The days of paying a lawyer or accountant huge sum of money to register a business name for you are over. Within few minutes, you would learn how to handle your business name registration yourself.
But first, why do you need to register a business name?
- You need a unique identity for your business. You don’t want people confusing your business for another person’s own. A unique name helps to separate your business from others.
- In Nigeria, without a business name registration certificate, you cannot open a bank account for your business. You must be registered.
- Business name registration is also required for obtaining a tax clearance for your business. Without proper business registration, you cannot pay taxes or obtain a tax clearance.
- Also, people would find it easier to do business with you when they see your business is duly registered. There is something that feelsillegitimate about an unregistered business.
The agency in charge of business name registration in Nigeria is the Corporate Affairs Commission (CAC). The C.A.C permits you to register your business either as a sole proprietorship, a private limited company, incorporated trustee or unlimited company.
However, the most commonly registered businesses in Nigeria are sole proprietorships and private limited companies. I assume that most readers would be interested in registering either of these two businesses hence I would focus on them.
Obtain a Business Name Search Form
This would cost you N500 and would take about two weeks. This is the first step involved in business registration in Nigeria and helps you come up with a unique name.
All you need to do is to come up with three alternative names and then fill the form and submit it. Within 2 weeks, you should check back for the results.
To avoid repeating this process, take time to sit down and come up with a unique name- don’t lift names off the internet or go for common success enterprises, Favor Nigeria Limited, Alubarika PLC; trust me, those are already taken.
Fill the Business Registration Form
This form costs only N250 for sole proprietorship (business name registration) and N500 for limited companies. This form is to be filled and submitted after you receive your results for the business name search.
For sole proprietorship, this is basically where it ends — except that you would be required to pay a sum of N10, 000 for business name registration. Limited companies however, have more work to do.
Shareholders-: A limited company is required to have a minimum of two adult shareholders. These could be your business partners, your spouse, your kids or your siblings. Your shareholders can also be your directors.
Objects of Business-: This is where you provide information on the nature of your business and what you would be engaged in.
Name of Directors-: You are also required to provide the names of two people who would act as directors of the business. Shareholders are allowed to act as directors.
Registered Address-: This would be the permanent address for your business. To avoid changing addresses all the time, you should consider using a permanent residential address.
Shares-: This is where you would provide information on the share capital of your business. Specialized companies like banks have specific minimum share capital requirements but for regular companies, you can consider going for a minimum of one million shares. The shares are also to be allotted amongst shareholders. A minimum of 25% of the entire shares must be allotted to shareholders.
Fees-: This would depend on whether you decide to make use of an agent or not. However, a minimum of N30, 000 should be reserved for this purpose.