is a conflict between the provisions of the two, that of Memorandum of Association takes pre-eminence prevails.
Contents of Memorandum of Association: Section 27 of CAMA 1990 specified the content of the Memorandum of Association. The content include among others:
- Name of the company: For a private company to end with (Ltd); public company to end with (PLC), i.e. both are limited by shares. If limited by guarantee to end with limited by guarantee or (Ltd/GTE). No two different companies must have an identical name;
- The address of the registered office of the company must be located in Nigeria;
- The object of the company – the type of business and contract the company can lawfully enter into;
- The restriction, if any, on the powers of the company;
- Share capital clause – minimum share capital required for private company is N10,000, while that of public company is N500,000;
- Liability closure – the statement whether the liability of its members are limited or unlimited or limited by share or guarantee;
- Subscription clause – the subscribers of the memorandum are required to subscribe nothing less than 25% of the company’s share capital. Each subscriber must write his full names, signature, profession or status as well as address on the column provided.