LegalBizPro - CAC Business Guides

Ask around Nigerian business circles and you'll hear the ₦100 million rule quoted like settled law: every foreign-owned company must have ₦100 million in capital, full stop. The reality offers a different view, and understanding where this number actually comes from changes how you should treat it. Myth 1: "It is a CAMA Law" It is not. The Companies and Allied Matters Act (CAMA) 2020, the law CAC administers, sets minimum issued share capital at ₦100,000 for private companies generally. This is nothing close to ₦100 million, and no special CAMA provision singles out foreign-owned companies at that figure. The ₦100 million actually comes from the Federal Ministry of Interior's Revised Handbook on Expatriate Quota Administration (2022), which set ₦100 million in paid-up capital as a condition for granting a Business Permit to a foreign-owned or joint-venture company. It is an immigration-linked requirement, not a company-law one. Myth 2: "CAC Enforces this Uniform...

If your company was registered before August 2020, there's a decent chance it has a shareholder who has never contributed a Naira, never attended a meeting, and never really cared about the business. A cousin. A spouse. An employee. Someone who agreed, as a favor, to hold one share so the paperwork would go through. This was not a loophole. It was the law working as designed. Now that the law has changed, thousands of Nigerian companies are quietly sitting on a structure nobody actually wants anymore. Why the Nominee Shareholder Existed  Under the old Companies and Allied Matters Act (CAMA 1990), every private company needed a minimum of two shareholders to incorporate. It didn't matter if one person was funding, running, and fully owning the business in every practical sense:  the law simply required a second name on the register. Company founders found a way around this. They would allot one share - sometimes a fraction of a percent of the company, to a trusted friend or re...

Most entrepreneurs treat their Memorandum and Articles of Association (MEMART) the way they treat a phone's terms of service. For them, it's something to scroll past and sign. It is filed with CAC, a certificate comes back, and nobody looks at it again until something goes wrong: a shareholder wants out, or the company tries to enter a new line of business and hits a wall nobody expected. The fact is that the wall was there from day one, sitting quietly inside the MEMART. The Objects Clause: From Strict Requirements to Some Default Freedom   Under the old Companies and Allied Matters Act (CAMA 1990), a company's Memorandum had to list its objects, which was essentially the specific businesses it was allowed to carry on. Step outside that list, and the company was acting ‘ultra vires,’ beyond its legal powers. As a result, older MEMARTs were often stuffed with long, sweeping lists of possible business activities. Lawyers padded the objects clause defensively, trying to cover...