by crossriverwatch admin
|No||Procedure||Time to Complete||Associated Costs|
Check the availability of company’s name with the Corporate Affairs Commission (CAC)
The Corporate Affairs Commission online system allows for online search of unique company names upon the purchase of an e-payment card for a flat fee of NGN 200 from an accredited bank. The system is widely used but in most cases, applicants have to go to the CAC office to complete this procedure. The time to conduct the availability of name search, receive confirmation and reserve the company name is usually 4 days in this state. The company name reservation lasts 60 days but can be renewed for a similar period.
|4 days||NGN 200|
This procedure involves the following tasks:
a. Preparing and printing the memorandum and articles of association;
b. Completing the requisite statutory forms, and;
c. Having the memorandum and articles of association stamped by the Federal Board of Inland Revenue Service.
There is no stamp duty office in Cross River State, and incorporation documents have to be stamped at the closest stamp duty office in Port Harcourt, adding time to this procedure.
There is no stamp duty office in this state and payments and stamping of the documents are handled in Port Harcourt, which is the nearest city where there is one. Transportation costs are included in the professional charges.
The recent reduction in stamp duty payment to 0.75% of the nominal share capital is still not widely disseminated in the state. As such, the lawyers still obtain stamp duty payments at 1.5% of share capital from entrepreneurs and only pay over the amount of the official rate to the stamp duty office. Since this procedure is usually handled by the lawyers, the entrepreneurs in this state who are not aware of the reduced official costs associated with handling the stamping of the incorporation documents pay more than their counterparts in other states.
|9 days||NGN 13,098 (stamp duty at 0.75% of share capital + NGN 1,000 for extra stamped copy of memorandum and articles of association + NGN 500 for incorporation forms)|
|3||Declaration of Compliance (Form CAC 4) signed before a Commissioner for Oaths or notary publicA sworn declaration that the requirements of the Companies and Allied Matters Act have been met must be sworn to by (i) a barrister or solicitor engaged in the formation of the company or (ii) by a person named in the memorandum and articles of association as a director or secretary of the company. This procedure can be done before a notary public or filed at the state or federal High Court. The common practice is for this declaration to be sworn before a Commissioner of Oaths at the state High Court.||1 day||NGN 50|
|4||Pay incorporation fees to the Corporate Affairs Commission at a designated bankPayment is made at any of the receiving banks designated by the Corporate Affairs Commission.||1 day||NGN 27,000 (NGN 10,000 for incorporation fees per 1,000,000 share capital + NGN 10,000 for every 1,000,000 share capital thereafter + 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)|
|5||Register the company with the Corporate Affairs CommissionThe applicant must file with the Corporate Affairs Commission the required incorporation documents and forms, which include:a. Stamped memorandum and articles of association (2 copies);b. Form CAC 3, Notice of registered address;c. Form CAC 7, Particulars of directors;d. Form CAC 4, Declaration of compliance and the prescribed registration fees;e. Copy of the reservation of company name approval;f. Form CAC 2, Statement of share capital and return of allotment of shares.
The CAC introduced a same-day incorporation option at an increased statutory fee (5 times that of standard incorporation). 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 10,000; filing fee for the certified true copies of 3 forms (CAC 3, CAC 2 and CAC 7): NGN 7,000.Payment is received at the cashier’s desk in the CAC.
There is a legal requirement for the company’s incorporators to hire a CAC accredited professional usually a lawyer to undertake the administrative incorporation procedures. Given that the use of lawyers for such purposes is mandatory throughout the country, lawyer fees are accounted for in the overall incorporation costs. On average, a lawyer will charge NGN 100,000 to handle the entire incorporation process in this state.
|21 days||NGN 100,000 (legal fees)|
|6||Register with the integrated Tax Office of the Federal Board of Inland Revenue for income tax and VATEntrepreneurs can register for both corporate income tax and VAT at the new Integrated Tax Office. For corporate income tax, the Federal Inland Revenue Service (FIRS) will require the applicant to complete tax registration forms. The new company registers at a Federal Tax Office nearest to its place of business or registered office. A letter is written to the tax authority applying for a tax clearance certificate. A form obtained from the tax office is filled and the following documents submitted with it:a. Taxpayer registration input form (TRIF/2006/001 COYS);b. Completed FIRS questionnaire;c. Copy of memorandum and articles of association;d. Names and addresses of directors;e. Copy of the certificate of incorporation;f. Name, address of tax adviser;
g. Letter of appointment of tax adviser and a letter of acceptance.
The application forms must be in triplicate and the original certificate of incorporation must be presented for ‘sighting’ by the controller before registration can be completed. Upon receipt of the completed taxpayer registration input form and all documents, a tax reference number is allocated. An application must be filed for the tax clearance certificate. Its issuance is not automatic.
The fees for the tax clearance issuance are as follows: for newly registered companies within 6 months of incorporation: no fee; for companies that are yet to commence business and show up for registration after 6 months of incorporation, if they request for tax clearance certificate a pre-operation levy of NGN 25,000 is payable for the first time and NGN 20,000 is payable for subsequent years until it files a notice of commencement of business.
Companies required to register for VAT should complete the VAT registration form (VAT Form 001, obtainable free of charge from all FIRS offices) and return it to the nearest integrated tax office, which will issue a taxpayer identification number (TIN). According to the VAT Act, companies required to register for VAT must do so within 6 months from the date of starting business operations. The TIN is issued in 1-2 days, but it is mailed with the VAT certificate, which is issued in a week.
|5 days||No cost|
|7||Register for personal income tax PAYE at the State Tax OfficeThe employers in the newly incorporated company are required to register with the relevant state tax authority for the purposes of deducting income tax from employees. Once an application is filed with a copy of the certificate of incorporation attached, a reference file is then opened for the company. There is no cost related to this registration.||2 days||No cost|
|8||Obtain a business premises permit from the Department of Investment PromotionFollowing incorporation with Corporate Affairs Commission, a newly established business must register and obtain a business premises permit from the Department of Investment Promotion.||3 days||No cost|
|9||Pay registration fees for business premises into a government account at a designated bankThere is no fee schedule and an individual assessment is made for each business. The fees can range from NGN 1,500 to NGN 250,000. Fees for the business premises permit are paid into a government account at a designated bank||1 day||NGN 20,000|
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