Sep 10, 2012

ENTREPRENUERSHIP: SETTING UP A COMPANY




My colleagues and I always get numerous questions from friends and family who want to set up their own companies, this enquires have made writing this article necessary, it aims to inform you about the basics everyone needs to know with regard to setting up a company. Kindly note that this article will never have be adequate to inform you about all you need to know about incorporating a company and if you need legal assistance, it will be wise to consult a lawyer.


Companies in Nigeria are regulated and registered in accordance with the Companies and Allied Matters Act (CAMA) and the body charged with this responsibility is the Corporate Affairs Commission (CAC) which has a branch in every state in Nigeria with its headquarters in Abuja.

This article relates only to limited liability companies and not sole proprietorships. According to law, 2 or more people may come together to incorporate a company, however persons under 18, people of unsound mind, discharged bankrupts cannot form a company. A company may be a private company or a public company, the names of private companies end with “limited” while public companies end with “Plc”, the major difference is that public companies can have members of the public subscribe to their shares while private companies can’t sell shares to the public.

There are 3 major forms of companies including;
• Company limited by shares
• Company limited by guarantee or
• Unlimited company

A company must have a memorandum of association and Articles of association, both documents contain the various particulars of the company and its owners as well as prescribe the regulations of the company. A company shall not carry on any business which is not authorized by its memorandum of association.

A company is duly managed by its Directors and its company secretary. A company must have at least 2 directors, who must discharge their duties with reasonable care and skill. A company MUST also have a secretary whose duties include administrative and secretarial duties as directed by the directors. Every company shall also at the annual general meeting appoint auditors to audit the financial statements of the company.
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