Taking your startup public in Nigeria is a major milestone — and one that requires more than just a great product or impressive growth numbers. Beneath the surface of every IPO-ready company is a solid legal foundation.
Unfortunately, many founders ignore these essentials until it’s too late.
Whether you’re eyeing the NGX or simply want to raise serious capital, these five legal basics could save your business from costly mistakes — and build investor confidence from day one.
1. Register Your Business Properly — Don’t Just Be “Popular,” Be Legal
It sounds obvious, but many Nigerian startups still operate without proper business registration.
Start by registering with the Corporate Affairs Commission (CAC). Depending on your growth plans, you may want to register as a Private Limited Company (LTD) rather than a Business Name.
Why it matters:
- You gain legal identity.
- Investors won’t touch an unregistered business.
- You can open corporate bank accounts and enter into contracts.
Pro Tip: Make sure your Company’s Objects in the CAC filing reflect your actual business model. This becomes important if you’re applying for licenses or facing a legal dispute.
2. Protect Your Intellectual Property (IP) — Your Ideas Need a Lawyer Too
Nigeria’s innovation scene is exploding — and so is idea theft.
Before going public, you should know what parts of your business need legal protection.
- Name and logo? Trademark it at the Nigerian Trade Mark Registry.
- Software? Consider copyright registration.
- Inventions or product designs? Explore patent protection.
Why it matters:
IP adds value to your company. In fact, investors often ask, “Who owns the code, content, or concept?” You don’t want to hesitate.
Real Talk: That amazing brand name you’ve built could be hijacked tomorrow if you haven’t secured the rights.
3. Understand Your Tax Obligations — Avoid Trouble with FIRS
As a founder, taxes may seem like the least exciting part of business. But one letter from the Federal Inland Revenue Service (FIRS) can ruin your day — or your public listing.
Know these basics:
- TIN (Tax Identification Number): Register for it immediately after CAC registration.
- VAT: Register if you’re providing taxable goods or services.
- Company Income Tax: File yearly even if you’re not yet profitable.
Tip: Hire a tax consultant or accountant familiar with Nigerian tax laws. It’s a small price to pay for peace of mind.
4. Comply with Sector-Specific Regulations — Know Your Industry Rules
Are you building in fintech, healthtech, agritech, or edtech?
Every sector in Nigeria has its own regulatory body and rules:
- Fintech? Watch out for CBN and SEC guidelines.
- HealthTech? You may need NAFDAC or NHIS approvals.
- EdTech? Some services require partnerships or accreditation from education ministries.
Why it matters:
Going public brings scrutiny. If your startup isn’t fully compliant, regulators or journalists might call you out — and investors will flee.
5. Build Clear Contracts — Even with Friends and Co-Founders
Too many Nigerian startups fall apart because they skipped basic agreements.
- Have a founder’s agreement. Who owns what? What happens if someone exits?
- Use employee contracts, especially if you’re offering equity or IP-sensitive roles.
- Create vendor/service agreements — handshakes won’t protect you in court.
Before going public, also ensure that your cap table is clean and all equity shares are documented and legally sound.
