Business name registration in Nigeria is something that anyone who wants to start a reputable business must do.
There has been an increase in the establishment of small businesses across the country in recent years.
While formal business registration with the state or local government is not always required to complete business transactions, it is critical for a new entrepreneur for a number of reasons.
Many small business owners in Nigeria dismiss the need to register their companies, either out of ignorance or simply to avoid the time-consuming process of registering a company or paying taxes.
To start a business in Nigeria, you must register your business name with the Ministry of Trade and Industry.
It is a legal requirement and it will also help you identify your business as well as protect your brand name from being used by others.
The official registration of your company name with the Registrar General Office (RGO) will protect you from confusion and ensure that everyone knows who owns or uses the particular trademarked name so that they can do business with you without infringing on your rights or trying to sell counterfeit products under those same names.
Reasons to Register Your Business Online
1. Save Time and Money
People occasionally favor activities that can be done online.
They prefer online booking, for instance, as well as shopping online.
That’s because not everyone enjoys having to manually enter registration information occasionally.
Business people can operate independently thanks to online registration, which helps them save more time and money.
This type of registration eliminates the requirement for printing applications, compiling reports, attending a particular location, and other similar tasks.
Overall, using online websites to complete applications has benefits for everyone.
2. Real-Time Information
You always have the option to immediately delete or rewrite anything when registering your business online.
In fact, you are free to make as many modifications as you like, and the server will do so for you automatically.
3. Simple Processing
Nearly everyone in Nigeria is busy with a variety of tasks.
Because of that, we don’t have much time for registration.
In reality, we pay a price for sacrificing our tasks in order to complete our obligations.
Online business registration makes things simpler for us, even though there is nothing wrong with it.
We are always able to file documents, even when we are somewhere else.
4. Reduced Errors
You can complete anything quickly and without any hassles when you register your business online.
When a machine processes everything for you automatically, you can reduce errors as much as possible compared to hand-operated processing.
People occasionally make mistakes and leave questions blank in some forms.
It will be challenging for you to address issues as quickly as possible when they are brought on by some flaws.
Given that, it is preferable to let a machine put the documents together.
In fact, online applications are programmed so that no one can submit a file until it is complete and accurate.
Benefits of Registering Your Business Name in Nigeria
1. Certificate of Incorporation by Corporate Affairs Commission
When a business is registered, the commission issues a certificate of incorporation to the business owner than proof that the business has been registered.
Registering your business grants you the right to operate it.
Furthermore, the certificate of incorporation provides a good reputation as well as legal recognition for a small business in Nigeria.
2. Reputation with Customers
Establishing consumer trust emphasizes the significance of business registration.
Customers and clients, particularly those with whom you have never worked before, require assurance that you are a legitimate business.
The significance of business registration cannot be overstated; the benefits far outweigh the drawbacks.
If your company is not properly registered, a potential client may suspect it of being a “fly-by-night” operation.
When a business is registered with the state, it may put your clients at ease when deciding whether or not to do business with you.
Registering a business gives potential customers confidence that they are dealing with a trustworthy company.
When this reputation is upheld, the company receives more referrals.
It gives the business owner an advantage over other unregistered businesses, makes the business look credible and reputable, and attracts financial aid.
3. The Ability to Transfer Ownership Shares
It is simple to share ownership for a registered business organization whenever appropriate, based on the standard regulations adopted in normal company or LLP form of companies.
Unregistered business entities face share transfer restrictions as well as a limited and complex assessment of the firm’s properties.
As a result, forming a corporation will make it easier to transfer shares.
4. Business Name Preservation
In business, just as no one person is entitled to a particular name on their own, so it is with names.
Given the competitive nature of our society, it is critical to register and protect your business name before another member of the public does.
If you allow your unregistered business to grow over time, becoming known by a specific name among your customers, it may become impossible to register that name later because someone else may have registered it first.
To me, the most important benefit of registering your business is the protection of your business name.
5. Protecting Your Business Name and Trademark
In the world of competitive marketing, business registration has become a necessity and is critical for the protection of the business name and trademark.
Where your business has grown to a certain level and the business name is now recognized by many people, a newly established business has a tendency to imitate your business name, thereby stealing both your name and your customers.
As a result, it is critical to register your company with the CAC.
6. Business Financing
There is no doubt that registering your business adds credibility to your company, which is what every investor or lender is looking for.
Financing a business, whether small or medium-sized, is the most business owners’ top priority.
The non-negotiable requirement for qualifying for a business loan is that you have a formalized business registration.
The same is true for investors, as they will only invest in your business if you give them a stake in it.
No investor will take you seriously if you ask for money while your company is not registered.
The majority of government grants for entrepreneurs and small businesses require the business to be registered.
Every business requires funding, and when it is necessary to apply for funds from external sources such as banks, the government, or investors, it is only your certificate of incorporation and other incorporation documents that can initiate and facilitate this process.
When you register your business, you have more opportunities to secure loans, investments, and grants from the government and other external bodies than when you make individual applications.
7. Creating Business Bank Accounts
To open a business bank account, you must provide proof that your company is properly registered with the state.
A business bank account is an important asset for a small business because it allows you to separate your personal and business activities.
It is also more professional to provide your clients with a business name for payment rather than your full name.
8. Taxes and Liability
Registered businesses must have an Employer Identification Number (EIN) with the IRS and the state in which they are based.
This ensures the legitimacy of the business entity as a legal and tax-registered operation.
Furthermore, it ensures compliance with legal bookkeeping and accounting standards.
This proves that the company pays taxes, has adequate insurance, and reports income to the government.
There are also numerous tax advantages to registering a business.
Business name registration in Nigeria offers you a legal status to operate your business.
You can start and run your business without worrying about the legal formalities and structure of the company.
Credibility is an essential quality for any business.
Most businesses want to enter the corporate environment so that they can trade with corporate organizations and generate revenue.
Most customers, particularly corporate customers, will only do business with you if your company is registered as invoices/receipts with business information.
This relates to governance and compliance.
By failing to register your business, you may appear to be attempting to avoid paying taxes.
10. Getting Loans from Banks
A registered business makes it easier to secure bank loans than a personal loan application.
Funding is essential in any business, and when it is necessary to obtain it from outside sources, particularly banks, your legal business documents make the process easier.
This is due to the fact that your company is regarded as a legal entity that can be tracked and accounted for.
When your company is registered, it is much easier to obtain a loan than it is to apply for a personal loan.
You can prove that you are a business with your documents.
This establishes credibility and trust, as well as ensuring confidence.
Furthermore, your investors or lenders will recognize that they are dealing with a business and will be willing to lend you money if additional terms and conditions are met.
Business Name Registration Steps in Nigeria
Here are the steps to register your business name online in Nigeria:
1. Create an account through the e-Registration portal
Before you can register your business with CAC, you must first create an account.
Visit the official CAC website and sign up for an account to start the company registration process.
2. Search for Available Company Name
You must first register a distinctive name that is associated with your brand and has not yet been assigned to another business before you can register your company.
Select “Search Now” from the Public Search section.
You would need to look for a different name if the one you had in mind for your proposed business was already taken.
However, if the name is available, move on to the following step.
3. Reserve Company Name
Your preferred company name may be reserved here.
Type of business (private company limited by shares, public company, etc.), proposed company name, and goals should all be entered.
You must finish your payment after entering all the required data in each column.
Within 24 hours, the CAC must inform you of the status of your application.
If your business name reservation is approved, you will receive a note containing a code for the name’s availability.
4. Register Your company
To continue registering your business, enter your company name availability code in the box provided.
Once the code has been validated, move on to the Registration Form CAC 1.1 and complete the necessary fields.
You must enter information about your company’s specifics, such as the principal business it will conduct, its registered office address, and its email address.
Enter personal information, including name, date of birth, gender, phone number, form of identification, and the proportion of shares to be held, to obtain information on the company’s directors and shareholders.
Likewise, enter this information for the company secretary (individual or corporate body).
To complete section E of the form, the statutory declaration of compliance with the requirements of CAMA, you would need to hire a legal practitioner.
The drafting of the Articles of Association may also require legal assistance.
Pay the required CAC registration fee (which varies by company type) after completing the form, plus stamp duty.
Then, you must scan and upload the following PDF-formatted documents: the printout of the approval notes, the registration form CAC 1.1, the receipt for the CAC payment, the identification of the directors and shareholders, the stamp duty certificate, the memorandum and articles of association, and the company secretary’s Certificate of Incorporation (if applicable).
Your company’s Certificate of Incorporation will be uploaded to your account dashboard, where you can quickly download and print it after the registration is finished and approved by the CAC.
I have just shared with you some useful tips on how to register your business name in Nigeria.
It is important that you take time out to do this as it will protect your company from any legal issues and also protect yourself from any potential lawsuit.