The Corporate Affairs Commission (CAC) by a notice published on its website in June 2020, stated that all Certificates of Incorporation of to be issued to companies will now include the TIN which will be provided by the Federal Inland Revenue Services (FIRS). This development is another Ease of Doing Business Initiative” from the Federal Government of Nigeria. As a result of this new directive, all companies to be registered under Part A of the Companies and Allied Matters Act (CAMA) will now be issued with their TIN at incorporation. According to the CAC, the main purpose of this innovation is to simplify and make it easier to carry on business without having to apply for the issuance of TIN from the FIRS after incorporation as was the previous practice.
The relevant companies to be affected by this directive are – public and private limited liability companies, companies limited by guarantee and unlimited companies. This new directive has eradicated the cumbersome process of having to queue at the FIRS to obtain a TIN after incorporation. This new development has thus come with a lot of benefits for companies by eliminating the time spent waiting to receive their TIN from the FIRS after incorporation. The former practice made the process of setting up companies slow and cumbersome as it could take up to two weeks to process a TIN.
From the financial and corporate perspective, this new development makes it easier for companies to open corporate accounts upon obtaining their Certificate of Incorporation (COI). Companies can now proceed directly with the bank account opening process by the submission of their COI reflecting their TIN which is a requirement for opening a corporate bank account. Another advantage of the new directive is that companies can now access credit facilities and loans from financial institutions without having to approach the FIRS for a TIN. For the revenue collection agencies, this new initiative will assist in improving the accuracy of their database of registered businesses operating in Nigeria with a resultant boost in their revenue generation capacity.
In conclusion, we view the introduction of this new directive as a welcome development as it will certainly assist with the “Ease of Doing Business in Nigeria” initiatives.
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