Highlights Of The Corporate Affairs Commission’s New Incorporation Form

The Federal Government of Nigeria in a drive to improve the country’s ranking on the World Bank Group’s ease of doing business index, recently announced a 60-day action plan for ease of doing business in Nigeria.
On the heels of this announcement, the Corporate Affairs Commission (“CAC” or the “Commission”) introduced a new pre-incorporation form (Form CAC1.1) (the “New Form”) which consolidates the traditional incorporation forms and reduces the number of forms to be completed by promoters of a company from 5 to 1. The rationale as disclosed by the CAC is to “reduce the cost and time needed to register a business”.

The New Form is divided into 5 (Five) sections namely Company Address, The Authorized Share Capital of The Company, Particulars of First Directors & Their Consent to Act, Particulars of Secretary and Statutory Declaration of Compliance with the requirements of Companies and Allied Matters Act (“CAMA”) by a legal practitioner. We note that while the information required on the old forms still appear on the New Form this paper work is relatively simplified, reducing the number of documents to be signed.

We note also that the allotment section on the old Form CAC 2 does not feature on the New Form. The implication here is that the information regarding subscription to the shares of the company will be as outlined in the memorandum of association of the company in formation.

In addition, the New Form indicates that persons who are directors or subscribers (“Promoters”) of Memorandum and Article of association of a Company may not require the services of a legal practitioner to incorporate a company. Promoters can now present their application for incorporation directly to the Commission. It is however noteworthy that the service of a lawyer is not completely dispensed with as the New Form still requires legal practitioner’s declaration that the application to register the business is in compliance with the provisions of CAMA.

With the operation of the New Form, only the data page of the international passport of a foreigner will now be acceptable as a valid means of identity for filing purposes.

While we opine that the introduction of the New Form is a step in the right direction, we note that it is an initial step in engendering the ease of doing business in Nigeria. It is however commendable that Promoters can now present an application to incorporate a company where they may not be able to afford the services of a legal practitioner. We will continue to track developments as the Federal Government unfolds its 60-day action plan for the ease of doing business in Nigeria.