Business Name Registration in Nigeria can now be likened to some primary school rhythms; every business now craves to be put in papers. In this post, you will learn the benefits of this business registration in Nigeria, with several other reasons why you have to take the bold step.
Just yesterday, the idea of doing business in Nigeria was perceived to be archaic and local. The market was relegated to the uneducated, illiterate and average Nigerian who merely sought for a way to survive. Today, the company/entrepreneurial world has taken over the economy.
I mean, the top wealthiest people in Nigeria today, are entrepreneurs. It is evident that the economic meltdown and inability to continue to rely on the Federal Government for jobs and survival pushed a lot of Nigerian to look inwards and become productive and solution providers in exchange for the needed cash.
Under the company and allied matters Act, an Act regulating businesses in Nigeria, posit that exchange of goods and services for money can be carried out either as a business or as a company.
That means there is a difference between a business and a company. This work seeks to erase the concept that only a company needs to be registered, and it goes further to dig out benefits for Registration of a business name.
What is the difference between a business name and a company?
- A business name can only be registered as an enterprise. In contrast, a company can either be registered as a public limited liability company, a private limited liability company, company limited by guarantee etc.
- A single individual can undertake the Registration of a BUSINESS NAME, otherwise known as an enterprise but not a company. A Company must have at least two members of full capacity.
- A Business owner can register his business name after commencing business, but a company must be incorporated before the commencement of business.
WHO CAN REGISTER A BUSINESS NAME?
Having discussed the differences between a company and a Business name, you will agree with me that the generally accepted notion that Registration is tagged with companies alone is not proper. May I add here that when it comes to companies, we talk of incorporation and not Registration?
That means if you are trading in anything, especially on an informal level, the law still creates a platform so you can register your new business name and enjoy some of the benefits of an incorporated company.
What product or service do you deal with? Why do you feel it’s not worth putting in papers? Your new business does not need to yield turn over in millions for you to have it registered.
I would recommend that the mere fact that you engage in an exchange of goods and services for money should prompt you to register your business. (I’m sure you are wondering why you need to register a small or petty business as you would call it).
BENEFITS OF REGISTRATION OF A BUSINESS NAME OVER INCORPORATION OF A COMPANY.
- Registration of a NEW BUSINESS AS BUSINESS NAME is advantageous for a sole proprietor (one-person business).
- It is cheaper to register a BUSINESS NAME for your new business than to incorporate a company.
- The procedure for Registration of new business as a BUSINESS NAME is more straightforward and less tedious than incorporation.
- When a new business is registered as a business name, it is not required to have formal meetings and rigid corporate governance meetings like companies that are incorporated.
Benefits of Business Name Registration in Nigeria
There are so many reasons we harmer on the needs to get every functional business registered in Nigeria; for startups and already existing businesses. This importance includes the following:
- ACCOUNT OPENING
This is one of the great benefits of registering your new business. This means that the bank account for your business can bear your BUSINESS NAME, and these brands your business on a whole formal level.
For instance, if you deal in electronics and your business name is Emeka and Sons Electronics. Still, this name is not registered, you can’t open an account for your company with that name; this is because it is not recognized by law as an artificial entity.
On the other hand, if you have registered with the corporate Affairs commission, you can open an account with your business name. This helps you to separate business money from personal income and makes your business professional, and more reliable to your customers.
- QUICK ACCESSES TO LOAN
As a business owner, there may be a time when your capital isn’t enough to fund a particular business development or expansion, and you are left with the only option of applying for a loan from a financial institution.
If you are given an audience in any of the financial institutions, the procedure will commence with whether your business name is registered. Reality is no banking institution will want to fund any un-registered business enterprise.
- BUSINESS INCENTIVES
This is also a benefit business registration enjoys. When you register your business name, you stand a chance of growing your business through the various business incentives extended to Micro, Small and Medium Enterprises (MSMEs) by the Federal Government.
- A UNIQUE IDENTITY
Registration of your new business name makes your it unique as nobody can bear such business name subsequently. Before the Registration, Corporate Affairs Commission (CAC) searches to ensure that the proposed name isn’t already in use.
Once the name is confirmed unencumbered, it is reserved for you and once registered no other business can use that name while you are using it. For instance, nobody will be able to use Emeka and sons Electronics if it is registered.
- CERTIFICATE OF REGISTRATION:
You will be issued a certificate of registration by the appropriate Government Agency. In Nigeria, the Federal Government of Nigeria issues such documents through the Corporate Affairs Commission (CAC). This raises a presumption of Registration.
DEATH OF THE OWNER OF THE COMPANY DOES NOT LEAD TO THE DEATH OF THE COMPANY. When you register a company, and proper structures are in place, even when the owner is no more, the company can still be functional except the owner desired otherwise.
- ABILITY TO SUE IN THE BUSINESS NAME. When a business is registered, the business owner can sue and be sued in its business name although it must be written as “trading under the name and style of Emeka and sons Electronics “.
The importance of Business Name Registration in Nigeria cannot be overemphasized. Its advantages spill over superseding any disadvantages if any and sometime later, you will be glad you registered your business today.