Lex Clavis Solicitors

07/02/2026

HOW A HIRE-PURCHASE AGREEMENT SAFEGUARDS THE HIRER AND THE OWNER IN NIGERIA.

1. INTRODUCTION
Every day in Nigeria, thousands of vehicles, generators, laptops, machines, and household appliances are bought through hire-purchase agreements. For many Nigerians, it is the only way to afford expensive goods. Yet, countless hirers lose both their money and the goods. Likewise, many business owners lose property to dishonest hirers.
Many parties enter hire-purchase agreements without knowing that the law already provides powerful protection for both parties. This work will work you through on the right of the owner and Hirer in a Hire-Purchase agreement in Nigeria.

WHAT IS A HIRE-PURCHASE?
A hire-purchase is not a sale. It is a contract of hire with an option to buy. The hirer hires the goods while paying installments. It is a contract of bailment with an option to purchase. The hirer hires the goods with the right, but not the obligation, to become the owner upon payment of all installments. The owner retains legal ownership as security for payment and the hirer enjoys possession and use of the goods. Ownership remains with the owner until the last payment is made.

PROTECTION OF THE HIRER AGAINST UNLAWFUL REPOSSESSION
One of the strongest protections in a Hirer Purchase is the protection against unlawful repossession by the owner. Once the hirer has paid two-thirds of the hire-purchase price, the owner cannot repossess the goods except by a court order. This prevents harassment, forceful seizure, or intimidation. However, it does not take away the owner’s rights; it merely requires him to follow the law by going to court to claim for the balance of the unpaid installment and not to unlawfully take a repossession of the goods.
PROTECTION OF THE OWNER’S OWNERSHIP RIGHTS
Even though the hirer has possession, ownership remains with the owner until full payment is made. This means: The hirer cannot sell the goods; the hirer cannot use the goods as security or any other unlawful purposes and the hirer must take reasonable care of the goods during the pendency of the hire-purchase.
If the hirer defaults before paying two-thirds for three or more times in payment of the installments, the owner may lawfully repossess under the agreement entered by the parties .

HIRER’S RIGHT TO TERMINATE THE AGREEMENT
The hirer may terminate the agreement at any time before final payment by returning the goods and settling outstanding installments. This protects the hirer from being trapped in a bad financial situation .At the same time, it allows the owner to recover his goods and limit losses.

LEGAL EFFECT OF ILLEGAL REPOSSESSION
If the owner takes a repossession where two-thirds of the hire-purchase price has been paid, the law treats the agreement as terminated in favour of the hirer, and the hirer becomes entitled to: Recover all the money already paid, Claim damages for unlawful seizure, in some cases, retain the goods . This prevents a situation where a hirer pays heavily and still loses everything overnight.

REQUIREMENT OF A WRITTEN AGREEMENT.
Every hire-purchase agreement must be in writing and signed by both parties. The agreement must state : The cash price of the goods, the hire-purchase price, the amount and due dates of installments and the description of the goods in question.
This protects the hirer from hidden charges and protects the owner by creating documentary evidence of the transaction. Where there is a dispute, the written agreement becomes the primary proof of rights and obligations.

CONCLUSION
The Hire-Purchase Act does not favour only the hirer or only the owner. It creates a balanced legal framework where the hirer is protected from exploitation and unlawful seizure and the owner is protected from fraud, default, and loss of property.
A properly drafted hire-purchase agreement, backed by the Act, remains one of the safest commercial tools in Nigeria when both parties understand and obey the law.
If you have inquiry, do give us a DM, we will attend to you as soon as practicable.

06/10/2025

Deductible Taxes and Allowable Expenses in Nigeria under the Nigeria Tax Act, 2025.

A deductible expense is a cost you are legally allowed to subtract from your income before calculating tax.
An expense is deductible if it is wholly, exclusively, necessarily and reasonably incurred in earning income. This rule is the guiding test for both companies and individuals.

DEDUCTIBLE EXPENSES FOR BUSINESSES.

a. General Operating Expenses: Businesses can deduct everyday running costs such as rent, staff salaries, utilities, and transport expenses.
b. Interest on Loans: Interest on money borrowed for genuine business purposes is deductible, but where companies rely too much on debt, only up to 30% of earnings before interest, taxes, depreciation and amortization (EBITDA) is allowed at that accounting year.
c. Capital Allowances: Instead of deducting the full cost of an asset at once, companies claim capital allowances on machinery, vehicles, and buildings over time.
d. Research and Development (R&D): Expenses on research directly related to the business are deductible, up to 5% of turnover.
e. Environmental Rehabilitation Funds: Contributions to an approved fund for environmental cleanup and rehabilitation are deductible.
f. Charitable Donations: Donations made to approved charities, educational institutions, research bodies, or public welfare projects are deductible, provided they do not exceed 10% of the company’s assessable profit.
g. Debt carried forward. Debt carried from previous years and the irrecoverable debts are deductible.

DEDUCTIBLE RELIEFS FOR INDIVIDUALS.

a. Employment and Professional Expenses: Salaried workers and professionals can deduct costs directly linked to earning income.
b. Pension, Insurance, and Health Contributions: Contributions to pension schemes, life insurance, and health insurance are deductible.
c. Mortgage Loan Interest: Interest paid on a housing loan for one’s main residence is deductible.
d. Rent Relief: Although the old Consolidated Relief Allowance (CRA) has been removed, rent relief is available for low-income earners.
e. Compensation and Employment Loss: Payments received for loss of employment or injury that is not more than ₦50 Million is exempt from chargeable tax.
f. Capital Gains Exemptions: Gains from selling a dwelling house or a personal-use chattel or cars are exempt from capital gains tax.
g. Income Exemption Threshold: Individuals who earn ₦800,000 or less per year are not required to pay personal income tax.
h. Disposal of chargeable assets: Any expenses incurred for the disposal of a chargeable asset are deductible.

COMPLIANCE AND PRACTICAL GUIDANCE.

a. Businesses should maintain proper documentation to prove that expenses were genuinely incurred.
b. Individuals should take advantage of pension, insurance, and mortgage reliefs to reduce their tax liability.
c. Private sector players considering charitable donations should ensure they donate to approve institutions to enjoy deductions.

The Nigeria Tax Act, 2025 is a landmark reform that simplifies and harmonizes Nigeria’s tax system. By clearly stating what businesses and individuals can deduct.

If you have any enquiry, do well to give us a DM, we will respond to you as soon as practicable.

09/09/2025

HOW TO GET A TIN IN NIGERIA

In Nigeria, a Tax Identification Number (TIN) is not just another document; it is a vital requirement for running a legal and credible business. Whether you are a small startup, a growing enterprise, or a large corporation, having a TIN is essential for compliance, growth, and access to opportunities.
WHAT IS A TIN?
A TIN is a unique number issued by the Federal Inland Revenue Service (FIRS) to businesses for tax purposes. It allows the government to track tax obligations and ensures that businesses comply with the law.
WHY YOUR BUSINESS NEEDS A TIN?
1. Legal Compliance: Every registered business in Nigeria must have a TIN. Operating without it can attract penalties.
2. Banking Transactions: A TIN is required to open a corporate account and carry out certain financial activities in Nigeria.
3. Government Contracts: Without a TIN, your business may not qualify to bid for government projects or tenders.
4. Credibility: A TIN signals to clients, investors, and partners that your business is legitimate and legally compliant.
5. Access to Funding: Banks and agencies often require a TIN before granting loans or business support.
6. Obtaining Tax Clearance Certificate: Without TIN, you cannot get Tax Clearance Certificate in Nigeria.
7. It is used for filing annual tax returns like company income tax, VAT, etc.
HOW TO GET A TIN IN NIGERIA
1. Register your business with the Corporate Affairs Commission (CAC).
2. Visit the nearest FIRS office with your CAC documents.
3. Submit the required documents (Certificate of Incorporation, etc.).
4. Fill out the TIN application form and get your number once approved.
WHAT ARE THE RISKS OF NOT HAVING A TIN IN NIGERIA?
1. Difficulty in opening or operating a business bank account.
2. Disqualification from contracts and grants.
3. Possible fines and restrictions from FIRS.
4. Reduced trust from clients and partners.
FAQ: WHAT HAPPENS IF YOU DON’T APPLY FOR A TIN AFTER REGISTRATION OF YOUR BUSINES OR ACTIVATE IT IF YOU HAVE ONE?
If your business fails to apply for a TIN or CAC gives you TIN number when you downloaded your documents, penalties can apply once you become liable to tax and fail to register or activate it. According to the Companies Income Tax Act (CITA), you will attract a fine of ₦25,000 for the first month of default and ₦5,000 fine applies for every additional month you remain unregistered.
This means that penalties begin once your business is due to file taxes or carry out transactions that legally require a TIN (such as opening a corporate account or bidding for government contracts).
CONCLUSION
A Tax Identification Number is more than a tax tool; it is your gateway to business credibility, financial access, and legal compliance in Nigeria. If your business does not yet have one, the best time to apply is today.
If you have inquiry, do well to give us a DM on 09029261360, 08134857926.

08/09/2025

25/08/2025

We stand out,stand tall, National security is not just for the bourgeoisie,it is for every Nigerian.

05/08/2025

CAN YOUR COMPANY BE DELETED FROM CAC'S REGISTER? DISCOVER THE TRUTH BEFORE IT'S TOO LATE.
Many business owners in Nigeria breathe a sigh of relief once their company or business name is registered with the Corporate Affairs Commission (CAC). They believe this means their business now has lifetime legal backing. But what if that belief is wrong?
The harsh truth is that your company or business name can be struck off the register even after years of registration.
The Corporate Affairs Commission (CAC), established under the Companies and Allied Matters Act (CAMA), is not just a registration body. It is a powerful regulatory agency that oversees ongoing compliance of all companies in Nigeria. The CAC is empowered to remove or strike off companies that fail to comply with statutory requirements.
WHAT DOES IT MEAN TO BE STRUCK OFF THE REGISTER?
To be struck off means that your company or business name loses its legal existence. It no longer enjoys legal recognition and cannot sue or be sued in its name. The company cannot engage in any legitimate business activity, and its directors may be held personally liable for continued operations.
Section 692 (3) and (4) of the Companies and Allied Matters Act, 2020 provides the legal foundation for CAC to strike off companies that have defaulted in filing annual returns and beneficial ownership information. This statutory provision gives CAC the authority to clean up its register by removing dormant or non-compliant entities.
THE GROUNDS FOR STRIKING OFF A COMPANY IN NIGERIA
Companies may be struck off for any of the following reasons:
a. Failure to comply with the provision of Companies and Allied Matters Act: These include failure to file of Annual Return, Failure to Submit Beneficial Ownership Information. If a company fails to file its Annual Returns or Failure to disclose Persons with Significant Control (PSC) or Beneficial Ownership information for a period of 10 years, it risks being struck off the company’s register.
b. Dormancy or Inactivity: Companies that are no longer carrying on business or operational for a period of 10 years may also be considered for strike-off.
CONSEQUENCES OF BEING STRUCK OFF
1. Loss of Legal Status: Your Company ceases to exist legally.
2. Unlawful to Operate: It becomes a crime to continue doing business under a struck-off company.
3. Loss of Assets and Rights: The Company loses title to property, contracts, and rights of enforcement.
4. Damaged Credibility: A struck-off status damages the trust of customers, banks, and investors.
THE 90-DAY GRACE PERIOD: YOUR LAST CHANCE TO COMPLY
According to CAC's public notice dated 29th July 2025, companies listed for strike-off have a 90-day grace period from the publication date to update their records and comply with filing obligations. Failure to act within this window means automatic removal from the register.
STEP TO TAKE TO AVOID YOUR COMPANY BEING STRUCK OFF FROM THE COMPANY’S REGISTER.
a. File Your Annual Returns Promptly: Visit the CAC portal and ensure all outstanding annual returns are filed.
b. Update PSC/Beneficial Ownership Details: Disclose accurate information about major shareholders or controllers in your company.
c. Keep Records Updated: Ensure your company’s email, phone number, and registered address are correct and current with the CAC.
HOW TO CHECK IF YOUR COMPANY IS ON THE STRIKE-OFF LIST.
Visit http://www.cac.gov.ng and locate the “Strike-off list” under public notices. Search using your Company Name or RC Number to verify if your business is listed.
REMEDIES AND REINSTATEMENT OPTIONS
If your company is mistakenly or wrongly struck off, you can apply to CAC for restoration of your company to the Register.
This usually requires court action and compliance with all pending obligations.
CONCLUSION
Stay Compliant, Stay in Business
Company registration is only the beginning. Regulatory compliance is the real test of corporate legitimacy. The CAC is no longer passive; it is actively monitoring, evaluating, and enforcing compliance with the law.
Don’t wait to be listed, act now before your business is legally erased.
If you have any enquiry, do well to give us a DM or WhatsApp on 08029261360, 08134857926, we will respond to you as soon as practicable.





consultant

04/08/2025

STEP-BY-STEP GUIDE TO THE CONVERSION PROCESS OF BUSINESS NAME TO LIMITED LIABILITY COMPANY IN NIGERIA.

Here is how to convert your business into a limited liability company in Nigeria:

1. Owner's Consent: If it's a sole proprietorship or partnership, a written resolution or consent to convert the business should be prepared and signed.
2. Name Reservation: Login to the CAC portal, click on reservation of name section. You can reserve your existing name (with 'Ltd' or 'Limited' added at the end of your existing name) or select a new one.
3. Prepare Incorporation Documents like Memorandum and Articles of Association (MEMART),Statement of share capital, Particulars of directors and shareholders, Evidence of registered address, Identification documents of stakeholders and Resolution approving the conversion
4. Submit to CAC: upload all relevant documents and make your payment.
5. Issuance of Certificate: Once approved, the CAC will issue a Certificate of Incorporation, and your business will officially become a limited liability company.
WHAT ARE THE POST-CONVERSION MATTERS TO COMPLY WITH?
After the conversion is completed, don’t forget these important steps:
1. Inform your bank: Update your bank records and company account details.
2. Notify FIRS and State Tax Authority: Re-register for TIN under your new corporate status.
3. Update business materials: Change your business signage, letterheads, contracts, and invoices to reflect the new company name and structure.
4. File with regulators: If you’re in a regulated industry (e.g., finance, agriculture, import/export), notify and update your status with relevant agencies.
CONCLUSION
Converting your business name to a limited liability company is a powerful move for growth, credibility, and long-term sustainability. It shields you from personal liability and opens the door to larger business opportunities.
To avoid mistakes and delays, it's advisable to consult a corporate lawyer or CAC-accredited agent to guide you through the process professionally.
If you have any enquiry, do well to give us a DM or WhatsApp on 08029261360, 08134857926, we will respond to you as soon as practicable.

28/07/2025

HOW TO CONVERT A BUSINESS NAME TO A LIMITED LIABILITY COMPANY IN NIGERIA

Are you running a business in Nigeria under a business name? Are you wondering how to scale legally, attract serious investors, or separate your personal assets from business liabilities?
Converting your business name to a Limited Liability Company (LLC) could be the smartest move you can make in your business decision. Unlike a business name also known as a sole proprietorship or enterprise, a Limited Liability Company offers credibility, limited personal liability, better access to funding, and legal recognition that makes doing business easier and more profitable.
Imagine sealing contracts with corporate clients, accessing loans from banks with ease, and protecting your personal properties from business risks, all because your business now enjoys the status of a limited liability company.
In our next post, we will delve into step-by-step guide on how you can convert your existing business name to a limited liability company in Nigeria.
In our next post, we will dive in and unlock the next level for your business.
If you have any enquiry, do well to give us a DM or Whatsapp on 08029261360, 08134857926, we will respond to you as soon as practicable.

21/07/2025

WHY YOU NEED A LAWYER IN YOUR PROPERTY TRANSACTIONS IN NIGERIA

In a country like Nigeria, where land is both valuable and deeply contested, navigating property transactions without legal guidance is like walking through a minefield blindfolded. Whether you are buying, selling, leasing, or developing property ,a lawyer is not just optional; it is a necessity.
Let me explain why.
1. Property Fraud is real and Expensive: Buyers are sold land that has already been sold to someone else. Others purchase property from the wrong owners or family members without legal rights to sell. With a lawyer involved from the start, these red flags are detected before money exchanges hands.
2. Lawyers Conduct Title Searches and Due Diligence: A lawyer will conduct a comprehensive title search at the right places to verify the real owner of the land and whether there are any debts, disputes, or legal issues attached to it. This helps avoid buying land that is under litigation or government acquisition.
3. Lawyers Draft and Review Key Legal Documents: Property transactions involve serious legal documents like Deed of Assignment, Contract of Sale, Power of Attorney, Etc. A lawyer ensures these documents are valid, properly executed, and protect your interest.
4. Lawyers save You from Future Litigation: Hiring a lawyer may seem like an extra cost, but litigation or losing your property will cost you millions more. Prevention is not just better; it’s cheaper than cure.
5. Lawyers Help Secure Government Approvals and Consents: If the property requires registration or Governor’s Consent under the Land Use Act, a lawyer knows how to perfect the title and help you avoid delays or rejection by the Ministry of Lands.
6. Don’t Gamble with Your Future: Your land, home, or office property is too valuable to risk. Before you sign anything or pay anyone, speak to a lawyer.

Need enquiry about your property transaction; just give us a DM now or Call/ WhatsApp we will assist you appropriately.

07/07/2025

DID YOU KNOW?

THE KEY DIFENENT BETWEEN BUSINESS NAME AND A COMPANY IN NIGERIA

1. There is no separate legal identity from the owner in business name while in company, there is an Independent legal entity different from the owner; it can sue or be sued in the registered name.
2. In Business Name, Owner bears unlimited liability in that the business can sell his clothes to pay the debt of the business whereas in
company, Shareholders enjoy limited liability.
3. Business name is owned by individuals or partners while a company is structured with shareholders and directors.
4. Business Name May be seen as informal; limited opportunities.
Company Commands trust; suitable for corporate and government contracts.
5. Business Name has no capital requirement. Company requires minimum share capital of not less than ₦100,000 in the case of a private company and ₦2,000,000 in the case of a public company.
6. In Business Name, it is Hard to transfer ownership to another party,
company, Shares can be sold or transferred easily to another shareholder.
7. Business Name ends with the owner’s death, in the other hand, company has perpetual succession.
8. Business Name has limited access to loans or investors.
Company is easier to secure funding and investment.
If you’re starting small with minimal risk, a Business Name may work for you. But if you're serious about scaling, raising funds, entering formal contracts, and protecting your personal assets, a Limited Liability Company is the smart, future-proof choice.

Don’t guess, choose your structure wisely. Your decision today can determine your freedom, protection, and profit tomorrow.

If you have any inquiry,just give us a DM.