Cap Table Software for Nigerian Startups: The CAMA 2020 ESOP Problem Nobody Warns You About

A cap table tool built for Nigeria has to solve a problem that doesn't exist in Delaware: there is no legal concept of an unissued, reserved option pool. CAMA 2020 abolished authorised share capital, so every share on a Nigerian company's register must already be allotted to a named holder — which means the standard "carve out 10% for the ESOP pool" move that every US cap table tool assumes simply doesn't map onto Nigerian law. Startups get around it with an Employee Share Trust, treasury shares, or just-in-time issuance at exercise, and the tool tracking their equity needs to know the difference.

Search "cap table software Nigeria" and the results are the same global shortlist every market gets — Carta, Qapita, Eqvista — none of which mention CAMA, NITDA, or the Startup Act. Here's what actually governs equity for a Nigerian startup, and where a generic tool gets it wrong.

Why "reserve a pool" doesn't work anymore

Before 2020, Nigerian companies operated with an authorised share capital ceiling — a number of shares the company could issue over time, with unissued shares sitting in reserve, conceptually similar to how a Delaware option pool works. CAMA 2020 removed that concept entirely. Under the current regime, share capital is defined as the shares actually issued, and companies existing before the law took effect had to formally dispose of any unissued shares in their register. There's no notional bucket of shares waiting to be granted. A share either exists, allotted to an identifiable person, and recorded with a board or shareholder resolution and a CAC filing — or it doesn't exist at all.

That single change is the reason a Nigerian founder can't just copy a Carta-style ESOP pool setup. Three structures have emerged to replace it, and they're not interchangeable:

• Employee Share Trust or SPV. The company allots a block of shares to a trust — managed by a founder, a staff representative, or a special-purpose vehicle — which holds them on behalf of future employee beneficiaries until options vest and are exercised. This is the closest functional equivalent to a Western option pool, but it means the trust itself is a shareholder of record on the cap table, and the mapping from "shares held in trust" to "shares an individual employee has actually earned" has to be tracked somewhere other than the statutory register.
• Treasury shares. The company buys back its own shares under CAMA section 186(d), which explicitly permits a share repurchase for the purpose of an employee stock option scheme, and holds them for reissue when options are exercised. This requires a formal buy-back and reissue process, not a spreadsheet adjustment — the shares leave circulation, then come back onto the register with a new holder.
• Just-in-time issuance. No shares exist for the ESOP until the moment an employee exercises a vested option. The company allots and issues new shares at that point, which keeps the register clean at every moment in between but pushes all the paperwork — board resolution, CAC filing, register update — to the exercise date instead of the grant date.

A cap table tool that doesn't distinguish these three will either misstate who currently holds shares (if it treats a trust's block as "unallocated") or misstate dilution (if it doesn't model treasury shares as temporarily out of circulation).

The register of members and minimum share capital, in practice

A Nigerian private company limited by shares needs a minimum issued share capital of ₦100,000, and — unlike the old regime — that capital must be fully paid up and fully allotted at incorporation, not just authorised on paper. Every company keeps a statutory register of members at its registered office, and any change — a new allotment, a transfer, a buy-back — has to be reflected there and, for most changes, filed with the Corporate Affairs Commission (CAC).

This is the part a spreadsheet handles badly under pressure. The register of members is a legal document, not an internal reference — if it disagrees with what a term sheet says about who owns what, that's a diligence flag, not a formatting issue.

The Startup Act label adds a compliance layer, not a new share type

The Nigeria Startup Act 2022 doesn't change how shares work, but it does add a reason to know your cap table precisely. To get a Startup Label from the National Information Technology Development Agency (NITDA), a company must be a CAC-registered limited liability company no more than ten years old, working on a digital technology product or process, with at least one-third of its shareholding held by Nigerians as founders or co-founders. Labelled startups get a three-year corporate income tax holiday — extendable by two more years against performance benchmarks — full deduction of Nigeria-incurred R&D spend, and exemption from Industrial Training Fund contributions. Investors get a 30% investment tax credit on capital deployed into a labelled startup and a capital gains tax exemption if they hold the investment at least 24 months.

None of that changes a single share class. It does make "who owns what, and what's their nationality" a question you may need to answer precisely for a NITDA renewal, not just a cap table export. A register that's approximately right becomes a liability the moment a label review, or an investor's tax credit claim, depends on the exact number.

Stock options are taxed as income, not capital gains

There's no dedicated national statute on the taxation of employee stock options in Nigeria, but the Lagos State Internal Revenue Service closed the gap in 2017 with a notice treating the value an employee receives — the difference between what they pay for shares and fair market value at the time — as taxable income, assessed at exercise. That's a meaningfully different design constraint than a US ISO, where the tax event and its treatment depend on holding periods and can be capital gains. A Nigerian option scheme that doesn't model this will surprise employees with a tax bill they didn't plan for at the exact moment they thought they were finally getting equity.

Why Nigerian startups still end up on a Delaware cap table

None of the above stops the majority of venture-backed Nigerian startups from eventually incorporating a Delaware holding company above the Nigerian operating entity. Reported figures put roughly 80% of Nigerian startups that raise outside capital in a Delaware structure eventually — higher than the wider African average. It's rarely about Nigerian law being inadequate; it's that a US-based lead investor's counsel would rather underwrite a cap table with decades of Delaware case law behind it than build a first opinion on a Nigerian Employee Share Trust structure they've never reviewed before. We go deeper on what actually breaks in that transition — exchange ratios, pool reconstitution, running two entities on one ledger — in our piece on cap table management after the Delaware flip.

Either path — staying Nigerian or flipping — lands on the same requirement: a register that can be trusted by name, share count, and date, because an investor's lawyer, a NITDA reviewer, or an FIRS auditor will eventually check it.

Where Govy fits — and where it doesn't

Govy's cap table runs on an event-sourced, append-only ledger, so a trust or SPV holding shares on behalf of future employees is a shareholder like any other — its allotment, and every later transfer out to an actual employee, is a logged event, not a spreadsheet cell someone edited. Govy's treasury module — buy-back lifecycle, reissue from treasury, retire shares — maps directly onto the treasury-share ESOP route CAMA 186(d) actually permits, rather than treating a buy-back as an afterthought. The shareholder registry doubles as the register of members you need to keep current regardless of which ESOP structure you use.

To be direct about the boundary: Govy's jurisdiction-aware legal template pack currently covers Saudi Arabia, the UAE, US-Delaware, and the UK — it doesn't yet generate a Nigerian Employee Share Trust deed, a CAC allotment filing, or a NITDA label application. Those still need Nigerian counsel. What Govy tracks is the ownership and governance record once those documents exist — across a Nigerian entity, a Delaware parent, or both at once — plus the fundraising CRM and tracked data room a startup needs regardless of which structure holds its equity. For the ESOP side without lawyers drafting every grant from scratch, our breakdown of running ESOP without a full legal team covers the parts that generalize across jurisdictions.

See how Govy tracks equity and governance across more than one entity at govy.tech.

FAQ

Can a Nigerian startup reserve an option pool the way a US startup does?

No. CAMA 2020 abolished authorised share capital, so there's no such thing as an unissued share sitting in reserve — every share on a Nigerian company's register has to be allotted to a named holder. A Nigerian startup gets the same economic effect through an Employee Share Trust or SPV that holds a block of allotted shares on behalf of future hires, through treasury shares bought back and held for reissue, or by issuing shares only when an option is actually exercised.

Does the Nigeria Startup Act 2022 change how startup equity is structured?

Not the mechanics of shares or vesting, but it adds a compliance layer for labelled startups. To get a Startup Label from NITDA, a company must be a CAC-registered LLC under ten years old with at least one-third Nigerian shareholding among its founders — a fact your cap table needs to track accurately, since the label carries a three-year corporate income tax holiday (extendable by two) and a 30% investment tax credit for investors.

Are employee stock options taxed in Nigeria?

There's no dedicated federal statute on stock option taxation, but the Lagos State Internal Revenue Service issued a 2017 notice treating the discount an employee gets on shares — the gap between what they pay and fair market value — as taxable income at the point of exercise. Most Nigerian startups model this as a benefit-in-kind rather than capital gains, which changes when an employee should actually exercise.

Do Nigerian startups need to flip to a Delaware C-corp to raise venture capital?

Most that raise from international VCs eventually do — reported figures put it around 80% for Nigerian startups specifically, higher than the African average. It's not a legal requirement inside Nigeria; it's a preference from US-based lead investors whose counsel would rather underwrite a Delaware cap table with settled case law than a Nigerian share register they haven't seen before.