On 7 August 2020, a new company legislation was signed into law in Nigeria. The federal law amended the thirty (30) years old, Companies and Allied Matters Act 1990, that came into existence since 2 January, 1990.
An overview of One-Person Company
An OPC is a business structure that enjoys the benefits of both forms of business, i.e., a sole proprietorship and a company. Thus, it eliminates the hassles of finding the right co-partner/s for starting a business as a registered entity.
It was introduced to encourage individuals who are capable of starting their own businesses. This form of company is appropriate for small businesses and is used to conduct regular commercial businesses with the purpose of the owner making a profit, whilst providing limited liability protection.
The minimum share capital to incorporate a One-Person Company in Nigeria is; 100,000 Naira and the name shall end with the word, “Limited” or “Ltd”.
OPC as a Private Limited Company has to obey specific rules and regulations that are mentioned in the Memorandum of Association (MoA) and Article of Association (AOA) which provides the guidelines for mutual rights and duties (We’ll provide both MOA & AOA for free).
What is a One-Person Company?
A one-person company is a company that has only one person as to its member. Furthermore, members of a company are nothing but subscribers to its memorandum of association, or its shareholders. So, an OPC is effectively a company that has only one shareholder as its member.
Such companies are generally created when there is only one founder/promoter for the business. Entrepreneurs whose businesses lie in early stages prefer to create OPCs instead of sole proprietorship business because of the several advantages that OPCs offer.
A sole proprietorship form of business might seem very similar to one-person companies because they both involve a single person owning the business, but they’re actually exist some differences between them.
The main difference between the two is the nature of the liabilities they carry. Since an OPC is a separate legal entity distinguished from its promoter, it has its own assets and liabilities. The promoter is not personally liable to repay the debts of the company.
On the other hand, sole proprietorships and their proprietors are the same persons. So, the law allows attachment and sale of promoter’s own assets in case of non-fulfilment of the business’ liabilities.
Here are some general features of a one-person company:
- Private company: A single person can form a company for any lawful purpose. It further describes OPCs as private companies.
- Single-member: OPCs can have only one member or shareholder, unlike other private companies.
- No perpetual succession: Since there is only one member in an OPC, his death will result in the nominee choosing or rejecting to become its sole member. This does not happen in other companies as they follow the concept of perpetual succession.
- Minimum one director: OPCs need to have minimum one person (the member) as director. They can have a maximum of 15 directors.
- Special privileges: OPCs enjoy several privileges and exemptions under the Companies Act that other kinds of companies do not possess.
- Limited Liability: The creditors can sue only the Company and not the Director nor member for Company’s debt.
- Property: OPC can acquire, alienate and own the property in its name.
- Share Capital: The minimum capital share requirement for the incorporation of OPC is 100,000 naira (One hundred thousand naira only).
- Age Requirements: An applicant whose age is less than 18 years (Minor) cannot become a member or director of such a company.
Formation of One-Person Companies
By the new Companies and Allied Matters Act, a single person can now start, promote, register and own a private company, by being the sole shareholder and director of his/her private company.
It is beneficial to avail support of an expert firm that can assure seamless delivery of the same without much hassle. That is what SplashDict is all about.
1. Make Payment Online
Add product to cart, then proceed to complete secured online payment.
2. Fill up Application Form
Come up with a name for your business and answer a few questions. Our easy online form can be completed in just 5 minutes or less.
3.Our Executive will process Application
Based on the information you provide, We will process and file the documents.
4. Receive your documents
Once your registration documents have been approved by the Federal Ministry, you will receive your completed business entity package by e-mail/mail.
Criteria for Registering One-Person Company
One should fulfill the following eligibility criteria before registering as One-Person Company in Nigeria:
- A natural person who is a resident of Nigeria can form OPC in the preceding calendar year.
- Only one member can form an OPC.
- The name should be unique and should not be similar to any other existing company and trademark.
- There must be a least one director.
- In the case of OPC, the minimum share capital is 100,000 naira.
- One Person Company must include in its name; ‘LTD’ or ‘Limited’ or ‘Private Limited.
One-person company is corporatization of sole proprietorship, so it has all benefits a corporate enjoys aside to this it has some relaxations in provision of company law. Following are some of benefits of One Person Company.
- It has separate legal entity.
- The liability of shareholder/ director is limited
- Legal status and social recognition for your business.
- It gives suppliers and customers a sense of confidence in business.
- The director and shareholder can be same person
- On the death/disability company can be succeed by nominee.
- Exemption available from various provisions under Company law.
- They do not have to hold annual general meetings.
- Their financial statements need not include cash flow statements.
- A company secretary is not required to sign annual returns; directors can also do so.
- Provisions relating to independent directors do not apply to them.
- Several provisions relating to meetings and quorum do not apply to them.
- They can pay more remuneration to directors than compared to other companies.
- It is unchallenging to manage a One-Person Company as it Provides complete control of the company to a person.
- This type of company is regarded as a corporate entity that draws in various venture capitalists and angel investors that support and help the company to raise more funds and to expand its business.
- When you register a company name, it is protected and cannot be used by any other limited company or LTD, nor can another company register a name that is similar to your own company name.
- Small businesses with an annual turnover of less than N25 million are exempted from paying Company Income Tax in Nigeria.
To complete the Registration of Your Company in Nigeria, you’ll have to provide the following details upon Submission;
- Proposed Name of the Company (2 Names).
- The objectives and nature of business of the company.
- Address of the company.
- The share capital and shareholding formula among shareholders.
- Memorandum of Association and Article of Association (MEMART) – We’ll provide both MOA & AOA for free.
- Details of Shareholder and Director(s). Details such as; names, occupations, residential addresses, email addresses, mobile phone numbers, and means of identification (National Identification Card, Data Page of International Passport, Driver’s Licence, or Voter’s Card).
How Long does it take for One-Person Company Registration in Nigeria?
It usually takes 3-14 business days for the OPC Registration in Nigeria.
- Name Search: 6 – 24 hours from submission.
- Grant of Certificate of Registration: 2 – 10 Days from filing.
- Total time: Approximately 3 – 14 days.
If you are still not sure which one to pick for your business, feel free to reach out to us and our experts will guide you in making the right decision.
SplashDict is equipped with accredited experts and the necessary resources to assist you to complete the One-Person Company Incorporation in Nigeria.
- Delivery of Certificate Of Company incorporation.
- Drafting and digital delivery of approved Memorandum of Association and Articles of Association (MEMART).
- Delivery of Status Report.
- Delivery of Certified True Copy of Application Form.
- FIRS’ Tax Identification Number Inclusive.
- 3 to 14 Business Days Delivery.