Introduction
Establishing a university in Nigeria requires adherence to a wide range of legal considerations, from regulatory requirements to compliance with educational standards. It is, therefore, crucial to choose the appropriate legal structure for establishing a university in Nigeria. Typically, universities are established as either private or public institutions. Private universities are owned and managed by private individuals or organizations, while public universities are established and funded by the government. This legal structure ensures compliance with corporate governance requirements and provides liability protection for the university’s management. This article outlines the key legal aspects involved in the process, providing a comprehensive guide for prospective university founders.
Registration with the Corporate Affairs Commission (CAC)
As mandated by the Companies and Allied Matters Act, 2020 (CAMA), every business must be registered with the CAC, and the same applies to a university and other educational institutions. A University may be registered as a Company Limited by Guarantee, a Company Limited by Shares or as Incorporated Trustees.
In a public notice released by the CAC on the 6th of April, 2021, the CAC informed potential founders of Universities that Universities must be registered as Companies Limited by Guarantee[1]. Whilst the CAC has the power to proffer guidelines on the effective registration of Companies, the firm legal opinion is held, that the public notice released by the Commission, as referenced above, is inadequate to dictate the legal structure to be adopted by promoters for the registration of a university. The CAMA provides in Section 26, that “where a company is to be formed for the promotion of commerce, art, science, religion, sports, culture, education, research, charity or other similar objects, and the income and property of the company are to be applied solely towards the promotion of its objects, the company shall not be registered as a company limited by shares, but may be registered as a company limited by guarantee.”
The intention of the promoters of the University in the aspect of profit making and the use of the profit being made is what determines the legal structure to be adopted for the registration of the university. Put more clearly, if the promoters of the University intend to make profit, and that profit is transferred directly to its members, then the University may be registered as a Company Limited by Shares[2]. Also, if the promoters intend to make no profit from the University, then it can be registered either as a Company Limited by Guarantee or as Incorporated Trustees[3].
Furthermore, the NUC in its Guidelines for Establishing Institutions of Higher Education in Nigeria recognises that a University can be owned by either an Individual, an incorporated company or an Association[4].
Approval from the National Universities Commission (NUC)
The regulatory body governing tertiary institutions in Nigeria is, primarily, the National Universities Commission (NUC). The NUC regulates the establishment, accreditation, and operation of universities in Nigeria[5].
Prospective university founders must submit a formal application to the NUC, providing detailed information about the proposed institution, including its mission and vision, curriculum, faculty qualifications, infrastructure, and financial viability. The NUC evaluates the application based on predefined criteria and grants approval if the proposed university meets the necessary standards. The procedure for obtaining approval from the NUC is provided in the NUC’s Guidelines for Establishing Institutions of Higher Education in Nigeria[6].
Land Acquisition and Title
Acquiring suitable land for the university campus is a fundamental aspect of the establishment process. Prospective university founders must ensure that the land acquisition process complies with relevant laws and regulations governing land use and ownership in Nigeria and the guidelines for establishing institutions of higher education in Nigeria as set out by the NUC.
Every land within the territory of each state is vested in the governor of that state, who holds such land in trust for the benefit of the citizens[7]. Therefore, obtaining a Certificate of Occupancy (C of O) or a valid leasehold title from the appropriate state government is essential to secure the land for the university campus.
The NUC specifies in its guidelines in accordance with the provision of the Education (National Minimum Standards and Establishment of Institutions) Act for establishing institutions of higher education, that a University must have a minimum land area of 100 hectares of land, and should make sure that there is the availability of municipal services, including water, transportation, private accommodation, communication and so on[8].
Academic Programs and Curriculum
Developing a robust academic program and curriculum is essential for obtaining accreditation from the NUC. The curriculum should align with the NUC’s Benchmark Minimum Academic Standards (BMAS) for various disciplines and incorporate contemporary teaching methodologies and research opportunities[9].
The NUC has the power to accredit a university’s academic program before its commencement and even afterwards to ensure its compliance with quality standards and facilitate recognition of degrees awarded by the institution.[10].
Financial Management and Sustainability
Ensuring financial sustainability is critical for the long-term viability of the university. Prospective founders must develop a comprehensive business plan outlining the sources of funding, revenue projections, and budgetary allocations for academic and administrative expenses. In preparing this business plan, the prospective founders are required to provide a concrete and guaranteed source of financial support to the University to the tune of N200,000,000 (Two Hundred Million Naira)[11].
In addition to tuition fees, universities in Nigeria can generate revenue from research grants, philanthropic donations, and income-generating ventures such as consultancy services and commercialization of intellectual property[12].
Conclusion
In conclusion, setting up a university in Nigeria entails navigating a complex legal landscape governed by various laws, regulations, and institutional frameworks. By carefully addressing the legal considerations outlined in this article, prospective university founders can establish a reputable institution that contributes to the advancement of education and knowledge in Nigeria.
[1] Public Notice by CAC dated the 6th of April, 2021 and accessed at https://www.cac.gov.ng/public-notice-on-registration-of-companies-for-the-purpose-of-running-university-education/ on February 12, 2024 at about 1pm.
[2] Section 21 of the CAMA, 2020
[3] Section 823 of the CAMA, 2020
[4] 19A of the NUC’s Guidelines for Establishing Institutions of Higher Education in Nigeria
[5] Section 4 of the NUC Act, 1974
[6] “Guidelines for Establishing Institutions of Higher Education in Nigeria” by the NUC accessed at https://www.nuc.edu.ng/project/scopu/ on February 12, 2024 at about 1:22pm
[7] Section 1 of the Land Use Act, 1978
[8] Criteria 5b of the Criteria for Establishing an Institution of Higher Education accessed at https://www.nuc.edu.ng/project/scopu/ and Schedule 5 of the Education (National Minimum Standards and Establishment of Institutions) Act, 2004, accessed at https://placng.org/lawsofnigeria/view2.php?sn=126 on February 12, 2024 at about 1:43pm.
[9] “Benchmark Minimum Academic Standards for Undergraduate Programmes in Nigerian Universities” by the NUC dated November, 2014 accessed at https://nuc.edu.ng/wp-content/uploads/2015/09/Education%20Draft%20BMAS.pdf on February 12, 2024 at about 2:40pm.
[10] Ibid
[11] Schedule 4c of the Education (National Minimum Standards and Establishment of Institutions) Act, 2004
[12] Page 10, “Alternative Modes of Financing Higher Education in Nigeria and Implications for University Governance” by Professor A. I. Odebiyi and Dr. Olabisi I. Aina accessed at https://web.archive.org/web/20110707184608id_/http://rc.aau.org/files/odebiyi.pdf on February 12, 2024 at about 3:39pm.