Lagos, the largest commercial city of Nigeria, has been found to be easier for the establishment of new businesses than Kano, its rival, according to World Bank’s 2015 Doing Business Report released recently.
The report which is meant to reveal the bureaucratic and legal hurdles an entrepreneur must overcome, to incorporate and register a new firm in 189 world economies indicated that eight procedures have to be followed by aspiring entrepreneur before the take-off of his or her business in Lagos. The procedures are expected to be completed within 28 days, while a start-up in Kano passed through eleven procedures over 40 days period.
Entrepreneurs approaching various ministries and agencies in the two cities are those expected to launch a commercial or industrial firm with up to 50 employees.
To legally start and operate a company in the two cities, aspiring entrepreneurs are expected to reserve a unique company name at the Corporate Affairs Commission, prepare the requisite incorporation documents and pay the stamp duty, sign declaration of compliance before a Commissioner for Oaths. They are also expected to obtain bank draft from a bank for payment of the registration fees and obtain a business premises permit from the State Ministry of Commerce, Industry, Cooperatives and Tourism among other procedures.
The performance of the cities is based on the number of days applicants spent before completing each of the procedure. Lagos edges Kano in the area of company name registration with Corporate Affairs Commission. Applicants spend 11 days to complete the process in Lagos while it takes 18 days in Kano.
To prepare the requisite incorporation documents, aspiring entrepreneurs must complete statutory forms, prepare and print the memorandum and articles of association, and have them stamped by the Federal Inland Revenue Service (FIRS). This process is usually completed within 7 days in both cities.
Apart from the number of days expected for the completion of each procedure, official fees, taxes due to government’s ministries and agencies, and a minimum capital need to be paid or deposited in a bank by the applicants prior to or within 3 months of company registration.
“Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government,” the report noted.