Aside from well-known companies, there are several business organizations in Nigeria which are legally registered with CAC while most are not.
Under the Company and Allied Matters Act (CAMA), small scale businesses like sole proprietorship and partnership are covered as business names, and such enterprises is under the Part B of the Act.
Getting recognition is ideal for such enterprises as this is the easiest and fastest way of conducting any business transaction, building trust and keeping up with your target customers.
Aside these advantages, it is mandatory for all businesses to be legally registered within a space of 28 days after commencement of operations.
What Is CAC?
Corporate Affairs Commission (CAC) is a Nigerian Government body that is accountable for the supervision of companies in Nigeria, and since its introduction in 1990 when the Companies and Allied Matters Act was passed into law, it has overseen all business activities in Nigeria.
The Commission is the only Agency of Government tasked with the job of registration of Companies, Business names and Incorporated Trustees.
Advantages Of Registering A Business Name In Nigeria
There are many benefits of registering your business name in Nigeria and some of them have been highlighted below.
- You become a Legal business owner in Nigeria
- You can operate in all parts of Nigeria without paying for stamp duty and other charges.
- Easy access to loans from banks and grants from the Government.
- Unique business identity – your business name would be one of its kind and others would be barred from using similar name.
- Certificate of Incorporation – this would help build a strong reputation among your customers, investors and stake holders.
- Official Company Bank Account – your business would be entitled to a customized account name with any bank in Nigeria, this would help when giving your customers your business account instead of your personal account for making payments.
- Continuity – in a situation where the business owner cannot continue operating and the business collapses, the business name still remains valid and cannot be registered by anyone else, this would preserve your business identity and keep the business running for as long as possible.
- Liability protection – in a situation where the business is facing a law suit, the company will be placed on all charges instead of placing it on the business owner.
What Kind Of Business Needs To Be Registered?
All legal businesses are allowed to be registered with CAC, so all business owners who have plans of expanding in the future should register its name.
This includes but not limited to:
- Law Firms.
- Car Dealers.
- Service providers (Plumbers, Electricians, Carpenters, Health Practitioners).
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How Long Does Registering A Business Name In Nigeria Take?
Registering a business name in Nigeria takes just 48 hours (2 days) excluding Saturday and Sunday, but in cases where the applicant(s) fails to submit the required documents it would take longer until all documents have been properly submitted.
Steps To Register A Business Name With CAC
Firstly, it is important to gather all the necessary documents that would be used for registering your business name.
The procedure for registering a business name in Nigeria is quite straight forward and it simply involves submitting documents of the names and means of Identification for the business Owner(s).
If more than 1 person is involved in the business, partnership agreement documents will be required.
Registering a business name under CAC has certain procedures that must be adhered to if you want full certification of your enterprise.
These steps are listed below:
STEP 1: APPLICATION
• Applicants should visit the CAC Portal and check if the business name they want to register is available and also book it for reservation.
• FORM BN1 which is known as statutory form should be properly filled and submitted after which the applicant should procced in paying all necessary fees.
• Afterwards, the Business Name form (FORM BN) and statutory form (FORM BN1) must be printed, and the signature of the applicant with the date of application should be appended on the provided spaces in Forms.
STEP 2: SUBMISSION
Applicants are required to upload the completed statutory form attached with two Passport photographs.
After submitting, the following documents (listed below) are also required to be uploaded:
- Means of Identification (Government Issued ID Card).
- Payment Receipt (Paying at the bank is advisable so as to get a standard receipt).
- Availability Printout (Approval Note) – this document proves that the business name is available for registration and has been properly booked by the applicant.
- Statutory form (FORM BN1) – make sure it is well signed before uploading it.
- Proficiency Certificate – this document proves that the Applicant(s) is qualified to register and own that business e.g. A lawyer is expected to submit his Certificate from Law School (under the new law, this certificate is not necessary but it can still be submitted if you opt to).
After successful completion, the Applicant(s) would be issued the following documents by the Corporate Affairs Commission (CAC):
- Original Certificate showing the business name has been registered with CAC and can be legally used in Nigeria.
- CTC – total cost at which the application for business name registration was charged.
NOTE: After completion, businesses with more than one owner (joint enterprise) may apply for a partnership deed with CAC, this would help provide a well detailed information on the positions, responsibilities and authorities that all partners of the business has in its operations.
Cost Of Registering A Business Name With CAC
As officially stated by the Corporate Affairs Commission, the filing fee for registering a Nigerian business name is N10,000 (Ten Thousand Naira only). There are several CAC accredited agents who help business Owners with registering business name and they usually charge extra for services rendered.
Registering a business name online is faster and more convenient because it requires little or no formalities. Business with more than one owner might require a lawyer to help with stipulating the agreements attached in the partnership deeds that would be submitted to CAC.
Registering a business name is different from registering a company in Nigeria because a company is totally different from a business (A company needs a business name, but not all businesses requires a company).
Foreigners who wants to start a business in Nigeria may be exempted from going through the registration of an enterprise because different documents are legally required for non-Nigerians.