For a country that was once coined as "third world nation", Nigeria has come a long way past the obstacles and challenges that history has to offer and is currently focussing on full-fledged industrialisation, development and globalisation. Apart from the ambitiousness for the current objectives at hand, the government has planned out future goals such as sustainability, advanced healthcare and digitisation in education.
Though the business atmosphere supports a flexible structure for handling corporate affairs, negotiations and dealings in business activities, the only subtle rigidity is imposed by the Companies and Allied Matters Act (CAMA) of the Nigerian government.
The CAMA is denoted as the Companies Act of Nigeria infrequent observations and stands firm as a solid testament of doing business in Nigeria for domestic firms as well as foreign business entities. Through its regulatory custodian, the act in coalition with the government's ideologies is slowly shaping Nigeria into a progressive nation full of business opportunities and vast untapped resources.
Under legal observation, a nominee director is an individual appointed to the board to satisfy the needs of the appointer which could be an existing director/member of the board, a shareholder and a creditor to the company.
Due to the existential regulations of the CAMA expressing that any company wishing to set up business in Nigeria must be initially represented by an internal promoter of the country; it becomes essential to avail the services of a Nominee Director to ensure that the incorporation of the company within Nigerian borders is smooth and does not severely consume the precious and productive time of the company.
Role of a Nominee Director in Nigeria
A nominee director in most cases happens to be an individual who has not been a part of the company's overall business cycle up to date. Therefore, he/she may not be aware of the Board of Directors’ tactics to take individual vital business decisions. In aspect to this, a significant role of the nominee director is to gel with the upper-level management of the company and understand the compliance policies associated with his appointed directorship.
In terms of their relationship with Nigerian companies, the Board of Directors can act as the initial company promoters helping the registration and incorporation of companies in Nigeria. For these reasons, it is suggestable to network and avail the assistance of currently operating corporate professionals in Nigeria.
As per the Nigerian law and the regulations of the Corporate Affairs Commission (CAC), which is also responsible for company formation and managerial control of all business entities in Nigeria, has demanded the requirement for a representative of the Board of Directors of a company also to be a Residential Director or Nominee Director. Such a condition also expands the duties and roles of the Nominee Director towards the nation's legal sectors as well.
Thus, it becomes the Nominee Directors responsibility to ensure that he/she maintains a legal connect with the obligations of the CAC as well as the financial disclosure regulations with the Office of the Auditor General of the Federation (Nigeria) also known as OAuGF Nigeria. The below-mentioned information encompasses the general responsibilities and universal duties that are directly or indirectly associated with the position of a nominee director.
Reporting Obligations
Nominee directors have legal obligations to report to the Corporate Affairs Commission and provide a notification of the details mentioned below -
- Any recent changes in the company constitution
- Changes in the office address that was previously registered
- Appointment of new directors and/or secretaries and their details
- Mortgages and repairs concerning company property
- Resolutions passed by the Board of Directors
Legal Obligations
The Nominee Director also becomes legally obliged to the Nigerian laws, therefore, in the absence of a company secretary, the Nominee Director can take up a dual role as a legal representative of the company –
- Signing the annual return of the company with a company director
- Certifying the legitimacy of the financial statements to the annual return
- Compiling the report of affairs during the scenario of company winding up or receivership
- Signing the required application form and making a statutory declaration, if applicable, during the re-registration of a company
- Documenting information discussed in General Meetings
- Making the company statements available for inspection in case of tax arrears or fraudulent activities
- Being a legal intermediary between the company’s Board of Directors and the Government
- Issuing Statutory notices
The Company Secretary must also provide information on the Board of Directors –
- Name of the Director
- Residential Address
- Registered Office Address (exemption for Offshore Company)
- Interests held in shares and debentures - the number and amount of shares
- Information of any shares or debentures purchased or sold in the company
Nominee Director Services in Nigeria
During the process of incorporation and business setup, certain consulting firms provide for potential director portfolios or self-elect nominee directors from within their network of advisors and push them through to the client company for completing the company registration process. The exposure and friendly attitude in Nigeria has prompted the development of various business networks thus allowing the availability of services such as –
- Appointment of Nominee Director for company registration only
- Appointment of Nominee Director for business research and market feasibility study and company registration.
- Appointing Nominee Director for the dual role of a member as well as a legal representative.
How can we help with the Nominee Director Services in Nigeria?
Due to the growing business landscape, business outsourcing services have become an increasing trend among the corporate masses in Nigeria. The different outsourcing services include administrative activities that, in hindsight, are not the core competencies of every business. Thus, the visibility has emerged for availing these services from companies that are offering services such as –
- Payroll Outsourcing
- Nominee Director Services
- Tax registration
- Project Assessment and Market Study
- Auditing
- Valuation service
- Accounting and Bookkeeping
Business Setup Worldwide is a premier consultancy that is well versed and experienced with the corporate landscape. Contact us to avail our various services and know more about how to set up business in Nigeria.
