Corporate documents that are not duly stamped in accordance with Nigerian law can bring a company's banking and loan facilities to a sudden halt. Under the Stamp Duties Act, an unstamped instrument is not admissible in evidence for any purpose and may be rejected outright by financial institutions when presented for transactions.
Banks and other lenders routinely require stamped board resolutions, loan agreements, debentures, share transfer forms, and other corporate instruments before processing credit facilities or even maintaining operational accounts. When a document lacks the required stamp duty, the bank is within its rights to decline the instrument, which can result in frozen accounts or stalled loan drawdowns at critical moments.
The Federal Inland Revenue Service has stepped up enforcement of stamp duties compliance in recent years, and financial institutions have become more diligent in verifying that documents presented by corporate customers bear the appropriate duty stamps. This applies not only to new agreements but also to older instruments that may need to be produced for ongoing banking relationships.
For manufacturing and industrial companies relying on factory loans and working capital facilities, the consequences are especially severe. A single unstamped document in a loan package can delay or derail the entire financing arrangement, potentially disrupting production schedules and supply chains.
Companies are advised to conduct regular audits of their corporate documents to ensure all instruments have been properly stamped and that the correct duties have been paid. Proactive compliance helps avoid the operational and financial disruptions that can arise when an unstamped document is uncovered during a bank's due diligence or account review process.
