Holding Nigerian Shares Through a Company or a Family Trust
How a company or the trustees of a family trust can hold NGX shares: corporate CSCS accounts, what brokers ask for, the trust law that applies, how dividends are taxed and the succession angle.
Nigerian shares do not have to be held in an individual's name. A company can open its own CSCS account through a broker and hold shares in the company's name, and trustees can hold shares for the beneficiaries of a trust. Each route changes who legally owns the shares, what the broker needs, how dividends are taxed and what happens when a family member dies. This article explains how each works; whether either suits you is a question for a lawyer and a tax adviser.
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This article includes tax points. They are general information only, the rules changed with the Nigeria Tax Act 2025 and may change again, and you should take advice from a qualified tax adviser in Nigeria and in the country where you live.
Holding Shares in a Company's Name
A company registered with the Corporate Affairs Commission (CAC) can open a corporate account with a stockbroker, which gives it its own CSCS account and Clearing House Number (CHN). The shares are registered in the company's name, dividends are paid to the company's bank account, and the company, not any individual, is the shareholder of record.
What brokers typically ask for
- A completed corporate account opening form.
- The certificate of incorporation and a certified copy of the memorandum and articles of association.
- Certified CAC records showing the company's shareholders and directors.
- A board resolution authorising the account, appointing the broker and naming the signatories.
- Identification, photographs and proof of address for the signatories. Some brokers also ask for their BVNs.
For private companies, the SEC's anti-money laundering regulations require brokers to verify the identity and address of the principal beneficial owners with 5% or more, and of the directors and others who control the company's assets. Family members who own the company will be identified, not just the company.
How dividends received by a company are taxed
Dividends from Nigerian companies are paid after withholding tax is deducted. Under the old Companies Income Tax Act, a dividend received after that deduction was franked investment income, with no further tax due. The Nigeria Tax Act 2025, in force from 1 January 2026, still refers to franked investment income, but section 8 also says a company includes dividend income in its profits, gross of any tax deducted at source; dividends received in the form of shares are excluded. Companies other than small companies pay tax on profits at 30%.
How these provisions apply to a family holding company, and how the tax already withheld is treated, is a question for a tax adviser. Money taken out of the company by family members, as salary or as a dividend from the company, is then taxed in their hands.
Holding Shares Through a Trust
A trust separates legal ownership from benefit. The trustees hold the shares and deal with them, for the beneficiaries named in the trust deed. In Nigeria, trusts rest on the general law of trusts, on state trustee laws such as the Trustees Law of Lagos State, and on federal statutes for particular points.
A private family trust does not need to be registered with the CAC. Part F of the Companies and Allied Matters Act 2020 (sections 823 to 850) deals with something different: incorporated trustees, where the trustees of a community or association are registered as a corporate body. It covers communities bound by custom, religion, kinship or nationality, and associations with religious, educational, literary, scientific, social, development, cultural, sporting or charitable purposes. Whether it fits a family's investments is for a lawyer to say.
The Trustee Investments Act (Cap T22) sets out investments that trustees may make under its powers, subject to any consent or direction the trust instrument requires. For shares it sets limits on how much of a trust fund may be invested in them and in any one company, and conditions such as a record of dividends. A trust deed normally sets out the trustees' own investment powers, and your lawyer will say how the two fit together.
Opening a broker account for a trust
The account is opened by the trustees. The SEC's anti-money laundering regulations require a broker to obtain and verify the identity of those providing funds for a trust, including the settlor, and of those who can invest, transfer funds or make decisions for it, such as the principal trustees. Expect to provide the trust deed and identification for the settlor and each trustee; the broker's own checklist decides the rest.
Tax on trust income
The Nigeria Tax Act 2025 has a schedule on income from settlements, trusts and estates. Among other things, the income of a trust is treated as the settlor's own income where the settlor keeps a general power over its capital or income, makes use of the income, or can revoke the trust and take back control. A tax adviser can tell you how a particular deed would be treated.
Moving Shares You Already Own
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Putting existing shares into a company or a trust usually means transferring them out of your name to the new holder. That is a change of legal owner, handled through the broker and the registrar, and it can have tax consequences, including on any gain. Take advice before transferring anything.
The Succession Angle
When an individual shareholder dies, the shares form part of the estate and cannot be dealt with until an executor or administrator holds a grant of probate or letters of administration. Shares held by a company stay with the company when one of its owners dies; what passes through that person's estate is their stake in the company, under its articles. Shares held by trustees stay with the trustees, who carry on under the deed and are replaced as it provides.
Each structure has its own costs: setting it up, annual filings and returns, accounts, and professional fees for as long as it exists. Families weigh these against the points above with their lawyer and tax adviser.
Investing a larger sum in your own name? See how purchases of ₦1 million and more work, and what the fee comes to.
Private Investors →Frequently Asked Questions
Can a company open a CSCS account in Nigeria?
Yes. A company registered with the CAC opens a corporate account through a licensed stockbroker, which gives it its own CSCS account and CHN.
Does a family trust have to be registered with the CAC?
A private trust does not. Registration under Part F of CAMA 2020 applies to incorporated trustees, which is a different structure.
Are dividends received by a Nigerian company taxed again?
Under the old law they were generally not. The Nigeria Tax Act 2025 changed the wording, and how it applies to a particular company is a question for a tax adviser.
Who gives instructions on shares held by a company?
The signatories named in the board resolution given to the broker. Changing them needs a new resolution.
Important disclaimer. This article is for general information and educational purposes only. It does not constitute financial advice, investment advice, or any recommendation to buy, sell, or hold any security. The value of investments can fall as well as rise. You should seek independent regulated financial advice before making any investment decision. Shares Saver does not provide financial advice.
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