Month: January 2023

Introduction

When it comes to protecting the safety of lives and properties in Nigeria, several private companies out there have played significant roles over the decades. It should be noted that this industry has been very competitive in the aspect of providing job opportunities for Nigerians.

According to certain records, the National Bureau of Statistics in 2019 recorded over 1,110 registered private companies, employing around 828,502 applicants in Nigeria from 2013 to 2018. As a result, this shows how several people consider this job as a good-paying one.

Moreover, the information regarding the number of people employed by various companies was compiled and supplied by the Nigeria Security and Civil Defence Defence Corps (NSCDC), which serves as an agency that was authorized by law for the purpose of supervising private security guard companies in Nigeria.

This article offers relevant information that relates to the legal requirements for setting up a private security guard company by virtue of the Private Guard Companies Act, CAP P30, LFN 2004.

FIRST STAGE: REGISTRATION OF A LIMITED LIABILITY COMPANY

You should know that a security company has to be registered at the Corporate Affairs Commission (CAC) as a limited liability company. This is because the company is expected by law to have a minimum share capital of N10,000,000 (Ten Million Naira) with the object as the provision of private security services.

Requirements for registration at the Corporate Affairs Commission

1. Two proposed names have to be provided which stipulate the preferred name of the company or an alternate name.
2. The address of the head office and branch offices has to be provided.
3. There should also be a share capital and shareholding formula among the shareholders.
4. The company must have the particulars of at least three directors. This will their phone numbers, email addresses, residential addresses, passport photographs, copies of any of their identity card (driver’s license/voters card, national passport/national identity card)

It is also imperative to note that one or most of the directors of the company must be retired military or paramilitary personnel, and their rank must be the rank of Major or Commissioner. This is how the process works as no foreigner is allowed to become or act as a director.

1. Secretaries of the company must have particulars of the company, passport photographs, and any other possible means of identification.
2. Shareholders must also have particulars, who will act as the first subscribers of the company.
3. The Corporate Affairs Commission has A Memorandum and Articles of Association (MEMART) irrespective of new companies to employ and adopt. On the other hand, it is best to seek a legal practitioner to draft an article, due to the peculiarities coupled with setting up a security company in Nigeria.
4. Applicants are required to pay the filing fees to the CAC and Stamp Duties to the Federal Inland Revenue Services (FIRS). This is based on share capital. It is also important to make a budget for professional fees for the legal practitioner in offering assistance during the course of the process.

All these requirements as stated above should be in place, the statutory CAC forms will be filled online and the company will be duly registered. The next stage would be to focus on obtaining a Private Security Licence from the NSCDC.

SECOND STAGE: REGISTRATION OF THE COMPANY WITH THE NSCDC

Registering with the NSCDC is very vital for any security company before a license can be granted for operation. However, the NSCDC outlined the requirements every security company must meet before obtaining a private security license. They are stated below;

1. An application for a private guard license must be tendered to the NSCDC, which must be addressed to the Commandant General of the NSCDC.
2. There must be evidence of a company’s registration which involves a minimum of N10,000,000 paid up share capital and a minimum of 3 directors.
3. Every security company must provide certified True Copies of the Memorandum and Article of Association.
4. Photocopies of the Certificate of Incorporation must be provided.
5. Must provide Tax Clearance Certificate.
6. Must Obtain a statement of account from a bank.
7. A letter from a legal advisor has to be provided.
8. A letter from an Auditor must be provided.
9. Letter from Bankers.
10. Proposed training program.
11. The proposed salary structure must be provided.
12. Veterinary certificate (Optional) Applicable if security animals are used.
13. All directors must obtain Personal History Statements (PHS) forms. The price is One Hundred Thousand Naira (N100,000), which is very important for all directors to have one. This form has to be filled by the directors stating ‘Nil’ or ‘Not Applicable’ at portions they do not have specific answers to, and every column should be filled.
14.  There should also be two copies of the Academic credentials of directors to be attached to the PHS form.
15. Each director has to provide eight passport photographs.
16. This eight full photographs postcard should be sized 5 x 7 inches with a white background, five fingerprints, and a signature signed on the back of the postcard.
17. Must provide a photocopy of the signature page of the Directors in the International Passport, Drivers License, or National ID Card.
18. Every director must provide attestation letters from 3 referees each.
19. There should be one uniform sample. This involves how the security officer will be dressed when discharging duty. They include; a complete set of shoes, clothes, and a cap) Additionally, a photograph of a guard in uniform would serve as a sample, and all uniforms must not have the same appearance as any governmental agency or any other Private Guard Companies.
20. An application fee of Five Hundred Thousand Naira (N500,000) must be provided.

All the requirements mentioned above must be completed during the assessment of applications by the NSCDC which would be forwarded onward to the presidency.

THIRD STAGE: OBTAINING A PRIVATE SECURITY LICENCE

Note that all requirements stated in stage two will be presented by the NSCDC to the Presidency for final check and clearance of all the directors.

Additionally, the President will issue a letter containing security clearance to the NSCDC and the stated company will be invited to make payments as regards the license fees.

However, there are two categories of licenses for private security guard companies which will be stated below;

THE LICENCE CATEGORIES

Category A: Note that the company can have the capacity to have more than 3000 guards. The license fee is N3,000,000 (Three Million Naira Only)

Category B: Under this category, the company’s maximum amount of guards is only 3000 guards. The license fee here goes for N3,000,000 (Three Million Naira Only)

Importantly, A license may be approved by the Ministry and issued by the company if the payment for a license under any of the categories is completed and the Commandant General of the NSCDC recommends the company.

UNDERSTANDING THE LICENSING AUTHORITY

According to Section 2(1) of the Private Guard Companies Act, (PGC Act) A formal application for a license is submitted to the Minister of Internal Affairs through the licensing authority. Section 3 of the Act allows the Minister to give a permit only if he believes it is justified in terms of national security and public interest.

Private security guard operations are currently managed by the Ministry of Interior. The NSCDC helps the Ministry do this. By virtue of Section 3 of the NSCDC Act, the NSCDC is required to recommend to the Ministry the registration of private guard companies.

The NSCDC functions through its Private Guards Companies Department to be effective in its duties. The licensing process only involves the agencies mentioned above, so it is important for license applicants to be aware of this. Therefore, applicants should watch out for scammers.

RENEWAL OF A LICENSE

The security company must renew its license three months before it expires following the first issuance of the license to the company.

Section 11 (2) provides that “where the holder of a license fails to renew such license within the specified period, the license shall stand revoked upon its expiry and the such holder shall thereupon cease to operate as a private guard company”.

REQUIREMENTS FOR RENEWAL

Below are the requirements for the renewal of a license, which will be stated below;

1. Application Letter for Renewal of Operational License.
2. Last Letter of Renewal or Copy of License.
3. Annual Performance Report (Report of activities of the company in the preceding year).
4. Current Tax Clearance Certificate.
5. Evidence of Payment for renewal of the license. Note that this payment method must be transacted into a designated bank account.
6. Current statement of Audited Account of the Company.
7. Staff Return (Staff list, Designation, and Salaries).

Conclusion

There are strict rules and regulations when registering and running a private security company in Nigeria which every company must comply with. These rules are strict to the extent that even when there is a slight departure from the established regulations stated, it could lead to the disintegration of the company or revocation of the operating license.

Therefore, every company should make a smart move by retaining the services of a legal practitioner to assist them concerning issues of regulatory compliance and filing of yearly returns/reports with the appropriate agencies.

Tolulope Oguntade 
Regville Associates
compliance@regville.com
08065111667