As an entrepreneur or a business person operating in Nigeria, it’s very important to register your business name.
Registering your business name certifies your business as a legal one. It also adds a cloud of professionalism to your business
However, as easy as it may seem, registering your business can be costly in Nigeria if you don’t know what to do. It could even get more expensive if you try hiring a lawyer.
In this article, you will learn how to register a business name in Nigeria without engaging a third party. You will also learn how to do it without leaving your doorstep. Everything will be done online from the comfort of your home.
Before getting started, let’s briefly look at the importance of registering your business with CAC in Nigeria.
The benefits of registering your business name with CAC
CAC is an abbreviation for Corporate Affairs Commission. It’s a body that controls how companies and businesses are created and run in Nigeria.
There are many benefits that come with registering a business name in Nigeria. They are briefly explained below.
Protection of brand name
Your brand name is your identity. It’s usually a unique name with which your business is known.
Whatever name you give your business, you can only claim full ownership when you register it. To have a better understanding of this, I will make an illustration below.
Let’s say a particular Mr. A starts a clothing business in 2015 and names it “Classic Wears“. Mr. A didn’t bother to register his business name, but he kept having many customers.
Later in 2022, Mr. B also wants to start a clothing business. He then thought of using the name “Classic Wears“. He went to the Corporate Affairs Commission portal and registered it online. The name was registered successfully and the legal rights were given to him.
Mr. B might have used the name intentionally even after knowing that another business is also using it. Mr. B might also have used the name innocently without knowing that someone else is using it.
Either way, we both know that Mr. A no longer has the legal right over the business name, since another person registered it first. In the future, Mr. A might have to change his business name or close down the business.
The illustration above teaches a lesson on why it’s important to always register your business name.
Protection of legal liability
This is another reason to register your business with CAC. This will prevent the business owner from being held accountable for any civil offence created by the business.
For example, if Mr. A (who didn’t register his business) made a mistake that caused a fire to the shops nearby, he might be arrested for Arson. He will be held responsible for the fire incident, and he might be imprisoned.
If the same thing happens to Mr. B (who registered his business), he would not be arrested. The fire incident would not be directed to the owner of the business since it’s a legal entity.
Instead, the business itself will have to answer for the damages done. The owner is protected from the trial, all because the business is a legal entity.
A business becomes a legal entity when it’s registered. This is one of the many benefits you will reap when you register a business name in Nigeria.
Protection from police brutality
This does not need much explanation. We all know that rich online businessmen are usually subjected to police harassment in Nigeria.
If your online business is a registered one, you can show it to the police officers. If your business is found on the CAC site, you will be released immediately. This assures the officers that you are not involved in fraud.
If your online business is not registered, it might be mistaken for fraud. This might make you prone to mistreatment since you have no proof to show that your online business is legitimate.
Foreign investors and government contracts
The opportunity can come later in the future. You might want to partner with large companies from abroad and within Nigeria.
In fact, you may at one point be considered for a government contract. Not having your business registered will not make this possible.
Evidence to remote customers that your business is legitimate
Your goods or services might be of good quality. People may hear of your business from distant locations around the world.
If your business is not registered, potential customers may doubt your authenticity. They may not want to patronize you from afar since they are not sure if your business is a legitimate one.
When you register a business name in Nigeria, it makes such a business a legit and professional one.
Continual running of business
Many businesses have been known to close down when the owners died or fell ill.
Most times, the businesses closed down because the investors withdrew, employees left or some customers were lost when the owner died.
A thing like this can not happen if the business is registered. If the business is registered with CAC, the continuity of the business is ensured even after the owner’s death.
How much does it cost to register a business name in Nigeria?
There is no direct answer to this. It varies depending on the business type. See details below.
- Name reservation costs ₦1,000 for business owners.
- Registration for a private company that has a share capital less than ₦1 million will cost ₦10,000.
- If the private company has a share capital more than ₦1 million but less than ₦500 million, it will cost ₦,000 for every ₦1 million shares.
- If the private company has more than ₦500 million shares, a registration fee of ₦7,500 will be charged for every ₦1 million shares.
- If its a public company, registration fee is ₦20,000 for the first ₦1 million shares.
- Registration fee for any company that has no share capital is ₦20,000.
Requirements to register a business name n Nigeria
Not everyone is eligible to register a business name in Nigeria. See the requirements below.
- The applicant must be at least 18 years of age. There can be an exception to this rule if 2 or more persons are shareholders in the business.
- The applicant must have 2 proposed names for the business. The second name will be an alternative in case the first name is not available.
- The applicant must briefly state the business objectives.
- A name that’s already being used by someone else can not be used again.
- The applicant must clarify the nature of the business. It can be a company limited by guarantee, a private limited company or private unlimited.
- The address of the business should be filled.
- The applicant must have a valid means of identification. This can be a NIN, driver’s license, international passport or voter’s card.
- Each shareholder/partner must be stated and the shares held by each of them.
Steps to register a business name in Nigeria
For an easy understanding, we have simplified the whole process into 3 steps.
- Account Creation.
- Business Name Reservation.
- Business Name Registration.
1. CAC account creation
- The first thing to do is to register and create an account with the Corporate Affairs Commission.
- Visit CAC website online.
- Tap on the registration button.
- Fill in the necessary details.
- Hit on the register button. You will receive a verification link in your email address.
- After verifying your email, your account will be created instantly. You can now register your business name.
2. Business Name Reservation
- Go to your account dashboard and tap “New Name Reservation“.
- Select your business category. Save your entry and proceed.
- You are to pay ₦500. Tap the Remita button and choose the payment method.
- Your proposed business name will be reserved for 60 days. After that the application will be cancelled.
3. Business name registration
- On your dashboard you will now see a button named “Reserved“.
- Click on “start registration“.
- Input your business details.
- Input the details of each proprietor.
- Fill your business description.
- Upload all the needed documents. You should review everything before you proceed.
- Click on the receipt payment button.
- After paying the registration fee, you will be directed back to your dashboard.
- You should download your receipt of payment.
- You should now be redirected to your registration panel. This is where you will be able to download your business certificate.
Your business is now registered and you can also prove it by showing your printed certificate.
It’s not difficult to register a business name in Nigeria. You don’t need to engage a lawyer and you don’t need to go to any court.
All you need is a computer and internet connection. Register your business now and start enjoying the benefits that come with it.