How to Open a Business Bank Account in Nigeria

Ikenna Nwachukwu

1 year ago

Ideally, entrepreneurs should set up a bank account for their business, separate from their personal account. This is the first (and perhaps the most important) step towards keeping their individual and corporate finances in different silos—which in turn makes it easier for them to manage business funds.

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But the process of opening a business bank account differs quite a bit from what you’ll expect with a personal account. And it’s quite likely that you don’t know what steps you’ll need to take to have one. Here, we’ll walk you through the things you should do to set up a proper business account. Before that, let’s have a look at some reasons why you should have a business bank account.

Why You Should Open a Business Bank Account

Your clients will probably be more comfortable with paying you via a corporate bank account than one that’s owned by an individual
Most business lenders and grant-giving organizations require that recipients of their financial aid have a proper business bank account into which they’ll pay the loan or grant if it’s approved
As we’ve already noted, having a business bank account that’s separate from your individual account makes it easier for you to track and manage your business’s finances
A corporate bank account gives your business a professional look

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Steps to Opening a Business Bank Account

Here are the steps you should take to open a business bank account in Nigeria:

Register Your Business with the Corporate Affairs Commission

It’s important that you register your business with the Corporate Affairs Commission (CAC) before trying to set up a corporate bank account. Any bank you choose to open an account with will request evidence of registration with that body. When your business is registered with the CAC, it becomes recognized by the government and will be treated by the relevant authorities as such. There are other benefits that accrue from this. For example, organizations that grant loans to businesses (including public sector bodies) often require that such businesses be legally registered in the country. Companies that are registered will also find it easier to sue and win cases against entities that use their names without their permission. Find out how to register your business with the CAC in our article, How to Register Your Business with the Corporate Affairs Commission. After completing your registration with the body, it will issue you a Certificate of Incorporation.

Choose a Bank

Next, you’ll want to pick a bank to open an account with. There are many options to choose from—about 24 commercial banks and numerous microfinance banks. However, most business owners prefer to stick with the larger, better-known banks, as they are perceived to be more stable. Compare the financial institutions that offer business bank accounts. Have a look at their terms and conditions, account opening and maintenance fees, minimum account balance, transaction limits, and other factors that may affect your ability to do business with your accounts. If you’re wary of sifting through the many banks out there, you’ll be pleased to know that we’ve made choosing easier for you. Have a look at some of the best business bank accounts (and what they offer) in our article, 7 Best Business Accounts for SMEs in Nigeria.

Prepare the Relevant Documents

After settling for a bank, you’ll need to get the required documents ready for the account opening process. You will be presenting those documents before the account opening officer at the bank for verification.

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These are the items you’ll be required to provide:

Certified Memorandum and Articles of Association (MEMART)
Certificate of Incorporation
Two referees/reference forms (referees should be current account holders in a Nigerian bank, preferably in the one you’re opening an account with)
Two passport photographs of each signatory
Valid ID of all signatories (International Passport, Drivers’ License, etc.)
Document verifying the business address (utility bills such as electricity, water, and waste management bills)
Forms CO2 and CO7
Board resolution from the Board of Directors, which authorizes the opening of the account
Directors’ Bank Verification Numbers (BVNs)
The company’s Tax Identification Number (TIN), obtained from tax authorities (Federal Inland Revenue Service, FIRS)
Corporate account opening form, signed by the signatories that the company designates (including its directors)

Open a Bank Account

The bank will have to verify that the documents you have presented to them are genuine. They will also conduct a search with the CAC to determine that your business is indeed registered with them. You will be charged ₦5,000 for this. In addition, expect to be billed for your cheque booklet and ATM card (if you request one). The total amount you’ll have to spend on setting up the account could be a minimum of ₦10,000. The actual figure may differ from this and will depend on the bank you’re opening an account with. Featured Image Source: Brand Icon Image

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