BUSINESS LAWS AND TAXATION

COMPANIES AND ALLIED MATTERS ACT under the supervision of the Corporate Affairs Commission
states that every company carrying out business activities shall register its name with the Corporate
Affairs Commission before commencement of business in which after registration the company shall pay
its yearly annual returns to the commission. In view of this McChatij Enterprises has legally registered
since mid 2016 under the relevant laws of the CAMA Act and has since been issued Tax Identification
Number (TIN) by the Federal Inland Revenue Service (FIRS).

EMPLOYMENT LAW

Employment law in Nigeria is generally employer friendly. Nevertheless, there are federal and local
employment and labor laws that govern contracts, wage and hour, discrimination, terminations, lay-offs
and privacy. Any company conducting business in Nigeria or considering doing so should be familiar with
the various laws which govern the employment relationship.

The Ministry of Labour and Productivity (the Ministry) is the main regulatory agency. Enforcement of
employment statutes and regulations falls under the auspices of the National Industrial Court With regard
to discrimination claims; there are no laws that specifically prohibit discrimination or harassment in the
employment context. However, Section 42 of the Nigerian Constitution provides for freedom from
discrimination on the basis of sex, age, ethnic group, and political affiliation.

Organized Labor and Worker Representation:

Although the Constitution allows for free association, including the formation of, or membership in labor
unions, there is no specific legislation mandating works councils or workers' committees.

Hiring of Employees

Aside from the constitutional requirement of freedom from discrimination on the basis of sex, age, political
affinity, and ethnic group there are no legal requirements to give preference in hiring, or not to
discriminate in the hire of employees. In addition, employers may perform background and medical/drug
checks when deciding hire a potential employee. Such checks may be performed by a third party, and
must be undertaken at the employer's expense.

When a hire is made, The Labour Act requires employers to provide an employment contract setting out
the terms and conditions of employment within three months of the commencement of employment. The
contract must provide: the name of the employer, and if appropriate, the undertaking by which the worker
is employed; name, address, and date of hire of the worker; nature of the employment; date of expiration
if the contract is for a fixed term; the appropriate period of notice for termination with attention to section
11 of the Labour Act; rates of wages, method of calculation, and frequency of pay; terms and conditions
relating to hours, holidays, incapacity (including any provisions for sick pay), and any special conditions in
the contract. Employers may use the first three months before providing the contract as a probationary
period, and if spelled out in the contract, time thereafter as well. With regard to contracts for a fixed term,
contracts must be in writing, but otherwise there are no statutory limitations or restrictions on employment
contracts for a fixed term.

In certain situations, an employer may desire to use independent contractors rather than hiring an
employee. The rules governing independent contractors in Nigeria are similar to the United States. For
example, an employer will not be held vicariously liable for torts committed by an independent contractor.
Status as an independent contractor is determined by the level of control exercised by the employer over
the contractor.
 Foreign Workers:

Admission of foreign workers is overseen by the Federal Ministry of the Interior. Employers must seek the
consent of the Ministry in order to employ foreign workers by applying for an "expatriate quota." The quota
allows a company to employ foreign nationals in specifically approved job designations as well as
specifying the validity period of the designations provided on the quota.

There are two types of visas which may be granted, depending on the length of stay. For short-term
assignments, an employer must apply for and receive a temporary work permit, allowing the employee to
carry out some specific tasks. The temporary work permit is a single-entry visa, and expires after three
months. There are no numerical limitations on short-term visas, and foreign nationals who meet the
conditions for grant of a visa may apply for as many short-term visas as required.

For long-term assignments, the employer should apply for a "subject-to-regularization" visa (STR). To
apply for an STR, an employer must apply for and obtain an expatriate quota. The expatriate quota states
positions in the company that will be occupied by expatriate staff. Upon arrival in Nigeria, the employee
will need to validate his or her visa by applying for a work and residence permit. 1

Thank you for reading and stay tuned for our next post on Nigerian employment law which will cover
wage & hour rules, dispute resolution, and terminating the employment relationship.

SALES LAW

The law governing Sale of Goods in Nigeria is the Sale of Goods Act2 1893 (SOGA), a statute of General
Application in force in Nigeria. The rules of Common Law, including the Law Merchant which is not
inconsistent with the express provisions of the Sale of Goods Act 1893 are also applicable. The study of
sale of goods is only a specialized one in the sense that it is a contract involving sale of goods; otherwise
it is essentially a part of the general law of contract. The Act has not therefore; done away with the
general rules relating to contract hence, offer and acceptance, consideration and other elements of a
valid contract must be present in a contract of Sale of Goods. Aside this, certain presumed ‘safeguards’
have been put in place by law to protect the interest of the buyer by implying terms concerning the
standard and quality of product in commercial transaction of sale of goods in the Sale of Goods Act.
Breach by the seller of any of these terms entitles the buyer to institute an action and gets remedies for
such breach. These terms impose strict liability on the seller and they are actionable per se. It is irrelevant
whether the seller was unaware of the alleged defect in the goods or not.3 Sale of Goods is defined in
section 1(1) of the Sale of Goods Act, 1893 as: ‘A contract whereby the seller transfers or agrees to
transfer the property in goods to the buyer for a money consideration called the price.’ This means that in
addition to the ordinary elements of a contract, two other elements, goods and money consideration, must
also be present in a contract of sale of goods. The above definition also envisages two situations namely:
a. A contract of sale, in which the property in the goods is transferred from the seller to the buyer. b. An
agreement to sell, in which the transfer of the property takes place ‘in future’ (at a future time), or a
fulfillment of certain conditions.

TAXATION

McChatij Enterprises through its assign BDSP get to know the taxes that are associated with its
operation as a business. These taxes are:

 Company Income Tax: this is payable on the taxable profit made by the business @ 30%. Education
Tax: this is payable on the assessable income of the company @ 2%
 Value Added taxes: this is payable @ 5% on all VAT-able goods and services. VAT payment is
expected to be filed on the 21st day of the month following the transaction. Its our responsibility to
retrieve this tax from customers for the government.
 With Holding Taxes (WHT): the rate of With Holding Taxes varies based on the services performed
from as low as 5% to 15%. WHT is an advance payment on income tax deductable at source on
specified transaction. In the case of WHT deducted by from companies, remittance is due to Federal
Inland Revenue Service (FIRS) within 21 days after the duty to deduct arose while in the case of
Individuals and unincorporated bodies entities, remittance is due to the State Internal Revenue Service
(SIRS) within 30 days after the duty to deduct arose.
 Personal Income Tax: this is payable on the incomes of individuals including employees, partnerships
and unincorporated trust. They are all liable to Personal Income Tax under this act.

Sources of Law (references):

With regard to private employers, Nigerian Labor and Employment law is largely based on the following
statutes:

 the Labour Act of 2004;

 the Trade Union Amended Act, 2005;

 the Employees Compensation Act, 2010;

 the Factories Act, 2004;

 the Pensions Act, 2004; and

 the Trade Disputes Act, 2004.

 CAMA Act 1990