FIVE (5) REASONS WHY NIGERIAN BUSINESS OWNERS NEED TO HAVE COMPLIANCE CERTIFICATES

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Compliance certificates are documents that show that a business is operating in accordance with the laws, regulations and standards set by the relevant authorities. In Nigeria, businesses are required to obtain a number of compliance certificates to demonstrate their compliance with the country’s laws and regulations this includes, a Tax Clearance Certificate (TCC) issued by the Federal Inland Revenue Service (FIRS), ITF Certificate issued by the Industrial Training Fund, NSITF Compliance Certificate issued by The Nigeria Social Insurance Trust Fund, PENCOM Certificate issued by The Pension Commission and Acknowledgement copies of payment of Annual Returns.

Here are five reasons why business owners need to have compliance certificates:

1. LEGAL COMPLIANCE: By obtaining compliance certificates, businesses demonstrate that they are operating within the law and that they are adhering to the standards and regulations set by the relevant authorities. This helps to reduce the risk of legal penalties and fines that may arise from non-compliance.

2. IMPROVED REPUTATION: Having compliance certificates can also help to enhance the reputation of a business. Customers and other stakeholders are more likely to trust a business that is in compliance with the law, which can translate into increased sales and a better bottom line.

3. ENHANCED COMPETITIVENESS: Obtaining compliance certificates can also give businesses a competitive edge over their competitors. By demonstrating their commitment to operating within the law and adhering to industry standards, businesses can differentiate themselves from those who are not in compliance.

4. ACCESS TO OPPORTUNITIES: Many businesses are required to have compliance certificates to participate in certain tenders or to enter into partnerships with other organizations. This means that by obtaining compliance certificates, businesses can gain access to new opportunities and markets that may not be available to those who are not in compliance.

5. PEACE OF MIND: Finally, having compliance certificates can provide peace of mind to business owners, as they know that they are operating within the law and that they are meeting the standards and regulations set by the relevant authorities. This can help to reduce the stress and anxiety that can arise from uncertainty and help business owners to focus on growing their businesses.

In conclusion, compliance certificates are an important part of doing business in Nigeria and can provide a number of benefits to business owners. By demonstrating their commitment to operating within the law and adhering to industry standards, businesses can reduce the risk of legal penalties, improve their reputation, enhance their competitiveness, gain access to new opportunities, and provide peace of mind to their owners.

Regville Associates offers end-to-end legal, tax and secretarial service for companies. We assist Companies in becoming and staying compliant.

We will be happy to hear from you.

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

ESSENTIAL COMPLIANCE CERTIFICATES AND REQUIREMENTS FOR BIDDING ON CONTRACTS IN NIGERIA

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In the competitive world of business, securing contracts is crucial for growth and success. In Nigeria, there are several compliance certificates and requirements that companies must fulfill in order to be eligible to bid on contracts. From tax clearance and pension compliance to BPP registration and audited financial statements, these requirements help to demonstrate a company’s financial stability, credibility, and commitment to following regulations. In this article, we will explore the essential compliance certificates and requirements for bidding on contracts in Nigeria.

1. TAX CLEARANCE CERTIFICATE: This certificate confirms that a business is up-to-date with its tax obligations and is in good standing with the Federal Inland Revenue Service (FIRS).

2. PENSION COMPLIANCE CERTIFICATE: This certificate confirms that a business is compliant with the Nigerian Pension Reform Act and is making the required pension contributions for its employees.

3. NIGERIAN SOCIAL INSURANCE TRUST FUND (NSITF) COMPLIANCE CERTIFICATE: This certificate confirms that a business is compliant with the NSITF Act and is making the required social insurance contributions for its employees.

4. INDUSTRIAL TRAINING FUND (ITF) COMPLIANCE CERTIFICATE: This certificate confirms that a business is compliant with the ITF Act and is making the required training contributions for its employees.

5. BPP (BUREAU OF PUBLIC PROCUREMENT) CERTIFICATE: This certificate confirms that a business is registered with the Bureau of Public Procurement and is in compliance with the procurement laws and regulations in Nigeria.

In addition to the above-mentioned compliance certificates, it is also important for business owners in Nigeria to file their CAC Annual Returns and have an audited financial statement.

CAC Annual Returns are a requirement of the Corporate Affairs Commission (CAC) and are necessary to keep a company’s registration up-to-date and in good standing. Failure to file annual returns may result in penalties or the eventual striking off of the company’s name from the CAC register.

An audited financial statement is an independently reviewed and verified financial report that provides assurance to stakeholders about the accuracy and reliability of a company’s financial information. This is particularly important for businesses bidding for contracts, as it demonstrates their financial stability and capacity to fulfill their obligations. An audited financial statement can also help to attract investment and improve a company’s credibility.

Regville Associates offers end-to-end legal, tax and secretarial service for companies. We assist Companies in obtaining relevant compliance documents needed to bid for any tenders and contracts in Nigeria.

We will be happy to hear from you.

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

HOW TO OBTAIN A PENCOM COMPLIANCE CERTIFICATE IN NIGERIA

The National Pension Commission (PenCom) is the regulatory body overseeing Nigeria’s pension administration. To ensure that companies operating in the country adhere to best practices in pension management, PenCom requires all employers to apply for and obtain a Compliance Certificate. This article will discuss the steps companies can follow to apply for a PenCom Compliance Certificate.

1. REGISTER WITH PENCOM: The first step in the process is to register with PenCom by filling out the Employer Registration Form (ERF) and submitting it to the nearest PenCom office. The form can be obtained from the PenCom website or any of its offices.

2. OPEN A PENSION FUND ADMINISTRATOR (PFA) ACCOUNT: After registering with PenCom, the next step is to open a Pension Fund Administrator (PFA) account. PFAs are organizations that manage pension funds on behalf of employers. A list of registered PFAs can be found on the PenCom website.

3. SUBMIT EMPLOYEE INFORMATION: Companies are required to submit employee information, including names, addresses, and contribution history, to their PFA. This information is necessary for the PFA to compute each employee’s pension contributions and benefits.

4. REMIT CONTRIBUTIONS: Companies are required to remit employee contributions to their PFA on a monthly basis (minimum of 10% by employer and minimum of 8% by the employee).

(a) for the last three fiscal years for organizations that were in existence for that period and have five (5) or more staff

(b) for organizations that have not been in existence for the last three fiscal years, from the date of Incorporation/registration/licensing to the last fiscal year.

5. GROUP LIFE INSURANCE: Evidence of valid Group Life Insurance Policy for employees which should include amongst others, a certificate of group life, policy document and evidence of payment.

6. APPLY FOR A COMPLIANCE CERTIFICATE: Upon successful submission of all required reports and documentation, companies will be issued a PenCom Compliance Certificate. This certificate is valid for one year and must be renewed annually.

Applicants are to note that it takes 15 working days from the date of receipt for an application to be processed. Certificates or rejections can be picked up at the offices where the applications were submitted.

In conclusion, PENCOM mandates that pension remittance should be made not later than seven (7) days after payment of salaries. PENCOM has begun the introduction of penalties payable by the employer to the employee RSA if remittance is not made within seven (7) days after payment of salaries. The PENCOM has also engaged Consulting Firms (majorly audit & accounting firms) to carry out audit exercises to check compliances.

For further assistance in obtaining PENCOM Certificate, feel free to contact us

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

FIVE (5) CATEGORIES OF PERSONS THAT CAN’T ACT AS A DIRECTOR IN NIGERIA

In Nigeria, there are certain individuals who are prohibited from serving as a director of a company. The Companies and Allied Matters Act (CAMA) outlines these disqualifications and restrictions.

1. INSOLVENT INDIVIDUALS: An individual who is declared bankrupt or is under a debt management plan is disqualified from being a director.

2. CONVICTED FELONS: Convicted felons: Individuals who have been convicted of an offense involving dishonesty or fraud are not eligible to serve as a director.

3. MINORS: Individuals who are below the age of 18 years are not eligible to serve as a director.

4. UNFIT INDIVIDUALS: Individuals who have been found to be of unsound mind or who are under a legal disability are prohibited from being a director.

5. DISQUALIFIED DIRECTORS: Individuals who have been disqualified from serving as a director by a court order or regulatory authority are not eligible to serve in this capacity.

It is important to note that the disqualifications outlined above apply to both executive and non-executive directors. Additionally, if a director is found to have acted in contravention of these restrictions, they may be held liable for their actions and face sanctions, including fines and imprisonment.

In conclusion, being a director of a company in Nigeria comes with its own set of responsibilities and obligations. It is important for individuals to ensure that they are eligible and qualified to serve in this capacity before accepting a directorship appointment.

For Company Formation and Restructuring, feel free to contact us

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

GROUNDS FOR THE REMOVAL OF DIRECTOR(S) IN NIGERIA

The Corporate Affairs Commission (CAC) is the regulatory agency responsible for registering and regulating companies in Nigeria. The removal of directors in Nigeria is governed by the Companies and Allied Matters Act (CAMA) which provides the legal framework for the appointment and removal of directors in Nigerian companies.

According to CAMA, directors can be removed by:

1. RESIGNATION: A director may resign from their position at any time by giving notice in writing to the company.

2. RETIREMENT: Directors are required to retire at the annual general meeting of the company and may be re-elected if they wish to continue serving on the board.

3. TERMINATION BY THE COMPANY: The company may remove a director by passing a resolution to that effect at a general meeting of the shareholders.

4. TERMINATION BY THE CAC: The CAC may remove a director if they are found to have acted in a manner that is prejudicial to the interests of the company or if they have been declared bankrupt.

It is important to note that the removal of directors must be done in accordance with the provisions of CAMA and any relevant regulations. The CAC may investigate and enforce compliance with these provisions to ensure the proper removal of directors.

For corporate restructuring process and filing, feel free to contact us

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

PARTNERSHIP FIRM IN NIGERIA: THE TYPES AND FEATURES

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INTRODUCTION: In Nigeria, partnerships are governed by the Companies and Allied Matters Act (CAMA) 2020. Partnerships in Nigeria can be classified into three types: general partnerships, limited partnerships, and limited liability partnerships.

GENERAL PARTNERSHIPS (GPs), are formed by two or more individuals who share the profits and liabilities of the partnership. The partners are jointly and severally liable for all the debts and obligations of the partnership, and each partner has the right to take part in the management and administration of the partnership.

LIMITED PARTNERSHIPS (LPs), on the other hand, consist of one or more general partners and one or more limited partners. The general partners are liable for all the debts and obligations of the partnership. In contrast, the liability of the limited partners is limited to the amount of capital they have contributed to the partnership. Limited partners do not have the right to participate in the partnership’s management and administration.

LIMITED LIABILITY PARTNERSHIPS (LLPs) are similar to limited partnerships, but the liability of all partners is limited to their capital contributions. This type of partnership is suitable for professional firms such as law firms, accounting firms, and consulting firms. An LLP may acquire, own, hold and dispose of property, as well as bring and defend actions in its own name. A partner in an LLP could be a Company. Each LLP must have a minimum of two authorized partners, at least one of whom must be a Nigerian national. LLPs are managed by a membership agreement or a partnership agreement and do not have any share capital.

To register a partnership in Nigeria, the appropriate forms and fees must be submitted to the Corporate Affairs Commission (CAC). Additionally, the partnership must have at least two partners and must be registered with the CAC.

It is strongly recommended that partners enter into a partnership agreement to govern the relationship between themselves and the partnership. It is also worth noting that Partnership is not taxed as an entity, but the partners are taxed on their own income.

In conclusion, understanding the nuances of the different types of partnerships and the registration process is crucial in ensuring the smooth running of the partnership business in Nigeria. It is advisable to seek legal advice before entering into a partnership agreement or registering a partnership with the CAC.

For more guidance and registration of Partnership in Nigeria, feel free to contact us

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

LEGAL & TAX: FIVE (5) COMMON MISTAKES MADE BY STARTUPS

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Starting a new business is an exciting and challenging endeavor, but it can also be risky. Legal and tax mistakes are common among startups and can lead to significant financial losses and legal trouble. In this article, we will discuss five common legal and tax mistakes made by startups and how to avoid them.

1. NOT INCORPORATING: One common mistake made by startups is failing to incorporate their business, which can lead to personal liability for the company’s debts and legal issues.

2. NOT PROTECTING INTELLECTUAL PROPERTY: Startups often overlook the importance of protecting their intellectual property, such as trademarks and patents, which can lead to legal disputes and financial losses.

3. NOT KEEPING ACCURATE FINANCIAL RECORDS: Many startups fail to keep accurate financial records, which can lead to legal issues and difficulty in obtaining funding.

4. NO UNDERSTANDING TAX LAWS AND DUE DATES: Startups often make the mistake of not understanding the tax laws and regulations that apply to their business, which can lead to penalties and fines.

5. NOT HAVING A CLEAR EQUITY SPLIT AMONG FOUNDERS: Startups often make the mistake of not having a clear equity split among the founders, which can lead to disagreements and legal issues. It is important to have a clear agreement in place from the beginning.

To avoid or remedy these pitfalls, contact us today

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

CONVERTIBLE NOTES: A FORM OF DEBT FINANCING FOR STARTUPS

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A convertible note is a type of debt financing that allows investors to loan money to a company in exchange for the option to convert their loan into equity at a later date. This type of funding is often used by early-stage companies that have not yet reached a point where they can issue traditional equity.

Here are five features of convertible notes:

1. Convertible notes have a maturity date: The notes are typically issued with a maturity date of one to three years from the date of issuance. At the maturity date, the company will either have to pay back the loan or convert the notes into equity.

2. Convertible notes have a conversion price: The conversion price is the price at which the notes will convert into equity. This price is typically set at a discount to the price of future equity rounds.

3. Convertible notes accrue interest: The notes accrue interest at a rate that is typically lower than the rate for a traditional loan.

4. Convertible notes have a cap: A cap is the maximum valuation at which the notes can convert into equity. This cap is typically set at a higher valuation than the current valuation of the company.

5. Convertible notes are typically used by early-stage companies: Convertible notes are often used by companies that are in their early stages of development and have not yet reached a point where they can issue traditional equity.

It’s worth noting that the terms of convertible notes may vary depending on the company’s situation, the stage of the company, and the investors.

A hypothetical scenario where a convertible note is used.

A startup company, called “ABC Inc.” is looking for $500,000 in funding to help them develop their product and expand their team. They decide to issue a convertible note to a group of angel investors.

The maturity date of the note is set at 18 months from the date of issuance.

The conversion price is set at a 20% discount to the price of the next equity round.

The interest rate on the note is set at 5% per year.

The cap is set at $5 million, which is higher than the current valuation of the company.

The angel investors loan $500,000 to ABC Inc. in exchange for the convertible notes. The company uses the money to develop their product and expand their team.

After 18 months, the company has made significant progress and is ready to raise more funding. They hold a Series A round and are able to secure a valuation of $10 million. At this point, the angel investors have the option to convert their notes into equity at a 20% discount to the Series A price. So, the conversion price would be $8 million (10 million * 0.8). Since the cap is set at $5 million, the angel investors can convert their notes into equity at $5 million.

It’s important to note that this is a simplified example and in reality the terms of convertible notes can be more complex depending on the company’s situation, the stage of the company, and the investors.

For assistance on StartUp Financing, feel free to contact us

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

THE RELEVANCE OF THE CERTIFICATE OF CAPITAL IMPORTATION TO FOREIGN INVESTORS IN NIGERIA

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A certificate of Capital Importation (CCI) is a document issued by the Central Bank of Nigeria (CBN) to foreign investors in Nigeria as proof of their capital investment in the country. The CCI serves as a key tool for foreign investors to access various benefits and incentives the Nigerian government provides to encourage foreign direct investment (FDI) in the country. In September 2017, the CBN introduced the electronic CCI (e-CCI) which replaced the paper CCI. In this article, we will discuss the relevance of the CCI to foreign investors in Nigeria.

The CCI serves as proof of investment for foreign investors, providing them with a legal document that confirms their Investment in Nigeria. This can be used as evidence of investment for various purposes, such as opening a bank account, obtaining a loan, or applying for a Nigerian visa. Additionally, the CCI is a requirement for foreign investors to access various incentives and benefits provided by the Nigerian government, such as tax holidays and duty waivers.

One of the main benefits of the CCI is that it enables foreign investors to access the Nigerian foreign exchange market. The CCI is required to open and operate a foreign currency account in Nigeria, which allows foreign investors to transact in foreign currency without restrictions. This is particularly important for foreign investors who need to make payments or receive income in foreign currency.

The CCI also enables foreign investors to repatriate their capital and profits out of Nigeria. The Nigerian government has put in place strict regulations to ensure that capital is not moved out of the country illegally. The CCI serves as proof of legal capital importation and is required to process the remittance of capital and profits out of Nigeria.

Another relevance of the CCI is that it helps track Nigeria‚Äôs foreign investment. The CBN issued the CCI and kept it in the bank’s records, providing a clear picture of the amount of foreign investment in the country. This helps the Nigerian government to monitor and track the inflow of foreign investment and make necessary adjustments to attract more foreign investment.

In conclusion, the CCI is a vital document for foreign investors in Nigeria as it enables them to access various benefits and incentives provided by the Nigerian government and enables them to transact in foreign currency without restrictions, repatriate their capital and profits, and track the inflow of foreign investment in the country. Obtaining a CCI is a key step for foreign investors looking to invest in Nigeria and should be done as soon as possible after the investment is made.

For assistance in processing the Certificate of Capital Importation. Feel free to contact us

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

FIVE (5) BENEFITS OF REGISTERING YOUR COMPANY WITH THE CORPORATE AFFAIRS COMMISSION (CAC)

Corporate Affiars Commission (CAC)

The Corporate Affairs Commission (CAC) of Nigeria is a government agency responsible for the registration and regulation of companies and businesses in Nigeria. It is tasked with the responsibility of regulating the formation, registration, incorporation and management of companies and businesses in Nigeria. Its aim is to ensure compliance with the laws and regulations that govern the formation, registration and operation of companies and businesses in the country. The commission also maintains a database of registered companies and businesses and makes this information available to the public. The CAC also has the power to deregister companies that do not comply with the laws and regulations or that have become dormant.

There are several benefits of registering a company with the Corporate Affairs Commission (CAC) in Nigeria, including:

1. LEGAL RECOGNITION: A registered company is legally recognized as a separate entity from its owners and has the ability to enter into contracts, borrow money, and sue or be sued in its own name.

2. LIMITED LIABILITY: Shareholders of a registered company are typically only liable for the debts of the company to the extent of their unpaid share capital.

3. CREDIBILITY: Registering a company with the CAC can enhance the company’s credibility and reputation, as it demonstrates a commitment to compliance with legal and regulatory requirements.

4. ACCESS TO FUNDING: Registering a company with the CAC may be a requirement for accessing certain forms of funding, such as bank loans or venture capital.

5. EASE OF DOING BUSINESS: Registering a company with the CAC can make it easier to do business, as it can streamline the process of opening bank accounts, applying for permits and licenses, and other administrative tasks.

In conclusion, registering a company with the Corporate Affairs Commission (CAC) in Nigeria offers several benefits that can help a business to operate legally and efficiently. These benefits include legal recognition, limited liability, increased credibility, access to funding, and ease of doing business. By registering with the CAC, a company is demonstrating its commitment to compliance with legal and regulatory requirements, which can enhance its reputation and make it easier to do business. Overall, registering with the CAC is an important step for any business looking to establish itself and grow in Nigeria.

For assistance on Company Formation and Compliance, feel free to contact us

Tolulope Oguntade 
Regville Associates
info@regville.com
08065111667