When you hear of Dangote Group, what comes to mind? Companies that have been built over the years, expanded massively in various industries and have now become very successful right?
As a sophisticated business investor, owning several successful companies is one of your core goals but maximizing the benefits of having these companies is equally important.
And one of the proven ways of maximizing the benefits is when you register them as a group of company.
You may want to ask “how do I do that?” You’re about to find out.
Topping the list of requirements for setting up a group of company is completing the legal process of registering the company and being legally compliant.
However, the registration process can be a bit challenging as the process is not as simple as the regular registration of company.
In this article, we will discuss what you need to set up a group of company which will make you become a CEO of a group of company. Specifically, we will discuss the following:
Table of Contents
What Is a Group of Company?
According to the Companies and Allied Matters Act (CAMA), a group of company consists of three or more associated companies that share same shareholders and similar names.
These companies then come together to form a separate “Group” company, where each company becomes a shareholder.
Simply put, it is like a big family of companies, that have same ownership and control.
It consists of a parent company (also known as a holding company) which is the bigger company and several subsidiary companies.
All the companies operate under one umbrella. You can take the subsidiary companies as the children of the parent company.
It’s important to note that using the word “Group” in a company name requires special permission.
According to the CAMA, you must get consent from the Registrar General of the Corporate Affairs Commission (CAC) before you can use the word “Group” in your company name.
How Does a Group of Company Work?
In a group of company, the parent company usually oversees and controls the affairs of the subsidiary companies.
Each company within the group remains a separate legal entity, meaning it has its own legal identity and responsibilities which may be production, services, importation, etc with each having the same owner.
For example, we know dangote cement in the building construction industry, and we know dangote petroleum refinery in the oil and gas industry and we know dangote sugar in the food production industry.
If the cement company is the parent company, then the others will be the subsidiaries being overseen by the cement company although each of these companies can exist and function with their business objectives separately on their own.
Examples of group of companies in Nigeria include Dangote Group, BUA Group, First Bank Holdings, etc.
What Are The Benefits of Owning a Group of Company?
It’s not a small feat to own a group of company. There are many benefits attached. No wonder, some of the sophisticated billionaires that you know of and those who love excellence choose to register their companies as a group.
You can check out some of the benefits below.
1. Financial Benefits
Financial resources arebetter shared and allocated efficiently across the group.
2. Reduced Risk
Each company in the group has its own separate liability assets. This can help protect each companies in the group where one company’s liabilities doesn’t affect the other.
3. Strategic Advantages
There is room for better coordinationand ability to work together towards common goals and strategies.
The group can also negotiate better deals with suppliers and lenders.
Other Benefits
1. Easier to sell part of the business: For a group of company arrangement, it is easier to sell part of the business while still being able to retain ownership of the business.
2. There is room for a more efficient and centralised management of the business since the business is controlled by same shareholders and directors across the companies.
Requirements for Registering a Group of Company
First of all, you cannot operate a business as a group of company without registration. It is therefore important for you to register it with the Corporate Affairs Commission (CAC).
The Corporate Affairs Commission is the government agency saddled with the responsibility of managing all types of companies in Nigeria.
Also Read: Understanding The Types Of Companies In Nigeria To Make The Best Choice in Business
For a proper registration of your group of company with the Corporate Affairs Commission (CAC), you will need the following requirements.
- A formal application to the Registrar General for consent for the use of the word “Group”
- Evidence and company details of a minimum of three (3) or more associated companies to form the Group Company, which will be the distinct entity.
- Evidence and list of similar names of associate companies with common shareholders and ownership.
- A resolution of the associate companies showing consent to the “Group” relationship.
- The updated annual returns of all associate companies.
- Evidence and personal details including names, address, phone number, email, signature, means of identification of Company secretary of associate companies.
- A statement by the proposed Group Company that the share capital shall not be less than the highest share capital amongst the associate companies.
- Where the associate company is a banking or insurance company or a deposit, provident or benefit society, it must provide a statement in the form in schedule 14 to CAMA.
After obtaining the Consent, you can then go ahead to register the company with the same procedure for the registration of a new company.
Requirements for the registration of the new company (Group of Company)
- 2 different options of names for the company for Name search and reservation
- The reason for setting up the company and services to be rendered
- Names, home address, phone number, email address, Occupation, signatures of shareholders, directors and secretary of the company. A minimum of one director and shareholder is required for the company. However, having at least two directors and a secretary is recommended for better management and compliance.
- Address of the company in Nigeria.
- Filing fee and FIRS stamp duty fee for the registration.
- Means of identification of shareholders, directors, secretary which is National Identification Number (NIN) or International passport in case of foreign shareholders, directors, secretary.
- Starting share capital of 1 million naira from which the CAC registration filing fee and stamp duty fee will be calculated.
Please note that what the CAC gives after registration is the certificate of incorporation, Memorandum and Articles of Association and status report.
Also note that the CAC registration and stamp duty fee is dependent on the highest amount of share capital of any of the existing associate companies.
Also Read: Comprehensive Guide to Registering a Fin-tech company in Nigeria
Intellectual Property Protection
Just like we can identify Dangote group and a host of others by their tradename or logo, it is expected that the group will need a new logo or tradename with which it will be recognised by the members of the public.
And for the sake of the company, the new logo will need to be protected by the law so it is not hijacked by competitors thereby losing years of hardwork.
A proven way to do this is by conducting intellectual property protection.
Intellectual property is the protection given by law to unique creations of the mind, such as inventions, literature and art to prevent others from using them without your permission.
In Nigeria, the key intellectual property protections are patents, copyrights with trademarks being the most applicable to your business.
A trademark is a unique sign that shows your company’s products or services are different from others. It could be a name, logo, or symbol.
For instance, you will be conversant with names like Dangote, BUA, Access, GTBank, etc. Those are the Company’s trademarks.
Registering your new company’s trademark is the only way to protect your unique brand in the marketplace.
A Certificate of Registration is what is usually given after successful registration to prove that the trademark belongs to you.
Also Read: What Every Business Owner in Nigeria Should Know About Intellectual Property Rights
Requirements for Trademark Registration
- Any of the marks which you intend to register (name, logo, image, or symbol) or a combination of these.
- A description of the services of the company covered by the trademark, Name of the owner of the company, Contact details of the owner of the company Power of Attorney appointing an agent to do the registration (an accredited agent/lawyer may help to prepare the power of attorney)
- Upon registration, the company gets a trademark certificate which is valid for 7 years and can be renewed.
Contracts For Your Group of Company
Since you’re creating a new company with several companies under one umbrella, your new company will definitely be involved in numerous contracts as a family.
One of the benefits highlighted earlier is for centralised management and efficiency.
It is therefore important for your company to have contract documents readily available for its operations.
An important key note regarding contracts is that it must be legally valid.
For a contract to be valid, it must include certain necessary details.
These details are what your lawyer will ensure are included to protect your business and prevent losses.
Some of the documents include the following:
Foundational Documents
1. Terms and Conditions: This document outlines customer relationships, purchase processes, cancellations, liabilities, refunds, insurance and marketing.
2. Employee Contract: This defines the job descriptions, salaries, rules and resignation procedures of your staffs.
3. Company Policies/Employee Handbook: This establishes work environment, conduct, safety and conflict resolution guidelines for your company which every employee, director must work with.
Digital Presence
4. Website Terms of Use: Where you have a website running, you will need this document to regulate how thecustomers will use the website.
5. Privacy Policy: Apart from the website terms of use, you will also need the privacy policy. Now this explains how your company handles your customer’s data and the extent to which their data are protected when they visit your company’s website.
6. Refund Policy: Of course there will be situations where a customer will demand for a refund, you need a well drafted refund policy that will Outline the refund procedures such as the time, the conditions and qualification for a refund.
Partnerships and Collaborations
7. Independent Contractor Agreement: This is similar to an employee contract. It defines the job description of temporary staffs or freelancer, their payment and deadlines to complete their job in the company.
8. Service Level Agreement (SLA): As the company providing goods and services toyour customers, you will need this document to keepyour customer rest assured that you are providingquality service.
9. Share Agreement: This outlines each shareholder’s responsibilities and company operations and the issuance of dividends. This helps to prevent disputes in the future and ensure compliance with the CAC.
10. Lease/Tenancy Agreement: This is necessary since you will either buy a property, develop it into an office space or rent out an office space. Either ways, a good lease/tenancy agreement is necessary to clarify the property rental/lease terms and responsibilities.
All these documents help to:
– Protect your business interests
– Establish clear relationships with your employees and third-parties
– Ensure compliance with regulations
– Prevent future disputes
– Clarify expectations
– Regulate financial transactions
Note that you will need to discuss with your lawyer to tailor these documents to your business services and needs.
Professional Guidance
In the registration of a group of company and other requirements highlighted in this article, the best Professional Guidance you can get is from a business lawyer accredited with the Corporate Affairs Commission.
Why is this?
1. Compliance: Lawyers will in addition to many Nigerian corporate regulations, ensure you adhere to the Nigerian Company and Allied Matters Act (CAMA) which is the law that regulates company operations in Nigeria.
2. Risk Management: They will also help identify potential liabilities and protect your business interests.
3. Contract Review: Draft and review the necessary contracts, memorandum, and articles of association, letters and other documents required for effective registration and operation of your business.
Conclusion
This is why at Charis Legal Practice, we offer the full package registration as listed out in this article for a company in Nigeria. Just click the link below and you can get started.
Our services are available to sophisticated entrepreneurs who are particular about getting it right in the legal foundation of their business right from the get go.
If you need our team to work with you to set up your group of company, you can click HERE to get started.
This Is How Charis Legal Practice Can Help You!
- Business Legal Consultation
Get started with an initial consultation tailored specifically for business owners like you.
Receive expert legal advice customized to your unique business needs and goals.
- Company Registration Service
Simplify the process of registering your group of company.
Ensure your business has the proper legal structure and stays compliant with regulatory requirements.
- Trademark Registration Service
Receive guidance and assistance for registering your trademark. As a group of company, protecting your company’s trademark is of utmost importance.
Safeguard your brand identity and protect your intellectual property rights with our expert support.
- Contract Drafting for Commercial Transactions
Gain access to expert negotiation and contract drafting services for commercial transactions valued at a minimum of 10 million naira.
Ensure that your business agreements are legally sound and protect your interests.
- Ongoing Corporate Legal Services Retainership
Access comprehensive legal support through a retainer agreement tailored to your business’s needs.
Benefit from ongoing legal advice, contract reviews, and representation whenever required.
WHY CHOOSE CHARIS LEGAL PRACTICE?
We are your top Business Law Firm in Lagos Nigeria.
As an entrepreneur, it can be overwhelming to manage legal processes and contracts on your own. Our virtual legal consultations make it easy for you to get expert advice and guidance in the comfort of your own space.
We have successfully registered numerous companies and negotiated contracts worth over billions of Naira for our clients. Let us handle all of your legal needs with our comprehensive services package specifically designed for business entities.
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