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...

In every registered company , shares represent ownership, and from time to time, that ownership changes hands. Under the Companies and Allied Matters Act (CAMA) 2020, which governs corporate practice in Nigeria, there are two distinct and often confused legal routes through which this change can happen: “Transfer” and “Transmission.”  Although both often result in a new person holding shares, the circumstances, procedures, and legal basis behind each are very different. Understanding this distinction matters for companies, shareholders, company secretaries, and anyone involved in corporate administration. What is Share Transfer? Share transfer is a voluntary act. It happens when a shareholder, of their own free will, decides to sell, gift, or otherwise pass on their shares to another person while they are still alive and legally capable of making that decision.  In clear terms, it is a deliberate transaction between a willing giver and a willing receiver. For example, the pers...

         Source: CDC on Unsplash Parents, guardians, and well-meaning families always want to leave a legacy for younger ones. This includes positioning children in companies they could run, serve in, or inherit in the future. However, this situation poses a lot of questions. Can a minor be a shareholder in a company in Nigeria? And can a minor be a director?  Thankfully, Nigerian company law draws a clear line between owning shares in a company and actively running one as a director. Under the Companies and Allied Matters Act 2020 (CAMA 2020), the answer differs depending on whether we are talking about a minor as a shareholder or a minor as a director. Who is a “Minor” Under CAMA 2020? CAMA 2020 defines a minor simply as a person who has not attained the age of 18 years. This definition underpins the specific rules that follow for both shareholding and directorship. Can a minor hold shares? Yes, but this comes with some safeguards. Section 20 of CAMA...

         Source : Mobile Screenshot If you're planning to register a Limited Liability Company in Nigeria, it helps to know exactly what to do. The good news? CAC company registration has become far more straightforward than it used to be, thanks to digital, more streamlined portal. However, company registrations could get challenging due to so many factors, including, but not limited to wrongly worded names, a missing document, an incorrect share allocation, and more. These are problems first-time founders may encounter.  What Is a Limited Liability Company?  A Limited Liability Company (usually written as "Limited or LTD") is a separate legal entity from the people who own it. In practice, this means: The company can own property, sign contracts, and open bank accounts in its own name. Shareholders are only liable for the value of the shares they hold, not the company's overall debts. The business continues to exist even if a director or shareho...