It has been said that “no business can succeed in any great degree without being organised”- this is the truth that many failed Businesses have not mastered.
Unfortunately too, it is not all registered companies that have had the opportunity of being advised on the things that every company must take note of after becoming registered.
Many of my business students have been sparked to start their company as soon as they understood the details needed to start one, but not all of them waited to find out the details that are needed to give their company that solid foundation that will give them an organised outlook.
The tips that I will give to you in this article may be totally new, while some will come to you as a reminder, if you will put everything in place to comply with them, they will strengthen your hands to become a master Potter modelling the business ideas that you want and growing it into a reality.
Comments are welcome, and questions may be directed to my email address firstname.lastname@example.org. Enjoy!
TIP NO 1:
As soon as you register your company, purchase a standard notebook to record the details of the members of your new company.
Put in the layman sense, your members are otherwise known as the co-owners of the company.
You can title the notebook as “Register of Members of ……. (Insert your company’s name)”.
The records of each member should include their names, address, extent of ownership in the company, date on which each person became a member, date on which the person ceased to be a member (i.e. where the person has ceased to be a member).
There are other technical details that you must bear in mind. For instance, the kind of entry that will be in your Register of Member for a Company Limited by Shares may be affected by whether or not each member has paid for the unit of shares owned by him/her. In the event too that you have converted your shares into stock with proper notice to the Cooperate Affairs Commission, your Register is supposed to show the details of the stock and not shares.
You must take inventory of the members that started the company within 28 days of registering your company, and you must take inventory of all subsequent members within 28 days of the conclusion of agreement for them to become members. Where a person ceases to be a member, you must take record of that fact within 28 days too.
You may decide to keep your Members’ Register at your registered office, or in another office of your company (if that is the place where you make up the content of the Register), otherwise, you can keep it with your Legal Adviser/ Solicitor particularly if he/she is responsible for using his/her professional competence to manage the Register on behalf of your company.
If you prefer to keep the Register at an office other than your registered office, or with your Legal Adviser/Solicitor, make sure that either your company secretary or your Solicitor notifies the Corporate Affairs Commission of the place where the Register is kept within 28 days of the company’s decision.
TIP NO 2:
Where your company has more than 50 members (maybe because there are members that are joint holders of your company’s shares or for some other reasons), you may either choose to keep an Index of the members of your company in your Register of Members, or buy a separate Standard Notebook to take inventory of the Index of members.
The index of your company will contain the alphabetic list of the names of the members of your company and must, at all times, be kept at the same place with the Register of Members.
Where you make any alteration in your company’s Register of Members which makes it necessary that a consequential alteration be made in your Index of Members, you must make the consequential alteration within 14 days after the date on which the alteration is made in the register of members.
TIP NO 3:
Your company must hold its first annual general meeting within 18 months of its registration, and within every 15 months thereafter.
An “Annual General Meeting” is the yearly general meeting of the members of a company to deliberate on the businesses of the company. By implication, the following people are entitled to receive notice of your company’s general meeting:
• Every member
• Every person upon whom the ownership of a share devolves by reason of law
• Every director of your company
• Every auditor for the time being of your company
• Your company Secretary
At the Annual General Meeting, your company may present the financial statements for the year ending, present directors and auditors’ report, elect new directors in place of those retiring, appoint members of Audit Committee, declare dividends, and fix remuneration for company’s auditor etc.
Every member is entitled to a 21 days’ notice prior to the day of meeting. A shorter notice may be valid if only all the members entitled to attend and vote at the meeting agreed for a shorter date.
You may opt to engage your solicitor to prepare the notice of meeting to be sent to the members of your company or otherwise get your company secretary to prepare it.
As a guide, here are the details that your Notice of Meeting must specify:
• the venue of meeting
• the date and time of meeting, and
• the nature of issues to be dealt with at the meeting
There are other technical details that may have to be stated in the Notice of Meeting; for instance, where your meeting is meant to consider a special resolution, the terms of the resolution must be stated in the Notice of Meeting.
In a similar vein, you are not allowed to discuss any issue which you have not stated in your letter of notice of general meeting, and failure to give notice of your company’s general meeting will invalidate the meeting unless the failure was an accidental omission on the part of the person(s) giving the notice.
It is therefore necessary that you seek proper legal advice while planning to hold the annual general meeting of your company. You may contact me for further information or explanation, and you may likewise contact your Solicitor for additional assistance or information.
TIP NO 4:
Your company must keep minutes of its meetings. To do this effectively, I will suggest that you dedicate special notebooks for that purpose so that your minutes can be sequential and orderly.
The meetings which the Corporate Affairs Commission envisages that your company should take record of are:
• Proceedings of all General Meetings
• Proceedings of Meetings of Directors
• Proceedings of Meetings of Managers (where there are Managers)
TIP NO 5:
Your company must have at least two (2) directors.
Anytime the number of directors fall below two, your company must appoint new directors within one month, otherwise, it will be illegal to continue doing business after one month of refusal to appoint a director.
The power to appoint the directors reside in the members of your company and it may be exercised at the Annual General Meeting of the company.
TIP NO 6:
The first meeting of your board of directors must be held not later than 6 months after you register your company. All other meetings may be held at any time whatsoever.
Any issue that is to be resolved at the Board of Directors’ meeting must be decided by a majority vote, and if there is an equality of votes, the chairman may have a second vote.
TIP NO 7:
You must buy a standard notebook to take record of your company’s directors and secretaries.
The notebook may be headed “Register of the Directors and Secretaries of ………………………………………. (Insert the name of your company)”
The notebook is to be kept at your company’s registered office, and will take note of the following:
• Full names of Director/ Secretary
• Any former name (s) or surname
• Residential address
• Business Occupation
• Details of any other directorships held by him/her
• Date of Birth
• Where your Company’s secretarial duties are outsourced to a Law Firm or Corporation, the details of the registered name and registered address or head office must be noted.
Your company is expected to file its first update with the corporate affairs commission within 14 days from the day it is registered with the corporate affairs commission, and 14 days after every subsequent change.
The Register of the Directors and Secretaries of your company is supposed to be accessible to the public.
TIP NO 8:
Where your company changes its registered address, you must notify the Corporate Affairs Commission within fourteen days of such change.
Your Company Secretary may purchase and file the appropriate form for that purpose, or otherwise, engage a competent Solicitor to assist with the process.
TIP NO 9:
One of the things that you need to do after registration is to impress your company’s name and “Registered Company Number” (i.e. “RC No”) on every form of your company’s correspondence.
Unfortunately, this aspect of company obligation is usually overlooked by business owners and investors, and where the name of the company is stated, the “RC No” is often left out.
In more specific terms, you must paint or affix (and keep painted and affixed) your company’s name and “RC No” in a very clear manner on the outside of your office, on every of your company’s business letters, notices, advertisements, all official publications of the company, its bills of exchange, promissory notes, endorsements, cheques, bills or parcels, invoices, receipts, letters of credit, orders for money or goods purported to be signed by or on behalf of the company, and on the company’s metallic seal.
TIP NO 10:
Your company must prepare and submit to the Corporate Affairs Commission an annual report on matters specified in the Companies and Allied Matters Act which are applicable to your company.
The annual report is otherwise known as ANNUAL RETURNS, and if you are operating a limited company, It will usually contain your company’s registered address, address of place where the register of members is kept, summary of share capital and debenture, particulars of indebtedness of your company (if any), list of past and present members of your company, balance sheet, auditor’s report, and profit and loss account etc.
Keeping your annual returns up to date with the Corporate Affairs Commission is about the most important obligation that you must keep up with as soon as you register your company, and considering the technical nature of the task, it is important that your company secretary should be given the necessary training to handle the task, or otherwise, same should be outsourced to a Professional to handle.
TIP NO 11:
Register your company for Tax Identification Number and Value Added Tax at the Federal Inland Revenue Services (FIRS).
To apply for TIN and VAT, you may have to design your company letterhead, rubber stamp/metallic seal, and company logo.
You can reach me for further enlightenment on tax compliance in Nigeria.
Here, let me get back to the title of this article “11 simple tips to grow your new company”.
That title came to mind because I have seen many Businesses crumble not because they were bereaved of ideas, or money, but because they did not have somebody to put them through on their legal obligations, and as soon as they started getting penalised, they had to forfeit operating the company as it was too late to comply.
You have an opportunity to get the basic things right if you master the content of this article.