What is a trademark?

A trademark is a mark or logo used to identify goods and services as those produced or provided by a specific person or enterprise. Hence, it helps to distinguish those goods and services from similar ones provided by others. For example, “BLACKBERRY” is a trademark that identifies a particular brand of phones from “NOKIA”. “GTBANK” with its accompanying logo is a trademark that distinguishes this bank from others.

Why do I need a Trademark?

Trademarks are part of intellectual property rights which the Nigerian law protects. Intellectual Property allows you to own the work that you create. A trademark is registered in order to protect your products or services under the law from infringement by others. If you are starting or growing your business for instance, you may need a trademark to distinguish your products or services from those of others thereby preventing others in the same line of business from passing of their products or services as yours and potentially stealing business from you. After you register your trademark, you can prevent others from using your trademark and sue for damages if someone infringes on your trademark.

How can I register a Trademark?

In Nigeria a Trademark can only be processed by duly accredited agents registered with the Trademarks Registry Abuja, and it is part of our firm’s responsibilities as registered trademark agents to provide such service to clients and potential clients.

What is a Patent?

A patent is an exclusive right granted in respect of an invention, which may be a product or a process that provides a new and inventive way of doing something, or offers a new and inventive technical solution to a problem.

What is the law governing patent, how do I register a patent?

The Patents and Designs Act of 1971 Cap. 344 is the law governing patents in Nigeria, while the Patents Rules regulates procedure adopted at the Patent Registry. Under section 26 Patent and Designs Act, the Jurisdiction is vested in the Federal High Court and the section also provides that the provisions of the Trade Marks Act applicable to legal proceedings under the Act shall apply with necessary modifications to legal proceedings under the PDA.

What is a copyright?

The Law governing copyright registration in Nigeria is the Copyright Act 1988 which has been amended several times over the years. A copyright is a license given by statutory authority to the author of an original published work which prevents the unauthorized/illegal use of the work without the permission of the owner of the copyright. Works which are eligible for copyright registration are literary works, musical works artistic works, cinematograph works, sound recording and broadcasts.

What qualifies as an invention to be registered in Nigeria?

An invention must in general satisfy the following requirements by law to be protected by a patent:

• It must be new or novel, that is, it must show some new characteristic which is not known in the body of existing knowledge (called “prior art”) in its technical field.
• It must be non-obvious or involve an inventive step, that is, it could not be deduced by a person with average knowledge in the technical field.
• It must be useful or capable of industrial application;
• Finally, the invention must be part of the so-called “patentable subject matter” under the applicable law. In many countries, scientific theories, mathematical methods, plant or animal varieties, discoveries of natural substances, commercial methods, or methods for medical treatment (as opposed to medical products) are not considered to be patentable subject matter.

How do I protect my invention?

The most common and efficient way of protecting an invention is by obtaining a patent. Patents provide incentives to individuals by offering them recognition for their creativity and material reward for their marketable inventions. These incentives encourage innovation, which assures that the quality of human life is continuously enhanced.

Does a Patent expire?

Yes, patents expires at the end of the twentieth (20th) year from the date of filing the application however they are renewable for a prescribed fee and a six (6) months period of grace is allowed by law.

What are the requirements for incorporating a company in Nigeria?

The legal requirements for the incorporation of substantive Companies, subsidiaries and holding companies are contained in the Companies and Allied Matters Act (CAMA) Cap 59 LFN1990. They are mentioned hereunder as:

(A) Name of Company:

It is the responsibility of the promoters of the company to select a name for their company. The company must have a name which must not be identical with another registered company or offensive or contains chambers of commerce, Nigeria or federal. Availability must be conducted at the Corporate Affairs Commission to verify the availability and suitability of the selected name.

(B) Registered office address:

The company must have a registered business address within Nigeria.

(C) Type of company:

The law allows for registration of companies limited by shares, limited by guarantee, unlimited and partnership. Companies limited by shares can be either private or public. At incorporation, all the legal objects of the company must be contained in it memorandum and articles of Association. The legal objects are the major business objectives of the company and the framework which it intends to run its business within the acceptance of the law.

(D) Share Capital:

There are several types of shares such as ordinary shares, preference shares and deferred shares. The most popular shares are ordinary shares. Non voting shares are prohibited and it is one vote per share except for preference shares. The currency allowed for shares is the Naira. Minimum authorized share capital for private companies is N10, 000, while for public companies is N500, 000. A minimum of 25% of the authorized share capital must be subscribed and paid for. Shares can be paid for in cash or value meaning the directors of the company must have at least 25% of the total issued share capital in terms of cash or property at the time of

(E) Objects of the Company:

The objects of the company must be legal and lawful. Nigerians and Non- Nigerians can undertake all forms of legal businesses. Non Nigerians cannot undertake certain businesses such as production of arms, ammunition, narcotic drugs, military wears, national security etc.

(F) Directors:

They run the day to day management of the company. The minimum number of directors is two and maximum number is 50 for private companies. There is no maximum for public companies. Alternate and shadow directors are allowed. The powers, appointment and removal of directors are contained in company’s articles of association.

(G) Subscribers:

These are the persons that subscribe to the memorandum and articles of association. They must be adults of over 18 years, of sound mind, not bankrupt, and must have the capacity to form a company.

(H) Expatriates:

Expatriates are subjected to the provisions of certain other laws such as the Nigerian Investments Promotion Act, Foreign Exchange Monitoring Act 1995, Investment and Security Act 1999, Immigration Act etc.

What are the Tax requirements for Companies?

Under Nigerian tax laws, companies are subject to taxation under the Companies Income Tax Act 1990 at the rate of 30% per annum. There is also Capital Gains tax under the Capital Gains Tax Act, 1990 which is 10% levy on disposal of company’s assets. Value added tax is for goods and several services including telecommunications which is a standard 5% under the Value Added Tax Act of 1993. Withholding tax for dividends earnings at the rate of 10% under the Company Income Tax Act 1990. Education tax is at the rate of 2% under the Education Tax Decree No. 7 of 1993. Personal income tax applied to employees of companies under the Personal Income Tax Act of 1993 charged on pay as you earn basis.

What are the Incentives for Companies operating under the Nigerian tax laws?

There are several incentives for companies operating under Nigerian tax laws. There is a tax free holiday for 5 years for companies that produce goods considered to have pioneer status under the Industrial Development Act 1990 LFN 579. There is a tax holiday of 100% for 7 years for companies cited in disadvantaged areas under the same Act for pioneer status. There is a tax waiver for 5 years approved status for companies with non resident investment where the original investment was imported in form of equity under the CITA 1990.

Import duty tax incentive under the duty drawback suspension scheme allows importers claim on refund on duties for imports under the Customs and Excise Management Act Cap 84, LFN, 1990. Investment income imported in Nigeria are not taxable if through authorized dealers. There is also capital assets depreciation allowance under the Companies Income Tax Act 1990. There is investment allowance of 10% for companies who incur capital expenditure on plant and machinery under the Finance Taxation Act.

Other incentives under the Company Income Tax Act are claims for local value added is 10% allowance for 5 years, labour intensive production is 15% allowance, local content material utilization is 60% allowance for engineering and chemicals, 70% for petrochemicals, 12% for research and development, plant training is 2%, investment in infrastructure is 20% etc.

How do I start a Business in Nigeria and what are the laws governing foreign Investment?

Under Nigerian law, foreigners are allowed to wholly own companies or part own companies with Nigerians. The laws that govern foreign investments are the Nigerian Investment Promotions Act 1995, the Foreign Exchange Act 1995, the Investment and Securities Act 1999, the Immigration Act Cap III 1990 etc

Under the Nigerian Investment Promotion Act 1990, non Nigerians are permitted to own businesses wholly or partly with Nigerians in all spheres of businesses except production of arms, ammunition, production of narcotic drugs, production of military wears equipments etc.

Under the NIPC Act, a foreign investor is required to incorporate a company under the Companies and Allied matter Act 1990, register with the NIPC, comply with the requirements of the Immigration Act 1990, apply and obtain the relevant license of the sector it intends to invest in, apply for business permit, expatriate quota and residence permit from the Federal Ministry of Internal Affairs, apply for all other relevant approvals such as capital importations etc.

On repatriation of proceeds from Nigeria, under the NIPC Act and the Foreign Exchange Act 1995, a foreigner can repatriate all business proceeds or even capital income from Nigeria without restrictions. Income earnings can also be repatriated from Nigeria subject to personal income tax and 10% withholding tax on share dividends. Foreigners are permitted to convert their currency and operate domiciliary accounts.

Where can a Board Meeting be held? Can it be held outside of Nigeria?

There are no restrictions on venue of Board meetings but it must be held in Nigeria.

Must every company file Annual Returns?

The filing of annual returns is a yearly mandatory requirement. The law requires that returns be filed with the Commission within 42 days after the annual general meeting.

What are the Voting patterns of private limited liability company at meetings in Nigeria?

For private companies, the subscribers to the memo usually constitute the voting shareholders of the company. Except as required by law, voting patterns under Nigerian corporate law are usually by a simple majority, that is a majority of the directors at Board of director’s meetings or at annual general meetings of shareholders. However, for special resolutions in matters affecting fundamental changes in the company such as change of name and alteration to Memo and Articles, a majority of 3/4 is required by voters in annual general meetings.

The procedure for voting at meetings is by a show of hands unless a poll is demanded by the Chairman or a major shareholder of the company or three other members present in person at the meeting. There is also the requirement of issuing meeting notices to shareholders or members of annual general meeting who are entitled to vote. Attendance of meetings can be personal or by proxy.