Tag: business

From Startup to Market Leader: The Role of Trademarks in Nigerian Business Success.

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Introduction

Nigeria’s commercial capital, Lagos where entrepreneurial activity is both vibrant and intensely competitive, brand identity functions as a critical business asset. It extends beyond a mere logo, wordmark, or slogan; it represents the intangible yet decisive factor that differentiates goods and services within saturated markets.

In this environment, brand identity is taken as optional, instead of a commercial necessity. When deliberately developed and strategically deployed, it fosters consumer loyalty, commands premium value, and safeguards the long-term viability of an enterprise, whether corporate or personal.

In the absence of adequate protection, however, a brand remains vulnerable to counterfeiting, imitation, and, in more severe cases, misappropriation by third parties. Practical experience, supported by legal precedent and commercial realities, demonstrates that effective leadership requires a proactive approach to trademark protection. A brand is not merely symbolic because of its marketing role; it is a legally cognizable asset warranting deliberate protection. Properly secured, trademarks provide a foundation for market differentiation and sustained competitive advantage.

The Leadership Decision: Prioritising Identity

Consider the case of an emerging founder in Abuja who launches a fintech application designed to facilitate rapid cross-border transactions. While significant resources are invested in product development and market entry, insufficient attention is given to securing proprietary rights in the brand name. The chosen name, though distinctive and commercially appealing, remains unregistered.

Subsequently, a more established competitor introduces a similar service under a confusingly similar name. Market uncertainty ensues: consumers are unable to clearly distinguish between the offerings, and investor confidence is undermined by perceived lapses in strategic foresight. Leadership extends beyond vision and operational competence; it encompasses the deliberate protection of those intangible assets that define and distinguish an enterprise. Within Nigeria’s rapidly expanding sectors—fintech, pharmaceuticals, beauty, cosmetology, and fast-moving consumer goods—the decision to secure trademark protection represents a critical inflection point. It communicates to stakeholders, including employees, investors, partners, and consumers, that the enterprise is structured for longevity rather than experimentation.

Nigerian jurisprudence provides clear guidance on this issue. In Piaggio & C.S.P.A. v Autobahn Techniques Ltd (Suit No: FHC/L/CS/1307/12) [2017] (Federal High Court, Lagos, per Tsoho J delivered 30 November 2017) (unreported)., the Federal High Court affirmed that proprietorship and goodwill in the PIAGGIO and APE trademarks remained vested in the Italian licensor, notwithstanding prolonged use by a local distributor. The defendant’s use was characterised as permissive rather than proprietary. The decision underscores a key commercial reality: absent proper registration and licensing frameworks, businesses expose themselves to opportunistic claims capable of undermining brand control.

Similarly, in Golden Guinea Breweries Plc v International Breweries Plc (FHC/PH/CS/647/2016, 6 March 2016, Pam J.) (unreported), the court upheld the claimant’s long-standing registration of the EAGLE STOUT trademark (No 21153, Class 32) and rejected assertions of registered user rights by the defendants. The award of substantial damages reinforces the evidentiary and remedial advantages conferred by registration. These authorities are not merely doctrinal; they provide practical instruction. Registration at the Trademarks Registry under the Federal Ministry of Industry, Trade and Investment converts a vulnerable business identifier into a legally enforceable right, thereby preserving goodwill and minimising litigation risk.

Beyond protection, trademarks function as strategic commercial assets. Under the Trade Marks Act, Cap T13 Laws of the Federation of Nigeria 2004, trademarks may be licensed, assigned, or utilised as collateral, particularly when read alongside the Secured Transactions in Movable Assets Act 2017. In SmithKline Beecham Plc v Farmex Ltd (2010) 1 NWLR (Pt 1176) 1 (CA), the Court of Appeal recognised the validity of trademark assignment, affirming the claimant’s proprietary rights in “Milk of Magnesia.” Although the claim ultimately failed on grounds of genericide, the case illustrates the legal recognition of trademarks as transferable commercial interests. Effective leadership therefore treats trademarks not as static identifiers but as dynamic financial instruments.

Conversely, neglecting trademark protection generates latent costs. These include erosion of consumer trust, diversion of managerial resources, and diminished valuation during investment or exit transactions. In contrast, early registration signals institutional foresight and enhances credibility in capital markets.

Brand as a Business Asset: Lessons from Controversy and Global Cautionary Tales.

Your brand is not ephemeral marketing fluff; it is a measurable, monetizable asset that can appreciate like prime real estate or outperform physical inventory. In Nigeria’s evolving economy, where intellectual property increasingly drives valuation, protecting this asset separates thriving enterprises from those that stumble.

Recent developments further illustrate these dynamics. The dispute between Paystack and Zap Africa (2025) highlights the commercial sensitivity of brand identity within Nigeria’s fintech ecosystem.

Zap Africa, a cryptocurrency exchange operating since around 2022 under the name “Zap,” had filed trademark applications in relevant classes (including Class 35 for business services and later Class 36 for financial services). When Paystack, the prominent fintech powerhouse (acquired by Stripe), launched its consumer-facing payment app “Zap by Paystack” in March 2025, Zap Africa publicly accused it of infringement, citing likely consumer confusion and dilution of its brand. Cease-and-desist letters flew. Public statements emphasized “There is only one Zap in Nigeria and Africa.” The spat spilled into regulatory scrutiny, with questions around Central Bank of Nigeria approvals and class-specific registrations (Paystack had filings in Classes 36 and 42, among others).

This controversy underscores the asset value of trademarks. For Zap Africa, the name represented years of building goodwill in crypto-to-Naira exchanges. For Paystack, the launch sought to expand into B2C payments but triggered a high-profile distraction, legal costs, and reputational noise. Analysts noted the dispute tested Nigeria’s first-to-file system and class-specific protection under the Trade Marks Act. Even partial overlaps in financial/tech services raised confusion risks. The episode highlighted how an unprotected or weakly defended name can suddenly become a liability rather than an asset, forcing reallocations of executive attention and resources.

Zap Africa’s defense illustrates the upside: a registered (or diligently pursued) trademark can shield market positioning and deter larger players. Yet the saga also exposed vulnerabilities when filings are not perfectly aligned across classes or when generic elements (“Zap” evoking speed or energy) invite challenges. Legal pundits debated whether “Zap” risked genericide, becoming so common it loses distinctiveness, echoing broader risks for descriptive or evocative marks.

Globally, unregistered trademarks amplify these dangers, turning potential assets into precarious ones. A classic cautionary tale is the Apple iPad dispute in China known as Apple Inc. v. Proview Technology (Shenzhen) Co., Ltd. (Shenzhen Intermediate People’s Court, 2011).

 Apple delayed securing the “iPad” trademark there; a local firm, Proview Technology, had registered it earlier. When Apple launched the product, it faced injunctions and a costly $60 million settlement to reclaim rights. The episode delayed market entry, damaged momentum, and underscored that even iconic brands suffer when they underestimate territorial registration. Unregistered goodwill offered little shield against a first-to-file jurisdiction.

Another stark example involves genericide risks, as seen with brands like “Aspirin” or “Escalator,” See, e.g., Bayer Co. v. United Drug Co., 272 F. 505 (S.D.N.Y. 1921) (Aspirin); Haughton Elevator Co. v. Seeberger, 85 USPQ 80 (1950) (Escalator); once trademarks but now public domain terms due to unchecked generic use. In the US and EU, companies have lost rights through non-use or abandonment (e.g., McDonald’s temporarily losing “Big Mac” in certain EU categories for insufficient genuine use evidence). Closer to home in common-law influences, passing-off actions for unregistered marks demand rigorous proof of goodwill, misrepresentation, and damage, a heavy evidentiary burden compared to statutory infringement claims for registered marks.

In Nigeria, unregistered marks rely on the tort of passing off (Section 3 of the Trade Marks Act), requiring proof of reputation and deception. Cases like IT (Nig.) Ltd. v. BAT (Nig.) Ltd. (2009) 6 NWLR (Pt. 1138) 477 (CA), emphasize that without registration, enforcement is uphill. Businesses face risks: squatting (where opportunists register your mark first), inability to license or franchise cleanly, reduced attractiveness to investors, and barriers to international expansion. Therefore, unregistered marks expose owners to lost revenue, partnership hurdles, and customer confusion, which directly erodes the asset’s value.

Conversely, a properly registered trademark becomes balance-sheet worthy. It supports licensing (as in Piaggio’s distributor arrangements), franchising (KFC or Domino’s models in Nigeria through registered user agreements, often NOTAP-registered for tech transfer), assignment (SmithKline Beecham’s acquisition of Milk of Magnesia rights), and collateralization under Section 65(2) of the Trade Marks Act, which treats equities in trademarks like other personal property. Nigerian startups leveraging IP-backed financing under the Startup Act recognize this: a strong trademark portfolio signals credibility to lenders and venture capitalists.

The Zap-Paystack drama and global parallels like Apple in China teach entrepreneurs that brand assets demand vigilance. Registration provides prima facie evidence of ownership, nationwide exclusivity in specified classes, and easier enforcement, including injunctions, damages, and account of profits. Without it, even substantial goodwill can prove fragile when bigger players enter the fray.

Trademarks as a Tool for Market Dominance: Storytelling from the Trenches

Picture a Nigerian brewer in the 1970s registering “EAGLE STOUT.” Decades later, that mark anchors market share, enables licensing deals, and withstands challenges in court. Or envision Chicken Republic, a homegrown brand that franchises its registered trademarks and business format across Nigeria and beyond, creating a network of outlets that dominate quick-service dining through consistent identity and quality signals.

Trademarks are weapons of market dominance. They create mental shortcuts for consumers: trust, quality, origin. In a crowded marketplace, a protected mark differentiates, commands premium pricing, and builds barriers to entry. Registered owners enjoy exclusive rights to prevent confusingly similar uses in relevant classes (Section 5 of the Trade Marks Act). This exclusivity translates into customer loyalty and repeat business , the engine of sustainable dominance.

Imagine a small fashion label in Aba registers its distinctive logo and name. As demand grows, counterfeiters emerge, but the registration allows Customs seizures and court injunctions. Revenue stays protected; reputation intact. The brand expands into exports, licenses designs, and attracts acquisition interest — all because the identity was fortified early.

Internationally, brands like Louis Vuitton have aggressively defended against dilutions (e.g., the South Korean “Louis Vuiton Dak” fried chicken case, where close imitation led to fines and rebranding orders). The lesson: even in unrelated fields, similarity can confuse or tarnish if the mark is well-known. Nigerian courts similarly protect well-known marks, though statutory enhancements for unregistered famous marks could further strengthen dominance.

In franchising, trademarks enable scaled dominance without proportional capital outlay. Domino’s Pizza entered Nigeria via master franchisees using licensed registered marks. Local players like Mr. Bigg’s and Chicken Republic have built networks by licensing their identities to operators, maintaining quality control while expanding footprint. These arrangements require registered trademarks for enforceability. underscoring how protection fuels growth.

For individual leaders, personal brands like renowned professionals, business moguls, or influencers — trademarks (or service marks) protect reputation. Registering a professional name or tagline prevents impersonation and builds authority that translates into speaking fees, book deals, or advisory roles.

Market dominance also arises from strategic portfolios. Businesses file in multiple classes to cover current and future offerings, anticipating expansion. They monitor the Registry for conflicting applications and oppose where necessary. They use marks consistently to avoid genericide (as mentioned in the Zap context). Over time, the trademark evolves from a legal tool into cultural capital — evoking emotions, stories, and community.

Yet dominance requires ongoing leadership: renewals every 14 years (an initial 7 years under Nigerian law, which is renewable), quality control in licensing to preserve distinctiveness, and enforcement against infringers. Inaction invites challenges, as seen when generic use weakens protection.

A Call to Action: Protect Today, Dominate Tomorrow

As Nigeria’s economy digitalizes and integrates globally, entrepreneurs who lead with brand power will thrive. The Zap Africa-Paystack controversy is not an isolated drama, it is a national teachable moment about the perils of delayed or incomplete protection. Global stories, from Apple’s China battle, reinforce the universal stakes.

Every founder must ask: Is my identity an asset or an accident waiting to happen? Register early. Conduct searches. File in all relevant classes. Document use. Enforce diligently. Consider licensing, franchising, and financing strategies that leverage the mark.

In otherwords, protected trademark is more than legal paperwork — it is the foundation of legacy. It empowers leaders to build organizations that outlast trends, firms that command respect, and personal identities that inspire.

The sun rises again on Lagos streets. The hustlers return, but the wise ones now carry something extra: registered certainty. They lead not just with ideas, but with fortified identities. They transform brands into assets that generate wealth, deter rivals, and dominate markets. For every entrepreneur reading this, the question is no longer “Why protect?” but “Why wait?”

Written by Adeola Osifeko LLB,BL,LLM,ACIS,ABR. She can be contacted on 08091336859 and/or send an email to adeola@aeolawpractice.com

FCCPC Digital Lending Regulations 2025: What Business Leaders Need to Know.

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In July 2025, the Federal Competition and Consumer Protection Commission (FCCPC) introduced the Digital Electronic Online, Non-Traditional Consumer Lending Regulations (DEON Consumer Lending Regulations) 2025. These rules are designed to bring greater transparency, accountability, and consumer protection into a market that has grown rapidly but often without sufficient oversight.

For business leaders, investors, and fintech operators, the regulations are not just about compliance—they reshape how digital lending will work in Nigeria for years to come. Below is a clear analysis of the new framework, its opportunities, and its challenges.

Mandatory Re-Registration and High Compliance Costs

Every digital lender and service provider currently operating must re-register with the FCCPC within 90 days from July 24, 2025. This implies that the deadline for compliance is November 5, 2025. Once registration is granted, approvals are valid until December 31 of the third calendar year and must be renewed by March 31 of the following year.

The cost of re-registration is significant. Beyond the ₦100,000 non-refundable application fee, lenders must pay ₦1,000,000 for registration and approval, which covers two software applications. Each additional application, up to five in total, attracts a fee of ₦500,000. Renewals also come with an annual levy of ₦500,000 after the first three-year cycle.

While this system may help the FCCPC sanitize the market and eliminate rogue operators, it risks excluding smaller or emerging players who cannot shoulder such heavy financial obligations. The effect could be a consolidation of the sector around larger, better-capitalized firms.

Clearer Rules on Interest Rates, Terms, and Consumer Protection

One of the most consumer-friendly provisions requires lenders to disclose all interest rates, repayment terms, and associated fees in plain English before a loan is issued. These details must also be published prominently on fintech websites.

The FCCPC has also reserved the right to periodically review interest rates to prevent exploitative practices. However, the lack of a defined benchmark for what counts as “exploitative” leaves room for regulatory discretion, which may create uncertainty for operators.

Regulatory Overlap with the Central Bank of Nigeria

Not all financial institutions are subject to the same requirements. Banks licensed under the Banks and Other Financial Institutions Act are fully exempt. However, microfinance banks and finance companies, even though they are already regulated by the Central Bank of Nigeria (CBN), must still obtain a waiver from the FCCPC before engaging in digital lending.

This dual oversight introduces regulatory duplication. Microfinance banks already comply with strict CBN rules, adding another approval process could result in inefficiency without delivering proportional benefits to consumers.

Tightened Control of Partnerships and Vendor Relationships

Another striking aspect of the new regulations is the level of scrutiny over partnerships. Digital lenders must now obtain FCCPC approval before entering into agreements related to consumer lending, including vendor contracts. Any amendments to these agreements will also require FCCPC consent. Unauthorized service-level agreements are outright prohibited.

While this move seeks to ensure accountability across the lending value chain, it may also slow down business operations. For fintechs that depend on rapid innovation cycles, the requirement for pre-approval could become a bureaucratic bottleneck.

Approval Timelines and Reporting Demands

The FCCPC has committed to processing complete applications within 30 days. However, it retains discretion to extend the timeline if it chooses, which creates some uncertainty for lenders eager to move quickly in a competitive market.

Compliance does not stop at registration. Lenders and their vendors must submit annual returns that detail lending transactions, consumer interactions, and complaint resolutions. In addition, bi-annual reports must capture transaction numbers, loan values, interest collected, fees charged, and complaint outcomes. The FCCPC also has the authority to demand access to documents at any time, which lenders must provide within 48 hours.

For larger, established companies, these reporting requirements may be manageable. But for smaller fintech startups, the administrative burden could prove overwhelming without significant investment in compliance infrastructure.

Severe Penalties for Non-Compliance

The FCCPC has backed these rules with some of the toughest penalties seen in Nigeria’s fintech sector. Companies found in breach could face fines of up to ₦100,000,000 or one percent of their previous year’s turnover, whichever is higher. Individuals—whether directors, managers, or employees—could face fines of up to ₦50,000,000 and disqualification from holding similar positions for up to five years. Beyond financial penalties, sanctions may include suspension, delisting, or even outright revocation of a lender’s approval.

Such measures are clearly meant to act as a deterrent and align Nigeria’s practices with global standards. However, to be effective, the FCCPC will need to ensure that enforcement is proportionate to the seriousness of violations, rather than becoming a revenue-generation tool.

Consumer-Centric Obligations for Lenders

The regulations also set out strict obligations that redefine how lenders interact with customers. Loan disbursements can only be made upon the explicit request of consumers, eliminating automatic or pre-authorized lending. Data protection rules, in line with the Nigeria Data Protection Act 2023, forbid lenders from accessing sensitive information such as call logs, contact lists, or photo galleries.

Consumer complaints must be resolved within 24 hours. If that is not possible, lenders must communicate a resolution timeline within 48 hours. Channels for lodging complaints must be visible and accessible.

Record-keeping is another area of focus. Lenders must maintain their records for at least five years and produce them within 48 hours when requested by regulators. These provisions strengthen accountability and trust but may stretch the operational capacity of smaller firms.

Striking the Right Balance

The DEON Consumer Lending Regulations 2025 are a bold attempt to professionalize digital lending in Nigeria. They place consumer protection at the heart of lending practices, enforce transparency in loan terms, and introduce severe consequences for misconduct.

Yet, the framework also comes with risks. The combination of steep registration fees, heavy reporting obligations, and dual oversight between the FCCPC and CBN could discourage smaller fintechs from entering or surviving the market. This might unintentionally reduce financial inclusion, leaving consumers with fewer lending options.

For decision-makers, the key takeaway is clear: compliance is non-negotiable. Re-registration must be prioritized, disclosures must be transparent, and complaint-handling systems must be robust. At the same time, there is a strong case for engaging regulators to ensure that enforcement remains fair, proportionate, and supportive of innovation in Nigeria’s fintech sector.

Written by Adeola Osifeko LLB,BL,LLM, ACIS,ABR

2026 Economic Outlook for Nigerian MSMEs: Data Driven Insights from PwC, IMF & Local Realities.

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As we step into the Ember Period, when the year glows with the intensity of renewed resolve, it is a decisive moment for Nigerian Micro, Small, and Medium Enterprises (MSMEs) to reflect, recalibrate, and project forward. Today’s Tuesday Notes series seek to equip business leaders, entrepreneurs, and in-house counsel with actionable intelligence rooted in robust data and local realities.

This edition examines the 2026 outlook, drawing from the IMF and PwC half-year reports, while situating these global insights within Nigeria’s economic context. The challenges of foreign exchange reforms, high inflation, infrastructure bottlenecks, and regulatory changes define the terrain in which MSMEs operate. Yet opportunities abound in digital transformation, sustainability, and Africa-wide trade integration.

Global Trends, Local Implications

The IMF projects global GDP growth of 3.0% in 2025 and 3.1% in 2026, while PwC estimates more modest figures at 2.3%–2.7%. These numbers indicate a slower but resilient global economy. For Nigerian MSMEs, this matters in two key ways: export opportunities into growing markets like India and Sub-Saharan Africa, and exposure to global risks such as tariffs, commodity price shocks, and currency volatility.

Globally, inflation is easing, with advanced economies stabilizing near 2%. But in Nigeria, inflation remains elevated, crossing 30% in mid-2025 and projected to average above 20% into 2026. For MSMEs, this means continued pressure on input costs and consumer demand, requiring smarter pricing, supply chain efficiencies, and cost controls.

Interest rates in advanced economies are easing gradually, but Nigeria faces persistently high rates following CBN’s tightening cycle to stabilize the naira. Lending rates for SMEs often exceed 20%, constraining access to credit. Nigerian MSMEs must therefore explore alternative financing channels—private equity, impact investors, fintech-driven credit platforms—while pushing for policy reforms that unlock cheaper capital.

Nigeria’s MSME Landscape

MSMEs contribute about 46% to Nigeria’s GDP and account for over 80% of employment, according to PwC’s MSME Survey. Yet the sector is highly vulnerable to exchange rate volatility, energy costs, and regulatory complexity.

The IMF forecasts Nigeria’s GDP growth at 3.2% in 2025 and 3.0% in 2026, driven by non-oil sectors like agriculture, services, and fintech. But inflation, currency weakness, and infrastructure deficits remain structural hurdles.

For decision makers, this dual reality—growth potential but fragile fundamentals—demands strategic recalibration. Nigerian MSMEs must:

(i) Diversify beyond domestic markets by leveraging AfCFTA, particularly into West African trade corridors.

(ii) Invest in digital tools, including generative AI, to cut costs and expand reach.

(iii) Build resilience into supply chains by integrating regional suppliers and hedging against FX risks.

Legal and Regulatory Considerations

For in-house counsel and legal advisors, the years ahead will require sharper focus on compliance, contracts, and risk management:

i. Tax and fiscal reforms: The Federal Government continues to broaden its tax net. MSMEs must ensure proper structuring and compliance to avoid penalties while exploring available incentives.

ii. CBN regulations: Ongoing currency and banking reforms will affect FX access and loan conditions. Counsel should review financing contracts closely to capture currency and interest rate risks.

iv. Trade agreements: The AfCFTA presents opportunities but requires legal preparedness—compliance with rules of origin, dispute resolution mechanisms, and cross-border contract drafting.

v. Technology and data governance: As more MSMEs adopt AI and digital platforms, compliance with Nigeria Data Protection Act (NDPA) and intellectual property laws becomes critical.

vi. Sustainability standards: Climate reporting and green certifications are gaining traction globally; Nigerian MSMEs seeking export markets must prepare for these requirements.

Strategies for Thriving in 2026

For Nigerian MSMEs, thriving in the next 18 months requires balancing immediate resilience with long-term reinvention. Practical strategies include:

i. Conducting scenario planning using IMF, PwC, and CBN data to anticipate FX and inflation movements.

ii.Strengthening governance structure, which implies boards, compliance units, and in-house counsel navigate regulatory uncertainty.

iii.Partnering regionally to expand trade and reduce dependency on volatile local inputs.

iv. Investing in workforce upskilling, particularly digital and legal literacy.

v. Pursuing sustainable practices that align with green financing opportunities.

Conclusion: Igniting Nigeria’s Ember Glow

As 2025 draws to a close, Nigerian MSMEs face a demanding yet opportunity-rich horizon. Global trends signal moderation, while local realities call for resilience and reinvention. Decision makers and in-house counsel must therefore embrace the sevenfold wisdom of the Ember Period—turning uncertainty into fuel for transformation.

At AEO Law Practice, we remain committed to supporting Nigeria’s business leaders with data-driven insights and legal foresight to ensure MSMEs not only survive, but glow brighter in 2026 and beyond.

Regulatory Update: CAC Mandates Annual Returns and PSC/BO Filing Compliance Within 90 Days.

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The Corporate Affairs Commission (CAC) has issued a compliance directive via a public notice dated 29th July 2025 on X, requiring companies to file their Annual Returns and update records of Persons with Significant Control (PSC) and Beneficial Ownership (BO) within 90 days. Companies failing to meet these obligations face the risk of being struck off the register.

Pursuant to section 692(3) CAMA 2020, the CAC has the discretion to strike off by October 28,2025 companies who have neither carried on business or been in operation in the last 10 years from its register and by implication have never complied with the requirements of filing annual returns. However the notice also mandates companies that are yet to update their PSC or BO information to do so within 90 days. Company secretaries, solicitors and/or compliance officers are expected to visit the CAC website to confirm the standing of their organisations and regularise their position accordingly if in default before the deadline.

We also note that, Section 119(5) of CAMA 2020 clearly stipulates that the consequence for non-disclosure of PSC/BO information is a fine, not deregistration. The Act intends for non-compliance with PSC/BO disclosure requirements to be sanctioned through financial penalties, not company delisting. Therefore, applying a blanket strike-off risk to all non-compliant companies—could be viewed as exceeding the provisions of section 119(5) CAMA 2020.

Why Filing Annual Returns and Updating PSC/BO Matters

Filing Annual Returns ensures that the CAC maintains an accurate record of a company’s financial standing, governance structure, and operational continuity. It is a basic but essential indicator of corporate health.

Updating PSC and BO information plays a critical role in advancing transparency. It allows regulators and stakeholders to identify those who truly control or benefit from the company—either directly through voting rights and governance roles or indirectly through economic interests hidden behind proxies, trusts, or nominee arrangements. This aligns Nigeria’s corporate reporting framework with international anti-money laundering and counter-terrorism financing standards.

Understanding PSC and BO under CAMA 2020

Under Section 119 of CAMA 2020, a Person with Significant Control (PSC) is anyone who:

(i) Directly or indirectly holds more than 5% of the company’s shares or voting rights;

(ii) Has the authority to appoint or remove a majority of the board of directors; or

(iii) Exercises significant influence over the company’s decisions and management.

On the other hand, Beneficial Ownership (BO), inferred from section 119(3) applies to individuals who will benefit from the company’s assets upon dissolution or profits, even if they do not appear on official records. This includes those entitled to over 5% of the company’s profits or assets upon dissolution, or those exerting influence through nominee shareholder (where shares are held on behalf of actual owner) and trust and proxy arrangements (delegation of control or benefits without legal ownership).

While PSC focuses on governance influence, BO centers on economic benefit and hidden control. The two often overlap, but not all BOs are PSCs, especially where influence is indirect.

Implications for Compliance and Corporate Reputation

Beyond regulatory obligations, compliance demonstrates a company’s commitment to transparency, legal responsibility, and ethical governance. It helps build investor confidence and strengthens a company’s market credibility. Conversely, the notice states that failure to comply—whether by omitting Annual Returns or neglecting PSC/BO updates—exposes the business to penalties, loss of investor confidence, and potentially deregistration.

Conclusion

While the CAC’s efforts to enforce corporate compliance with respect to annual returns filing are necessary and aligned with CAMA 2020, the implementation of the ultimatum notably addresses the different categories of default i.e companies that have yet to comply with annual returns filing requirements and also those that are yet to update PSC/BO information, backed by the legal penalties delisting. Regulatory enforcement must be both firm and legally sound, hence default in updating PSC/BO information should not be addressed the same way as default in filing annual returns as the Act provides different consequences for each default category.

Nevertheless, companies are encouraged to review their filings and promptly update the requisite outstanding information prescribed to avoid sanctions and preserve their legal status before the due date.

Written by Adeola Osifeko LLB, BL, LLM, ACIS, ABR. She can be contacted on 07074453571 and adeola@aeolawpractice.com.

The Legal Practitioners Remuneration Order 2023: Will It Strengthen or Strain the Legal Industry?

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The legal industry in Nigeria is undergoing a significant transformation with the introduction of the Legal Practitioners Remuneration (For Business, Legal Service and Representation) Order 2023 (LPRO 2023). This regulatory framework, established under the Legal Practitioners Act (Cap LII, LFN 2004), seeks to standardise fees for legal practitioners across various areas of legal practice. While its objectives include ensuring fair compensation for lawyers and preventing fee undercutting, the broader economic and business implications of this regulation are profound. Against the backdrop of Alternative Legal Service Providers (ALSPs), this Order raises questions about its potential to strengthen or strain the legal profession in Nigeria.

Economic and Business Implications of LPRO 2023 on the Legal Profession

LPRO 2023 introduces minimum fees for various legal services, including consultations, incorporation of companies, litigation, property transactions, and other commercial dealings.1 By establishing prescribed fees, the regulation aims to curb price undercutting, which has historically affected law firms, particularly small and mid-sized firms. This structured pricing model ensures that practitioners receive adequate remuneration commensurate with their experience and the complexity of legal services rendered. However, the regulation also introduces rigid constraints on pricing flexibility, potentially impacting market competitiveness.

For established law firms, particularly those operating in corporate commercial law and litigation, the LPRO 2023 provides a more predictable revenue stream2. Firms that cater to high-net-worth clients or corporate entities may find this beneficial as it aligns with international best practices. However, for younger lawyers, solo practitioners, and small firms that rely on competitive pricing to attract clients, the LPRO 2023 presents a challenge. Many clients, especially startups, SMEs, and individuals seeking legal representation for minor matters, may opt for ALSPs, online legal platforms, or non-traditional legal service providers offering more affordable solutions.

The rigidity in the Order also poses concerns in dispute resolution practices. Given the increasing global shift towards flexible billing arrangements such as contingency fees, fixed retainers, and subscription-based legal services, the LPRO 2023 appears to constrain such innovations.3 While it does allow for percentage-based fee arrangements, it does not permit any arrangement below the prescribed hourly rate, thus limiting lawyers’ ability to tailor their services to market demands.

The Rise of Alternative Legal Service Providers (ALSPs) and the LPRO 2023

The global legal market has witnessed a surge in Alternative Legal Service Providers (ALSPs), which offer legal solutions outside the traditional law firm model.4 These entities, ranging from legal tech companies, document review services, online dispute resolution (ODR) platforms, contract automation providers, and freelance legal consultants, leverage technology and process efficiencies to deliver cost-effective legal services.

In Nigeria, ALSPs are emerging as formidable competitors to traditional law firms, particularly in areas like legal research, contract drafting, compliance, and regulatory advisory services.5 With the advent of artificial intelligence (AI)-driven legal research tools, automated document generation platforms, and online corporate registration services, ALSPs are addressing clients’ needs faster and at lower costs.

The LPRO 2023 inadvertently favours the rise of ALSPs by making traditional law firms less attractive to cost-conscious clients. A small business seeking corporate registration, for instance, may find online incorporation services preferable to engaging a law firm that charges statutory minimum fees as stipulated in the Order.6 Similarly, businesses needing contract review and compliance services may opt for subscription-based ALSPs rather than law firms constrained by hourly rate requirements.

Furthermore, ALSPs often operate in a less regulated environment compared to traditional law firms. While law firms must adhere strictly to professional ethics rules and LPRO 2023’s fee structure, ALSPs may offer customised, on-demand pricing models.7 This regulatory gap could create an uneven playing field, where ALSPs thrive while traditional law firms struggle with compliance costs.

The Role of the NBA and Regulatory Bodies in Shaping ALSPs within the Legal System

The Nigerian Bar Association (NBA) and the Legal Practitioners Remuneration Committee (LPRC) play crucial roles in shaping the legal market, particularly regarding ALSP operations. LPRO 2023, by its design, primarily regulates traditional legal practitioners but does not comprehensively address how ALSPs fit into the legal ecosystem.8

The NBA has an obligation to define the regulatory boundaries for ALSPs, ensuring that while innovation is encouraged, it does not undermine the traditional legal profession. Possible regulatory responses include:

  1. Bridging the Regulatory Gap: The NBA could introduce specific regulations to cover ALSPs, ensuring they operate within a defined legal framework. This could include licensing requirements, ethical codes, and restrictions on certain reserved legal activities.9
  2. Collaboration Between Law Firms and ALSPs: The NBA could encourage synergy between ALSPs and law firms, rather than fostering direct competition. By permitting law firms to integrate ALSP models (such as automated legal research tools and contract lifecycle management solutions), practitioners could enhance efficiency while remaining within the LPRO 2023 framework.10
  3. Reforming Fee Structures for Greater Flexibility: The rigid minimum fees imposed by the Order may require periodic review. The NBA could consider allowing alternative fee structures, such as tiered pricing models for SMEs, startups, and social enterprises, to ensure legal services remain accessible while sustaining law firm profitability.11
  4. Addressing Ethical Concerns and Consumer Protection: Given the rise of unregulated online legal services, the NBA must establish consumer protection policies to prevent unauthorized practice of law (UPL) and data privacy breaches in tech-driven legal services.12
  5. Promoting Technology-Driven Legal Services within the Traditional Bar: The NBA can train and support law firms in adopting legal tech solutions rather than allowing ALSPs to dominate the market. By incorporating document automation, e-discovery tools, and AI-based research, traditional law firms can compete effectively without violating the LPRO 2023 pricing model.13

Conclusion

The Legal Practitioners Remuneration Order 2023 presents both opportunities and challenges for Nigeria’s legal industry. While its intent is to promote fair remuneration and standardise fees, its economic impact could inadvertently drive clients towards ALSPs and alternative legal solutions. Traditional law firms, particularly smaller firms and solo practitioners, may struggle to retain clients in a market where cost efficiency and flexible pricing are increasingly prioritised.

The NBA and regulatory bodies must therefore strike a balance between protecting traditional legal practice and embracing the innovations brought by ALSPs. Through strategic regulatory reforms, collaboration with ALSPs, and modernising fee structures, Nigeria’s legal profession can evolve without losing its competitive edge. The future of legal practice in Nigeria will depend on how well regulators and practitioners navigate this complex intersection between standardisation, innovation, and market competitiveness.

Author: Adeola Osifeko LLB, LLM, BL,ACIS,ABR

Endnotes

  1. Legal Practitioners Remuneration Order 2023, s 1.
  2. ibid.
  3. 2023 LPRO, s 8.
  4. Nkemakonam Umeadi-Onyedika, ‘The Rise of Alternative Legal Service Providers: Threat or Opportunity’. BusinessDay Newspaper, 13 March 2025 Page 21.
  5. ibid.
  6. 2023 LPRO, Schedule 2.
  7. 2023 LPRO, s 10.
  8. 2023 LPRO, s 14.
  9. ibid.
  10. ibid.
  11. ibid.
  12. ibid.
  13. ibid.