Compliance by Business Stage: From Idea to Series A in Nigeria
A sequential, stage-by-stage compliance roadmap covering pre-incorporation, post-incorporation, hiring, fundraising, and scale-up milestones.
Stage 0: Pre-Incorporation (Idea & Validation)
Before spending capital on formal CAC registration, founders should establish clear contractual foundations. The primary legal risks at this stage are co-founder equity disputes and intellectual property leakage.
Pre-Incorporation Legal Checklist:
- ✓Co-Founder Agreement: Document equity splits, vesting schedules (standard 4-year with 1-year cliff), and IP assignment
- ✓Standard Non-Disclosure Agreement (NDA) for contractors and early advisors
- ✓CAC Public Name Search to ensure desired company name availability
Stage 1: Formation & Early Traction (0–5 Staff)
Upon formal incorporation, your statutory tax and regulatory clocks start ticking immediately.
Post-Incorporation Checklist:
- ✓CAC Certificate of Incorporation + Status Report (Form CAC 1.1)
- ✓Automatic Tax Identification Number (TIN) activation on FIRS/NRS portal
- ✓Corporate Bank Account opening with designated corporate resolution
- ✓Registration with State Internal Revenue Service for PAYE employer tax code
- ✓NSITF registration (1% gross payroll contribution for workplace injury insurance)
- ✓Trademark Application filing with NIPO to protect brand name and logo
Stage 2: Growth & Institutional Scale (5+ Staff & Scaling Revenue)
As headcount exceeds 5 employees or turnover crosses ₦50M, secondary statutory obligations activate automatically.
Scale-Up Compliance Checklist:
- ✓Industrial Training Fund (ITF) registration & annual 1% payroll remittance
- ✓PenCom registration for Contributory Pension Scheme (CPS) + Group Life Insurance policy
- ✓Annual CAC return filing to prevent 'INACTIVE' registry status
- ✓Annual FIRS CIT and monthly VAT return submissions via TaxPro Max
- ✓NDPA 2023 data audit and privacy framework implementation
Frequently Asked Questions
Common Founder Questions on Founder Strategy
What is the single biggest red flag investors find during Nigerian legal due diligence?▾
Unassigned founder IP (intellectual property created before incorporation without formal IP assignment agreements) and delinquent CAC annual returns/missing tax clearance certificates.