Corporate entities in Nigeria are required by law to ensure that certain documents evidencing transactions are duly stamped in accordance with the Stamp Duties Act. An unstamped corporate document can have serious consequences for a company's access to banking services and credit facilities.
When a company presents an unstamped document to a financial institution — whether as part of account opening documentation, loan applications, or security instruments — the bank may reject the document outright. In more severe cases, existing banking relationships can be disrupted, with accounts frozen and factory or equipment loans suspended pending compliance.
Under Nigerian law, an unstamped document is generally not admissible as evidence in court proceedings. This legal limitation means that a company seeking to enforce its rights under an unstamped agreement faces significant hurdles, and banks, mindful of this risk, are increasingly reluctant to act on documents that have not been properly stamped.
The Federal Inland Revenue Service has intensified enforcement of stamp duties compliance in recent years, and financial institutions have correspondingly tightened their internal controls. Companies are advised to review all material contracts, board resolutions, loan agreements, debentures and other charge documents to confirm that applicable stamp duties have been paid and the documents duly stamped.
