Factors to be Considered in Choosing the Type of Company to Establish

In addition to the key features and suitability of a particular type of business organization, several other factors also impact on the decision to register any of the business organizations. Some of these factors are:

a.           Cost of registration and expenses

b.           Speed of processing and completion of registration

c.           Documentation and legal compliances

d.           Post-registration compliances and regulatory supervision

e.           Sphere/extent of operation

f.           The number of the membership. For Ltd. it is 50 while in a PLC it is unlimited.

g.           The size and nature of the proposed business.

h.           The cost/capital intensity of the business. For Ltd it must have a minimum authorised share capital of N10,000 while that of a PLC is N500,000. Please Note that a company’s asset is different from the share capital of the company.  Shares give a member participating right to the affairs of the company and a right to dividend.

i.             Proposed date of incorporation

j.            Restrictions on the issue and transfer of shares. In Ltd that right is restricted; but this is not so with a Plc. S. 22(2) of CAMA.

k.           The formalities to be complied with depending on the type of company incorporated like holding of statutory meetings, filling full or abridged statement of finance, etc.

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