To register a company limited by guarantee in Nigeria, there is a mandatory requirement to obtain the authority of the Attorney General of the Federation, as per Section 26(4) of the Companies and Allied Matters Act (CAMA) 2020. To reduce delays in the registration process, the CAMA has provided a 30-day timeframe for the Attorney General to grant the necessary authority for the registration of a company limited by guarantee, if there are no valid reasons for failing to approve the application.
In order to improve the efficiency of the registration process, the Guidelines for the Issuance of the Attorney General of the Federation’s Authority for the Registration of a Company Limited by Guarantee (the Guidelines) have been issued. These guidelines aim to create a synergy between the Corporate Affairs Commission (CAC) and the Attorney General’s office in processing applications for registration.
This article serves as a practical guide for individuals seeking to register a company limited by guarantee in Nigeria, highlighting the key provisions of the guidelines and the requirements for registration.
1. COMPANIES LIMITED BY GUARANTEE SEEKING TO OPERATE OUTSIDE NIGERIA MUST PROVIDE A DECLARATION BY THE PROMOTERS OF SUCH COMPANY TO COMPLY WITH THE LAWS OF THE COUNTRY
Section 3(4) of the guidelines states that companies limited by guarantee, who wish to operate outside of Nigeria, must apply. Along with the application, the promoters of the company are required to provide a declaration to confirm that the company will comply with the laws of the country where it intends to operate.
2. WHERE THE APPLICANT IS AN EXISTING COMPANY REGISTERED OUTSIDE NIGERIA
When a company registered outside of Nigeria wishes to be registered as a company limited by guarantee in Nigeria, the following guidelines must be followed: The application for authority to incorporate such a company must be accompanied by evidence of incorporation in that country and evidence of registration with the National Planning Commission of Nigeria.s successor
3. GROUNDS FOR WHICH AN APPLICATION FOR INCORPORATION OF A COMPANY LIMITED BY GUARANTEE MAY BE DENIED
An application for incorporation may be denied where the Memorandum and Articles of Association of the company;
There are three reasons why a document may be deemed inconsistent: containing inconsistent objects, functions, and powers of MDAs, or purporting to regulate other bodies.
4. CONTENTS OF THE OBJECTS OF A COMPANY LIMITED BY GUARANTEE
A company that is limited by guarantee can only have specific objectives that it intends to promote, as provided for in Section 26 (1) of the CAMA. These objectives can include commerce, art, science, religion, sports, culture, education, research, charity, and other similar objectives.
However, the application will be denied if the objectives of the company are considered to be a threat to national security, promote disunity, and hatred, or instigate a crisis.
Additionally, objectives that aim to professionalize a trade or issue proficiency certificates for any formal trade will also be denied.
5. BODIES THAT QUALIFY TO REGISTER AS A COMPANY LIMITED BY GUARANTEE
With reference to Section 7(1) of the guidelines, the following may register;
Chamber of Commerce, trade associations, membership organizations, sports clubs and associations, religious bodies, academy of Science, charitable foundations, agro-based associations, musical composers and artists, literary associations, teaching hospitals, research Institutes and Institutions, cultural organizations, educational support organizations, schools, and other similar bodies
6. ACADEMIES SEEKING TO BE REGISTERED MUST PROVIDE A LETTER OF NO OBJECTION
As per Section 7 (2) of the guidelines, an academy must provide a letter of No Objection from the relevant MDA to register as a company limited by guarantee.
7. PROMOTERS SEEKING TO ESTABLISH A RESEARCH INSTITUTE MUST PROVIDE A LETTER OF NO OBJECTION
If a promoter intends to establish a research institute, they must provide a letter of no objection from one of the following:
a. A statutory research body, if the subject of the research is already covered by a statutory research body, or if it is ancillary to subjects covered by the research institute.
b. An MDA (Ministry, Department, or Agency), if the subject of the research is not expressly covered by a statutory research body but is related to or connected with the functions of an MDA.
Please refer to Section 9(5) of the guidelines for more information.
If you want to register a company limited by guarantee, you need to ensure that you meet all the requirements and pre-conditions outlined in the guidelines. Once you’ve submitted your application alongside these requirements, the Attorney General will review it. Based on the review, the Attorney General may either authorize the registration of the memorandum of association of the company or withhold authorization while communicating the reasons for withholding authorization to the promoters. In the second scenario, the Attorney General requests that the promoters rectify the concerns raised. Alternatively, the Attorney General may deny the application if he believes that the promoter has not complied with the provisions of the Act. It’s important to note that the Attorney General’s decision to decline the application for incorporation of a company limited by guarantee is final.
Overall, the guideline is a helpful resource that enables stakeholders to make informed decisions when it comes to registering a company limited by guarantee. If you’re considering registering a company limited by guarantee and you have no idea about what it takes to do so successfully, feel free to reach out to us HERE or via the Whatsapp icon on the lower right part of this page, and we’ll attend to you.