OIL & GAS BUSINESS/ COMPANY SHARE CAPITAL IN NIGERIA

OIL & GAS BUSINESS/ COMPANY SHARE CAPITAL IN NIGERIA

In this post, we explained how to register and start Oil & Gas Business/ Company in Nigeria, the Minimum Share Capital Requirement for Oil and Gas Company by Nigerian Law, some of the basic Oil and Gas Company registrations, permit, licenses, registrations and steps to register business/ company.

What is Oil and Gas Company?

An oil and gas company is a business entity that engages in the exploration, production, refinement, and distribution of oil and gas. They oil and gas businesses that are involved in the entire value chain of the oil business. In Nigeria, oil and gas businesses are categorized into upstream and downstream activities.

An oil and gas company can be in both upstream and downstream activities.

Upstream activities include all exploration and production endeavors, midstream, which covers transportation and storage, and downstream, which is confined to refinement and marketing activities.

Read: Oil & Gas Business Permits, Licences and Registrations in Nigeria

What Is Share Capital?

Share capital is the money a company raises by issuing common or preferred stock. The amount of share capital or equity financing a company has can change over time with additional public offerings. It means the total amount raised by the company in sales of shares.

What is Company Share Capital?

A corporation's share capital or capital stock is the portion of a corporation's equity that has been obtained by the issue of shares in the corporation to a shareholder, usually for cash. "Share capital" may also denote the number and types of shares that compose a corporation's share structure.

In Nigeria, the required minimum share capital of a company is dependent on either the objects of the company, type of company or statutory provisions regulating that company. The primary law on the registration and regulation of companies in Nigeria is the Companies and Allied Matters Act, 2004 (CAMA) while the Corporate Affairs Commission (CAC) is the body empowered to ensure that the provisions of the CAMA are complied with during preincorporation and post incorporation stages.

Oil and Gas Company Minimum Share Capital Requirement in Nigeria.

The minimum share capital of Oil and Gas companies in Nigeria differs based on some variables.

The basic minimum share capital required by CAC company registration for Oil and Gas company is One Million Naira (N1,000,000) share capital.

Note: This is not the cost of registering Oil and Gas business/ company in Nigeria.

Also, you can start Oil and Gas business in Nigeria with a Business Name registration.

As a foreign company, there some registrations that may require you to raise your company/ business minimum share capital so as to manage your business. Another key important requirement you need to know are contend in Nigeria Local Content policy.

It will interest you to know that there are specific Oil and Gas services in Nigeria that the minimum share capital is above one million share capital.

Read: Nigerian Local Content Registration

Requirements for Oil & Gas Business/ Company Registration

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The Proposed Company Names and Registered Address.

Directors and Secretary Details.

Share Capital and Shareholder Details.

Identification Documents of Directors & Shareholders Proficiency Certificates (where applicable) Memorandum & Articles of Association.

Basic Registrations for Oil & Gas Business 1. Business/ Company registration with Corporate Affairs Commission (CAC).

2. Obtain Tax Identification Number (VAT) from Federal Inland Revenue Service (FIRS) 3. Obtain Value Added Tax Certificate and Company Tax Clearance Certificate from Federal Inland Revenue Service (FIRS).

4. Register and obtain Nigerian Social Insurance Trust Fund (NSITF) compliance certificate.

5. Obtain DPR Permit(s) with Department of Petroleum Resources 6. Meet Nigerian Local Content Act by obtaining NOGIC JQS with Nigerian Content Development and Management Board (NCDMB) 7. Obtain Nigerian Content Equipment Certificate (NCEC) (where applicable) with Nigerian Content Development and Management Board (NCDMB).

8. Search or hunt for jobs in Nigerian Oil & Gas industry.

Steps to Register A Business/ Company in Nigeria To register business /incorporation / company, you need to first know what the company wants to do. A company is a type of corporate structure whereby the legal status of the business is separated from the proprietor/promoter of the business. The company is a legal entity.

The law that established company registration and regulation of companies in Nigeria is Company and Allied Matters Act (CAMA). This act state that there are 2 types of companiesprivate and public companies. And there are 3 types of private companies- a company limited by shares, company limited by guarantee, and an unlimited company. The majority of businesses in Nigeria are private companies limited by shares. It deals with the various types of company structures, eligibility, process for registration/incorporation, and rules for operation.

Step 1 – Name Availability /Reservation The first step to register a company in Nigeria is called the name availability search. At this stage you want to find out if the name which you want to register your company with is available and not already in use. There are 2 ways you can do a search. You can do a free public search on the CAC website. The website has a public search tool here which you may use to do an initial free search.

It is important to note that when you are reserving a name, you choose a name that is considerably unique and you have two (2) names options to submit.

It is also important to note that the commission will reject names that is in their opinion of capable of misleading as to the nature or extent of its activities or is undesirable, offensive or otherwise contrary to public policy. Example: Names that contain the words “Chamber of Commerce”, “Federal”, “National”, “Regional”, “State”, “Government”, “Municipal” or “Chartered”, “Co‐operative” or the words “Building Society”; or “Group” or “Holding” The commission also in the opinion would reject a name that violate any existing trademark or business name registered in Nigeria unless the consent of the owner of the trademark or business name has been obtained.

If you conduct this search and finally decide on what name you want to use and confirm that it is not in use by anyone else, you can then proceed to officially conduct a search using the CAC online portal. The search costs nonrefundable fee of N500 (Five hundred naira) and if your name is available, this will be reserve it for 60 days.

Step 2 – Register the Details of the Shareholders Under Nigerian law, a private company must have a minimum of 2 members, and can only have a maximum of 50 members. The founding members must not be – under the age of 18 years old (unless at least 2 other members are over the age of 18), of unsound mind, an undischarged bankrupt, or disqualified by CAMA from being a Director The information which you will need to present include – the name of the shareholders, residential address, occupation, email address and mobile phone number. You will also need to provide a government issued identity document e.g. International Passport, Drivers Licence, Voters’ Card, National Identity Card etc.

Step 3 – Prepare the Documentation The documents required for the registration of a company include: Memorandum and Articles of Association Notice of registered address of the business List, particulars, and consent of the first Directors of the company Statement of compliance by legal practitioner

Under the new CAC process, individuals are able to get all the required documentation from the CAC portal. However, because of Memorandum of Association and Articles of Association drafting that require special documentation and care, you should consider getting professional or a lawyer/ law firm.

Step 4 – Payment, Submission and Pick Up Once you make the relevant payments online (the amount depends on the share capital of your company), you can upload all the documents and your submission is finalized. After submission, the CAC will contact you if there are any queries. If there are no queries, the CAC will inform you once the registration is complete, and then you can go to their office of your choice to pick up your hard copy certificate of incorporation and other related incorporation documents.

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