While the move is designed to sanitize Nigeria’s corporate landscape and ensure only compliant entities remain active, many business owners are often caught unprepared. In several cases, companies only discover they have been struck off when applying for bank loans, seeking investment, or attempting to bid for contracts—by which time it is already too late to salvage their legal standing.
Industry observers argue that the problem stems not just from negligence, but also from limited awareness of the obligations imposed under the Companies and Allied Matters Act (CAMA) 2020. For entrepreneurs and small businesses, compliance is not just about registration—it extends to ongoing obligations that keep the business legally recognized.
To help firms stay afloat and avoid the pitfalls of deregistration, legal experts highlight six essential steps every business must take during and after incorporation:
1. Select a Distinctive Business Name
Entrepreneurs must choose at least two unique names and confirm their availability on the CAC online portal. Under Section 30 of CAMA 2020, names must not be identical to existing companies, misleading, or prohibited. Once approved, a name can be reserved for 60 days upon payment of a ₦500 fee.
2. Draft Governing Documents
Every business must prepare a Memorandum of Association—outlining objectives and share capital—and Articles of Association, which define governance structures. These documents, often drawn from CAC templates, must comply with Sections 27 and 28 of CAMA and be signed by the company’s promoters.
3. Declare Share Capital
The law requires companies to specify an authorized share capital, with a minimum of ₦100,000 for private entities. Higher capital attracts increased filing fees and stamp duty, in line with Section 27(2) of CAMA.
4. Appoint Directors and Shareholders
A minimum of two directors (or one for small companies) and at least one shareholder must be appointed. Directors must be at least 18 years old and mentally fit, as stipulated in Sections 20 and 271 of CAMA. Their personal details, including addresses, occupations, and valid identification, are mandatory.
5. Submit Registration Documents
Promoters must file CAC Form CAC1.1 along with the Memorandum, Articles of Association, and details of directors and shareholders via the CAC portal. Statutory fees and stamp duty are payable, depending on the company’s share capital.
6. Maintain Post-Registration Compliance
A Certificate of Incorporation confirms a company’s legal existence, but survival depends on compliance after registration. Companies must secure a Tax Identification Number (TIN) from the Federal Inland Revenue Service (FIRS), obtain relevant permits, and file annual returns within 42 days of each anniversary. This includes disclosure of Persons with Significant Control (PSC) and timely payment of fees. Failure to comply leaves a company vulnerable to being struck off.
The CAC’s intensified scrutiny reflects a broader push to enforce transparency, curb shell companies, and improve Nigeria’s business environment. For entrepreneurs, however, the crackdown is a reminder that registration is just the beginning of a long-term legal commitment.