Many Nigerians have gone into money lending business, majority of these money lenders are not registered and some are partially registered meaning they registered with Cac without more. The money lending business has become so rampant that people have nicknamed them “sharks”, they are out to devour their victims (borrower).
If you really want to go into Money lending business legally and to be seen as genuine you must follow the steps outline hereunder strictly. Money lending business is really lucrative and with the ever-increasing population of Nigeria, money will become scarcer but you must follow due process. The Money lending and Loan operation business in Nigeria requires registration.
We have handled cases where money lenders lost huge sum of money because the law did not see them as money lenders and so a smart customer capitalized on that to approbate and reprobate.
One would need to think on the risks of starting a business before thinking of the profits associated with such business. Money lending is one of the ways of using money to make money world over.
in Nigeria, incorporating a company for purpose of lending money to others for interest is something every citizen can do. The process of having a fully functional money lending company in Nigeria is in stages, the company owners will have to meet up with the registration criteria, then business plan, capital and workplace.
In this article we will give you the step-by-step guide on how to set up a Money lending and Loan business legally and operate same genuinely in Nigeria.
REGISTRATION WITH CAC
The corporate affairs requirement for a money lending incorporation, is that the company must have minimum share capital of N20M shares capital. The object clause of the company must include money lending business or rendering of financial service.
The amended CAMA 2020 has made provision for one person being a director and a shareholder of a company but the money lending company in Nigeria is not inclusive.
HOW TO REGISTER A LIMITED LIABILITY COMPANY in Nigeria
The steps are as follows:
- Proposed Name for Name search and reservation
- Fill the online forms for company registration
- Prepare memorandum and articles of association of the company
- Pay filing fee and firs stamp duty fee for the registration.
- upload the means of identification
- obtain the certificate when approved.
After going through this first stage, then the owner is now presented with the incorporation certificate
THE DUTIES AND ROLE OF A LAWYER IN NIGERIA
HOW TO GET A LICENSE FOR MONEY LENDING COMPANY IN NIGERIA.
- The owner will prepare An Application/Forwarding letter with the iron seal of the company attached the same will be addressed to the Chief Magistrate of the state in which the applicant is carrying on business.
- The content of the letter must indicate the office address of the individual or corporate applicant.
- Duly certified copy of the CAC application page and page evidencing the director(s) of the company.
- A coloured photocopy of Certificate of Incorporation of the Company.
- Duly Certified copy of the Memorandum and Articles of Association of the money lending company.
- Tax Clearance certificate from state tax office of the proposed private lending company.
- Police clearance certificate from the Commissioner of Police for the director of the proposed private lending company.
- Open a Physical Office: The business can be operated from there or remotely, but the office address must be recognized and traceable for purpose of correspondence.
- Open and maintain a corporate account with a commercial bank.
- Obtain form B AND C from a magistrate in the location.
- Personal income tax clearance certificate for payment of Tax at least for 3 years from the owner(s) of the company.
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