Investor Presentaiton
The Country and its
institutions
Business Organisation Labour and Social
and Regulation
Security Regulations
The Nigerian Financial
Services Industry
Tax System
Foreign Exchange
Transactions
Investment in Nigeria
Accounting and
Auditing Requirements
Importation of Goods
Exportation of Goods
COVID-19 Economic
and Fiscal Measures
CAMA 202019 regulates the operation of businesses in Nigeria. Under CAMA, business
can be carried on in Nigeria through any of the following vehicles:
(i) Sole proprietorship or sole trader;
(ii) Partnership; or
(iii) Incorporated company.
2.1
Sole Proprietorship
The sole proprietorship form of doing business is typically used by an individual
intending to do business on his account. In general, this form of business is open
to anyone in Nigeria wishing to engage in any kind of lawful business activity. The
statutory requirements for this form of business are very limited, the major one
being the requirement for registration of a business name, where a name other
than the true name of the sole proprietor is used as the trade name.
Every sole trader having a place of business in Nigeria is required to register under
Part B of CAMA, if the business is carried on under a name that is not the true
name of the proprietor. Details of the names and addresses of the proprietor
registered under CAMA are available on request to the public at the Corporate
Affairs Commission (CAC) 20 after payment of the prescribed fee.
2.2
Partnerships
In most parts of Nigeria, the laws governing partnerships are based on the English
Partnership Act, 1890 applicable to general partnerships. Section 1 of the Act
defines a partnership as "the relationship which subsists between persons carrying
on a business in common with a view to profit." Prior to the enactment of CAMA
2020, only Lagos State permitted the registration of limited partnerships (LPs) and
Limited Liability Partnerships (LLPs) in addition to general partnerships. However,
CAMA 2020 now provides for the registration of LPs and LLPs across the country.
This is aimed at improving the ease of doing business in Nigeria.
The rights and duties of partners are generally governed by the English Partnership
Act, 1890, and the provisions of the specific partnership laws of some States
(largely States within the former Western Region and Lagos) that have enacted their
own laws in that regard. The provisions of the Act or Laws are, however, subject to
any contrary agreement by the partners. In a general partnership, the partners are
the joint owners of the partnership property and are personally liable (both jointly
and severally) for the debts and obligations of the firm. The surname and initials of
all the partners must be disclosed on the firm's letterhead and trade circulars.
In an ordinary or general partnership, the liability of each partner is unlimited. The
transfer of a partnership interest is permitted, if agreed between the partners. Each
partner is an agent of the other and may enter into contracts, undertake obligations,
and dispose of the partnership property in the ordinary course of business on
behalf of the partnership.
In a limited partnership21, there must be at least one general partner who will have
unlimited liability with respect to all the debts and obligations of the firm. The
limited partners contribute capital or property to the business but have no liability
for the debts or obligations of the business beyond their actual contributions
thereto. This is much like the limited liability of shareholders in a limited liability
company. All limited partnerships in Lagos State have to be registered at the
Limited Partnership Registry of Lagos State, which became operational with the
appointment of a Registrar of Limited Partnerships by the Lagos State Government
in June 2002.
19 President Muhammadu Buhari signed the Companies and Allied Matters Act, 2020 which repeals the Companies and Allied Matters Act,
Cap C20, Laws of the Federation of Nigeria, 2004. CAMA 2020 seeks to establish an efficient means of regulating businesses, minimize
the compliance burden of small and medium enterprises (SMEs), enhance transparency and shareholder engagement, and promote a
friendly business climate in Nigeria.
20 The CAC has launched an electronic platform for business registration in a bid to shorten business set-up time and minimize registration
costs.
21 CAMA 2020 introduced general framework for the regulation of limited partnerships and limited liability partnerships, including registration
and other compliance requirements in Nigeria.
KPMG
Investment in Nigeria Guide - 8th Edition 24View entire presentation