What are the steps local and foreign tech startup founders need to take to register their company in Nigeria?
As technology continues to evolve, the emergence of new companies has continued to be on the rise. These tech companies, created to offer technological solutions, often require strict registration processes.
While the process can be stretching, it gets easier if you know what to do. You’ll need to register first with the Corporate Affairs Commission (CAC) as the Nigerian system demands. But you need to note that this is only the first step in the process.
If you’re wondering how to go about the entire process, you have nothing to worry about. We will break down the process so you can understand how to register your tech company in Nigeria.
Let’s get right into it.
What Is a Tech Company?
What exactly constitutes a tech company? A tech company is an enterprise that utilizes technology to create, enhance, or deliver products and services.
Usually, a tech company can range from software development firms to hardware manufacturers, and everything in between.
Sometimes a company may not be strictly a software development firm but if technology is at the core of your business operations, you likely fall into the category of a tech company.
For instance, Jumia and Konga are retail-oriented companies but they are classified as tech companies. This is because their operations are centred around the use of technology to serve customers with their e-commerce business.
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What is the Legal Framework for Registering Tech Companies in Nigeria?
In Nigeria, the legal framework for registering tech companies falls under the jurisdiction of the Corporate Affairs Commission (CAC).
The Corporate Affairs Commission (CAC) was established by the Companies and Allied Matters Act (CAMA) of 1990.
The CAC is responsible for the regulation and supervision of the formation, incorporation, and management of companies in Nigeria.
As such, any entity looking to establish a tech company must adhere to the regulations set forth by the CAC. Essentially, the CAC not only oversees the registration of businesses but also handles post-incorporation matters.
What Business Structure Should You Register Your Tech Company Under?
Every company falls under one business structure or the other. This is why you must register under the appropriate structure.
The business structure you will choose will be determined by the business’ ownership structure, number of shareholders, purpose of business and general operations.
While you can register a tech company as an Limited Liability Company, it’s often advisable to register it as a Private Limited Company (Ltd). With this structure, you can have a maximum of fity members which is still a good bargain.
The only downside to it is that your company cannot issue shares to the public. In all, the structure offers adequate protection to the company owners and separates them from bearing the liability of the business.
How to Register a Tech Company in Nigeria
Here is a step-by-step process of registering your tech company in Nigeria:
Choose a Business Name
The first step in registering your tech company is selecting a unique business name. This should be a name that aligns with your product or service. It should also be a name that will be easy to remember.
Additionally, ensure that the name is not already in use by another company and that it complies with the guidelines set by the CAC. You will also need to submit two names for a name search.
Conduct a Name Availability Search
It’s not enough to choose a name. You will need to conduct a name availability search with the CAC to ensure that the name is not already taken.
This is a relatively easy process. You can conduct the search online through the CAC’s website or in person at their offices.
Fill Out the Required Forms
Before proceeding with the registration process, you will need to fill out CAC forms. The form will ask for various information such as:
- Office address of the proposed company
- Email and phone number of the proposed company
- Personal information of Director(s) & shareholders(s) such as full names, residential address, occupation and date of birth.
Submit the Documents to the CAC
The CAC will demand for some relevant documents that they will review. Documents you will need to prepare include:
- Valid means of identification for the company’s directors and shareholders such as driver’s license and international passports
- Proof of address for the company’s registered office
- Approval note of name reservation from CAC
- Memorandum and Articles of Association
- Passport-sized photographs of the company’s directors and shareholders
After you have gathered all the required documents, you will need to submit them to the CAC for review. Again, you can do this either online through the CAC’s website or in person at their offices.
Pay the Registration Fees
Along with submitting the documents, you will also need to pay the registration fees as stipulated by the CAC.
The fees vary depending on the type of company being registered and its share capital.
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Wait for Approval
After submitting the documents and paying the necessary fees, you will need to wait for the CAC to review and approve your application.
This process can take several days to several weeks, depending on the workload of the CAC and the completeness of your application.
Collect Your Certificate of Incorporation
If the CAC approves your application, you will receive a Certificate of Incorporation from them.
This document serves as a legal proof that your tech company has been officially registered and is recognized by the Nigerian government.
Register for Tax Purposes
Finally, after receiving your Certificate of Incorporation, you will need to register your tech company for tax purposes with the Federal Inland Revenue Service (FIRS).
This involves obtaining a Tax Identification Number (TIN) for your company and fulfilling your tax obligations as required by law.
Who Should Register Your Tech Company in Nigeria?
The CAC allows individuals to register their businesses, but this is only feasible if you are registering a sole proprietorship.
For tech companies, it is more beneficial for a professional like us to handle it because we are knowledgeable in corporate law and business registration processes.
We recommend that you engage the services of a qualified corporate lawyer or a reputable business registration consultant. These experts possess the expertise to navigate the legal intricacies, ensuring that your company registration adheres to all necessary regulations.
Their guidance can simplify the process and minimize all the errors an unguided individual might make in the registration process.
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Register Your Tech Company with Ease in Nigeria
Your tech company will thrive when it meets all the important regulations it should meet. This includes undergoing a registration process. In Nigeria, this is not an easy process as you have to provide a lot of proofs and documents.
But with the right information and guidance, you can successfully register your tech company in Nigeria and begin operating legally within the country. And in no time, you can set your tech company on the path to success.
