Types of company registration in Nigeria.
This write up is to help you understand the different types of companies in Nigeria as it states the basic features of each type of company registrable in Nigeria.
BUSINESS NAME OR SOLE PROPRIETORSHIP: This type of business registration is most suitable for sole proprietors or small partnerships. An enterprise is a business in which the owner of the enterprise registers the business name with the corporate affairs commission and is exposed to bear all business risk, the sole proprietor is personally responsible for the running of the business and has unlimited liability to all debts and legal actions.
Read the blog post on how to register a business name to find out the requirement and the procedure of registration.
PRIVATE COMPANY LIMITED BY SHARES: A company limited by shares is a company where the liability of the members is limited to their subscription on the memorandum and articles of association.
A private company limited by shares has a separate entity from those who own it, the shareholders which means that shareholders personal assets remains his personal assets even if the company has a liability or a debt it owes and the liability of the shareholder is to the extent of the shares he owns in the company.
Read the blog post on How to register a limited liability company to find out the requirement and procedure of registration.
PUBLIC COMPANY: A public company is a company that the transfer of its shares is unrestricted. And it is open to the public to buy shares or debentures or deposit money for fixed periods. Any company that is not a private company shall be a public company and its memorandum shall state so. Every public company shall have capital except those limited by guarantee.
COMPANY LIMITED BY GUARANTEE:
A company limited by guarantee does not have a share capital, the guarantors do not receive any profits and have no claim to the company’s assets. All income generated is used to cover operating costs and to achieve the objectives of the company.
The liability of its members is limited to whatever amount they undertake to contribute to the assets of the company. It may not be incorporated with the objective of carrying on business for the purpose of making profits for distribution to its members.
Read up the blog post “Companies limited by guarantee” to know the requirement and procedure of registration.
UNLIMITED COMPANY: An unlimited company is a company incorporated with or without a share capital where the legal liability of the members or shareholders is not limited which means that its members or shareholders have a joint, several and non-limited obligation to clear the liability of the company.
An unlimited liability company has no limit on the liability of its members.
NON-PROFIT/ NON GOVERNMENTAL ORGANISATION: This is a non profit making organization that is geared towards charity, promotion of culture and activities that do not generate profit for the organization or its members. There are no shareholders nor share capital but it has the board of trustees.
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