Wale has finally saved up enough money from his 9-to-5 to start his own business. Now he has been considering what business to go into. While having lunch with Uche his best friend, he was exhausted at Uche’s endless rant on how he was unable to deliver the shoes he made to clients on Lagos Island as he had no one working with him. Like a light bulb moment, Wale decided that he was going to start his own logistics company. He now wants to know what is legally required in this line of business.
What should Wale know?
The business of logistics generally deals with the management of transportation of goods from one place to another. Logistics is important when an organization is into the manufacturing and production of goods.
A logistics company therefore stores and delivers the products of other businesses. They may specialise in the import and export of goods in and out of the country or may concentrate on niche areas such as dispatch services.
As a logistics provider, you will be tasked with the challenge of coordinating warehousing of goods, inventory, delivery and/or security requirements of your clients’ merchandise.
What regulations do you need to meet?
Business Registration and Incorporation
First of all, registration. Your business should be registered with CAC. We have super helpful information on this right here.
2. Rider’s card
This is different from a driver’s license and can be obtained from any of the State Motor Vehicle Administration Agency (MVAA) regional offices.
3. Local government and inter-state papers
There are two types of registrations – interstate and intrastate. If your logistics business is in Lagos, you are likely to do deliveries to border cities which are technically in neighbouring states like Ogun State but are assumed to be Lagos. E.g. Akute, Alagbado etc.
This requires both interstate and intrastate registrations. Very importantly, be sure to get the local government sticker of where your business is situated, especially if registration was done in another local government.
Both state and local government registrations can be done at any Lagos State local government office.
4. Stage carrier papers (if within Lagos)
The Stage Carriage Permit is a document required according to Lagos State Road Traffic Law. The Law mandates operators of any motor vehicle designed for the carriage of goods or passengers to obtain the permit.
5. Obtain a Licence to Operate as a Courier Service Company from the Courier Regulatory Department of NIPOST
The following information and/or evidence are required to be forwarded along with an application for a grant of license.
(i) Certified True Copy of the Company’s certificate of incorporation;
(ii) Memorandum and Articles of Association
(iii) Company’s Tax Clearance for the last three years (originals to be sighted);
(iv) Leasehold Certificate or Tenancy Agreement in respect of the company’s registered office;
(v) Evidence or information to show a capacity to operate courier service including but not limited to indemnity insurance policy of Five Hundred Thousand Naira, a capital base of Two Million Naira or a bond of that value.
(vi) Evidence of payment of the refundable application fee as may be prescribed from time to time;
(vii) Names, qualifications and addresses including telephone and/or fax numbers of all Directors of the company.
(viii) Samples of waybills, labels, bags, tags envelopes, receipts registered trademark (if any) and other documents that may be required.
(ix) Partnership, merger, alliance (or such other arrangements) agreements (if any).
(x) Such other information or evidence that may assist the minister in forming a decision or such other information or evidence as he may specify from time to time.
Conclusively, according to the 2018 Logistics and Supply Chain Industry report, the value of the logistics sub-sector of the Nigerian economy stands at N250 billion as at March 2019.
The rapid growth of the large and small manufacturing sector has boosted demand for logistics services and as we see a rise in e-commerce activities, so also the need for logistics will expand.
Regardless, in taking advantage of this expanding business industry, legal requirements must not be overlooked, hence these regulatory steps to getting your logistics/dispatch service registered.