A public limited company is much more suitable for the well-established companies as running companies of such form have a higher cost in comparison to a private limited company. With the increasing business opportunities and the increasing per capita GDP, The Federal Republic of Nigeria has proven itself to be one of the best places for a budding entrepreneur to be in. If you have deep pockets and do not shy away from spending money on something which would brighten up the future of the company, then a Public Limited Company is just the thing for you.
What is a Public Limited Company?
A Public Limited Company is different from a private limited company due to the ability to be able to sell its shares to the public via a stock exchange. It is a mandate to have a minimum share capital of N 500,000 and the Corporate Affairs Commission (CAC) Nigeria, requires a minimum of 2 persons to register the public limited company there is no restriction on the maximum number of shareholders in such company. In such company, the shareholders have liability only on the amount of capital they have invested in the company. The cost of running such a form of company is higher than the cost incurred in private limited business and because of this reason, this form of business structure is suitable for a larger company which has deep pockets.
Features of a Public Limited Company
- The name of the company must end with the words “Public Limited Company” or its abbreviation “PLC”
- The shares and debentures offer no restriction on transfer of its shares to the general public
- The minimum authorized share capital of the company is N 500,000. 25% of this share capital must be subscribed by the founding members during the incorporation of the company
- If the company expects to be listed on the Nigerian Stock Exchange then in such a case the Article of Association of the company must be in accordance with the Nigerian Stock Exchange
- There is no limit to the maximum number of members who can join a company
- People with relevant professional certification or experience in similar industries may be appointed as its company secretary
- If a person is over 70 years of age and is able to fulfill certain statutory conditions may be appointed as one of the directors of the company
- It is necessary for a Public Limited Company to hold a statutory meeting within 6 months of its establishment
Documents Required for Setting up a PLC in Nigeria
According to the Corporate Affair Commission, which is the regulating authority on the establishment and management of companies in Nigeria, certain documents must be kept ready for a quick and easy establishment of a company. These documents are:
- Names, addresses, phone numbers and email addresses and shareholding percentage of each shareholder
- Name, address, phone number and email address of the Professional Company Secretary
- Name, addresses, phone numbers and email addresses of Directors (minimum of two adult directors)
- The Proposed Company address.
- The Proposed share capital of the company (N500,000 at the least)
- Means of identification for the directors, shareholders and Company Secretary to a copy of international passport, permanent voters card, national id card or driver’s license
- Objects of the Company, i.e. business the Company proposes to operate
- Memorandum and Articles of Association of the Company
How to Setup a Public Limited Company in Nigeria?
There are certain steps which need to be followed by an entrepreneur to setup a Public Limited Company such as:
- The entrepreneur should choose two names for the company in order of preference. It should be kept in mind that two different names must be chosen in case the first preference is not selected by CAC.
- Then he should log on to the CAC portal and conduct a search for the availability of the chosen name.
- If the name is available, he should reserve the name by paying reservation fees after which a notice of approval will be sent by the COC.
- Next, the online pre-registration form (CAC 1.1) needs to be completed on the portal
- Filing and stamp duties fees need to be paid
- The entrepreneur needs to prepare and scan all the documents which will be then uploaded to the portal
- The original copies of the scanned documents are then submitted at the nearest CAC office.
Since the formation of a Public Limited Company is only suitable for companies having a big spending budget, the procedure might get a bit tricky for an entrepreneur to handle all the workings on his own. This is why the help of business consultancy firms should be taken as they would guide the entrepreneur and would provide them with practical and realistic advice.
We at Business Setup Worldwide can help you with the company formation process in Nigeria. Our experienced advisors will provide you with professional and realistic advice and will also provide a guideline for the future of the company. For any query about the various services we provide do contact us today – we’d be happy to help.