As a business owner, you probably know that your business is regulated by different laws. Some of these laws govern social and economic matters which may include business income or payroll taxation. Others may be environmental laws, occupational health and safety laws, employment laws, criminal laws, and laws that are specifically related to your industry.
These laws are typically administered by regulatory agencies. Regulatory agencies are set up by the government to implement and enforce specific laws on behalf of the government. They also enforce standards required in businesses and protect consumers.
Below, some key regulatory agencies and some sector-specific ones have been highlighted and discussed.
CAC - Corporate Affairs Commission
The CAC is of course, the first name that must come to your mind as a business owner when regulatory bodies are mentioned. This is because it is the agency responsible for regulating the formation and operation of companies in Nigeria. Your business cannot be a 'registered' business without the CAC. It is an autonomous body with its head office in Abuja.
The CAC is in charge of implementing the provisions of the Companies and Allied Matters Act (CAMA). CAMA is the primary law governing companies and businesses in Nigeria, and it deals with the various types of company structures, eligibility, the registration process, and rules for operation. Services such as incorporation of companies (whether private or public, or limited by guarantee), registration of business names, and registration of incorporated trustees (NGO's) are under their purview.
Whilst you are here, remember you can get your registrations done easily and conveniently through DIYlaw here.
Federal Inland Revenue Service
If you run a business, you probably would know that some taxes are levied on you as a business owner, your employees, the products you sell or the services you offer. Some taxes are levied by the Federal Government while some are levied by the State Government.
The Federal Inland Revenue Service is the agency responsible for assessing, collecting and accounting for taxes and other revenues accruing to the Federal Government. The agency enforces tax laws and ensures tax compliance by the citizenry. It is also responsible for giving penalties and sanctions for non-compliance by individuals and businesses.
Two important taxes regulated by the FIRS, are Value Added Tax (VAT) and Companies Income Tax.
Value Added Tax is a consumption tax payable on the goods and services consumed by any person, whether government agencies, organizations or individuals. The target of VAT is consumption of goods and services and unless an item is specifically exempted by law (such as it is for pharmaceutical products, basic food items, etc.), such item is subject to the tax.
The standard rate of tax is currently 5% of invoice value of goods and services.
The VAT system in Nigeria is administered by the FIRS and all existing manufacturers, distributors, importers and suppliers of goods and services are required to register for VAT.
The VAT payer is to obtain and complete VAT registration form and return it, along with required documents, to the nearest FIRS Tax Office. A permanent VAT registration number is then issued to the taxpayer.
Companies Income Tax is a tax imposed on the profits of Nigerian companies on a preceding year basis. The standard rate is 30%.
Respective states tax offices like the Lagos State Inland Revenue Services (LIRS) is responsible for personal income taxes such as the Pay As You Earn (PAYE) tax which is deducted from salaries.
SON - Standards Organisation of Nigeria
The Standards Organisation of Nigeria (SON) is the apex body in charge of standardization in Nigeria. To make things simple, let's just say, standardization is the process of making things conform to a standard. Through standardization, technical standards for products are developed and implemented based on the agreement of different groups or entities that include governments, standard organisations, interest groups and users.
The SON's main responsibility is to make sure that products that are manufactured locally in Nigeria have the required level of satisfaction desired by consumers. They achieve this by making sure that companies comply with the policies of the government on standardization. Also, they check products for conformity. SON also ensures that imported goods meet the minimum requirements of industry standards in Nigeria, or other approved and domesticated international standards. Their aim is to keep improving the lives of Nigerians through quality standardization and quality assurance.
If you, therefore, are into manufacturing and importation of unassembled goods, you should seek to register your products with them.
NAFDAC - National Agency for Food & Drug Administration & Control
After checking for the expiry date of a product you purchase in a store, the next thing you check is if it has a NAFDAC number right?
NAFDAC is a common regulatory body that every Nigerian knows. It is the regulatory agency in charge of safeguarding public health. It is responsible for controlling and maintaining the sale, distribution, transportation, advertisement, exportation, importation, manufacture and use of packaged water, chemicals, medical devices, cosmetics, drugs and food (regulated products) in Nigeria.
Since the main objective of NAFDAC is to safeguard the health of Nigerian citizens, they have a function to undertake proper investigation of regulated products by ensuring that only the right quality drugs, food and other regulated products are manufactured, imported, distributed, advertised, sold and used in Nigeria.
As a business owner who produces any of the regulated goods, having a NAFDAC number not only shows that your product is compliant, it also gives credibility to it.
NCC - Nigeria Communications Commission
Remember when MTN was fined N330 billion due to its failure to disconnect improperly registered SIM cards? If you do, then you must have heard of the NCC.
The NCC is the regulatory body for businesses in the telecommunications space in Nigeria. It is saddled with the responsibility of assuring the availability of qualitative and economical telecommunication services throughout the country. They also create an enabling environment for competition among operators in the industry.
Businesses in this space will have to be licensed by the NCC to operate and are regularly checked by the NCC.
Other regulatory agencies that you need to know include:
The National Pension Commission (PENCOM) - responsible for regulating and administering pension matters in Nigeria;
The Consumer Protection Council (CPC) for consumer complaints and ensuring best practices are maintained by service providers;
The Securities & Exchange Commission (SEC) for the regulation of securities issued to the Nigerian Public;
Trademarks, Patent & Design Registry responsible for registering, administering and regulating intellectual property rights relating to trademarks, patent and industrial design;
Another NCC, this time the Nigerian Copyright Commission also responsible for intellectual property rights but as it relates to copyright; and
The Nigerian Investment Promotion Council (NIPC) which is a one-stop investment centre that promotes and coordinates foreign investments in Nigeria
There are quite a number of other agencies that regulate different matters in Nigeria, and as a business owner, it is absolutely imperative for you to know which applies to your business and comply with the necessary regulations.