Due Diligence Report (Nigeria)

A Due Diligence Report in Nigeria captures the structured information needed to complete the process it supports.

In Nigeria, the corporate and legal framework governing due diligence includes the Companies and Allied Matters Act 2020 (CAMA 2020), which regulates company incorporation, share capital, directors, beneficial ownership, and charges; the Land Use Act Cap. L5 LFN 2004, which governs land tenure and requires governor's consent for property transfers; the Federal Inland Revenue Service (FIRS) Establishment Act Cap. F36 LFN 2007, which governs tax compliance verification; and sector-specific regulatory frameworks including the Central Bank of Nigeria (CBN) Act 2007 for financial institutions, the Securities and Exchange Commission Nigeria (SEC) Investment and Securities Act 2007 for capital market entities, and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) Act 2021 for oil and gas companies.

The Corporate Affairs Commission (CAC), established under CAMA 2020, maintains the public register of Nigerian companies. Company searches at the CAC — obtainable online through the CAC e-search portal — reveal the company's incorporation details, share structure, directors, charges registered against assets, and whether annual returns have been filed. CAC search results are a mandatory starting point for any Nigeria due diligence.

Land title due diligence in Nigeria is uniquely complex because of the Land Use Act Cap. L5 LFN 2004, which vests all land in the relevant state governor. Verifying valid title requires confirming that the Certificate of Occupancy (C of O) or Right of Occupancy is authentic and registered at the State Land Registry, that no adverse encumbrances are registered, and that governor's consent has been obtained for any previous transfer of the occupancy right. Failure to conduct land title due diligence has resulted in significant financial losses for investors in Nigerian real estate.

Due diligence reports prepared by legal practitioners enrolled at the Nigerian Bar Association carry greater evidentiary weight in transaction documentation and may be required by Nigerian commercial banks and development finance institutions — including the Development Bank of Nigeria (DBN) and the Bank of Industry (BOI) — as part of credit approval processes.

The legal framework governing the Due Diligence Report (Nigeria) in Nigeria draws on several key statutes and regulatory bodies. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Parties executing a Due Diligence Report (Nigeria) in Nigeria should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies and Allied Matters Act (CAMA) 2020 sets the foundational requirements.

A Nigeria Due Diligence Report is needed before completing any significant transaction involving a Nigerian company, business, or property asset.

When a private equity fund, venture capital investor, or strategic acquirer is considering acquiring shares in a Nigerian company, due diligence is required to verify that the target company's CAMA 2020 incorporation is in order, share ownership is correctly documented, there are no undisclosed liabilities or litigation, tax obligations to the Federal Inland Revenue Service (FIRS) and relevant State Internal Revenue Service are current, and the company holds all regulatory licences and approvals required to operate its business.

When a buyer is purchasing real estate in Nigeria — whether a commercial property in Lagos, Abuja, or Port Harcourt, or a residential property in any state — land title due diligence under the Land Use Act Cap. L5 LFN 2004 is critical to verify the authenticity of the Certificate of Occupancy (C of O), absence of encumbrances at the State Land Registry, and that governor's consent was obtained for all previous transfers.

When a Nigerian commercial bank or development finance institution is considering a large credit facility, the bank's credit approval process requires a due diligence report on the borrower's corporate structure, assets offered as security, regulatory compliance, and financial condition — including an assessment of the borrower's compliance with the Central Bank of Nigeria's (CBN) Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regulations.

When a foreign company is entering Nigeria for the first time through a joint venture with a Nigerian partner, due diligence on the Nigerian partner's corporate integrity, financial standing, regulatory status, and beneficial ownership (as required under CAMA 2020's beneficial ownership register provisions) is essential before committing capital.

Parties in Nigeria should prepare a Due Diligence Report (Nigeria) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.

A complete Nigeria Due Diligence Report should cover the following areas, each supported by documentary evidence and conclusions on the risks identified.

Corporate Standing: Verification of incorporation at the Corporate Affairs Commission (CAC) under CAMA 2020, including the certificate of incorporation, memorandum and articles of association, current directors and their particulars, share register, and confirmation that annual returns are filed. The CAC e-search should be included as an exhibit.

Beneficial Ownership: Under CAMA 2020 (Section 119 and the Significant Control regulations), Nigerian companies must maintain a register of significant controllers — persons holding 5% or more of shares or voting rights. The due diligence report should verify this register and identify ultimate beneficial owners to comply with Financial Action Task Force (FATF) recommendations adopted by Nigeria through its Anti-Money Laundering (AML) legislation.

Charges and Encumbrances: A search of the CAC register of charges (under CAMA 2020 Part VII) to identify any fixed or floating charges registered over the company's assets, which may affect the buyer's or lender's security position.

Land Title (where applicable): Confirmation of the Certificate of Occupancy (C of O) number, state, date of issue, term of occupancy, governor's consent for previous transfers, registration at the State Land Registry, absence of encumbrances, and current property taxes paid.

Tax Compliance: Verification of the Tax Identification Number (TIN) with the Federal Inland Revenue Service (FIRS), confirmation that Company Income Tax (CIT), Value Added Tax (VAT), and withholding tax (WHT) returns are filed and assessments settled. Outstanding tax liabilities represent contingent claims that may affect transaction value.

Litigation and Regulatory Proceedings: A review of court records (Federal High Court, relevant State High Courts, and National Industrial Court of Nigeria) and regulatory enforcement actions (from CBN, SEC Nigeria, FCCPC, NAFDAC, or sector regulators) against the target.

Regulatory Licences: Confirmation that all operational licences — CBN licence for financial institutions, NAFDAC registration for regulated products, Nigerian Communications Commission (NCC) licence for telecoms operators, or any other sector-specific authorisation — are current and in good standing.

Key Contracts: Review of material contracts — major customer agreements, supplier agreements, employment contracts with key personnel, and any loans or guarantees — to identify change of control clauses, assignment restrictions, or termination triggers that may be activated by the proposed transaction.

Additional compliance elements for a Due Diligence Report (Nigeria) used in Nigeria include: Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Forms-legal.com provides this template as a starting point for Nigeria-compliant documentation.