Corporate Affairs Commission: Easy guide to CAC registration 2021

Corporate Affairs Commission or CAC registration is a way to make your business legally recognised in Nigeria, and this post will tell you all you need to know about it.

It is possible that you might have heard a lot of things about registering a company with CAC that got you worried. Well, why business registration isn’t a walk in the park, it is not rocket science either. In this guide, we will walk you through the hassle and explain things to you in a very clear and concise manner. After reading this guide, you will understand the different types of registrations you can make with the Corporate  Affairs Commission, how much it costs to register a Company or a Business Name with the CAC, how to go about it, and much more.  We guarantee that you will feel very confident about registering your company with CAC by the time you finish reading the article or the sections that are of interest to you.

What is the Corporate Affairs Commission?

In the year 1990, the Companies and Allied Matters Act officially recognised the Corporate Affairs Commission (CAC) as an independently functional body: validated as Nigeria’s Corporate Registry whose overall purpose is the regulation of the structuring and management of companies in Nigeria.

Formerly, the Company Registry, a section of the Federal Ministry of Commerce and Tourism, had the job of registering companies.

However, the Companies Act of 1986 was annulled and the Act rescinded. The CAC was validated as an independent organisation was prompted due to notable incompetency and incapability of the former Company Registry.

Why the government establish the CAC

You see, the major economic driver of any state, country or society is its ability to produce and manage and its resources.

The internally generated revenue is a primary indicator of how well the economy of a nation is doing. In simpler terms, how the citizens can take care of themselves within their domestic circle, proves how well government policies are aiding the common man.

Government, as we know, has a basic function toward the citizens and all who live within that society, which is to provide security and welfare. One of the ways the government does this is by creating an enabling environment for company and business ideas to be thought up, initiated, grown and thrive. In this economic cycle, some will set up businesses, others will work for those who set up businesses, some others will begin sub businesses from other businesses and some will teach others how to expand on existing business ideas and frameworks.

Through and through, everyone is into business one way or the other. However, if you are at the top end of this discussion – a business person, entrepreneur, or an intending company owner – you might want to know or know already that, beginning a business or company is the one step. Making the business or company a legal entity is another one.

For this to happen, in Nigeria, the legal framework which has been provided by the government for all legitimate organisations, either profit or non-profit, to run and follow the guidelines of the society is the Corporate Affairs Commission of Nigeria (CAC). This means that if you wish to register your organisation, company, firm, business, trademark and corporations, you must go through the Corporate Affairs Commission of Nigeria (CAC) for it to be legally binding. In other words, CAC registration is essential for every business.

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What are the functions of the Corporate Affairs Commission?

In the 7th section of the Companies and Allied Matters Act, the job of the CAC include:

1. To regulate and supervise the formation, management of the incorporation and discontinuation of companies.
2. To create and manage the registration of companies and offices in every state in the Federal Republic of Nigeria well and appropriately provisioned to carry out its duties in line with the Act or any law that it has been clearly given that responsibility.
3. Set up and conduct findings into the management and official files of any organisation where the rights and legal share of individuals associated with the company and the public are required. In this, to carry out necessary and imperative investigations that are fully needful within the legal framework of the Act.
4.  The Corporate Affairs Commission is also in charge of Business Name registrations, Incorporated Trustees registrations and also the provision of several other subsidiary and supplementary services.

Why do I need to register my business with CAC?

1. It is possible to start a business without registering it, maybe using your personal name or whatever. However, this is all informal. If you desire that your business be taken very seriously, you will have to make it completely formal and this is by registering it. If this is not done, your full business potential will be undermined. This is to say, serious business people may not want to go into or risk doing business with you, particularly if you are trading with an unregistered or personal name.
2. When your business has a formal and legal identity, you can create business accounts, apply for contracts, and even apply for loans.
3. It is only a registered business that can apply to access government grants, schemes, business aids, start-up investment, business loans and the like. No government nor investor will fund or partner with an unregistered organisation.
4.  When a company is a legal entity, that is to say, that your business is separate from you personally. Your liability is limited, meaning that your company is separate from yourself. Note that this is non-effective to a simple Business Name registration.

What type of company can I register?

There are three categories of registrations that can be made in Nigeria through the Corporate Affairs Commission. These are classified on the CAC website and include:

• Companies
• Business Names
•  Incorporated Trustee

1. Companies

This is for an association of persons who work together in a commercial, industrial enterprise or even social groups. It includes Limited Liability Company (Private or Public) and Limited by Guarantee.

– Limited Liability Company (LLC), which is the most common form of business around the world. We have the Private Limited Company and the Public Limited Company. They are both limited by shares.

(a) In Nigeria, a Private Limited Company can be made up of a minimum of 2 and a maximum of 50 shareholders. Their liability is only limited to their shares in the business capital. It is a privately-owned business entity. It is run by private stakeholders. Here, the liability of a shareholder is limited to the number of shares he holds.

(b) A Public Limited Company is an entity that can sell shares to the general public through an initial public offering (IPO). It should have a minimum of 7 shareholders but the maximum is unlimited. The shareholders have limited liability. They are not responsible for any business losses above the number of purchased shares.

– Limited by Guarantee is a type of corporation set up basically for non-profit organisations requiring legality. It doesn’t require shares nor shareholders but is rather owned by guarantors who agree to contribute amounts of money towards company debts. Companies limited by guarantee are largely formed for charities purposes, communal purposes, clubs and so on. Members do not receive profits but keep them within the organisation or use them for other purposes.

2. Business Names

A business name is simply a trade name. It is a name used to identify one’s business or organisation. This is the most simple business registration for small businesses. There are things to note about business names:

(a) Unlike the Limited Liability Companies, anyone can perform this CAC registration by themselves. However, it is recommended that you give it to a legal practitioner to make it easier.

(b) It is also advised that you have and provide, at least, five different business names in order of priority in the case of one or more of them being unavailable.

(c) Create a unique business name for your business. Avoid the use of common clichés and slogans. Use names that are not stereotypical so that in case you wish to change business, it will not alter the business name direction.

3. Incorporated Trustee

These are organisations that are not set up for business nor profiting. They are basically organised to aid the acquisition of a corporate personality through a group of people who are united by religion, custom, nationality, ideology, education, sporting activities and so on.

How much does CAC registration cost?

Initially, a name search costs N500. This is why you must supply at least five names. If research is done, you will have to pay an additional N500.

• Registering your company will cost you around N60,000 and an additional N5000 for each addition if there are more than two directors.
• Registering your NGO cost around N120,000 and an additional N5000 for each addition if there are more than two directors.
• Registering your Business Name costs N25,000

How do I go about CAC registration?

First, to register your company or business name on your own, you would have to be an accredited agent. This will require you to be registered as an agent with the Corporate Affairs Commission.

However, for a much smoother sailing registration process, get a lawyer to help you do the processing. This is recommended because a lawyer can help you scale through the legal hurdles, including requirements and language structure that you may not easily understand or comprehend.

1. CAC Portal: How to register a Company (Private or Public)

When you click on the Companies icon on the CAC website, it reveals a list of options. Then, follow the step-by-step instructions to register a company (Private or Public):

Step 1:
Check for availability of proposed company name and reserve a new name

Step 2:
Complete pre-registration form – CAC1.1 (Online using Company Registration Portal)

Step 3:
Pay Filing and Stamp duty fees

(Steps 1-3 can be completed on the “Company Registration Portal”.

Step 4
Prepare the signed scan copy of your pre-registration documents for upload as follows:

(i) Form CAC1.1
(ii) Memorandum and Article of Association (MEMART)
(iii) Recognized form of identification for Director(s)/Subscriber(s) and Secretary
(iv) Evidence of payment to CAC

Step 5

Upload the scanned documents for processing

Step 6
Submit the original copies of the documents uploaded at Step 4 (Form CAC1.1, MEMART, etc) to the CAC office you had selected in exchange for your certificate and the Certified True Copies of the documents.

2. How to register a business name

When you click on the Business Name icon on the CAC portal, the process goes thus:

Step 1:
Check for availability of the Business Name and reserve a new Name

Step 2:
Complete pre-registration form – CAC-BNo1 (Online using Company Registration Portal)

Step 3:
Pay filing fee

(Steps 1-3 can be completed on the COMPANY REGISTRATION PORTAL)

Step 4:
Prepare the signed scan copy of your pre-registration documents for upload as follows:

• Application form
• Filing fee receipt
• Means of identification for the proprietor (s)

Step 5

Upload the scanned documents for processing.

3. How to register an Incorporated Trustee

When you click on the INCORPORATED TRUSTEE icon on the CAC website, the process goes thus:

Step 1

Check for availability of proposed Incorporated Trustee name and reserve a new Name

Step 2

Complete pre-registration form – CAC-IT01 (Online using Company Registration Portal)

Step 3

Pay filing fee

(Steps 1-3 can be completed on COMPANY REGISTRATION PORTAL)

Step 4

Publication of notices in three (3) national dailies, one being a local newspaper widely circulated in the area where the organization is based.

Step 5

Prepare the signed scan copy of your pre-registration documents for upload as follows:

• A formal letter of application
• The original newspaper publications
• A copy of the Applicant’s constitution
• Minutes of the meeting whereat the trustees were appointed, having the list of members present and absent and showing the voting pattern, signed by the chairman and the secretary of the board
• Minutes of the meeting where the special clause rules were adopted into the constitution of the organisation; signed by the secretary and the chairman
• Trustees (Applicants) have to attach 2 passport sized photographs of themselves
• Trustees have to sign against their names on the application form and furnish permanent residential addresses
• The impression of the common seal should be affixed on the form and
• Filing fee payment receipt
• A copy of the application form
• Application form duly signed by Secretary and Chairman of the Board

Step 6

Upload the scanned documents for processing

Step 7

Submit the original copies of the documents uploaded at Step 6 to the CAC office you had selected in exchange for your certificate and the Certified True Copies of the documents.

Can I convert or re-register a company in case I change my mind?

Yes. Just in case you decide that you choose to convert your Private company to Public or you Limited Company as Unlimited, all you have to do is:

Step 1

Visit the CAC website

Step 2

Click the Companies icon

Step 3

Choose the appropriate option (Conversion and Re-registration of Private Company as Public or Re-registration of Company Limited by Shares as Unlimited Company)

Step 4

Follow the processes provided

(i) Conversion and Re-registration of Private Company as Public

Provide the following alongside your application:

• Special resolution signed by at least two directors
• Memorandum and Articles of Association as required under CAMA for public companies
• Written statement by the Directors in respect of share capital
• The balance sheet as at the date of the resolution or the preceding six months, whichever is later
• The statement must show that the paid-up capital of the company as at the date of the application is not less than 25 per cent of the authorized share capital
• Copy of any prospectus or statement in lieu of prospectus delivered within 12 months to Commission
• Payment of filing fees
• Annual Returns to be filed up to date
• Evidence of S.636 (in case of banks etc)

(ii) Reregistration of Company Limited by Shares as Unlimited Company

Send an application in the required form signed by two directors and the secretary and accompanied by:

• A prescribed form of assent to the company being registered as unlimited
• A statutory declaration made by directors of the company
• Stamped Memorandum and Articles of Association incorporating the alterations set out in the application
• Payment of filing fees

Step 5

Submit all the requirements

What other CAC registrations can I make?

Through the Corporate Affairs Commission (CAC) you can also perform a “Change of Name” of your company, a “Re-registration of Unlimited Company as Limited by Shares,” a “Registration of Mortgages, Debentures and Charges.” You can also apply for an “Increase in Share Capital” of your company, perform “Company Searches,” go through the process of “Obtaining Certified True Copies (CTC) of Filed Documents,” “CTC of Certificates” and “Other Statutory Filings.”

How do I get the forms required in the processes?

The forms are all available on cac.gov.ng/forms/

• Click the form you require and download it on your phone or computer.
• Fill the form appropriately and as required
• Send the copy to cservice@cac.gov.ng using your functional email.

Conclusion

Here is everything you need to know about CAC registration. Now, registering your business/company/church has been made easy.

Finally, the post is for information purposes only and does not constitute endorsement or recommendation. Use your discretion at all times.