Registering your business name can boost your business in many ways as an entrepreneur.
Many people claim to have a business but no name not to talk of registering the business name. The identity of anything or anyone lies in the name accorded to that person or thing. This also applies in the establishment of a business. Having a business name defines your identity, and provides clarity. The first impression your business has lies in the name.
Hence, you must be deliberate in choosing a name.
In Nigeria, having a name does not hold water if that name is not registered under the Corporate Affairs Commission (CAC). However, registration of your business is one of the things to consider before starting a business because it accounts for credibility and authenticity. Also, you should consider whether to incorporate a company or to operate as a registered business name.
Here in this article, you will understand how to register your business name, why you need to, and where you can register your business in Nigeria.
CORPORATE AFFAIRS COMMISSION (CAC)
Corporate Affairs Commission is a body of the Nigerian Government responsible for the regulation and management of companies and businesses in Nigeria. Introduced in 1990 with the passing of the Companies and Allied Matters Act. Also, a chairman closely assisted by the Registrar General/CEO is in charge of the Corporate Affairs Commission.
The inception of the Corporate Affairs Commission in Nigeria has helped maintain order in the business world. Every individual has the opportunity to get legal backup for their businesses, and enjoy the benefits it comes with.
Things you need to do before having your business name registered.
CHECK FOR AVAILABILITY OF NAME/RESERVE A NAME
This is the first step to registering your business name. Because we live in a world where coincidences are bound to happen, it is wise to conduct a search to confirm the availability of your proposed business name before registration.
The Corporate Affairs Commission has a website that allows individuals to search for name availability without any cost.
After deciding your name, search the website to confirm that there is no pre-existing business with the same name, then the incorporator must conduct an official search using the CAC online portal. This search costs N500. Also, you can reserve a business name online for 90days or walk into any CAC office within the country and obtain Name Reservation form.
APPLY FOR REGISTRATION
After the approval of your business name, and reservation is done, the incorporator submits the duly completed statutory forms.
The incorporator must attach two passport-sized photographs with the form. If your company is in partnership, then you must attach each applicant’s photographs with the form. This can be completed online by filling the following information:
- Approved name of the business
- Address of the business
- Nature of the business
- Name, Address, Occupation and other details of the proprietors of the business (if in partnership)
- Signature of the proprietors.
Note: if the name does not get approved, then you must obtain another reservation form and re-submit alongside 2 business name options and wait for approval.
STEP-BY-STEP ONLINE PROCEDURES
- Visit the website
- Check the availability of a proposed company name (you could reserve a name too)
- Complete pre-registration form –CAC1.1 (using Company Registration Online Portal)
- Pay filling and stamp duty fees
- Prepare the signed scan copy of your pre-registration documents for upload as follows:
Memorandum and Article of Association (MEMART).
Recognized form of identification for Director(s) and Secretary.
Evidence of payment to CAC
- Upload the scanned documents for processing.
- Submit the original copies of the documents uploaded to the CAC office you selected in exchange for your certificate and Certified True Copies of the documents.
PAYMENT OF FEES
After completion of application forms, you are expected to pay a stipulated fee for business name registration. The entire process of registration takes 1-2 weeks. You can go alone for the registration, you do not need a lawyer. However, if you want to register a company, you need a lawyer or any accredited agent. Here is a breakdown of application fees:
– Reservation of Name N500
– Business Name Registration Form N250
– Fee for Registration of Business Name N10,000
RULES IN REGISTRATION
Despite how easy it is to register a business name, there are some restrictions you need to take note of. They include:
- The name must be void of terms like Federal, National, State, Municipal, Co-operative, etc.
- The name should be unique – 100%.
- Names must not contain terms that would violate any existing trademark or business name registered in Nigeria unless consent is obtained from the supposed trademark or business.
- The name must not be contrary to public policy.
- Names must not be offensive to public policy.
- The name must not be abusive.
BENEFITS OF REGISTERING YOUR BUSINESS NAME
Having a business idea is not enough guarantee for owning a business. Your business lacks basic recognition without business name registration.
Despite the cost, there are lots of benefits accompanied with business registration.
Business name registration is like first-come-first-serve. You are at advantage by having your company registered with the local, state or federal government. This is to ensure your company name is not registered by someone else. You should always have it in mind that if your company name is “Nelson Ede Ltd” and someone else has already registered “Ede Nelson Ltd”, you can’t register “Nelson Ede Ltd” because the name is similar to “Ede Nelson Ltd”. So always strive to register your company name before someone else snaps it from you.
Some benefits of registering your business name include:
- Certificate of incorporation
- Good reputation with customers
- Better arrangements with suppliers
- Easy access to a company bank account
- Legal protection
- Easy means of getting funds
- Hiring employees
- Business trips to other countries
Certificate of Incorporation
After registration, you will receive certificate of incorporation by the appropriate government agency. In Nigeria, the Federal Government of Nigeria issues through Corporate Affairs Commission (CAC) – the government agency empowered to register companies and issue certificates.
Reputation With Customers
Business registration helps you build reputation especially with customers and clients you’ve never done business with before. It depicts authenticity.
Also, registering your business gives your potential customers confidence that they are dealing with a reputable organization.
If your business is online based and you have the option of customers paying to your company account before you can ship the goods or services, having a registered business, and a corporate account gives more credibility and trust.
Better Arrangements with suppliers
A registered business also makes you eligible to receive supplier discounts that you would not normally receive as an unregistered operation.
Suppliers commonly reserve wholesale rates for business owners who can show official paperwork from the state. Also, if you plan to try to get government contracts for your company, a business registration is one of the first requirements.
In addition, registering your business name makes you eligible to send business proposals. You have a better chance of partnership if your business is registered.
Easy access to a bank account
This is another benefit registering your business name.
However, it is not appropriate to use a personal bank account for your business transactions. Presenting your business incorporation certificate to bank officials quickens the account registration process for your business because you have proof of ownership.
You can open a corporate account in your company name. Having corporate account give you more credibility and trust from your customers, bank, suppliers and other business partners.
When you register your business as Limited Liability Company, you are a different entity from your company. You also get legal liability protection. If you incorporate, you will not be held personally responsible for certain accidents and other liabilities.
If you obtained loan and you defaulted in payment, your bank will not seize your property except the company asset because you are protected from such incidence.
When your company is registered, accessing loan is very easy compared to personal loan application. With your documents, you are going to have to prove that you’re actually a business. This gives credibility and trust and also ensures confidence, and your investors or lenders will see that they are dealing with a company and will be willing to do lend you money if other terms and conditions are made.
Also, your ability to attract investors, and raise money for your company will be easier. No one invests in a company or business that is not registered – with no formal structure. So registering your business gives you an advantage over a non-registered business.
Furthermore, you can raise money through equity financing if your business is registered. Equity financing involves the trading of shares in your to prospective shareholders, inventors or venture capitalists.
In equity financing, the money raised is not refunded and it incurs no interest. The company pays the dividend to the shareholders, that is where profit is made.
Raising money is very essential for the growth of your business, and this will be made easier by registering your business.
This is the best part of registering your business.
Before starting a business, ask yourself the kind of company you want to build. Is it a company or business that can continue even when you are dead or company that dies with you? The answer is pretty obvious, you will definitely want a company that will continue even when you are not around.
Also, registering your business serves as an immunity even if you’re dead or you become incapacitated, your business continues especially when you have the right structure in place.
A registered business can employ full-time employees and pay them salaries and other benefits.
With registration, you have the opportunity to seek for intern especially from National Youth Service Commission or Sure-p, which will not cost you a lot in terms of paying salaries and incentives or sometimes, it will cost you nothing in the case of Sure-p.
Business Trip to Other Countries
Another great benefit of business registration is that you can easily obtain visa and travel to any country for business purposes.
Every country welcomes foreign investors who have interest in doing business in their country because such good investments will add value to their economy.
In addition, registering your business name helps you in creating public awareness and advertisements. Your name will be on every billboard, social media platform, TV or radio broadcast.
That way, it is easy for customers to identify you anytime, anywhere.
Read Also: How To Write a Convincing Business Proposal
These are some benefits of business registration that you stand a chance of enjoying by just registering your business, which is not a difficult task. Do not let that business idea die off or allow someone else live your dreams.
CHANGE OF NAME
In a case where you have your company or business registered already but you want to change the name, it is possible too.
Anyone is allowed to change the name of his/her business in Nigeria. However, anyone who wants to do a change of business name must follow a stipulated process.
A step-by-step procedure for changing your business name:
- Check for the availability of your desired name with the help of CAC name search, if it’s available then reserve it until the whole documentation and payment procedure is complete. This you have to do with utmost urgency.
- If the CAC Nigeria name search confirms that the desired name is available then prepare an application stating the reasons for the change in business name along with the signature of two directors.
- State a special resolution explaining the desired change along with the signature of two directors.
- Submit the original certificate of incorporation of your formal registered name for cancellation immediately.
- The next step is to do the payment of filing fees.
- Check whether the annual returns are up to date.
- Get the stamped memorandum and articles bearing the new name.
Documents Required for Changing a Business Name in Nigeria
- A board resolution stating the approval of name change.
- Three copies of memorandum and articles of association using the new business name.
- The original certificate of incorporation.
Cost of Change in Business Name Registration in Nigeria
- Reservation of business name N500
- Filing of notice regarding the change of business name N5,000
- Filing of annual return N1,000
- Delayed annual return penalty N100 per day
Go register that business, and begin your journey to a successful business life.