Capital Ace Attorneys is a fast evolving 21st century corporate commercial law firm with legal solutions in diverse areas of law. Our industry knowledge and experience of our core practice areas has helped our clients meet their legal needs in their respective business practices. Our values are predicated on providing a wonderful client/attorney experience, attention to details and dedication to serve our clients.
We critically analyze each business transaction, provide well researched and sound legal advice to assist our clients in mitigating business risks then deploy diverse solutions to specifically tailored to solve each client need. Our core areas of practice cover Immigration, Real Estate, Commercial Litigation, Corporate Commercial transaction advisory, Alternative Dispute Resolution, Project Finance and Taxation.
Our team of young, vibrant and experienced professionals are well grounded in specific areas of law and are committed to client satisfaction from commencement of each brief till a logical and satisfactory conclusion is reached. We ensure that we approach client instructions with industry knowledge of each partner and associate thereby ensuring that the best and most capable hands work on the concerned area of law.
We understand the business aspect of our client’s industry therefore we consider the commercial implication of each of our solutions on our client’s business. Our solution is always tailored to keep our clients in business within the ambits of the law. In most cases, our practice is structured around advisory, drafting and dispute resolution. We are proficient in domestic business transactions capable of creating a profitable and strategic business relationships in each industry.
We critically analyze each business transaction, provide well researched and sound legal advice to assist our clients in mitigating business risks then deploy diverse solutions to specifically tailored to solve each client need. Our core areas of practice cover Immigration, Real Estate, Commercial Litigation, Corporate Commercial transaction advisory, Alternative Dispute Resolution, Project Finance and Taxation.
We understand the business aspect of our client’s industry therefore we consider the commercial implication of each of our solutions on our client’s business. Our solution is always tailored to keep our clients in business within the ambits of the law. In most cases, our practice is structured around advisory, drafting and dispute resolution. We are proficient in domestic business transactions capable of creating a profitable and strategic business relationships in each industry.
Our team of young, vibrant and experienced professionals are well grounded in specific areas of law and are committed to client satisfaction from commencement of each brief till a logical and satisfactory conclusion is reached. We ensure that we approach client instructions with industry knowledge of each partner and associate thereby ensuring that the best and most capable hands work on the concerned area of law.
Startups have the potential to play a very important role in the development of developing countries, especially because of their ability to create wealth by their potentials to receive foreign direct investment and also, their chances of appealing to the younger demography which constitutes a significant percentage of the country’s population.
They also have the chances to reduce unemployment by creating more job opportunities and further improve the standard of living in their respective countries through innovation.
In spite of the ability to bring immense benefits to the country, the widespread view among Nigerian startups is that the business geology and regulation offers many barriers to reach their full potentials. These include high cost of doing business, lack of infrastructure, unpredictable taxes and regulatory scrutiny.
Innovative startups in Nigeria have a range of incentives to encourage their early stage growth. Despite the availability of these incentives, a lot of Nigerian Startups miss out on these benefits majorly due to lack of knowledge of existence of the benefits.
Some of these incentives are as follows:
In conclusion
Many startups and investors are unaware of the incentives available to them in Nigeria due to the lack of a comprehensive platform or document that highlights all the incentives and relevant regulations. Without the assistance of professionals, a search by startups for such incentives can be as tedious as searching for a needle in a haystack. Although the Nigerian Startup Act did a good job in ensuring that the stress to access this information, regulation and benefit is reduced to the barest minimum, it is important that a Startup founder discuss and liaise with an appropriate legal practitioner or law firm to advise on the foregoing. This may help Startups save tons in revenue and taxes which may be ploughed back into the business to help it survive. It may also help Startup founders create a solid structure for their startup which is a requisite tool to attract foreign direct investment.
Nwaogwuwgwu Abiola Glory
Startups that want to operate with ease need to avoid fines and sanctions from regulators. Several startups in different jurisdictions have suffered reputational damage and have also missed out on benefits essential to their growth due to their failure to understand the regulation and ensure compliance accordingly.
Regulatory compliance is key for the following reasons:
Following the above, we have compiled a preliminary compliance checklist below for startups operating in Nigeria.
Regulatory Authority/ Regulation | Requirement | Details of requirement | Timeline | Penalty for non- compliance |
Federal Ministry of Industry, Trade and Investments Trademarks Act, Cap T13, Laws of the Federation of Nigeria | – Brand Protection | Register their intangible assets which include: brand names and marks; patents; and copyrights | Trademark registrations are valid for 7 years and renewable subsequently every 14 years. | Although there is no penalty for non- compliance, it is essential that startups protect their trade/brand names and marks by registering them so as to enjoy a priority status on such marks. |
Financial Reporting Council of Nigeria The Nigerian Code of Corporate Governance 2018 |
– Corporate Governance | Set up a board of directors comprising of a sufficient size to effectively undertake and fulfil its business and to constitute a quorum. | It is good practice for startups to set up a board of directors consisting of experienced and knowledgeable persons to assist in overseeing its affairs and providing advise where necessary, as this boosts investor confidence. | |
Federal Inland Revenue Service (FIRS); State Inland Revenue Service (SIRS)
Finance Act, 2019 & 2020; Companies Income Tax (CIT); Value Added Tax (VAT). |
– Taxation | Startups are required to file and remit: i) Companies Income Tax; andii) Value Added Tax |
Startups are required to: i) file CIT within 18 months of incorporation, and subsequently on or before June 30 of every year; andii)remit VAT monthly to the FIRS on or before the 21st day of every month. |
Failure to: i) file CIT attracts a penalty of ₦25,000 for the first month and ₦5,000 for each subsequent month; andii) remit VAT attracts a payment of fine of ₦5,000 for every month of default. |
National Information Technology Development Agency (NITDA)
Nigerian Data Protection Regulation |
-Data Protection | Startups that process data of up to 1,000 data subjects within 6 months are required to:
i) submit to an annual audit; and ii) file the report of such audit, amongst other requirements. |
The audit report is to be filed not later than the 15th day of March of every year.
(Please note that NITDA at its discretion could extend the deadline for submission of the report.) |
Payment of fine of 2% of the annual gross revenue of the preceding year or payment of 10 million naira, whichever is greater, depending on the number of data subjects dealt with. |
Nigeria Social Insurance Trust Fund (NSITF); National Pension Commission (PENCOM).
Employee Compensation Act, 2020 Pension Reform Act (PRA), 2014 |
– Employment matters | . Startups are required to:
i) contribute 1% of their employee monthly payroll to NSITF; and ii) upon the employment of 3 or more employees deduct and remit monthly pension contribution (employee – 8% and employer -10%). |
Startups are required to remit: i) the 1% contribution to the NSITF within 2 years of commencement of its operations, and subsequently every year; andii) pension contribution with an approved Pension Funds Administrator (PFA) not later than 7 days of payment of salary every month. |
Startups who fail to remit the statutory contribution to NSITF, shall be required to pay a fine of at least 2% of the amount due to be remitted, in addition to the amount to be paid. Penalties for failure to remit pension contribution by a startup varies from cautions, monetary penalty to imprisonment, depending on the duration of non- compliance. |
Corporate Affairs Commission Companies and Allied Matters Act (CAMA) |
Incorporation and filing of annual returns | Startups are required to: i) be incorporated in Nigeria; and ii) file annual returns regularly . |
Startups are required to: i) incorporate their company before commencing business in Nigeria; andii) file their annual returns within 18 months of incorporation of the company in Nigeria and |
Startups who fail to file their annual returns shall be required to Pay an additional ₦3,000 or ₦5,000 fine for each year of non- compliance depending on whether the company is a small or large company. |
It is important to note that certain licenses and permits are required to successfully commence operations in specific industries. A few of these are set out below.
Conclusion
The outcomes of non-compliance with stipulated rules in Nigeria can be alternatively severe, as it can preclude the easy operations and increase of a startup.
It is crucial that startups apprehend the regulatory terrain it needs to perform in, take important measures to make sure compliance and engage the services of a legal professional.
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