Before registering a non-governmental or non-profit organisation (NGO/NPO) in Nigeria, it is important to note that they can be registered either as a ‘company limited by guarantee’ under Part A or ‘incorporated trustees’ under Part F of the Companies and Allied Matters Act (CAMA), 2020. For registration as a company limited by guarantee, the organisation is expected to solely apply its income and property to the promotion of its identified objectives and not for profit making for the benefit of its members, as provided in section 26 of CAMA. For incorporated trustees, the organisation is expected to pursue social objectives without seeking to make profits (section 823 of CAMA). Below are the steps required to incorporate an NGO/NPO under the new CAMA.
- Select the preferred name of the non-profit organisation and then conduct an availability search for the proposed name of the organisation at the Corporate Affairs Commission (CAC). Where available, the name will be reserved by the Commission for a period of 60 days, to allow for incorporation. It is advisable to have a preferred name and an alternative name. The latter can be used where the former is unavailable.
- Identify at least one director in the case of a company limited by guarantee and at least two trustees in the case of registration as incorporated trustees. A trustee must not be less than 18 years of age; of unsound mind; an undischarged bankrupt; or convicted of an offence involving fraud or dishonesty within 5 years of the proposed appointment.
- Obtain and fill out relevant forms from the CAC. This is better accomplished by a CAC accredited lawyer.
- Obtain the consent of the Attorney General of the Federation in the case of an organisation to be registered as a company limited by guarantee in line with section 26(4) of CAMA.
- Submit the following documents to the CAC, as part of the application process:
- Duly filled CAC forms containing the proposed name and address of the organisation, its aims and objectives, the names, addresses, occupations and other details of the directors/trustees and secretary of the organisation;
- Constitution of the organisation (for incorporated trustees);
- Memorandum and Articles of Association (for company limited by guarantee);
- Statement of Guarantee (for company limited by guarantee);
- Duly signed copies of the minutes of the meeting appointing the trustees and authorising the application, showing the persons present and the votes obtained (for incorporated trustees);
- The impression of a proposed common seal for the organisation, if any.
- If CAC is satisfied with the application, it shall cause the application to be published in two daily newspapers in circulation within the proposed organisation’s locality, with at least one being a national newspaper and allow for any objection from the public for a period of 28 days from the date of the last of the publications in the newspapers. This is applicable to incorporated trustees. An application for the incorporation of a company limited by guarantee does not require a newspaper publication where the Attorney General has given consent for registration. If the Attorney General does not make a decision within 30 days (from the time of application for consent), the application shall be advertised in three national daily newspapers, inviting objections within 28 days of the last publication.
- Where there is an objection, the Commission may uphold or reject the objection. In the absence of any objection or if it is rejected by the Commission, it will proceed to assent to the application and issue a certificate of incorporation for the organisation.
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Experiences with the CAC Registration Process
The process of incorporating an organisation under the law differs somewhat in practice. For a long time, lawyers, accountants, chartered secretaries, and other persons accredited by the Corporate Affairs Commission (CAC) served as intermediaries between persons who sought to register organisations and the Commission. Accredited agents would obtain relevant information from their clients and submit required documents on their behalf, using their online accounts on the CAC registration portal and visits to the Commission’s offices. Some parts of this process were paper based. If any queries arose during the registration process, the agents would resolve these queries, ensure completion of the process and the issuance of incorporation certificates by CAC.
However, in 2017, CAC expanded its use of technology and moved more aspects of its incorporation services online. However, post incorporation services were still done in-person at the Commission’s offices.
Accredited CAC agents mastered the use of the Commission’s upgraded online platform with relevant training and practice. Also, CAC opened some registration services to the public, meaning that individuals could initiate and carry out certain transactions without accredited agents. This seemed like a relief, as people no longer had to pay for the services of accredited agents. However, the reality was that many public users encountered difficulties along the way and ended up engaging the services of accredited agents to finalise their transactions.
The registration process for companies and Incorporated Trustees is usually more elaborate and technical. Therefore, people hardly succeeded in registering such entities without the assistance of accredited agents. It would seem that the registration of Business Names was about the only registration service some public users could accomplish without assistance.
In 2020, a new Companies and Allied Matters Act (CAMA) was enacted. At the onset of the COVID-19 pandemic in Nigeria, CAC introduced some changes to their service delivery platforms. The Commission introduced courier services for the collection of certificates of incorporation and the exchange of correspondences for queries and post incorporation documents. This meant additional charges for clients, who bore the financial burden of the courier services.
CAC largely restricted accredited agents from visiting its offices for the purpose of obtaining its services. However, the transition within this period was rough. Several applications for the Commission’s services suffered severe delays and backlogs, with correspondences reported missing between the CAC and the courier services.
In January 2021, CAC made even more material changes to its service channels, with the law coming into force. In addition to incorporation services, which were already online, most post incorporation services were transferred to the Commission’s online platform. However, a few post incorporation services are still done using courier services. Visits to its offices remained restricted. This is a tough situation for users who have complaints, as visits to CAC offices are strictly on invitation and on rare occasions, based on serious complaints.
Another significant change is that certificates of incorporations and other documents issued by the CAC are now made available in downloadable soft copy versions, leaving the client with the option to print. This is as opposed to hard copies being delivered to the clients or the accredited agents, as was done in the past. In place of a seal of authenticity, the soft copies of incorporation certificates now bear unique codes.
Migrating most of CAC services online appears progressive, with a view to improving the ease of doing business in Nigeria. However, users have complained of lagging on the Commission’s service portal. Also, the changes effected on the Commission’s online platform to reflect the provisions of the new CAMA resulted in frequent glitches and this severely affected the Commission’s service delivery at the onset of the transition. Many processes, particularly post incorporation services suffered delays.
Also, CAC’s records have not been fully digitalised; as such, some information are not readily available online. Although incorporation and post incorporation are now made easier on the online platform, the turnaround time for services are rated average.
Accredited agents and other users of the CAC platform are of the opinion that the Commission was not prepared for the transition to offering most of its services online. However, several months down the line, online services are said to have generally improved. At this time, very few public users of the CAC platform can successfully register an organisation with this new development, as certain services still require technical knowledge.
Many people still require the services of accredited agents. Therefore, enhancing the ease of doing business from the perspective of allowing public users direct access to CAC services, is yet to be achieved. CAC online services appear to be a work in progress at this time, therefore it is advised to employ the services of CAC accredited lawyers.
Finally, it is reported that the Registrar-General’s consent is now required to register incorporated trustees (non-profit organisations), a new practice that is a clear departure from the provisions of the Act.