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Shares are symbols or percentage of ownership in a business. It is allotted to investors in exchange for equity capital. The shares of a company are owned by the shareholders who are also the owners of the business. It is advisable that shares are allocated with proper caution as shareholders are the owners of a company. It is also advisable that as shareholders, you have a shareholder’s agreement to govern all actions, contributions, and benefits to individual shareholders.
Minimum share capital is the minimum amount of money the owners of a company or shareholders have invested in the company. This is represented by the shares the shareholders possess. The purpose of this capital is to make sure a company has enough equity to settle its creditors in the event of bankruptcy.
Most businesses have an industry-prescribed minimum share capital requirement in Nigeria and the Corporate Affairs Commission (CAC) notifies the public of these requirements. These are published on the CAC portal as well as that of the various regulatory agencies in charge of regulating these industries.
Industry and Corporate Affairs Commission prescribed minimum share capital
Generally, The Corporate Affairs Commission provides for a minimum issued share capital of N100,000 for private companies limited by shares and N2,000,000 for public companies limited by shares. It is also important to note that CAC requires that the shares in a company are issued at the point of registration.
The minimum share capital requirement of a foreign-owned company in Nigeria is One hundred million naira (NGN 100,000,000). This is in line with the revised handbook on expatriate quota administration 2022.
The required minimum share capital for various industries is listed below. Whatever business sector or industry is not included in the list below can be registered with the required minimum or at the discretion of the business owner.
| S/N | Sector/Industry | Required Minimum Share Capital |
| 1. | Agents of Foreign Airlines | 1 Million |
| 2. | Agricultural Seed, Productions, Processing, Marketing | 10 Million |
| 3. | Air Ambulance/Fumigation/Private Jet | 20 Million |
| 4. | Air Transport (International) | 2 Billion |
| 5. | Air Transport (Local) | 500 Million |
| 6 | Air Transport (Regional) | 1 Billion |
| 7 | Asset Management (Intangible Assets) | 300 Million |
| 8 | Aviation (Air Transport Training Institutions) | 2 Million |
| 9 | Aviation (Ground Handling Services) | 500 Million |
| 10 | Brokers/Dealers | 300 Million |
| 11 | Bureau De Change | 35 Million |
| 12 | Cabotage Trade | 25 Million |
| 13 | Capital Trade Point | 20 Million |
| 14 | Closed Pension Fund | 500 Million |
| 15 | Commercial Bank with International Authorization | 50 Billion |
| 16 | Commercial Bank with National Authorization | 25 Billion |
| 17 | Commercial Bank with Regional Authorization | 10 Billion |
| 18 | Commodities Broker | 40 Million |
| 19 | Composite Insurance | 18 Billion |
| 20 | Consultant (Partnership, Individual and Corporate) | 2 Million, N500,000 and 5 Million respectively |
| 21 | Corporate Investment Adviser (Registrar) | 150 Million |
| 22 | Corporate Investment Adviser | 5 Million |
| 23 | Corporate/Sub Broker | 5 Million |
| 24 | Finance Company | 20 Million |
| 25 | Freight Forwarding | 5 Million |
| 26 | Fund/Portfolio Manager | 150 Million |
| 27 | General Insurance | 10 Billion |
| 28 | General Micro-Insurance | 200 Million |
| 29 | Individual Investment Adviser | 2 Million |
| 30 | Insurance Broker | 5 million |
| 31 | Issuing House | 200 Million |
| 32 | Life Insurance | 8 Billion |
| 33 | Life Micro-Insurance | 150 Million |
| 34 | Lottery | 5 Million |
| 35 | Market Maker | 2 Billion |
| 36 | Merchant Bank | 15 Billion |
| 37 | Microfinance Bank (National) | 5 Billion |
| 38 | Microfinance Bank (State & FCT) | 1 Billion |
| 39 | Microfinance Bank Unit (Tier 1) | 200 Million |
| 40 | Microfinance Bank Unit (Tier 2) | 50 Million |
| 41 | National Microinsurer | 600 Million |
| 42 | Non-Interest Bank (National) | 10 Billion |
| 43 | Non- Interest Bank (Regional) | 5 Billon |
| 44 | Payment Service Bank | 5 Billion |
| 45 | Pension Fund Administrator | 1 Billion |
| 46 | Pension Fund/ Asset Custodian | 2 Billion |
| 47 | Primary Mortgage Institution | 2 Billion |
| 48 | Private Security Company/ Consultant | 10 Million |
| 49 | Rating Agency | 150 Million |
| 50 | Re- Insurance | 20 Billion |
| 51 | Shipping Company/ Agent | 25 Million |
| 52 | Sports Lottery | 30 Million |
| 53 | State Microinsurer | 100 Million |
| 54 | Stock Broker | 200 Million |
| 55 | Stock Dealer | 100 Million |
| 56 | Takaful Insurance (General and Family Takaful) | 200 Million |
| 57 | Travels/Tours | 30 Million |
| 58 | Trustee | 300 Million |
| 59 | Underwriter | 200 Million |
| 60 | Unit Microinsurer | 40 Million |
| 61 | Venture Capital Manager | 20 Million |
| 62 | Education | 1 million |
Types of Businesses Exempted from Minimum Share Capital
Business that are not part of those listed above are exempted from the mandatory required minimum share capital for company registration. In essence, if your line of business is not part of those listed above you can have as much or as little (i.e. the minimum prescribed) a share capital you desire for your company upon registration.
Do I need to have the minimum capital in my bank before I start my Company?
The idea behind a share capital does not mean you need to present it for sighting to anyone or deposit in a bank for inspection. However, for financial companies, the Central Bank of Nigeria (CBN) requires that the share capital be deposited in an escrow account with CBN.
Should I choose a high or low share capital for my business?
The minimum share capital listed above does not mean that such businesses cannot have above that listed, please note the term ‘minimum share capital’. You are at liberty to pick any share capital for your business bearing in mind the requirements explained in this article.
Conclusion
It is advisable that you consult a CAC-accredited agent before registering a company in Nigeria to avoid making mistakes during registration.
We will be happy to hold your hand in your business set-up processes. Contact us here