The benefits of registering a business name goes without mention in Nigeria as an investor will only be interested in a company that is duly registered and certified by the relevant authorities. Thus, registering a business makes it more eligible for certain benefits either from investors or government.
As an entrepreneur, business name registration is one of the essential requirements that would give you a head start. However, the process of business name registration was quite cumbersome in the past such that it would take several days and alot of paper work to eventually get things sorted.
In Nigeria, the institution that is saddled with the responsibility of business registration is the Corporate Affairs Commission (CAC). The Corporate Affairs Commission is a body established in 1990 under the Companies and Allied Matters Act. This body is duly charged with the responsibility of regulation and management of companies in Nigeria.
How much is business name registration in Nigeria?
1.) Registration of a private company with an authorized share capital of N1m or less, costs N10,000.
2.) Registration of a private company with a share capital of more than N1m and up to N500m costs N5,000 for every 1m shares of the company.
3.) Private company registration above N500m authorized share capital costs N7,500 for every 1m shares of the company.
4.) Public company registration for the first 1m share capital or fewer costs N20,000
5.) Registration of company not having a share capital costs N20,000
How to Register a Business Name in Nigeria
Below are the easy steps required to take in registering a business name in Nigeria:
1.) Choose a Business Name
Choosing a business name can be quite tasking sometimes. Your business name needs to be identified with a brand name. It is important that you pick a name that is relevant to your business.
You should do a quick search on the internet on the names you choose and have up to three backup plans. This is to ensure you have at least chosen the names that are not in use to the best of your knowledge.
You can also use a platform like Namelix, a digital tool to help with finding a name that fits your business.
2.) Submit Your Chosen Business Name To The CAC For Name Reservation
In the past, business name reservation at the CAC took days before it came back with a result. Today, it only takes the same day if you submit your request before 5 pm and it costs just NGN500.
3.) Register Your Business Name
Once you wrap up with the name reservation, you can then proceed to the registration of your business name proper. Using the online registration portal, you will have to complete a pre-registration form (CAC-BNo1).
3.) Pay For a Filing Fee
Upon payment of the filing fee, you will receive a receipt of payment. Note, you can make Payment directly from the website portal or straight to the bank. The cost of business name registration depends on the type of company you are trying to register.
4.) Prepare Your Documents For Upload
You will need to prepare a signed copy of the pre-registration documents and upload a scanned copy to the website for processing. The following are the requirements for registering a business name.
• Application form
• Filing fee receipt
• Means of Identification for the proprietors of the business.
5.) Submit the Original Copies of Your Documents
You will have to submit the original copies of documents uploaded in step 5 to the CAC office. You will do this in exchange for your certificate and the Certified True Copies of the documents.
Benefits of registering a business name in Nigeria
There are numerous benefits that comes with registering one’s business with the relevant government agencies but the focus here will be on the major benefits, viz;
1.) Certificate of incorporation.
Following your application to get your business registered by the relevant government agency(s) and the successful completion of the said registration, you will be issued with certificate of incorporation by the appropriate government agency.
In Nigeria, the Corporate Affairs Commission (CAC) which is a Federal Government agency, is charged with the sole duty of registration of companies and issuance of certificates of incorporation, as well as other allied matters.
Once your company is registered, it is regarded as a corporate entity that can sue and be sued in its business name.
2.) Business continuity.
No doubt, the aim of every business is to remain in business. Business registration is therefore a sure way to remain in business even after the death or incapacitation of the business owner, once there are able hands to take up with the management of the said business.
Registering your business therefore, offers you the opportunity of having a business structure that out lives you as the founder and not one that dies with you.
3.) Getting on record.
Once your business name gets on record by being registered with the relevant government agency, someone else can not register his business with same name or even a name so similar to yours.
This is therefore a major advantage of business registration and it saves your customers and target audience from the stress of having to distinguish between your business and that of your competitors with similar business names.
Thus, always strive to register your company name before someone else takes advantage of it.
4.) Account opening in your company name.
You get to open a corporate account in your company name once it is registered. This helps to give more credibility and trust to your business in its dealings with customers and other business partners and therefore serves as a great advantage of business registration.
5.) Legal liability protection.
Business registration offers you legal liability protection. This means that if you register your business as a Limited Liability Company, you are a different entity from your company and the law sees you as such. You will therefore not be held personally liable for certain liabilities if you incorporate,
For instance, if you default in the repayment of a loan from your bank, the bank can go ahead to seize the company asset(s) and not your personal properties as a result of the default in payment.
This is so because you’re protected from such and even similar incidents following the registration of your business.
6.) Reputation with customers.
Registering your business gives your potential customers the confidence and assurance that they are dealing with a reputable business organization. More so, it makes it easier to connect and build reputation with new customers and target market audience which you’ve not had a business transaction with before, which ordinarily would have been more difficult.
Also, if you operate an online based business which requires customers to make payments before delivery of goods or rendering of services, having a registered business name and an accompanying corporate account will give you the required trust and credibility in the business dealing.
7.) Accessing loans.
Accessing loans when your business is registered is comparatively easier as against personal loan applications. With your certificate of incorporation and other documents, you get to prove that you are actually a business and a registered one at that.
This helps to gain the trust and confidence of lenders and even investors who have interest in your business and are willing to invest in same, though other requirements may have to be met.
8.) Employment of workers
A registered business has the capacity to employ full-time employees and pay them salaries and other benefits. As a registered company, you as well have the opportunity to seek for intern especially from National Youth Service Commission or Sure-p that will not cost you a lot in terms of paying salaries and incentives or even cost you nothing in the case of Sure-p.
This increases your work force and invariably, your productivity even at the lowest cost possible.
9.) Business trips to other countries.
Another awesome benefit of business registration that goes without mention is that it affords you the opportunity to easily obtain Visa and travel to other countries for business purposes.
It should be noted that every country welcomes foreign investors who are interested in doing business in their country. This is usually so because of the perceived economic benefits from such investments.
The amazing benefits of registering a business name as explained above and more are clear indications that business registration is certainly the way to go.
With the above, I believe you’re already making plans to do the needful and get your business name registered without further delay.
We hope to hear from you in no time.