“I want to register a record label and I don’t (know) how to go about it and how much it will cost me to get registered.”
I have received many questions like Steev’s. Below is a republished article, slightly modified, that answers this question. Please check with the CAC to see current costs of registration. Also, if you can afford a lawyer, get a lawyer who practices in business or entertainment law to help you out.
“How do I incorporate my record label in Nigeria . . .?”
What Law Governs? Nigeria’s Company and Allied Matters Act 1990.
Which Agency is Responsible for Administering the Act? Corporate Affairs Commission (CAC)
What Does this All Mean? The Nigerian government essentially says, “if you want to run your music label or do business as an artist in Nigeria, you should let us know, register your business with us (i.e. pay us some money 10,000.00 to 30,000 Naira depending on business entity) and we will give you some benefits and protect you in case of wahala.” You should seek the help of a Naija based attorney, chartered accountant or secretary to help execute this.
What Services Does CAC Offer? For our purposes CAC can:
- Help incorporate your music company. For example, they can make your music label be incorporated as a private or public company. If you want to incorporate a music NGO i.e. ‘AML Music Feed the Hungry,’ for example, they can do that under a corporate structure called “Limited by Guarantee.”
- CAC can register your business name. For example, ‘AML record Label’
- CAC can issue certified true copies of any documents you file with them
- They can also help manage and/or dissolve your record label if you decide things are now working out anymore.
What are the Incorporation Options Available to You as a Music Business Owner?
- Sole Proprietor: This means it’s just you i.e. you fly solo. For example, ‘AML Music Enterprise’ or ‘AML Music Ventures.’ Advantages: It is easy to form and dissolve this form of legal entity because the requirement is minimal.Disadvantages: You have limited access to finance and if there is wahala, you can be personal liable i.e. lose your house and other personal assets if sued and the folks that sue you win. However, this might be a perfect structure for solo artists/labels i.e. the one man/woman shop who does it all. As your business grows, you can incorporate into other forms.
- Partnership: This is where two or more persons go into music business together. For example, ‘AML, Peter & Mary Music Records.’ Nigeria’s English Partnership Act of 1890 governs. The key here is you all go into business to make “profit.” You can form a partnership with individuals or companies. Independent of the partnership act I just cited, Nigerian partnership law allows for the partnership contract you and your partners draft to govern. So, be sure to have one drafted to clearly spell out the terms of your partnership.
- Incorporation. You’ve seen the word “Limited/Ltd.” on billboards in Nigeria, heard the word on radio and television advertisements etc. How does this shake out? For example, if ‘AML Music Label’ was incorporated, it could be ‘AML Limited (LTD),’ private limited company; ‘AML Unlimited (UNLTD),’ private unlimited company, or ‘AML Public Company (PLC),’ a public limited company.
- Limited Liability Company: Assume you are a member of ‘AML Records Limited.’ This means if there are issues and you get sued, there is a limit on the amount of monies that can be collected from you as a member of AML Limited.
- Unlimited Liability Company: This means if there are issues with your organization and you get sued, there is no limit in terms of how much monies can be collected from you.
- Legal requirements under the above Incorporated structures include:
- Memorandum (i.e. agreement) and article of association
- Minimum two directors, maximum 50, excluding present and ex employees
- Issuance of stock to shareholders
What if I am “Nigerican” i.e ‘I am an American born Nigerian’ and want to register my business in Nigeria?
- Can I incorporate in Nigeria? Yes. As a non-Nigerian citizen, you can invest and participate in the operation of any business in Nigeria. In our example, if you already own ‘AML Record Label’ in the USA and you want to set your business operations in Nigeria, then you need to incorporate your business locally as a separate business entity in Nigeria.
- Where do I register/incorporate my business? Corporate Affairs Commission (www.cac.gov.ng). They handle all incorporations for Nigeria and non-Nigerian owned businesses based in Nigeria. Also registration with Nigerian Investment Promotion Commission (NIPC) (www.nipc-nigeria.org) is required.
- Can I get an exemption from local registration of my music business? Yes. Nigeria’s Federal Executive Council enunciates several criterion that would qualify you for such exemption; but record labels do not appear to fall under this exemption.
- Are there other things I need? Business permit, expatriate quota (allows you to hire foreigners as employees) etc. Check with the organizations above.
Visit the listed sources below for more detailed info.