Information You Need About Registering A Company In Nigeria.

I came across this Article by "LOUDMOUTH" on Nairaland,
so I decided to share it with you because i believe its very important.

Have you ever felt it was high time you launched your business idea but do not have adequate information on registering a business in Nigeria? Or are you confused and do not know the most suitable structure to choose for your business? Have you search everywhere, yet cannot find a central resource to find answers to your pending incorporation-related issues?

It is worthy to note, however, that new policies regularly evolve at our nation's company registry - the Corporate Affairs Commission - so this write up is subject to regular update.

Enjoy reading!

Q1: What is a business name and why is it so important? A business name is the name which a business trades under for commercial purposes. There is more to business names than just identity. A good business name is an adver­tising tool. Many large companies even hire expensive consultants to help them name their businesses, products and services. Q2: I have this business name that I love so much, and I want to start a business under that name. Can I pro­ceed immediately? No. I think the next thing after you must have done a feasibility study on the busi­ness itself is to get the business name regis­tered at the Corporate Affairs Commis­sion (CAC). Q3: What do you mean by Corporate Affairs Commission? Registration of businesses in Nigeria is the exclusive responsibility of the Corporate Affairs Commission, also known as CAC; which has its head office in Abuja, and branches in most states of the federation. The CAC is the federal government agency responsible for registration of all companies. Q4: But I was told that the cost of registering/incorporating a company is expensive. Can’t I go on with the busi­ness then register the name later? My candid advice is No! Having your busi­ness registered definitely confers some cred­ibility on it, given that it then acquires an identity. In many important business activi­ties or relationships you may want to get involved in, details of your business registra­tion will be required. You do not have to wait for such occasions before getting your business into the register of companies — you may miss an important opportunity just for that omission. Q5: Is that all? No. Using a business name similar or identi­cal to that of a registered business name can land you into problems, including legal issues. Besides, if you have succeeded in doing business for several years under a name which has not been registered, that does not confer ownership of such business name on you. The CAC has to approve the availability of such a business name before you can proceed to file an application to get the name registered. Q6: Does that mean I may forfeit a business name that I have been trad­ing under and has become so popular in the marketplace just because I didn’t register it at first? Yes. Due to your negligence, someone somewhere might have registered that name or a similar one. This means you will lose all the goodwill that name garnered over the years.

Q7: I understand that the Corporate Affairs Commission rejects registra­tion of some business names. What are the likely reasons for such actions? Good question! Officials at the CAC use their discretion in approving a business name submitted for search. Business names may be disapproved if such names existed or are similar to the ones on their database. At times, business names are dis­approved due to their vague nature. Con­sider someone who submitted LAW FIRM as a business name! More so, objects such as INSTITUTION, FOUNDATION and MINISTRY are not likely to be approved as a business name, except when such objects are used for registration of incorporated companies/​trustees. Q8: What difference exists between a business name and incorporation of company or trustee? To start a business, you need to decide on a business name. You also need to choose a business format under which to operate. You need to know the requirements relat­ing to membership of the company, owner­ship, etc to enable you make decisions you will remain happy with. The routine processes of registration can then be car­ried out on your behalf by an accredited pro­fessional. Q9: Do you mean business names, companies, and trustees are formats? Yes. It may be called business structures too. You will need to talk to an expert con­cerning this. However, let me give you a lit­tle of what you should know. Three major classes of registration are available under the relevant law (the Companies and Allied Matters Act of 1990): The first class is the registration of Business Names: This applies to sole proprietorships and partnerships. It is the simplest form of business structure. It is the one-​man business, owned by a single person and called ‘enter­prise’ in the local parlance. The partnership (under this class) applies to a business where two or more persons agree to jointly own and carry on the business. Given the fairly complex nature of partnerships, it is best to seek the services of experts to assist with the details. Q10: What about incorporation of com­panies and trustees? Incorporation of companies is the second class of registration available under this Act. Incorporation recognizes the business as a unique entity, separate from the own­ers, with statutory powers to own property and sue or be sued. There is thus the con­cept of limited liability, implying that the individual owner’s (shareholder’s) liability relating to the business is limited to the amount of his share subscription. The third class under this Act is the registration of Incorporated Trustee. This applies to public institutions and associations, oper­ated by a Board of Trustees. This category includes: NGOs, churches, clubs, trade asso­ciations, political and civil groups etc.