Thread by @credovoNG

Startups and Regulatory Requirements in Nigeria.

Are you planning to start a business or recently started one, below are step by step process to help you manage the regulatory requirements and avoid penalties.

1. Register your business with the Corporate Affairs Commission (CAC) either as a Limited Liability Company or an Enterprise.

2. Register your business for tax with the Federal Inland Revenue Service (FIRS) and obtain a Tax Identification Number (TIN) within six months of registration with CAC. Delay attracts penalty.

3. If the nature of your business requires Special Control Unit against Money Laundering (SCUML) certificate. Kindly apply and obtain the certificate before opening a bank account. Application for SCUML does not guarantee approval. Ensure you have the certificate

before opening the bank account to avoid sudden blockage.

4. Proceed to open the bank account once you have the SCUML certificate.

5. Commence monthly filing of your Value Added Tax (VAT) returns. Whether you have started earning income or not, you are required by law to make a monthly filing to the FIRS. Non-compliance attracts a penalty.

6. For those who have commenced business operations, ensure VAT is added to your invoices and properly accounted for. If you are into manufacturing, you might need to engage a professional to help you with proper accounting of your input VAT.

7. Ensure you deduct Withholding Tax (WHT) before making payment to your vendors and remit same to the relevant tax authority. Non-deduction attracts penalty plus you will be required to pay for the sum not deducted.

8. Assess your company’s eligibility to Pension Fund, Nigeria Social Insurance Trust Fund (NSITF) and Industrial Training Fund (ITF).

9. Pension Act requires a company with a minimum of three employees to contribute to the Fund (8% to be deducted from the employee income and 10% to be be contributed by the employer). NSITF and ITF requires 1% of payroll cost to be contributed to the Fund. Every employer is

liable to NSITF contribution while only employer with a minimum of five employees or 50 million naira turnover are liable to ITF contribution.

10. Limited liability companies are required by law to prepare an audited financial statements and file same with the FIRS and CAC within six months after the company’s accounting year end. Non-compliance attracts penalties.