How do i incorporate my business
Ask Ms. Uduak: How Do I Incorporate my Music Business in Naija?
“How do I incorporate my record label in Nigeria. ” I got this question, made a mental note of it and can’t for the life of me find the email to identify the author. Pele (sorry) to the author. Here is the answer to your question on incorporation.
What Law Governs? Nigeria’s Company and Allied Matters Act 1990.
Which Agency is Responsible for Administering the Act? Corporate Affairs Commission (CAC)
Wetin all Dis Oyinbo Mean Sef? The Naija government essentially says, “if you want to run your music label or do business as an artist in Naija, you should let us know, register your business with us (i.e. pay us some money 10,000.00 to 30,000 Naira depending on business entity) and we will give you some benefits and protect you in case of wahala.” You should seek the help of a Naija based attorney, chartered accountant or secretary to help execute this.
What Services Does CAC Offer? For our purposes CAC can:
- Help incorporate your music company. For example, they can make your music label be incorporated as a private or public company. If you want to incorporate a music NGO i.e. ‘Maga no Need Pay,’ for example, they can do that under a corporate structure called “Limited by Guarantee.”
- CAC can register your business name. For example, ‘More You record Label’
- CAC can issue certified true copies of any documents you file with them
- They can also help manage and/or dissolve your record label if you decide things are now working out anymore.
What are the Incorporation Options Available to You as a Music Business Owner?
- Sole Proprietor: It means it’s just you i.e. you fly solo. For example, ‘ Muna Music Enterprise’ or ‘Ice Prince Music Ventures.’ It is easy to form and dissolve this form of legal entity because the requirement is minimal. Disadvantages: You have limited access to finance and if there is wahala, you can be personal liable i.e. lose your house and other personal assets if sued and the folks that sue you win. However, this might be a perfect structure for solo artists/labels i.e. the one man/woman shop who does it all. As your business grows, you can incorporate into other forms.
- Partnership: This is where you and some of your “boyz” and “girlz” go into music business together. For example, ‘Muna, Iceprince & Skales Music Records.’ Nigeria’s English Partnership Act of 1890 governs. The key here is you all go into business to make “profit.” You can form a partnership with individuals or companies. Independent of the partnership act I just cited, Nigerian partnership law allows for the partnership contract you and your partners draft to govern. So, be sure to have one drafted to clearly spell out the terms of your partnership.
- Incorporation. You’ve seen the word “Limited/Ltd.” on billboards in Nigeria, heard the word on radio advertisements etc. How does this shake out? For example, if ‘More You Music Label’ was incorporated, it could be ‘More You Limited (LTD),’ private limited company; ‘More You
Unlimited (UNLTD),’ private unlimited company, or ‘More You Public Company (PLC),’ a public limited company.
- Limited Liability Company: Assume you are a member of ‘More You Records Limited.’ This means if wahala dey and you get sued (instead of the mob showing up and beating you to a pulp- saw too many of this scenario growing up in Lagos), there is a limit on the amount of monies that can be collected from you as a member of More You Limited.
- Unlimited Liability Company: This means if wahala dey, there is no limit in terms of how much monies can be collected from you.
- Legal requirements under the above Incorporated structures include:
- Memorandum (agreement) and article of association
- Minimum two directors, maximum 50, excluding present and ex employees
- Issuance of stock to shareholders
Hopefully all that one wey I just talk no pass una head and you got the gist. :)
What if I am “Nigerican” i.e ‘I am an American born Nigerian’ and want to register my business in Naija?
- Can I incorporate in Naija? Yes. As a non-Nigerian citizen, you can invest and participate in the operation of any business in Nigeria. In our example, if you already own ‘More you Record Label’ in Yankee and you want to set your business operations in Naija, then you need to incorporate your business locally as a separate business entity in Naija.
- Where do I register/incorporate my business? Corporate Affairs Commission (www.cac.gov.ng ). They handle all incorporations for Naija and non-Naija businesses based in Naija. Also registration with Nigerian Investment Promotion Commission (NIPC) (www.nipc-nigeria.org ) is required.
- Can I get an exemption from local registration of my music business? Yes. Nigeria’s Federal Executive Council enunciates several criterion that would qualify you for such exemption; but record labels do not appear to fall under this exemption.
- Are there other things I need? Business permit, expatriate quota (allows you to hire foreigners as employees) etc. Check with the organizations above.
Visit the listed sources below for more detailed info.
For Naija based or “Nigerican/Yankee” based artists/record labels looking to incorporate in the USA, look out for a future article covering that topic.
Now go make it happen!
Sources: Federal Embassy of Nigeria. A.D. Doherty Law Firm, NGEX & CAC. To search for local attorneys in Nigeria, click here .
NOTE: Disclaimer- this article is for information purposes only and does not constitute an attorney-client relationship with Ms. Uduak. If you want Ms. Uduak to represent you for your legal matters, contact her directly to discuss your legal situation and fees for her representation.
Ms. Uduak Oduok is the founder and principal attorney for UDUAK LAW FIRM. She is also the President & CEO of Ladybrille Media Group, Inc. She has over seventeen years combined experience in the fashion and entertainment industries and will be answering your NOT JUST OK basic Business of Music Questions. Have a question for Ms. Uduak? Send an email to email@example.com with the subject heading “Not Just Ok Music Question.”Source: notjustok.com
Category: Personal Finance