Company Limited by Guarantee in Nigeria

Nigeria is rapidly emerging as a hub for business, driven by a growing middle-class population and a favourable macroeconomic environment. This potential has attracted entrepreneurs and businesspeople from around the world. The Nigerian government is actively implementing strategies to attract both tourists and investors, prioritizing tourism as a primary sector. The government is particularly encouraging foreign investment, and one of the most effective ways to participate is through the formation of a company in Nigeria. Among the various types of companies available, one notable option is the Company Limited by Guarantee in Nigeria.

What is Company Limited by Guarantee?

A company limited by guarantee in Nigeria is also known as a Guarantee Company. In these companies, there are no shareholders. Members known as the Guarantor instead own the company. The guarantors are obligated to pay a specified sum of money, which is limited by the memorandum of association if the company is winded up. They are required to be liable for taking care of the amount contributed to the company.

This type of business structure is generally viable for non-profit organizatioin. In this business structure, any profits earned are reinvested into the company to enhance the workings of the entity. This type of company is considered a separate legal entity, meaning the law treats it as an individual distinct from its owner. It can carry out various activities in the name of the business, such as acquiring credit, employing people, buying or selling property, etc.

It is to be noted that a company limited by guarantee should neither be incorporated nor conduct its business activities for profit distribution among its members.

Features of Company Limited by Guarantee

• A company limited by guarantee in Nigeria can have any number of guarantors or directors. A minimum of one director and one guarantor are mandatory for the establishment of a company limited by guarantee. It is also possible that the same person handles the mantle of both a guarantor and a director.
• Organizations typically set up a Company Limited by Guarantee for non-profit purposes. Any profit generated by the company is reinvested and used to promote its non-profit activities.
• A Company Limited by Guarantee in Nigeria operates as a unique legal entity, separate from its owner. This approach means the company itself is responsible for any debts it accumulates.
• Since this business structure would hold the company responsible for any of the debt taken by the company, the personal assets of the owner/shareholder are protected. They only need to pay the amount mentioned in the guarantee, which will only occur in the event of the company’s insolvency.
• A Company Limited by Guarantee in Nigeria must include the suffix ‘’limited’’ in its name to invoke a feeling of trust among the clients.

Requirements for Registering a Company Limited by Guarantee

The following are the requirements for registering a Company Limited by Guarantee in Nigeria:

• The CAC must issue a certificate confirming that the chosen name is available and a receipt indicating that the name has been reserved.
• Memorandum of Association and Articles of Association
• All the completed Statutory Forms
• Receipt of payment for the Stamp Duty to the Federal Board of Inland Revenue
• Receipt of payment for the filing fees
• The consent from the Attorney-General of the Federal Republic of Nigeria

Procedure to Register a Company Limited by Guarantee in Nigeria

• Check for the availability of the chosen name in the online portal of the Corporate Affairs Commission (CAC). Upon finding the availability, reserve the said name.
• Fill out the CAC1.1 form online using the Company Registration Portal.
• Pay the appropriate stamp duty fee to the Federal Board of Inland Revenue Service and also pay the required filing fee to the Corporate Affairs Commission (CAC).
• After filling out the CAC1.1 form, it is necessary to scan all the required documents, which include:

1. Memorandum of Association and Article of Association (MART for short)
2. Any recognized form of identification for the directors and secretary

• Scan the above documents and upload them for processing.
• After all the documents have been scanned and uploaded, the Commission must obtain approval of the Attorney General of the Federation before registering the Company Limited by Guarantee.

Setting up a company limited by guarantee in Nigeria would require a lot of knowledge of the jurisdiction’s business environment and a deep understanding of the incorporation process for a company limited by guarantee. A business setup consultant would help you with the entire process, making the experience hassle-free and seamless for you.

Business Setup Worldwide is here to support you in establishing your business in Nigeria, offering professional and expert guidance to help your business thrive. Contact us today to take advantage of our comprehensive services and set your business on the path to success.