HOW TO REGISTER A BUSINESS NAME IN NIGERIA IN 2023.
In Nigeria, the procedures in which Business name is registered is called Business name registration. There are three business structures or company you can register.
The three structures are; a business name, an incorporated company and incorporated trustees. Each of these structures has its own legal implications.
The purpose is to show you how to register a business name in Nigeria, it will also detail the differences between registering a business name and incorporating a company and the implications of each of them.
Below are the Requirements for Registering a Business Name in Nigeria
The following is a list of requirements for CAC business name registration in Nigeria are:
- Approved Name of the Business
- General Nature of the Business
- Address of the Business to be registered
- Name, Address, Occupation and other details of the Proprietors of the Business
- Signature of the Proprietors or owners
How Much it Costs to Register a Business Name in Nigeria
It can be between N5000 Naira and N1 Million to register a business name in Nigeria. This is a breakdown of how much it costs to register a business name in Nigeria:
- Registering a regular business name in Nigeria costs #5000.
- The Registration of a private company with a share capital of N1 million or fewer costs N10000.
- The cost of Registering a private company/Increase in Share Capital is above N1 million and up to N500 million costs N5,000 for every N1 million share capital or part thereof.
- The registration of a company not having a share capital cost N20,000.
- The registration of a Public Company/increase in share capital above N500 million costs N15,000 for every N1 million share capital or part thereof.
- The Registration of a Public Company/Increase in share capital above N1 million and up to N500 million costs N10,000 for every N1 million share capital or part thereof.
- Registration of Public company/Increase in share capital cost N20,000 for the first N1 million share capital or part thereof.
- Registration of private company/Increase in share capital above N500 million costs
Online Registration of Business Name in Nigeria.
A business name can be registered online. And this can take up to 2days.
Here’s how to register a business name in Nigeria.
First Step– Search to check If your Business name is available
First is to conduct a public search to check if your business name is available. By so doing, you are certain that the business name that you want to register in Nigeria doesn’t exist. Which can also save you money and time too.
Second Step – Reserve Your Business Name
You need to be sure that the business name that you have chosen does not exist then you are good to go.
For you to submit the business name, you have to use the Name reservation feature to complete the form shown to you. This business name reservation cost N500.
You will receive a notification of your availability code the moment you succeed in reserving your business name, then you register the business name with the code given to you.
Once the registration of your business name is completed, The CAC will reserve the business name for you for a period of 60-days during this period it is expected that you will complete the registration process for your business name.
Third Step – Register Your Business Name
For you to register a business name in Nigeria. You will need to complete the statutory pre-incorporation registration form (CAC/BN/1) using the online registration portal.
These are the key steps you must follow:
- Fill in the required information
- Pay for the incorporation filing and Stamp duty
- Upload the required scanned documents
- Receipt of your certificate of incorporation
You can achieve the first three steps within 24 hours; and also possibly receive your certificate of incorporation same day. You can make payment across any Nigerian Bank or online using your Card details. The certificate of incorporation would be posted to your chosen Drop off Point as selected by you.
You have to pay for the CAC filing fees via the website once you complete the business name registration form show to you.
And you can now submit the forms by clicking “Continue” Once your payment has been approved or is successful.
CAC will review your documentation and if it’s fine it will notify you that your application has been approved, and your Business Name Certificate is ready for collection.
The Difference between Registering a Company and Business Name in Nigeria.
The difference is that, if you want to start a business, and you don’t have enough capital to start, then what you have to do is to register the business name first. Most business owners like you would just register a business name to get things running.
They don’t consider the legal implications of doing so, and you can’t blame them either. It’s the convenient and the cheaper option. You on the other hand don’t have to go the same route as them.
It is important to understand the risks and the differences associated with registering a business name in Nigeria and Incorporating a company in Nigeria.
When you want to officially set up a business structure in Nigeria, it is important that you choose the business structure that is best for you in the long run as well as the short run.
You have to choose the business structure that is more suited to your business.
Here is a list of the major differences between registering a business name and incorporating a company (limited liability company):
- For a business that has only a registered business name, you are personally liable for the debts of the business. That debtors can come for your personal assets or after you. While for a business that has been registered as a company (limited liability company), you or the shareholders of the company are not personally liable for the debts of the business.
- A business with only a business name registration will find it really hard to raise capital for the business. For a Limited liability company (LLC) its way easier to raise capital. Whether from investors through equity investments or via using the shares of the company as collateral for a loan.
- A business name registration has lower costs as you don’t need too much documentation and a lawyer to register it. For an LLC you will require a lawyer or a credited agent, you will also need to submit your company’s constitutional and legal documents. Making an LLC more expensive to set up.
- Because there is no difference between the owner of a business and the business itself in regard to a business name registration, it is nearly impossible to transfer ownership of the business to another person. For an LLC ownership is easily transferable.
How Do I Register My Business Name online in Nigeria?
You can register your business name online in Nigeria by using the CAC registration portal. The registration platform was recently upgraded by the Corporate Affairs Commission.