This page summarizes Subnational Doing Business in Nigeria 2014 data for Lagos (Lagos). The first table shows its rank among 36 cities/regions in Nigeria. The rest of the tables summarize the key indicators for each topic and benchmark against regional and high-income economy (OECD) averages.
The steps of launching a business are shown below. Included are: the number of procedures entrepreneurs can expect to go through to start up and formally operate an industrial or commercial business, as well as the time and cost to complete these procedures and the paid-in minimum capital requirement as a percentage of gross national income (GNI) per capita.
The total number of procedures required for married men to register a firm. A procedure is defined as any interaction of the company founders with external parties (for example, government agencies, lawyers, auditors or notaries).
The total number of days required for married men to register a firm. The measure captures the median duration that incorporation lawyers indicate is necessary to complete a procedure with minimum follow-up with government agencies and no extra payments.
The amount that the entrepreneur needs to deposit in a bank or with a notary before registration and up to 3 months following incorporation and is recorded as a percentage of the economy’s income per capita.
Reserve a unique company name at the Corporate Affairs Commission
The Corporate Affairs Commission (CAC) Online System was commissioned in June 2005. The system envisaged an online search of unique company names immediately upon the purchase of an e-payment card from an accredited bank. Although this service is widely advertised by CAC, until now the system is not fully operational either because of power fluctuation or because of lack of availability of the pre-paid cards necessary to conduct the online transaction. In most cases, the applicants have to go to the CAC branch office in Lagos (either in Yaba or Alausa) to complete this procedure, where they submit Form CAC 1: Availability Check and Reservation of Name.
Prepare the requisite incorporation documents and pay the stamp duty
To prepare the requisite incorporation documents, the incorporators must complete the requisite statutory forms, prepare and print the memorandum and articles of association, and have them stamped by the Federal Inland Revenue Service (FIRS)
NGN 18,181 (stamp duty of 0.75% per share capital + NGN 1,000 for stamping of two extra copies of memorandum and articles of association + NGN 500 for incorporation forms)
Sign the declaration of compliance (Form CAC 4) before a Commissioner for Oaths or notary public
The declaration by the barrister or solicitor engaged in the formation of the company may be sworn to before a notary public for a fee of NGN 4,000 - NGN 5,000, or at any of the recognized courts in the country (Magistrate Court, the State High Court, or the Federal High Court) before a Commissioner for Oaths for a small fee of NGN 500 usually chargeable by the respective courts.
Register at the Corporate Affairs Commission and Pay the fees at the bank desk of CAC
To register the company with the Corporate Affairs Commission (CAC), the following incorporation documents are submitted:
a. Stamped memorandum and articles of association (2 copies); b. Form CAC 1: Availability check and reservation of name; c. Form CAC 2: Statement of share capital and return of allotment of shares; d. Form CAC 2.1: Particulars of the company secretary; e. Form CAC 3: Notice of registered address; f. Form CAC 4: Declaration of compliance; g. Form CAC 7: Particulars of directors; h. Photocopy of information page of international passport or national identity card for each director and subscriber.
The fee schedule for registration is the following: for the first NGN 1,000,000 of nominal capital: NGN 10,000; for every NGN 1,000,000 or less thereof of nominal capital after the first NGN 1,000,000: NGN 5,000. Fees for certified true copies of some forms are paid as follows: NGN 3,000 for C.T.C of memorandum and articles of association, NGN 2,000 for C.T.C of particulars of directors (CAC 7), NGN 2,000 for C.T.C of allotment of share capital (CAC 2) and NGN 2,000 for C.T.C of particulars of the company secretary. The payment can be done at the bank desk at CAC.
NGN 89,000 (NGN 60,000 for legal fees + NGN 20,000 for registration fees [NGN 10,000 for company whose nominal share capital is NGN 1,000,000 or less + NGN 5,000 for all subsequent million] + NGN 3,000 for certified true copy of memorandum and articles of association + NGN 2,000 for certified true copy of particulars of directors + NGN 2,000 for certified true copy of particulars of shareholders + NGN 2,000 for certified true copy of particulars of the company secretary)
Make a company seal
Section 74 of the Companies and Allied Matters Act (CAMA) requires every company to have a common seal. The company is thus mandated to have a company seal by the Companies and Allied Matters Act 1990 (2004) (CAMA) first schedule paragraph 15, which provides a standard memorandum of articles of companies and requires directors to provide a company seal. Such is also the common practice, especially because companies will generally have to register a deed and other official documents.
Register for income tax and VAT at the Federal Inland Revenue Service
The Federal Inland Revenue Service (FIRS) requires the applicant to complete tax registration forms for corporate income tax registration as well as VAT. The company submits an application letter to the tax authority for a tax clearance certificate and, for income tax purposes, registers at the integrated tax office. The registration process requires submitting a completed tax office–issued application (taxpayer registration input form, TRIF/2006/001 COYS) and the following documents: a) Completed FIRS questionnaire. b) Memorandum and articles of association (copy). c) Certificate of incorporation (copy). d) Directors’ names and addresses. e) Tax advisor’s name and address. f) Letter of appointment of a tax adviser and corresponding letter of acceptance. g) The date the company commenced business; h) Names, addresses and mobile numbers of major promoters and the chairman of the company, including their email addresses; i) Other sources of income of the chairman and the promoters of the company; j) Name and addresses of the principal officers of the company including the chairman, managing director, legal adviser and accountant;
To register, the company must submit the taxpayer registration input form in triplicate, and the original certificate of incorporation must be presented for review by the controller. Upon the completed taxpayer registration input form and all other documents being received, a tax reference number is allocated. An application must be filed for the tax clearance certificate; its issuance is not automatic.
Register for personal income tax PAYE at the State Tax Office
All employers shall register with the relevant state tax authority for income tax withholding. The PAYE Regulations, 2003 made pursuant to the Personal Income Tax Act provides that all employers are to register with the Lagos State Board of Internal Revenue Tax Office nearest to the registered company address for the purpose of remitting income tax deducted from their employees. The employer must within 6 months of commencing a business deduct tax from emoluments of employees and remit the amount deducted to any of the designated collecting banks.
The registration requirements are as follows: a) A copy of certificate of incorporation. b) List of staff and their annual salaries. c) The Directors’ Tax Clearance Certificates (now Electronic Tax Clearance Certificate) d) Letter of application for registration. Upon completion of registration, an Employer's Identification Number will be issued.
An employer who fails or refuses to register commits an offence and is liable on conviction to pay a NGN 25,000 fine in addition to the payment of arrears of the tax due.
Register business premises with the Lagos State Government and Pay the business premises levy at a designated bank
To register the company premises with the Lagos State Government, the entrepreneur heads to any nationalized commercial bank with some evidence of the business premises (utility bills, etc.) and pays the business premise levy to the account of the Lagos Inland Revenue Services (LIRS). The bank then issues a receipt bearing the Lagos State Government logo.
Business premises in an urban area of Nigeria are required to be registered on the payment of a NGN 10,000 registration fee in the first year of registration (NGN 5,000 per annum as renewal registration fees in the subsequent years). For rural areas, the business premises registration fees is NGN 2,000 for the first year of registration (NGN 1,000 per annum as registration renewal fees for the subsequently years).
* Takes place simultaneously with previous procedure.