Nigeria Startup Bill – Eligibility For The Grant Of A StartupLabel.
Nigeria’s startup ecosystem, shortly will have an Act which will cater for its specific needs. The Nigeria Startup Bill is already before the National Assembly and hopefully the lawmakers will give it a favourable response.
The objectives of the Bill as evidenced in Section 1 are as follows;
A) To provide an enabling environment for the establishment, development and operation of startups in Nigeria.
B) To provide for the growth and development of technology related talent in the country and
C) Position Nigeria’s startup ecosystem as a leading digital technology hub in the whole of Africa.
Today we examine the principal provision in the Bill. Section 13 of the Bill, which provides for the eligibility criteria’s to be satisfied for grant of a startup label.
Section 50, the interpretation section of the Bill defines a startuplabell as, a startup labelled under this Act and issued a digital certificate by the coordinator.
Under the Nigeria Startup Bill, a startup must fulfill the labelling requirements provided in Section 13 of the Bill, which qualifies it to be labelled under the act and is also a prerequisite to access the benefits provided for in the Bill.
Section 13 of the Bill provides;
(1) A startup label under this Act is a certificate issued by the Secretariat to a startup upon the fulfillment of the labelingrequirements under this Act. The labelling requirements are thus highlighted in subsection 2 (a) – (e) of section 13, below;
A startup is eligible for labeling under this Act, where –
(a) it is registered as a limited liability company under the Companies and Allied Matters Act 2020, and has been in existence for a period of not more than 10 years from the date of incorporation;
(b) its objects are innovation, development, production, improvement, and commercialisation of a digital technology innovative product or process;
(C) it is a holder or repository of a product or process of digital technology, or the owner or author of a registered software;
(d) it has at least one Nigerian as a founder or Co-founder of the startup, provided that the Nigerian founder or co-founder will share from profit or revenue from the sale of shares; and
(e) in the case of a sole proprietorship or partnership, it satisfies the conditions set out in
paragraphs (b), (c) and (d) of this sub-section.
Subsection 3, 4 and 5 of Section 13 further provides that, the Act shall not apply to any organisation which is not registered as a startup. Whereas a sole proprietor or partnership referred to in subsection (2) (e) shall be granted a pre-label status for a period of 6 months to enable the sole proprietorship or partnership comply with the requirements set out in subsection (1) (b) (c) and (d) of this section. Also a sole proprietorship or partnership, which fails to comply with the provisions of subsection (4) shall lose the pre-label status granted to it.
Subsection (6) wraps up section 13 by providing that a labelled startup shall be granted access to the incentives provided under this Act.
We believe that the requirements for labelling a startup, as provided by the bill is fair enough, especially because it contains blanket conditions which every tech startup otherwise, in Nigerian can fulfill. The Bill has done well to provide every qualified startup in Nigeria an opportunity to access the benefits it offers. This is commendable as it will ensure an all-inclusive growth across all areas in the Nigerian tech ecosystem.
We trust that this has informed you on what it takes to be a labelled startup under the Nigeria Startup Bill.
Please do well to drop any comments, questions or reservations which you may have with regards to the subject matter of this article in the comment section.
Visit our website for more details and follow us on our social media handles for news updates and informative articles.
