If You have a business name, you can open an account with it because it gives you a unique identity and allows your clients to pay money into the account. Having a business name registered is a major criteria to access loans from the government, a cooperative or any other institution.
CAC through its online platform has now made incorporation of a company easier. An individual can now register a company
Also read 20 Steps to Market Your Business Card
What is CAC By The Way?
The Corporate Affairs Commission of Nigeria was established in 1990 vide Companies and Allied Matters Act no 1 1990 as amended, now on Act cap C20 Laws of federation of Nigeria. It is an autonomous body charged with the responsibility to regulate the formation and management of companies in Nigeria.
Why Register your Business Name?
The importance of business registration cannot be over-emphasized. It is very important that your business be a legal entity, in other to enjoy the maximum operational business benefits, protect yourself to some extent and getting funding.
also read How to make Money Online in Nigeria with these Top 23 Online Business Ideas
While it is possible to do business informally under your personal name, you cannot reach your full business potential without becoming fully formal. It would be very hard for serious minded people to give your business serious attention if you are trading under your personal name.
You can open bank accounts, apply for serious contracts etc, when your business has a proper identity.
Depending on the form of business or company you register, you can separate your personal and business liability. For example, a Limited Liability Company is a separate legal entity from yourself. A simple Business Name Registration does not offer this protection.
You can only apply for government grants, business loans, startup investment etc when your business is registered. No serious investor, financial institution or government department would fund your business if it is not a registered entity. None.
Types of Business Registrations in Nigeria
- Business Names: this is the simplest form of business registrations open to Nigerians. Any individual or proprietor can register a business name themselves without going through a law firm, lawyer, chartered accountant or any other professional service that offers business registration.
- Limited Liability Company (LTD): this is the most visible types of company in Nigeria and tends to be taken more seriously. This legal structure is more Ideal for businesses that plan to grow big and this requires more legal hurdles to register. You would typically need the services of a legal practitioner or chartered accountant to register an LTD company.
- There are other types of business Registrations in Nigeria that are beyond the scope of this article.
- Limited by Guarantee
- Limited by Shares
- Public Companies (PLC)
also read 7 Tips on How to Choose a Good Business Name
Comparison: Business Name Vs Ltd Company
|Business Name||Ltd Company|
|Ownership||Single Entrepreneur||2 or more shareholders|
|Shareholding||None||2 to 50 people / entities|
|Legal liability||Business owner||Company/company assets|
|Intellectual property||–||Strong ownership|
|Setup process||Simple & straight-forward||More processes involved|
How long does it take for CAC to approve business name?
Can I use a company name that already exists?
Requirements to register a limited liability company
- The first step required by the applicant is to choose two suitable proposed names for the company. Where this is done, an availability check will be conducted on the CAC online portal to find out if the name is available and not already in use.
- Choosing the type of company to be registered whether a private limited company or private unlimited company or company limited by guarantee.
- The objectives and business of the company must be provided.
- The registered principal address of the company.
- The share capital and shareholding formula among shareholders will be required.
- The particulars of a minimum of two (2) Directors will be required. A copy of their means of identification such as voter’s card, national ID, drivers’ license or international passport.
- Particulars of the company secretary (one of the directors may also act as the Secretary of the company)
- The applicant will be required to furnish details of the shareholders of the company. Details such as names, occupation, residential address, email address, mobile phone number and means of identification such as driver’s license, international passport or national identity card. It should be noted that the directors listed can also hold the capacity of shareholders in the company if desired.
- The memorandum and Articles of association of the company to be registered which is advisable to be drafted professionally by a Legal Practitioner. However, the CAC has provided a generic MEMART, which any new company can be adopted.
also read 5 solid ways to register your business offline
How to Register a Business Name
- Choose Your Names
You need to think up multiple names that would be submitted and checked in the database of the CAC. With your list of names at hand, you can then approach the nearest offices of the CAC.
- File the form at the CAC offices
The CAC would give you a form that requires a list of the names you want to check in their database as well as your personal details like names, address, telephone and other contact details. They also require your passport photos and a filing fee. You can get the result on name availability the same day if you submit before 5 pm.
- Business Certificate
The actual Business Name registration takes 24 hours once you decide on the name you wish to go for.
Your business certificate confirming the company name registration would be available for pick up a few days after the successful registration.
How to Register a Company
1. List your potential Company Names
You need to prepare a list of potential company names that would be checked for availability and potential registration.
2. Find a credible practitioner
Where you choose to register a company, making use of a professional registration entity like a Legal Practitioner, Chartered Accountant or Chartered Secretary is a very good idea. They can guide you with navigating and filling the numerous registration forms.
- Check for availability of proposed company name (click here). Read more about name reservation and Reserve a new Name (click here)
- Complete pre-registration form – CAC1.1 (Online using Company Registration Portal)
- Pay filing and Stamp duty fees Check the Fees for our Services here
- Steps 1-3 can be completed on COMPANY REGISTRATION PORTAL (CRP)
- Prepare the signed scan copy of your pre-registration documents for upload as follows:
- Form CAC1.1
- Memorandum and Article of Association (MEMART)
- Recognized form of identification for Director(s)/Subscriber(s) and Secretary
- Evidence of payment to CAC
- Upload the scanned documents for processing. (click here)
- Submit the original copies of the documents uploaded at step 6 (Form CAC1.1, MEMART, etc) to the CAC office you had selected in exchange for your certificate and the Certified True copies of the documents.
Business / Company Certificate
At the end of the process, you would be issued the company certificate that could be used to open bank accounts, register for taxes, apply for loans, use as supporting documents for visa applications etc.