Types of company registration in Nigeria

Types of company registration in Nigeria

July 23, 2019

 

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.

ENTERPRISE OR BUSINESS NAME: 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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For Further inquiries;

www.618bees.com

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The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer. This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached.

 

 

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Frequently Asked

  • When are Annual Returns due for filing?

    A company’s first Annual Returns are due for filing after 18 months of its inception, subsequently it should be filed annually as the name implies. The filing dates could differ for each company depending on their financial year end but must be filed not later than 42 days after its Annual General Meeting.

    The Annual Returns for Business Names is due not later than the 30th of June each year except in the year the business was registered.

  • What’s the difference between a business name and an LLC?
    • A business name is a sole proprietorship, usually owned and managed by one individual only. Legally, the sole proprietor and his business are one. It simply means an individual trading with an alias. The sole proprietor is personally liable for all business related obligations.

    • A limited liability company on the other hand is a separate business entity from the individuals that hold its shares and act as directors. Legally, it’s a separate business entity and a person on its own who can transact business, own property separate from its owners and can sue or be sued. 

  • What are the penalties for not registering my products with the SON?
      1. Seizure of goods by the Inspectorate and Compliance Directorate
      2. Payment of a fine.
      3. Prosecution

     

  • Do I have to physically drop off my product sample at NAFDAC office?

    No, you can choose to have it sent to NAFDAC office

  • What’s the difference between a business name and an LLC?
    • A business name is a sole proprietorship, usually owned and managed by one individual only. Legally, the sole proprietor and his business are one. It simply means an individual trading with an alias. The sole proprietor is personally liable for all business related obligations.

    • A limited liability company on the other hand is a separate business entity from the individuals that hold its shares and act as directors. Legally, it’s a separate business entity and a person on its own who can transact business, own property separate from its owners and can sue or be sued. 

  • Can I trademark my logo and name separately? Why is this a good idea?

    Yes you can. The advantage is that it gives you the opportunity to have more than one logo or the opportunity to change your logo easily as opposed to registering the name and the logo as one trademark.

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