What does it take to form a holding company? This post will help you through the process.
There are varying models of corporate structure for all kinds of business operations.
Many of these structures are in place to cover the exigencies of the evolving corporate world. Examples include holding companies, group of companies, consortium, etc.
While each of these forms has their unique utilities and regulatory requirements, the focus of this post is on Holding Companies.
What Is A Holding Company?
Many have heard the word ‘holding company’, but what do they actually mean? What does the law say about them? As a tech start-up, are there investment advantages that accrue with this type of structure? Am I even permitted to form one?
A holding company is a corporate structure particularly designed to hold, control or acquire majority stocks/interests in subsidiary companies, effectively maintaining oversight over these companies.
Let us go into the next subheading that answers the question that relates to having a holding company in Nigeria.

Can I Form a Holding Company In Nigeria?
Holding companies generally fall within a restricted class as prescribed by CAC. The Nigerian CAMA has imposed restrictions on the usage of the word “holding” by companies in Nigeria. This is however subject to obtaining required regulatory approvals.
So, Yes, forming a holding company in Nigeria is possible provided all approvals and conditions have been met. Now the question is:
What are these Regulatory Approvals and Requirements?
Regulatory Approvals and Requirements For Forming A Holding Company
First, the consent of the Registrar General of the Corporate Affairs Commission is required to incorporate a holding company.
You will also need to have at least two subsidiary companies
Importantly, there must be a statement by the directors of the holding company that the holding company would acquire more than 50 percent of the nominal share capital of the subsidiaries within 90 days of incorporation.
Tech start-ups might also want to set up an holding company due the investment advantages that come with it. For example, start-ups might incorporate an holding company in an investor and tax friendly jurisdiction and leverage the incidental benefits that accompanies such ventures.
In all, setting up an holding company in Nigeria is legally permissible provided you align with the stipulated requirements as laid down by the relevant laws. You would need to obtain thorough advisory from your legal counsel to help you maximally navigate the journey to creating one.
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References
1. 618 Bees, “Difference Between a Holding Company and a Group Company in Nigeria” available at https://www.618bees.com/article/1074-difference-between-a-holding-company-and-a-group-company-in-nigeria accessed on June 19 2023
2. Tekedia, “The Regulatory Framework Governing Holding Companies, Group of Companies and Consortiums in Nigeria” available at https://www.tekedia.com/the-regulatory-framework-governing-holding-companies-groups-of-companies-and-consortiums-in-nigeria/ accessed on June 19 2023
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