Corporate law in Nigeria comprises a body of laws that governs the rights, conduct, and relations of companies, organizations, and commercial businesses in Nigeria.
In this write-up, we will briefly explain major laws governing the companies’ activities in Nigeria.
The CAMA is the principal statute that regulates the establishment and management of companies in Nigeria. It is enacted to provide for the incorporation of companies, limited liability partnerships, partnerships. Section 1 of the Act establishes the Corporate Affairs Commission (CAC) which is the apex regulatory body for companies in Nigeria, charged with the responsibility of the regulation and supervision of the formation, incorporation, registration, management, and winding up of companies in Nigeria.
The CAMA further makes provisions for the registration of a business name, limited partnerships, and incorporated trustees of certain bodies, communities, and associations. The CAMA mandates foreign companies looking to carry on any business in Nigeria to do so through a locally incorporated entity in Nigeria unless exempted from the registration by the Federal Government.
The Regulations 2021 is made under the Companies and Allied Matters Act 2020. it makes provisions for CAC administrative processes and to clarify certain compliance requirements of the CAMA 2020. It also provides a comprehensive procedure and specific requirements to undertake any process with the CAC.
The Act is enacted to govern investment in the capital markets. It establishes the Securities and Exchange Commission (SEC) as the regulatory body charged with the responsibility of regulating investment and securities business in Nigeria. The Act provides for a set of market infrastructures to regulate investment and securities business in Nigeria especially in the areas of mergers, acquisitions, take-over, and collective investments schemes in Nigeria.
Under the ISA, every capital market operator must register with the SEC before engaging in any activities pertaining to the capital market.
The Act essentially governs foreign investment in Nigeria. It establishes the Nigerian Investment Promotion Commission (NIPC) as a regulatory government agency responsible for encouraging and promoting investment in Nigeria by both domestic and foreign investors.
The Act establishes the National Office for Technology Acquisition and Promotion (NOTAP) charged with the responsibility of implementing the acquisition, development, and transfer of foreign technology into Nigeria.
Under the Act, every technology agreement between Nigerian and foreign company must be registered with the organization.
The Immigration Act is enacted to enforce compliance on the part of foreigners wishing to undertake employment in Nigeria. By the Act and subsequent Regulations, every foreigner is required to obtain a residence permit issued by the Comptroller General of the Nigeria Immigration Service (NIS) before undertaking any employment in Nigeria. Foreigners seeking to reside in Nigeria must do through the expatriate quotas granted to the company through the Federal Ministry of Interiors.
The Act is established to provide incentives to manufacturing exporters of exportable products in Nigeria
The Act governs the operation of the foreign exchange market and provides a framework for the remittance of interest, dividends, and payments in foreign currency by foreign investors.
The Company Income Tax Act is the principal law that governs the taxation of companies in Nigeria. CITA is a tax imposed on the profit of a company from all its sources and it is also imposed on foreign companies operating a business in Nigeria. Section 1 of the Act provides for the establishment and constitution of the Board whose operational arm shall be called the Federal Inland Revenue Service, while Section 3 provides that the powers and duties of the board to companies include the collection of tax and accounting for all amounts collected.
Under the law, companies having a turnover above 100 Million Naira are subject to the tax rate of 30% of profits, while the companies having a turnover of 25 Million Naira to 100 Million are subject to the tax rate of 20% of profits. Companies having less than a 25 Million turnover are not liable to pay any company income tax.
The Act governs the taxation of companies operating in the petroleum operations (upstream) sector of the economy. Under the Act, companies operating in the exploration and export of crude oil are exempted from CITA, as the companies must remit their taxes per the provisions of PPTA.
Conclusion
Corporate law is a body of laws that regulates how corporations are established and run in Nigeria. It also includes various laws regulating some business activities and taxation of companies. The above list is not exhaustive, as more laws are governing various sectors of the Nigerian economy.