REGISTERING A HOLDING, CONSORTIUM OR GROUP OF COMPANIES IN NIGERIA

How to register a group of Companies in Nigeria is a popular concern amongst those in the corporate circle. A “Group” of Companies is more popular than the other two.

A Holding, Consortium or a group of companies are special business structures that are established to achieve specific goals. As you may already know, the Companies and Allied Matters Act (CAMA) is the Law governing the formation of companies in Nigeria.

Generally speaking, using the words Holding or Consortium or Group for any proposed new company is prohibited by the CAMA except with the consent of the Registrar General of the Corporate Affairs Commission (CAC), had and obtained.

How to Set up a Holding Company In Nigeria.

A Holding company is a parent company. As the name already suggests, a Holding company must hold more than 50% shares in another company known as a subsidiary company. The purpose of the holding company is to control, acquire assets and manage the affairs of the subsidiary company. It must maintain a controlling share of the subsidiary company to retain its status and to be able to prevail on the subsidiary company as a parent would over its offsprings.
The law prohibits the use of the word “Holding” in registering a company unless the requisite consent of the Registrar General of the CAC is sought and obtained prior to the use of the word in the company name.

Basic Requirements for registration of a Holding company in Nigeria.

The following enumerates what it takes to register a Holding company in Nigeria.

  1. The applicant is to bring a formal application for Consent to use the word “Holding” in the name of the company, addressed to the Registrar General of the CAC.
  2. There must be evidence of at least, 2 subsidiary companies, which must be Limited Liability Companies whose controlling stakes are being held by the applying company. OR
  3. Statement by the majority of the Directors of the proposed holding company that the company shall acquire more than half in the nominal value of the share capital of each of the subsidiaries within 90 days of incorporation of the Holding Company.
  4. The applicant is to provide evidence of updated annual returns of the existing subsidiary company.
  5. Present Evidence of compliance with Section 553 of the Companies and Allied Matters Act where applicable, limited to categories of companies.
  6. Upon obtaining the Consent, the Applicant can go ahead to register a new company with the same procedure for the registration of a new company.

How to Register a Group of Companies in Nigeria.

Going by the provisions of the CAMA, a Group of companies comprise three or more associated companies with common shareholders and similar names. These companies become the shareholders of the distinct “Group” company.
Just as in the case of a Holding company, the law prohibits the use of the word “Group” in the name of a company except where the requisite consent of the Registrar General of CAC is sought and obtained prior to that.

Basic Requirements for registering a Group of Companies.

  1. First, make a formal application to the Registrar General for consent for the use of the word “Group” in the company name.
  2. There must be evidence of a minimum of three (3) or more associated companies to form the Group Company, which will be the distinct entity.
  3. Evidence of similar names of associate companies with common shareholders and ownership.
  4. There must be a resolution of the associate companies indicating consent to the “Group” relationship.
  5. The updated annual returns of all associate companies must be provided.
  6. Evidence of Company secretaries of associate companies.
  7. Statement by the proposed Group Company that the share capital shall not be less than the highest share capital amongst the associate companies.
  8. Evidence of compliance with S.553 CAMA where applicable.
  9. Upon obtaining the Consent, the Applicant can then proceed to register a new company with the same procedure for the registration of a new company.

The above stipulations must be met in order to register a group of Companies successfully in Nigeria.

How to Set up a Consortium Company in Nigeria.

A Consortium company is composed of separate and different companies that agree to pool resources together for a common goal. Each company is responsible for the consortium as specified or set out in the consortium agreement.
The word “Consortium” is prohibited against use by the CAC, and it is required that the consent of the Registrar General of CAC be had and obtained before the word can be used in the name of a company, just like “Holding” and “Group”.

Basic Requirements for registering a Consortium Company in Nigeria.

  1. Make a payment of a non-refundable application for the consent fee to the CAC.
  2. Make a formal application for consent to use the word ‘Consortium’ in the name of the company.
  3. Evidence of not less than 3 different companies forming the consortium.
  4. Evidence of registration in the home country, if the company is a foreign company.
  5. A Resolution of each company in the consortium indicating consent to the consortium arrangement and stating the objectives of the consortium.
  6. The statutory declaration to wind up the consortium in accordance with the provision of CAMA upon completion of the object of the consortium.
  7. Statement of the object of the consortium in the memorandum of association.
  8. Inclusion of a clause to wind up the consortium in the articles of association.
  9. Evidence of updated annual returns of component companies.
  10. Evidence of appointment of company secretary of component companies.
  11. Evidence of compliance with S.553 of CAMA where applicable.
  12. Upon obtaining the Consent, the Applicant can go ahead to register a new company with the same procedure for the registration of a new company.

Please note that a one company cannot use the words Holding, Group or Consortium among its names as a thing of choice. Before these names can be used, the consent of the Registrar General of the Corporate Affairs Commission must be sought, and such consent can only be given by the Registrar General upon meeting the specific thresholds or requirements of the the CAMA for the registration.

It is clear that to register a group of companies and other specialized business formations, strict attention must be given to statutory provisions.

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