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What Should be the Minimum Share Capital for Company Registration?

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.

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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/NSector/IndustryRequired Minimum Share Capital
1.Agents of Foreign Airlines1 Million
2.Agricultural Seed, Productions, Processing, Marketing10 Million
3.Air Ambulance/Fumigation/Private Jet20 Million
4.Air Transport (International)2 Billion
5.Air Transport (Local)500 Million
6Air Transport (Regional)1 Billion
7Asset Management (Intangible Assets)300 Million
8Aviation (Air Transport Training Institutions)2 Million
9Aviation (Ground Handling Services)500 Million
10Brokers/Dealers300 Million
11Bureau De Change35 Million
12Cabotage Trade25 Million
13Capital Trade Point20 Million
14Closed Pension Fund500 Million
15Commercial Bank with International Authorization50 Billion
16Commercial Bank with National Authorization25 Billion
17Commercial Bank with Regional Authorization10 Billion
18Commodities Broker40 Million
19Composite Insurance18 Billion
20Consultant (Partnership, Individual and Corporate)2 Million, N500,000 and 5 Million respectively
21Corporate Investment Adviser (Registrar)150 Million
22Corporate Investment Adviser5 Million
23Corporate/Sub Broker5 Million
24Finance Company20 Million
25Freight Forwarding5 Million
26Fund/Portfolio Manager150 Million
27General Insurance10 Billion
28General Micro-Insurance200 Million
29Individual Investment Adviser2 Million
30Insurance Broker5 million
31Issuing House200 Million
32Life Insurance8 Billion
33Life Micro-Insurance150 Million
34Lottery5 Million
35Market Maker2 Billion
36Merchant Bank15 Billion
37Microfinance Bank (National)5 Billion
38Microfinance Bank (State & FCT)1 Billion
39Microfinance Bank Unit (Tier 1)200 Million
40Microfinance Bank Unit (Tier 2)50 Million
41National Microinsurer600 Million
42Non-Interest Bank (National)10 Billion
43Non- Interest Bank (Regional)5 Billon
44Payment Service Bank5 Billion
45Pension Fund Administrator1 Billion
46Pension Fund/ Asset Custodian2 Billion
47Primary Mortgage Institution2 Billion
48Private Security Company/ Consultant10 Million
49Rating Agency150 Million
50Re- Insurance20 Billion
51Shipping Company/ Agent25 Million
52Sports Lottery30 Million
53State Microinsurer100 Million
54Stock Broker200 Million
55Stock Dealer100 Million
56Takaful Insurance (General and Family Takaful)200 Million
57Travels/Tours30 Million
58Trustee300 Million
59Underwriter200 Million
60Unit Microinsurer40 Million
61Venture Capital Manager20 Million
62Education1 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