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’s 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
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
Yes, it is possible for a foreigner to register an NGO in Nigeria, but they must first obtain a Combined Expatriate Residents Permit and Aliens Card (CERPAC) before registering the NGO. It is also recommended to use local trustees for the registration process. The registration of an NGO in Nigeria is regulated by the Corporate Affairs Commission (CAC). The process includes conducting a name and availability search, completing and submitting incorporation application forms, publicizing intentions of registering in three newspapers, and submitting required documents to the CAC. The entire process can take around 2 months to complete.
Non-governmental organizations (NGOs) in Nigeria are independent organizations registered by the government but operate outside government control. They are typically non-profit and focus on a variety of social and economic issues, such as poverty reduction, education, healthcare, and human rights. Some well-known NGOs in Nigeria include ActionAid, the Nigerian Red Cross Society, and the International Committee of the Red Cross.
For assistance regarding NGO registration, feel free to contact us
1.1 The Nigerian Investment Promotion Commission (NIPC) Act 16 of 1995 established the Nigerian Investment Promotion Commission established by law to encourage, promote, and coordinate all investments in Nigeria. This act also regulates the participation of foreign businesses in the country.
1.2 The NIPC Act allows foreign nationals to own up to 100% equity and invest in any business in Nigeria except those indicated on the negative list as defined by section 31 of the Act such as the production of arms, ammunition, narcotics and related substances.
1.3 Section 20 of the NIPC Act requires all enterprises in which foreign participation is permitted to apply to the Commission for business registration.
2.0 REQUIREMENTS
2.1 To apply for NIPC Business Registration Certificate, the following documents are required:
2.1.1 Duly completed NIPC Form I;
2.1.2 Memorandum & Articles of Association;
2.1.3 Certificate of Incorporation;
2.1.4 CAC Form 1.1 (or CAC Forms CO2 and CO7 for old companies);
2.1.5 Power of Attorney/ Letter of Authority (where applicable);
2.1.6 Approved Remita payment receipt of N15,000.00 only (Non- refundable)
2.1.7 NIPC payment receipt
3.0 PROCEDURE FOR PROCESSING
3.1 The NIPC Business Registration takes 24 hours to process once all required documents are submitted.
3.1.1 Applicant downloads NIPC Form 1 from the website at https://www.nipc.gov.ng;
3.1.2 Applicant pays a non-refundable processing fee of N15,000.00 only, via Remita online portal at www.remita.net;
3.1.3 Applicant submits all required documents (see 1.4 above) at the One Stop Investment Centre in NIPC or scanned copies sent to osicinfodesk@nipc.gov.ng;
3.1.4 NIPC Business Registration Certificate issued to the applicant.
For more inquiries and assistance with NIPC Registration, feel free to contact us.
The idea of launching a franchise in Nigeria might become easy but it is not easy and simple to launch one. The concept of establishing a franchise in Nigeria can be abused in some instances, and this is why it calls for massive cooperation with the franchisor and franchises. As a result, this could be the only way such a franchise could thrive in the Nigerian business industry.
What is the Legal Definition of a Franchise?
It should be noted that there are laws relating to franchises in Nigeria. This also includes the legal definition. However, the franchise is defined by the Nigerian International Franchising Association as a business arrangement or setting where the franchisor grants the franchise operator the right to make distribution of certain products or services in a specific way or sequence, at a particular location and period. As a result of this service, the franchisee pays the franchisor estimated fees and royalties.
As far as Nigeria is concerned, there are several franchises ranging from local and international. These include; Mr. Biggs, Dominoes, Chicken Republic, Pizza Hut, Shoprite, McDonald’s, etc. For the sake of this article, you will be given a brief guide on how to start a franchise in Nigeria, as well as the laws regulating the offer and sale of franchises.
Laws Regulating The Offer and Sale of Franchises?
As mentioned previously, there is no Nigerian law that regulates the offer and sale of franchises. However, some enabling statutes seem to play a crucial role in regulating the transfer of foreign technology to Nigeria. Therefore, this includes the National Office for Technology Acquisition and Promotion Act, stated in Chapter N62, Laws of the Federation of Nigeria, 2004. Note that where there is the involvement of the transfer of technology, then there is a franchise arrangement, which is regulated by the provisions of the NOTAP Act.
A Step-By-Step Guide on How To Start A Franchise in Nigeria
Firstly, to start a franchise in Nigeria, business registration with the Corporate Affairs Commission must be compulsory. As a result of this The Companies and Allied Matters Act, 2020 Provides that whoever wants to create or establish a business in Nigeria must first register their entity for whatever purpose they would want to run and operate such business.
In a similar vein, there are circumstances where the business owners are not nationals but foreigners. As a result of this, the Immigration Act 2015 and the Nigeria Investment Promotion Commission Act provide that every foreigner must register their business with the Nigeria Investment Promotion Commission and must also obtain a business permit to effectively run their business within Nigeria under the supervision of the municipal laws.
On the other hand, if the new business seeks to employ foreigners, then the such business must apply for an Expatriate Quota which is stated in Section 34 of the Immigration Act.
Secondly, when it comes to starting a franchise in Nigeria, every business owner must register such a franchise agreement with the National Office for Technology Acquisition and Promotion (NOTAP).
However, according to the provisions of the NOTAP Act, every agreement intended for the transfer of technology between a foreign transferor and a Nigerian transferee must be registered by the NOTAP. This is the policy since the agreement involves technology transfer if necessitates the NOTAP registration as a franchise agreement. It should be noted that agreements for foreign technology transfer shall be registrable if its purpose or zeal conforms with the NOTAP wholly or partially which is based in connection with any of the following;
Trademark Usage
Basic or Detailed Engineering Supply
Patented Inventions Usage Act
Machinery and Plant Supply
Operating Staff or Managerial Assistance and Personnel Training Provision
Technical Expertise Supply
Importantly, every business owner should note that when registering a franchise agreement, the Federal Competition and Consumer Act (FCCPA) states that any provision based on an agreement for the sale of certain goods that seems to establish minimum prices for the resale of goods in Nigeria shall be void.
Additionally, trademarks are very essential when it comes to business recognition and management. As a result, every franchise must have one registered in Nigeria. As far as Nigeria is concerned, it will be the first to file jurisdiction for the protection of any trademark. This is why the franchise has to be registered in Nigeria even if the trademark is being registered in other jurisdictions.
Conclusion
Securing a lease agreement for the franchise store in a suitable location is very important for every franchisee. Other actions required to be taken include; employing local staff, registering the franchise company with Federal Inland Revenue Service for sake of taxing, and registering for some industry-specific permits. Take for instance how a franchise intends to operate in the Oil and gas sector. One of the actions such businesses must undertake to get involved is to obtain a license from the Department of Petroleum Resources (DPR.)
Frequently Asked Questions
What Forms of Business Entities are Typically Used By Franchisors?
It should be noted that as far as Nigeria is concerned, the business entities which are mostly used by franchisors are limited liability companies. These companies may either be private or public.
Are there any Registration requirements Or Other Formalities Applicable to a New Business Entity As A Pre-condition to Being Able To Trade in Your Jurisdiction?
Trading is common in Nigeria, and to begin such an operation, a new business entity must meet the following requirements;
The company must be registered with the Nigerian Investment Promotion Commission. This registration applies only to companies with foreign participation.
Must be registered with the Federal Inland Revenue Service for tax-related purposes.
A corporate bank account must be opened in a commercial bank in Nigeria, which supports capital.
Must have a business permit and expatriate quota from the Ministry of Interior. Only companies with foreign participation and in cases where other foreigners are employed are entitled to this feature.
Are There Restrictions on the ability of the Franchisor to Impose Minimum Resale Prices?
Yes, NOTAP has the authority to deny the registration of a franchise agreement if it contains resale price clauses that are against the Price Control Act or any other law governing prices imposed for internal use or export.
Additionally, any clause or condition in a contract for the sale of commodities that purports to set minimum prices for the resale of products in Nigeria is invalid under the FCCPA.
Is There a Maximum Permitted Term For Any Related Product Supply Agreement?
Yes, the NOTAP Act specifies that a technology transfer agreement’s duration does not exceed ten years. In reality, however, NOTAP typically accepts a franchise agreement for a term of three years, after which it may be extended for additional three-year periods.
Is Membership in Any National Franchise Association Mandatory or Commercially Advisable?
No, it is not necessary to be a member of a national franchise group. Belonging to a national franchise group has no commercial benefit either.
Is There A Requirement for Franchise Documents or Disclosure Documents To Be Translated Into The Local Language?
The necessity that documents be translated into the local language is not mandated by law. However, because English is Nigeria’s official language, all documents must be written in English.
FIVE (5) REASONS WHY NIGERIAN STARTUPS ARE INCORPORATING A PARENT COMPANY IN DELAWARE, UNITED STATES
The Delaware Flip
INTRODUCTION
Why do Flutterwave, Paga, Paystack, Kuda, Cowrywise, Andela, Ulesson, Shuttlers and a host of others have their Parent/Holding Company in Delaware, United States?
Interestingly, over 70% of StartUps that are incorporated outside Africa are based in Delaware, United States (Disrupt Africa).
According to Forbes Advisor, Delaware has become internationally recognized as a corporate paradise and is “home” to such famous firms as Amazon, Google, Tesla, Walmart, American Express and Disney, to name just a few. Interestingly, 68% of Fortune 500 companies and 93% of all U.S.-based initial public offerings are registered in Delaware United States.
So, what is the fuss about Delaware, United States?
1.CONDITION PRECEDENT TO FUNDING: To get funded, most Venture Capital (VC) requires your Company to be incorporated outside Nigeria, and form a Holding-Subsidiary Relationship, the Delaware Company becomes the Holding Company and the Nigeria Company a subsidiary.
If your company is already incorporated somewhere other than the United States, Canada, Singapore or the Cayman Islands, in order to participate in YC you will need to create a parent company that is in one of those jurisdictions. The existing company will then become a subsidiary of the new United States, Canada, Singapore or Cayman parent company.
2.FUNDING OPPORTUNITIES
Undoubtedly, the US has the biggest funding institution, with $63 billion in 2022 and positioning is synonymous with funding. So, asides from being a condition precedent, the need to attract investors and VC firms will drive StartUps to incorporate in the US and perhaps Delaware.
3. TAX BENEFITS
According to Forbes Advisor, the most famous reason Delaware has attracted the eye of corporations across the world is the lenient taxes imposed by the state. Corporations registered in Delaware that do not do business in the state do not pay corporate income tax. Delaware also does not have a sales tax, investment income taxes, inheritance taxes or personal property taxes. While companies do have to pay a franchise tax to register in Delaware, this can be pennies compared to the income tax other states would charge. Nationwide companies that do conduct business in Delaware can still skirt the in-state income tax by establishing subsidiary or shell companies that hold various intangible assets but do not directly run business operations.
4. CORPORATION COURT
Instead of a traditional trial system, corporate lawsuits in Delaware are resolved by the Court of Chancery, a court made up of judges who specialize in corporate law. Because of this, Delaware has well-developed and predictable legal precedents that may benefit corporations. While the average civil lawsuit may take a number of years to resolve, Delaware’s use of judges instead of juries and prioritization of corporate-related cases means similar cases can be decided more quickly.
5. PRIVACY
As with registering a business in most states, companies must assign a registered agent who maintains a physical address to be the official address and to receive mail and collect paperwork. Unlike most states, however, in Delaware, the registered agent is the only name that must be disclosed in association with the company. Other officers and directors are not required to disclose their names, allowing an extra degree of anonymity. Because of this lack of reporting, officers, directors and shareholders are also not required to maintain residency in Delaware.
For Delaware Company Formation and how to form the Holding-Subsidiary structure between the Delaware Company and the Nigeria Startup, feel free to contact us.
According to Investopedia, the term trademark refers to a recognizable insignia, phrase, word, or symbol that denotes a specific product and legally differentiates it from all other products of its kind. A trademark exclusively identifies a product as belonging to a specific company and recognizes the company’s ownership of the brand.
REQUIREMENTS FOR THE GRANT OF TRADEMARKS IN NIGERIA
TRADEMARK SEARCH: This is to confirm the registrability of the mark if it doesn’t infringe on any existing mark or is similar to any already registered mark.
APPLICANT INFORMATION
Owner of Mark (Company or Individual)
Address of Mark Owner
Phone Number
E-Mail Address
TRADEMARK INFORMATION
Trademark (Name, Sound or Device)
Class of Specification of Goods/Services
Specification of Goods/Services Description
Attach Power of Attorney
Upon Approval/Acceptance, a Trademark Acceptance Letter is issued.
TRADEMARK CERTIFICATE: Kindly note that Acceptance Letter should not be misconstrued as a certificate. Not until the mark has been published in the Trademark Journal and not opposed within two months can an application be made to the Registrar for a Trademark certificate.
Regville Associates offers end-to-end legal, tax and secretarial service for companies. We are an Accredited Agent of the Ministry of Trade and Investment, Department of Commercial Law, where Intellectual Property such as Trademarks, Patents and Designs are registered. We will be happy to hear from you regarding your Intellectual Property protection.
For most small and medium-scale businesses, the business owner also doubles as the Business Owner and the Managing Director/Proprietor/Partner as the Business Structure may be.
WHAT IS DIRECT ASSESSMENT?
Direct Assessment tax in Nigeria is a system through which self-employed persons are assessed and charged to pay tax based on their income.
WHAT IS PAYE:
Pay As You Earn is a tax that employer deducts from employees’ salaries and wages. This tax rate moves from 7 to 24 per cent of taxable income. The taxable income band ranges from NGN300,000 to above NGN3.2 million in a year.
THE TAX MAN
Tax authorities more often than not subject Managing Director/Proprietors/Partner to Direct Assessment and the reasons are not far-fetched: to comb and get a declaration of all sources of income, investment etc. after that subjecting the gross income, less the reliefs to tax in line with Section 41(3) and 36 of the Personal Income Tax Act (PITA).
Therefore, if you have multiple sources of income and avoid being double taxed then a Direct Assessment will be the perfect match. Direct Assessment must be filed within 90 Days from the beginning of the year (on or before March 31st).
ONLY SOURCE OF INCOME
However, if the Business is the only source of income, it is advisable to subject oneself to salary and come under the Pay-As-You-Earn PAYE scheme.
FEATURE OF DIRECT ASSESSMENT
Ideal for multiple sources of income individuals
For High Net Worth Individual
PROs
It prevents double taxation
One payment serves all the Companies
CONs
The declaration/assessment form will be subjected to verification by the tax man before an assessment is raised.
Lump sum payment
FEATURES OF PAYE
Monthly Tax Payment
To be remitted on or before the 10th of the Month for the preceding Month
It is single employment or single salary based
Employer’s responsibility
PROs
Monthly Payment (flexible)
8% Pensions, NHIS, NHF are Tax Deductibles
CONs
Must be filed monthly on or before the 10th of the Month for the preceding month.
For some States such as Lagos State, the Tax Clearance Card carries both the Tax Payer Details and the Company’s Name.
CONCLUSION
The route to take largely depends on your income (the sources) and your tax planning strategies.
To this end, it is advisable to consult a competent tax practitioner or tax firm for guidance.
For Taxation, Tax Planning and Tax Filing, feel free to contact us:
The Federal Competition and Consumer Protection Commission (FCCPC), is primarily saddled with the responsibility of protecting and advancing the interest and well-being of consumers in Nigeria.
THE NITDA SANCTION ON SOKOLOAN
On August 17th 2021, the National Information Technology Development Agency (NITDA) sanctioned an online lending platform, Soko Lending Company Limited (Soko Loans), for privacy invasion, unauthorized disclosures, failure to protect customers’ data and defamation of character. The action was taken after a series of complaints from the public. The Company has imposed a monetary sanction of NGN 10,000,000.
THE INTER-AGENCY
In November 2021, the Federal Competition and Consumer Protection Commission (FCCPC) alongside 5 other agencies, set up an Inter-Agency Joint Task Force to look into the practices of Digital Money Lenders (DMLs) including privacy invasion, failure to protect personal data, data abuses and other aberrant debt collection practices.
STEPS TAKEN
On August 18, 2022, Inter-Agency Joint Task Force, conducted enforcement actions in Lagos with respect to Digital Money Lenders (DMLs) in addition to the enforcement action the task force established a mutually adopted Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, 2022.
In light of the Registration Framework and Guidelines, the Commission commenced the registration of DMLs. By an Order and Notice of the Commission on August 17, 2022, existing DMLS were required to comply within ninety (90) days. The payment gateways used by the DMLs are needed to demand FCCPC Approval from the DMLs to continue to provide their services. In a big step, Google Play has requested digital lenders to provide evidence of their compliance with FCCPC within 30 days from November 16, 2022, or be removed from the platform.
CHECKLIST OF DOCUMENTS TO BE SUBMITTED FOR REGISTRATION AND APPROVAL OF DMLs
A certified copy of the certificate of incorporation of the digital lender;
Evidence of compliance with Form DLG 001 – FCCPC Interim Digital Lending Guidelines Form;
Terms of use;
Privacy policy;
Code of conduct;
Any and all previous defamatory messages sent to customers and any and all new templated messages;
Proof of disciplinary action against erring staff;
A brief description of the business and where relevant, its groups;
Organogram showing the role players, and location of key role players and any operational approving authority;
Name and address of a person within the business who is authorized to accept all the correspondence and accept service on behalf of the business;
Evidence of membership of any trade or professional associations;
Any service level agreements with any service providers with respect to operations but excluding administration;
Proof of tax payments or tax waivers where applicable.
Evidence of all applicable fees associated with service.
Evidence of compliance with Form DLG 002 – Declaration for Digital Lending Businesses in Nigeria.
STATUS OF DMLs
The FCCPC on November, 15th 2022 provided a list of DMLs who has been granted approval and those with conditional approval.
FULL APPROVAL
SYCAMORE INTEGRATED SOLUTIONS LIMITED
TRADE DEPOT
TAJOW INVESTMENT
BLUE RIDGE MICROFINANCE BANK LIMITED
GROLATECH CREDIT LIMITED
BRANCH INTERNATIONAL FINANCIAL SERVICES LIMITED
BRANCH INTERNATIONAL FINANCIAL SERVICES LIMITED
P2VEST TECHNOLOGY LIMITED
CREDITWAVE FINANCE LIMITED
KEENEST TECH SERVICE LIMITED
FAIRMONEY MICRO FINANCE BANK
ALTRACRED FINANCE INVESTMENT LIMITED
CREVANCE CREDIT LIMITED
MENACRED COMPANY LIMITED
AFROWIDE DEVELOPMENT LTD
RED PLANET NIGERIA LIMITED
AFROFIRST MOBILE AND TECHNOLOGY COMPANY LIMITED
RANKCAPITALS LIMITED
IBS GOLDEN INVESTMENT COMPANY LIMITED
LENDVISERY SERVICES LIMITED
CREDITWAVE FINANCE LIMITED
RENMONEY MICROFINANCE BANK LIMITED
SWIPEBILL TECHNOLOGIES NIGERIA LIMITED.
HOMETOWN FINTECH LIMITED
GIASUN TECHNOLOGY NIGERIA LIMITED
BE RESOURCES LIMITED
ROCKIT LENDERS NIGERIA LIMITED
PIVO TECHNOLOGY LIMIED
YES CREDIT COMPANY LIMITED
FUBRIL CENTURY LIMITED
IRORUN TECHNOLOGIES LIMITED
CSENSE LIMITED
SUPREME HELP COOPERATIVE SOCIETY LIMITED
ORCOM AND ORCOM BUSSINESS SUPORT LIMITED
PAYHIPPO LIMITED.
EASYCHECK FINANCE INVESTMENT LIMITED
QUARK FINANCIAL NIGERIA LIMITED
CONDITIONAL APPROVAL
TRIPPDBASE LIMITED
BLACKCOPPER SERVICE
OWOAFAR FINTECH SERVICE
PAYLATER HUB
WINDVILLE FINANCIAL NIGERIA LIMITED
AFROFIRST MOBILE AND TECHNOLOGY COMPANY LIMITED
ORCOM AND ORCOM BUSINESS SUPPORT LIMITED
OTP INTERNET TECHNOLOGY LTD
RED HARBOR FINTECH LIMITED
BERYL SPRING GLOBAL LIMITED
HOMETOWN FINTECH LIMITED
AJAX LENDING LIMITED
RACEOVA NIG. LIMITED
LANTANA TECHNOLOGY LIMITED
THE PLATFORM DIGITAL NETWORK LIMITED
ZIPPY CAPITAL LIMITED
NEO-LINK TECHNOLOGY LIMITED
TRIPOBASE LIMITED
BESTFIN NIGERIA LIMITED
POCKETFUEL FINANCE LIMITED
LENDING EDGE LIMITED
TED ROCKET LIMITED
PENAID LIMITED
ALTARA CREDIT LIMITED
NEW CREDAGE NIGERIA LIMITED
LENDHA TECHNOLOGIES LIMITED
DOJA LEMAIRE GLOBAL LIMITED
PAYDAYHUB ONLINE NIGERIA LIMITED
RETAIL BOOSTER LIMITED
FINNEW FINTECH LIMITED
FEZOTECH NIGERIA LIMITED
ORANGE LOAN & PURPLE CREDIT LIMITED
CITADELE CAPITALS LIMITED
FEWCHORE FINANCE COMPANY LIMITED
A1 CAPITAL SOLUTION LIMITED
ONE PAYOUT LIMITED
LINKPARK TECHNOLOGY NIGERIA LIMITED
LIDYA GLOBAL LIMITED
PHOENIX PAYMENT SOLUTIONS LIMITED
RED PLANET NIGERIA LIMITED
KWABA INTERNATIONAL LIMITED.
MAYWOOD LENDING LIMITED.
PRINCEPS CREDIT SYSTEM LIMITED
LINKPARK TECHNOLOGY NIGERIA LIMITED
EXTENSION OF REGISTRATION DEADLINE
In light of the progress made by the Inter-Agency and the need to create a mutual working relationship with the DMLs, the Commission has not extended the deadline to January 31st, 2023, to enable all DMLs to comply with the Order.
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
Two proposed names have to be provided which stipulate the preferred name of the company or an alternate name.
The address of the head office and branch offices has to be provided.
There should also be a share capital and shareholding formula among the shareholders.
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.
Secretaries of the company must have particulars of the company, passport photographs, and any other possible means of identification.
Shareholders must also have particulars, who will act as the first subscribers of the company.
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.
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;
An application for a private guard license must be tendered to the NSCDC, which must be addressed to the Commandant General of the NSCDC.
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.
Every security company must provide certified True Copies of the Memorandum and Article of Association.
Photocopies of the Certificate of Incorporation must be provided.
Must provide Tax Clearance Certificate.
Must Obtain a statement of account from a bank.
A letter from a legal advisor has to be provided.
A letter from an Auditor must be provided.
Letter from Bankers.
Proposed training program.
The proposed salary structure must be provided.
Veterinary certificate (Optional) Applicable if security animals are used.
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.
There should also be two copies of the Academic credentials of directors to be attached to the PHS form.
Each director has to provide eight passport photographs.
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.
Must provide a photocopy of the signature page of the Directors in the International Passport, Drivers License, or National ID Card.
Every director must provide attestation letters from 3 referees each.
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.
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;
Application Letter for Renewal of Operational License.
Last Letter of Renewal or Copy of License.
Annual Performance Report (Report of activities of the company in the preceding year).
Current Tax Clearance Certificate.
Evidence of Payment for renewal of the license. Note that this payment method must be transacted into a designated bank account.
Current statement of Audited Account of the Company.
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.
