Steps For Establishing New Companies in Nigeria

Steps For Establishing New Companies
Checklist of Steps For Establishing New Companies in Nigeria with Foreign Shareholding;

STAGE A
1. Establish partners/shareholders and their respective percentage shareholdings in the proposed company.
2. Establish name, initial authorized share capital and main objects of proposed company.
3. [EXCEPT in instances where the proposed company will be 100% owned by non-resident shareholders] - Prepare Joint-Venture Agreement between prospective shareholders. The Joint-Venture may specify; inter-alia, mode of subscription by parties, manner of Board Composition, mutually protective quorum for meetings, specific actions which would necessitate share-holders approval by special or other resolutions.
4. Prepare Memorandum and Articles of Association, incorporating the spirit and intents of the Joint-Venture Agreement.
5. Foreign Shareholder may grant a power of attorney to its Solicitors in Nigeria, enabling them to act as its Agents in executing incorporation and other statutory documents pending the grant of Business Permit (i.e. formal legal status for foreign branch/subsidiary operations) to the foreign shareholder.
6. Conduct a search as to the availability of the proposed company name and, if available, reserve the name with the CAC.
7. Effect payment of stamp duties, CAC filing fees and process and conclude registration of the company as a legal entity.

STAGE B
1. Obtain �€œTax Clearance Certificate�€ for the newly registered company
2. Prepare Deeds of Sub-Lease/Assignment, as may be appropriate, to reflect firm commitment on the part of the newly registered company, to acquire business premises for its proposed operations.

STAGE C
1. Prepare and submit simultaneous applications to the NIPC (on the prescribed NIPC Application Form) for the following approvals:-

- Business Permit and Expatriate Quota;
- Pioneer Status and other incentives (where applicable)

2. The application to the NIPC should be accompanied with the following documents:-

- Copies of the duly completed NIPC Form;
- Copies of the treasury receipt for the purchase of NIPC Form;
- Copies of the Certificate of Incorporation of the applicant company;
- Copies of the Tax Clearance Certificate of the applicant company;
- Copies of the Memorandum and Articles of Association;
- Copies of treasury receipt as evidence of payments of stamp duties on the authorised share capital of the company as at date of application;
- Copies of the Joint-Venture Agreement - UNLESS 100% foreign ownership is envisaged;
- Copies of feasibility Report and Project Implementation Programme of a company for its proposed business. It is advisable that quotations, letters of intent and other such documentations relating to industrial plant and machinery to be acquired by the company, be forwarded either as annexes or separately. In order to discourage the dissipation of administrative energy on speculative applications, the NIPC favours the applicant who has demonstrated positive intention to commence business as and when approvals are granted. Hence, the requests for evidence of acquisition of business premises and evidence of having sourced the plant and machinery to be utilised in the company�€™s business;
- Copies of Deed(s) of Sub-Lease/Agreement evidencing firm commitment to acquire requisite business premises for the company�€™s operation. By implication, the ultimate NIPC approvals do incorporate approvals of the industrial site locations indicated in the application;
- Copies of training programme or personnel policy of the company, incorporating management succession schedule for qualified Nigerians;
- Particulars of names, addresses, nationalities and occupations of the proposed directors of the company;
- Job title designations of expatriate quota positions required, and the academic and working experience required for the occupants of such positions. It is pertinent to note that expatriate quota on a �€œPermanent Until Reviewed�€ (PUR) status is only accorded to a Managing Director, where the non-resident shareholders own a majority of the company�€™s shares, and the authorised capital of the company is N5 million and above;
- Copies of information brochure on foreign shareholder (if available) as testimony of international expertise and credibility of the foreign partner in the proposed line of business.

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