July 17 2006
The Corporate Affairs Commission was established by the Companies and Allied Matters Act 1990 to regulate the formation and management of companies in Nigeria. It was set up to replace the erstwhile Company Registry, which was operated by the Federal Ministry of Commerce and Tourism and was considered to be inefficient and ineffective. Although the commission was created to facilitate the formation and management of companies, over the years it has been beleaguered by bureaucracy, which led to delays.
Reforms recently carried out by the commission have helped to reduce the delays that have plagued it since its inception.
The commission has recently introduced an online system to provide services to its customers. The electronic system of company registration replaces manual and paper-based procedures.
Under the new system, customers pay for the commission's services through an e-payment system based on smart card technology and can receive the commission's services in any location. A special payment card or a credit card may be used; the service is available 24 hours a day.
Therefore, clients can easily incorporate Nigerian companies and access other services provided by the commission without visiting its headquarters. This has reduced the cost of incorporation significantly: companies can save on transportation costs to the commission's headquarters in the capital, as well as on the costs of other logistics associated with incorporation.
The new system introduced the electronic generation of data to facilitate searches on Nigerian companies, which were previously made physically at the commission. The commission has records of over 600,000 Nigerian companies and is currently converting all its records to electronic images for faster and easier retrieval by customers. This is expected to improve the commission's information management system and give international investors the opportunity to conduct searches on their business contacts and verify information from any location around the world.
As part of its repositioning efforts, the commission has introduced a 24-hour delivery service (known as 'special registration') to register companies. Individuals or corporate bodies may pay an increased fee and incorporate their companies in one day (as opposed to the current five-day term for normal registration of a company at the commission).
According to the commission's registrar general, efforts are being geared towards reducing the 24-hour delivery period for special registrations to two hours and the five-day period for normal registrations to two days.
Other investment reforms
The government has recently announced that foreigners visiting Nigeria for business and leisure purposes will no longer require letters of invitation to apply for Nigerian visas. Foreign nationals may also carry out any type of business (except the production of arms, narcotics and related substances which are on the negative list).
The Nigerian Investment Promotion Commission Act also guarantees foreign investors an unrestricted transferability of dividends or profits (net of tax) attributable to investment in Nigeria, as well as capital repatriation in the event of liquidation.
The reforms have introduced a more efficient and effective company registration procedure in Nigeria. The reforms also provide an enabling environment for prospective investors wishing to benefit from Nigeria's abundant investment opportunities, which are devoid of bureaucratic and cumbersome procedures. Another positive aspect of the reforms is the guarantee of transparency, which makes investment in Nigeria more attractive to foreign investors.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.