Registration Requirements for LLC in Nigeria: CAMA 2020 Guide

You cannot simply decide one morning that your business is now a company. No matter how long you have been trading, no matter how large your operations, and no matter how many employees you have, a company comes into existence in Nigerian law only when the Corporate Affairs Commission issues a certificate of incorporation. Before that certificate can be issued, a specific set of conditions must be satisfied. These are the legal requirements for forming an LLC in Nigeria, and they are statutory: imposed by the Companies and Allied Matters Act 2020, and neither the Commission nor any applicant has the discretion to ignore or waive them.

This article examines each of those conditions systematically, explaining what the law requires, why those requirements exist, and what happens when they are not met. For any law student, understanding the conditions precedent to incorporation is foundational, because without incorporation there is no company, and without a company none of the other rules about membership, directors, shares, and meetings have any application.

The Statutory Framework

The right to form a company in Nigeria is conferred by section 18 of CAMA 2020. Section 18(1) provides that any two or more persons may form and incorporate a company by complying with the requirements of the Act in respect of registration.¹ By section 18(2), one person alone may form and incorporate a private company, a significant innovation introduced by CAMA 2020 which reversed the previous requirement of at least two subscribers.² A company may not, however, be formed or incorporated for an unlawful purpose.³

The process of incorporation is not self-executing. Section 41 of CAMA 2020 provides that when the Commission receives the required registration documents and is satisfied that the requirements of the Act have been complied with, it shall register the company and issue a certificate of incorporation.⁴ The Commission’s satisfaction with the documents delivered to it is therefore the gate through which every company must pass. What the law requires to be delivered forms the substance of the CAC registration requirements examined in this article.

Condition One: Eligible Promoters

Not every person is legally capable of participating in the formation of a company. Section 20(1) of CAMA 2020 sets out specific categories of individuals who are disqualified from joining in the formation of a company.⁵ An individual shall not join in the formation of a company if:

First, the individual is less than eighteen years of age. The law recognises the general contractual incapacity of minors and excludes them from participation in company formation. However, section 20(2) creates an important qualification: a person under eighteen is not disqualified if two other persons who are not themselves disqualified have also subscribed to the memorandum.⁶ This means that a minor may be a co-subscriber alongside at least two adult, qualified subscribers, but a minor cannot be the sole subscriber even of a single-member private company.

Second, the individual is of unsound mind and has been so found by a court in Nigeria or elsewhere.⁷ The requirement that unsoundness of mind be established by a court protects individuals from arbitrary exclusion: mere eccentricity or unconventional behaviour is not enough to disqualify a person.

Third, the individual is an undischarged bankrupt.⁸ A person who has been adjudged bankrupt but whose bankruptcy has not been discharged cannot participate in company formation. This reflects the broader policy of company law to prevent persons who have demonstrated an inability to manage their own financial affairs from controlling the financial affairs of a company.

Fourth, the individual is disqualified under sections 279, 280, or 283 of CAMA 2020 from being a director of a company.⁹ Section 279 disqualifies an insolvent person from acting as a director. Section 280 empowers a court to make a disqualification order against a person convicted of offences relating to fraud or the management of a company, prohibiting that person from being involved in company management for a period not exceeding ten years. Section 283 provides for the vacation of a director’s office on the occurrence of specified events including bankruptcy and unsoundness of mind.¹⁰

In addition, section 20(3) provides that a corporate body in the process of liquidation shall not join in the formation of a company.¹¹ A company being wound up lacks the capacity to undertake new ventures or obligations of this nature. All other corporate bodies, including duly registered companies and foreign entities, may join in forming a company under section 20(4), subject to any enactment regulating the rights of aliens to participate in business in Nigeria.¹²

Condition Two: A Lawful Purpose

Section 18(3) of CAMA 2020 provides expressly that a company may not be formed or incorporated for an unlawful purpose.¹³ This is a fundamental constraint rooted in the general principle that the law will not assist in the accomplishment of illegal objectives. A company formed for the purpose of carrying on an illegal trade, facilitating fraud, or advancing any other unlawful enterprise cannot be registered, and if registered through misrepresentation of its objects, may be wound up by the court on just and equitable grounds.¹⁴

In practice, the Commission scrutinises the objects clause of the MEMART (the combined Memorandum and Articles of Association) to ensure that the stated purposes of the proposed company are lawful. Applications in which the stated objects are considered to threaten national security, promote disunity or hatred, or seek to professionalise a trade without the requisite statutory authority will be refused.¹⁵

Condition Three: The Memorandum and Articles of Association (MEMART)

The MEMART is the combined constitutional document that must be prepared and submitted as part of the primary CAC registration requirements. In current CAC practice, the memorandum and articles of association are filed together as a single document, and this combined filing is commonly referred to as the MEMART. Section 27 of CAMA 2020 sets out the requirements with which the memorandum must comply, while section 32 governs the articles.¹⁶

The Memorandum

The memorandum must state the name of the company.¹⁷ For a private company limited by shares, the name must end with “Limited” or “Ltd.”¹⁸ The Commission will scrutinise the proposed name and will refuse to register a company with a name that is identical or confusingly similar to an existing registered name, or that contains any word or expression the use of which is prohibited or restricted.¹⁹

The CAC name reservation process is the first practical step in any incorporation. Section 31 of CAMA 2020 allows prospective promoters to reserve a proposed company name electronically before filing the full registration documents, protecting that name for a specified period while the other incorporation requirements are met.²⁰ CAC name reservation is now processed through the Commission’s online portal, and as at August 2025, the statutory fee for name reservation is one thousand naira.²¹ Promoters and their lawyers routinely conduct this search first: the entire incorporation process may be wasted if the proposed name proves unavailable.

The memorandum must state the nature of the company’s objects. Section 35 of CAMA 2020 provides that unless the memorandum specifically restricts the objects of the company, it shall be deemed to have unlimited capacity to carry on any lawful business.²² This represents a significant departure from the old ultra vires doctrine under which a company could only do what its objects clause expressly authorised, and any act beyond that was void. Under CAMA 2020, unless the company itself restricts its own capacity, the presumption is unlimited capacity.

The memorandum must state whether the liability of the members is limited, and if so, whether by shares or by guarantee.²³ It must state whether the company is to be private or public.²⁴ And, in the case of a company with share capital, it must state the amount of the minimum issued share capital subscribed to by each subscriber.²⁵ The full scope of the memorandum and its legal effect are examined in detail in our article on the memorandum of association in Nigerian company law.

The Articles of Association

Section 32 of CAMA 2020 requires every company to have articles of association.²⁶ The articles contain the internal regulations for the management of the company’s affairs, covering matters such as the conduct of meetings, the powers of directors, the transfer of shares, and dividend distributions. Where a company does not register its own articles, the model articles prescribed by the Minister under section 33 of CAMA 2020 shall apply by default under section 34.²⁷ The full scope of the articles of association is examined in our article on the articles of association in Nigerian company law.

Condition Four: The Registration Documents

Section 36 of CAMA 2020 specifies the documents that must be delivered to the Commission to effect registration. These are the documents through which the CAC registration requirements are formally satisfied, and the Commission will not register a company until all of them are received and found to be in order.²⁸

The documents required include the signed MEMART; a statement of capital and initial shareholdings in the prescribed form, setting out the amount of the company’s share capital, the number of shares each subscriber has taken, and the amount paid up on each share;²⁹ a statement of the proposed directors of the company, giving their names, addresses, and other particulars required by the Act;³⁰ a statement of compliance;³¹ and, as now required under the Persons with Significant Control (PSC) Regulations 2022, a disclosure of every person with significant control over the company.³²

The Statement of Compliance

The statement of compliance, introduced by CAMA 2020, is a declaration by the applicant or the applicant’s agent that the requirements of the Act have been complied with.³³ This replaced the older requirement for a statutory declaration that could only be made by a legal practitioner, thereby simplifying the process, though many practitioners note that removing the compulsory involvement of a lawyer at this stage introduces the risk of defective filings by persons unfamiliar with the legal requirements.

Persons with Significant Control Disclosure

The PSC disclosure is a significant addition to the CAC registration requirements since the introduction of the PSC Regulations 2022. Section 119 of CAMA 2020 imposes an obligation on companies to maintain a register of persons with significant control, meaning individuals who directly or indirectly hold more than twenty-five percent of the shares or voting rights in the company, or who otherwise exercise significant influence or control over it.³⁴ As at the time of writing in 2026, the CAC mandates disclosure of PSC information at the point of incorporation as part of its commitment to corporate transparency and anti-money laundering compliance.³⁵ Failure to comply with PSC disclosure obligations exposes the company and its officers to prescribed fines.³⁶

The application for registration must also state the registered office address and head office address if different, whether the liability of members is to be limited and if so how, and whether the company is to be private or public.³⁷

Condition Five: The Minimum Share Capital for LLC in Nigeria

The minimum share capital requirements for company registration are among the most practically important of the legal requirements for forming an LLC in Nigeria, and students must be familiar with the current figures.

Under CAMA 2020, the minimum issued share capital in Nigeria for a private company limited by shares is one hundred thousand naira (₦100,000), and for a public company limited by shares it is two million naira (₦2,000,000).³⁸ These figures have remained consistent since CAMA 2020 came into force and continue to apply as of 2026 for general commercial companies.³⁹

It is critically important, however, to understand that these are only the general CAMA thresholds. In highly regulated industries, sector-specific regulators impose significantly higher minimum share capital requirements. A company intending to operate as a bank must comply with Central Bank of Nigeria capitalisation requirements, which run into billions of naira depending on the banking licence category. A company seeking a travel and tour licence must have a minimum share capital of thirty million naira.⁴⁰ A company seeking certain Securities and Exchange Commission licences must meet the SEC’s revised minimum capital thresholds, which were updated by a circular dated 16 January 2026.⁴¹ The CAMA minimums are therefore a floor, not a ceiling, and a competent legal practitioner advising on incorporation will always check the sector-specific requirements applicable to the client’s proposed business.

CAMA 2020 also changed the terminology from “authorised share capital” to “minimum issued share capital,” reflecting a fundamental policy shift.⁴² Under the old CAMA 1990 and 2004, companies could authorise large amounts of capital on paper while issuing only a fraction of it to shareholders. Under CAMA 2020, all share capital must be fully issued: a company cannot have unissued shares.⁴³ The Companies Regulations 2021 required all companies with unissued shares at the time of CAMA 2020’s commencement to fully issue those shares by 30 June 2021.⁴⁴

Condition Six: CAC Name Reservation

Although the CAC name reservation process is a practical step that precedes formal filing rather than a document submitted with the registration documents, it is so integral to the overall process that it deserves separate treatment as one of the conditions a prudent promoter must satisfy.

Section 31(1) of CAMA 2020 provides that a person intending to register a company may apply to the Commission to reserve a name for the proposed company.⁴⁵ The reservation is processed through the CAC’s digital portal, which was upgraded to Version 3.0 in 2025 and now provides real-time name availability searches.⁴⁶ Once a name is reserved, it is protected from registration by another applicant for the duration of the reservation period, allowing the promoters to complete the preparation of the MEMART and other registration documents without risk of losing their chosen name.

A name will not be reserved if it is identical or too similar to an existing registered name, if it contains prohibited words, or if the Commission is satisfied that the name is likely to mislead the public.⁴⁷ Names containing words such as “Federal,” “National,” “Government,” “Municipal,” “Chartered,” “Bank,” or “Insurance” typically require the prior consent of a relevant government authority before the Commission will reserve or register them.⁴⁸

Condition Seven: Qualified and Authorised Subscribers

Beyond the disqualification conditions in section 20, the subscribers to the MEMART must be persons with the legal capacity to enter into contracts. The memorandum must be signed by each subscriber in the presence of at least one witness who attests the signature.⁴⁹ Any subscriber who holds shares in trust for another person must disclose that fact in the memorandum, along with the name of the beneficiary.⁵⁰

The formation of a company is the exclusive preserve of legal practitioners under Nigerian law.⁵¹ Only an accredited legal practitioner may prepare and file incorporation documents on behalf of clients in relation to companies under Part B of CAMA 2020. This accreditation requirement, administered by the Corporate Affairs Commission, serves to ensure that the persons managing the filing process understand the legal requirements and can be held professionally accountable for any deficiencies.

A 2026 Update: The RC Number as TIN

One practical development relevant to the registration process in 2026 is the introduction of the Nigeria Tax Act 2025, under which a company’s CAC Registration Number (RC Number) automatically serves as its Tax Identification Number (TIN) from the date of incorporation.⁵² This means that upon successful registration, a company no longer needs to separately register with the Nigeria Revenue Service to obtain a TIN. The RC Number is the TIN. While this is not a condition precedent to registration, it is a material benefit of completing the registration process that practitioners advising promoters should communicate clearly.

What Happens After the Conditions Are Met

Once all the conditions are satisfied and the Commission registers the company, it issues a certificate of incorporation under section 42 of CAMA 2020.⁵³ The legal consequences of that certificate are far-reaching: from the date of incorporation stated in it, the company comes into legal existence as a body corporate, capable of exercising all the powers of an incorporated company including the power to hold land, and having perpetual succession and a common seal. The certificate is prima facie evidence of the regularity of the incorporation and of all matters precedent and incidental to it.⁵⁴

These consequences are examined in full in our article on the effect of a certificate of incorporation, which explores what it means in legal terms for a company to come into existence and the protections that status provides.

The Importance of Strict Compliance

The conditions precedent to incorporation are mandatory. A company cannot be registered in partial compliance with the CAC registration requirements. If any required document is missing, defective, or inconsistent with the Act’s requirements, the Commission may refuse to issue the certificate of incorporation.

Where a company is incorporated through misrepresentation or fraud, or where its formation was for an unlawful purpose, the courts retain the power to intervene and the company may be wound up on the just and equitable ground.⁵⁵ The certificate of incorporation, though prima facie evidence of regularity, is not conclusive and can be challenged in appropriate proceedings.⁵⁶

For the law student, the conditions precedent to incorporation form the essential context for understanding everything else in company law. The rules on pre-incorporation contracts, on promoters and their duties, and on the legal effect of the certificate of incorporation all presuppose a clear understanding of what a company must do before it can be said to exist.

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Footnotes

¹ Companies and Allied Matters Act 2020 (CAMA 2020), s 18(1).

² CAMA 2020, s 18(2); Punuka Attorneys and Solicitors, ‘Get to Know the New Companies and Allied Matters Act (CAMA) 2020’ (Punuka Attorneys, August 2020).

³ CAMA 2020, s 18(3).

⁴ CAMA 2020, s 41(1).

⁵ CAMA 2020, s 20(1).

⁶ CAMA 2020, s 20(2).

⁷ CAMA 2020, s 20(1)(b).

⁸ CAMA 2020, s 20(1)(c).

⁹ CAMA 2020, s 20(1)(d).

¹⁰ CAMA 2020, ss 279, 280 and 283.

¹¹ CAMA 2020, s 20(3).

¹² CAMA 2020, s 20(4).

¹³ CAMA 2020, s 18(3).

¹⁴ CAMA 2020, s 572(f).

¹⁵ Lexpraxis Solicitors, ‘Registering a Company Limited by Guarantee in Nigeria: A Practical Guide’ (Lexpraxis, 2023).

¹⁶ CAMA 2020, ss 27 and 32.

¹⁷ CAMA 2020, s 27(1)(a).

¹⁸ CAMA 2020, s 30(1)(a).

¹⁹ CAMA 2020, s 29(1).

²⁰ CAMA 2020, s 31(1).

²¹ Corporate Affairs Commission, ‘CAC Fee Schedule’ (CAC, August 2025); Multilaw, ‘Nigeria: Private Company Limited by Shares’ (Multilaw Global Business Entities Guide, 2025).

²² CAMA 2020, s 35.

²³ CAMA 2020, s 27(1)(c).

²⁴ CAMA 2020, s 27(1)(d).

²⁵ CAMA 2020, s 27(2)(a).

²⁶ CAMA 2020, s 32(1).

²⁷ CAMA 2020, ss 33 and 34.

²⁸ CAMA 2020, s 36(1).

²⁹ CAMA 2020, s 37.

³⁰ CAMA 2020, s 39.

³¹ CAMA 2020, s 40.

³² Companies and Allied Matters Act 2020, s 119; Persons with Significant Control Regulations 2022.

³³ CAMA 2020, s 40(1).

³⁴ CAMA 2020, s 119(1).

³⁵ SOW Professional Services, ‘Business Registration in Nigeria 2026: Complete Guide’ (SOW, April 2026).

³⁶ Persons with Significant Control Regulations 2022, reg 10.

³⁷ CAMA 2020, s 36(2).

³⁸ CAMA 2020, s 27(2)(b); Pavestones Legal, ‘CAMA 2020: Share Capital Requirements Under Nigerian Law’ (Pavestones, April 2021); Aluko & Oyebode, ‘Minimum Issued Share Capital Requirement in the CAMA 2020’ (Aluko & Oyebode, November 2022).

³⁹ DLA Piper REALWORLD, ‘Nigeria: Minimum Capital’ (DLA Piper, 2026); CAC Business Registration, ‘Requirements for CAC Registration in Nigeria: Complete 2026 Guide’ (CAC Business Registration, April 2026).

⁴⁰ CAC Business Registration (n 39).

⁴¹ Securities and Exchange Commission, Circular on Revised Minimum Capital Requirements for Capital Market Operators (SEC, 16 January 2026).

⁴² Aluko & Oyebode (n 38).

⁴³ CAMA 2020, s 124; Aluko & Oyebode (n 38).

⁴⁴ Companies Regulations 2021, reg 4.

⁴⁵ CAMA 2020, s 31(1).

⁴⁶ SOW Professional Services (n 35).

⁴⁷ CAMA 2020, s 29(1).

⁴⁸ CAMA 2020, s 29(2).

⁴⁹ CAMA 2020, s 27(3).

⁵⁰ CAMA 2020, s 27(4).

⁵¹ CAMA 2020, s 863(1).

⁵² Nigeria Tax Act 2025, s 1; Nigeria Tax Administration Act 2025; SOW Professional Services (n 35).

⁵³ CAMA 2020, s 42.

⁵⁴ CAMA 2020, s 42(1).

⁵⁵ CAMA 2020, s 572(f).

⁵⁶ Abakaliki LGC v Abakaliki Rice Mills Owners Enterprises (unreported), cited in Isochukwu, ‘Company Law 1.4 Incorporation and Pre-Incorporation Contracts’ (Isochukwu Blog, 29 December 2017).