You just started a business and you are wondering what the next step is? You have heard people say they register their businesses and you may be asking yourself if going through the stress is worth it. I mean how really important is registering a business. Why should I register my business?
This article expounds the why and how you should register your business in Nigeria. I am going to begin by explaining the different ways or avenues to register your business in Nigeria, while stating their respective differences.
Business name registration
You have a business name, awesome! Now you need to ensure you can use that name and also protect it. This is where business registration comes in. The first and most important reason why you should register your business name is to make it unique, to ensure that nobody else is using it and to protect it from being used by anybody else. It gives your business a unique identity.
BUSINESS NAME registration is the process of getting your unique business name registered as an enterprise with the Corporate Affairs Commission in Nigeria.
Business name plays a number of important roles in a business, including:
- Your business/complimentary cards carry your business name.
- Your advertising media and marketing materials, such as banners, fliers, signboards, etc., will feature your business name.
- If you intend to own a company website, your business name could be used as your domain name.
- You can open an account with it.
You might ask, ‘what’s the worst that could happen if I don’t register my business name?’ Now imagine this scenario: You want to use the name ‘Xenith Saloon and Spa’ as your business name and there’s already a business in your state with the name ‘Zenith Saloon and Spa’. This can confuse your customers; and whatever happens to the other business, whether positive or negative will be reflected own your own. It can also have legal repercussions amongst other things. Also if the name ‘Zenith Saloon and Spa’ has been trademarked, the owner can sue you for trademark violation. But what does it mean to trademark a business name?
Trademark is a brand name. It is a unique means of identification for a company. It is used to distinguish the goods of one company from others. A trademark can be a word, phrase, name, a symbol or a combination of all of them, for example, a logo. Logos are always trademarked.
The symbol ® is usually used to show a trademarked item on a product. This is done to deter anyone from using the same brand and the owner is allowed to sue for trademark violation.
Registering a trademark in Nigeria
The government agency in Nigeria that is in charge of the registration of trademarks is the Trademarks, Patents and Designs Registry, Commercial Law Department, Federal Ministry of Industry, Trade and Investment. You either have to be accredited or sort for accredited agencies in order to register your trademark in Nigeria.
The requirements for trademark registration are your name or the name of whoever is applying for the trademark, every necessary information about the trademark, the range of goods that are represented by the trademark and authorization of the accredited agent.
How to register for trademark in Nigeria
- Ensure that your trademark is unique and not yet in use by conducting a search.
- Once you are sure that the trademark is available, apply for registration.
- If your application is approved, you will be issued a letter of acceptance.
- After the acceptance has been issued, the mark is advertised in the Trademarks journal published by the Trademarks Office.
- The mark is advertised for a period of two months in order to give room for any contention or opposition. After which you can apply for a trademark certificate, if the mark is not opposed.
- If everything is in order, you will be issued a Trademark certificate.
How to Register a Business name in Nigeria
- First, you have to choose a name for your business. You select two names and send to Corporate Affairs Commission (CAC) for approval. Before CAC can approve the name, they will have to check their database to make sure there is no similar name registered. If the name is approved, it will be reserved for a period of 60days during which you are expected to complete the registration process.
If the name is not available, you will have to choose another name for your business.
- The next step is to fill the business name registration form. It is important to fill this form as accurately as possible, to avoid problems in the future due to one error or another.
- After completing the form, you will be required to pay CAC filing fee.
- Once your payment has been approved, you can then proceed to submit the form. If everything is in order, your Business Name Certificate should be ready for collection in a few weeks.
According to Investopedia, incorporation is the legal process used to form a corporate entity or company. It is the process of legally declaring a corporate entity as separate from its owners. A corporation is the resulting legal entity that separates the firm’s assets and income from its owners and investors.
What you ought to understand is that a corporation is a legal person in the eyes of the law. It is separate from the person(s) that created it, it has the ability to sue and be sued, it can be taxed, etc.
Some persons regard registering a corporation as a smarter and better business decision than registering a business name but I would say it depends on the structure of the business. As an entrepreneur you need to ensure that whatever business structure you decide to set up reflects the nature of your business and the inherent risks. Knowing the differences between both can help set you on the right track.
Differences between Business Name and Company Registrations
|The business does not assume a separate legal entity, it cannot sue or be sued, cannot enter into contracts, cannot buy or sell properties, etc. The person who owns the company is one and the same with the company and is liable for any debt incurred.||It becomes a separate entity different from you. If the company owes a debt to the bank, the directors or owners are not liable for that debt, they cannot be sued.|
|If you want to run a sole proprietorship business or a one-man business, only a business name will suffice.||To register a company, you must have at least two shareholders.|
|Pay only personal income tax||Pay both company tax and personal income tax|
|A one-man business can end suddenly, especially in the event of death of the owner. The business dies with the owner.||The death of the founder does not mean the death of the company because the company has a life of its own.|
|Many at times registered businesses have to raise their own capital from their own resources or from family and friends.||Registered companies in Nigeria can raise capital at any time by issuing new shares.|
|When you retire, the business retires with you.||There is always the possibility of selling a registered company in future.|
How to register a company in Nigeria
- Choose a name for the company. Check if the name is available. This is done online, in the CAC website.
- Next step is to complete a registration form, CAC1.1.
- After which you pay a fee for filing and stamp duty.
- Prepare the required documents for registration, sign and scan.
- Upload the scanned documents for processing.
- When the certificate is ready, you will submit the original copies of the documents to claim the certificate.
Registering an NGO in Nigeria
A Non-Governmental Organisation (NGO) is a non-profit body that is independent of the government. In Nigeria, an NGO is registered as incorporated trustees under Section 590 of the Companies and Allied Matters Act, Cap C20 Laws of the Federation 2010 for the advancement of any religious, educational, literary, scientific, social/cultural development, sporting and charitable causes.
Because they are non-profit, NGOs rely on funding from external sources such as, private donations, membership dues, grants, etc.
An NGO is viewed as an entity; therefore it is expected to be registered. Registration of an NGO is done by CAC.
How to register an NGO in Nigeria
- Select two alternate names and conduct a search to find out if they are available.
- Appoint the trustees. NGOs are governed and managed by a board of trustees.
- Once the name has been approved, a publication should be made in 3 newspapers, one of which should be widely known and circulated in the area the NGO is to be based. The purpose of the publication is to let the public know that you intend to register an NGO; it should include the name of the NGO, the name of the trustees, the aim and objectives of the NGO, and a call for objection or opposition to the registration of the NGO within a 28-day period.
- Next, complete the application form. Then submit.
- The form should be submitted alongside other required documents such as, 2 copies of the NGO constitution, 2 passport photographs of each trustee, the minutes of the meeting where the trustees where appointed and the newspaper publications.
- The documents are reviewed and if everything is in order, the NGO is registered.
Now you know why you need to register your business. If you are ready to make the move, we can help you. Why don’t you contact us here