How to Register a Business Name in Nigeria
Registration of business name in Nigeria is done by an autonomous body named Corporate Affairs Commission (CAC) vested with the business of regulating and managing companies in Nigeria. This article covers the steps and the requirements necessary to get a business name registered.
Registration is crucial part of establishing a business in Nigeria because it confers legal status on the business itself different from the proprietor. There are a number of steps and requirements that a proposed business name must pass to become recognized as valid and legal business name in Nigeria.
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Registering business names goes beyond the subject. It is all inclusive efforts that goes into registering a business as legal in Nigeria. It extends to the nature of business, address of the business, proposed date the business will start operation etc.
The article provides a well thought out answers to two basic questions pertaining to business registration, viz; why should business be registered in Nigeria and how to register business name.
See also: How to Register an NGO in Nigeria
Why Should a Business Be Registered in Nigeria
Many a small business owner undermine the essence of registering their individual business due to variety of reasons, which include but not restricted to; the obligation of paying tax, avoidance of extended process of registration. The benefits of registration outweigh the disadvantages encountered, some benefits of which are explained below.
1. Legal Recognition
Legal recognition is imputed upon the issuance of Certificate of Incorporation to the business owner. The identity of a separate legal entity is conferred upon the business. The implication is that it separate business owners from the business itself. In a case of liability or loan with default in payment, the owner of the business will not the held liable, but the business itself.
2. Easy accessibility to Loans
To further the subject under discussion, registration of business makes easy, the securing of loans. It’s common place that business necessarily needs source of funds, where banks can be the external resort. However legal documents that attest to the registration of the business under the appropriate authority must be presented to banks to qualify for loan.
3. Benefits from investors and Lenders
Additionally, registered business becomes eligible for benefits from investors or lenders. No investor will accept the offer to invest in a business that is not registered because it does not speak confidence in the business.
Be aware that registration of business does not outrightly confer any special right or privilege to carry on the business itself. For instance, if I register a pharmaceutical company, the registration does not offer the right to practice pharmacy. I need to earn license to practice from relevant professional body.
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Steps to Registering a Business Name in Nigeria
While registering business name promises multifaceted benefits, the acknowledgment of these benefits should inspire the decision to register a business name. Thus, to registering business name in Nigeria a number of steps and stages must be passed to qualify for a business recognized under law.
See also: How to Register a company in Nigeria
1. Purchase of Availability Check and Reservation of Name Form
Purchase Of ‘Availability Check And Reservation Of Name Form’ opens the process. No two businesses can have the same or identical name in Nigeria, recognized by the provision of Company And Allied Matters Act 2020(CAMA), section 30(1).
To comply with the demand of law, business owner chooses a name and checks for availability by conducting a ‘PUBLIC SEARCH’ that can be done on CAC registration site. The public search mechanism searches through the database of the institution to validate the availability of the business name and checks for the monopoly of business name.
The public search system may not suffice, therefore, the need to await confirmation and approval from the CAC that the name is not previously owned.
2. Application for Registration of Business Name
Thereafter, the proprietor goes ahead to complete pre-registration form by filling in all necessary information. If the business name is approved, it will be reserved for 60 days when the owner is obliged to complete registration.
The business owner applies for registration of the approved business name. This stage requires information such as:
- The approved business name
- General nature of the business
- Proposed date of commencement of business
- Passport sized photography
- ID of the directors and shareholders
- Stamp duty and statutory fees
- Incorporation certificate and company resolution (where a different registered company will be a subscriber or shareholder to the company undergoing registration processes)
- Upload of documents and Payment of necessary fees, such as filing fee and any other necessary payment.
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3. Payment for Filing Fee
Registration will not be processed without payment. In fact, files will not be reckoned by the CAC without prior payment. The official filing fee for registering business name is N10,000 (Ten thousand naira only), although fees are not uniform for distinct business type.
4. Documents Upload and Issuance of Certificate
After the receipt of payment has been confirmed, procession to upload necessary documents is granted by the CAC. This process may take seven days for completion where there is no problem with the scrutinization of the documents before notifying the proprietor of a complete process of registration.
List of Documents Needed to Complete the CAC Registration Process
Generally, here is a list of the documents you need to provide during the CAC registration process:
- The proposed name of the business.
- The objectives of the business.
- The business memorandum and articles of association.
- Address of the business office
- Two passport photographs of every director
- Names and addresses of proprietor or owner
- Statutory declaration of compliance by a legal practitioner.
- Name and address of the company secretary
- Filing with the Federal Inland Revenue Service for the purpose of tax.
- Form CACC 1, reservation and availability of Name.
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Conclusion
Summarily, the benefits of registration exceed the stress that goes into it. Registration of business name in Nigeria follows, relatively, simple steps. These steps if duly followed gets a business name successfully registered.
