Section 18(2) of the Companies and Allied Matters Act 2020¹ (the ‘Act’), provides that notwithstanding the requirement for the formation of a company by two or more persons as provided for in Section 18(1) of the Act, one person may form and incorporate a private company by complying with the requirements of the Act in respect of private companies. This implies that all private companies registered in Nigeria can be registered with a single shareholder.

There have been arguments that the concept of single-shareholding does not apply to foreign-owned entities registered in Nigeria as they are not considered small companies as defined under the Act. It is important to note that the requirements for qualification as a small company as provided for in Section 394(3) (a-f) of the Act does not include the number of shareholders. As such, any private company in Nigeria whether foreign-owned or indigenous can register as a single-shareholder company. However, foreign-owned entities registered in Nigeria cannot operate as small companies.

It is also important to note the major features of a small company and single shareholder company as follows:

Accordingly, a foreign-owned company registered in Nigeria can operate as a single-shareholder company, provided it complies with the registration requirements of the CAC and NIPC⁷ on foreign participation in Nigeria.

1. CAMA, 2020
2. A single shareholding entity may also be a small company, it all depends on the modalities of incorporation
3. Section 271 (1) of CAMA 2020
4. Section 330 (1) of CAMA 2020
5. Section 240(1) of CAMA 2020
6. Section 393 (1) and 424(2) of CAMA 2020
7. Nigerian Investment Promotion Commission Act- Section 20