It is very crucial to register your business name as a Nigerian entrepreneur. Registering a business name with Corporate Affairs Commission (CAC) holds a lot of tremendous benefits for every business, from small-scale to medium to large-scale businesses. This article addresses all that needs to be known about registering a business name in Nigeria with CAC as well as the numerous benefits that it holds.
What are the Benefits Of Registering A Business Name With Corporate Affairs Commission (CAC)?
The CAC refers to the Corporate Affairs Commission. It is the Nigerian government body responsible for regulating and managing companies in Nigeria. It was an entity introduced in 99 with the passing of the Companies and Allied Matters Act. Plenty of benefits come with registering a business name with CAC. They include;
1. Registration Comes With A Certificate Of Incorporation:
Registering a business name with CAC comes with incorporation once registration is complete, which can be handy for authentication purposes. The CAC also issues e-certificates that can now be used worldwide without being physically present. A business owner or agent does not have to obtain the certificate of registration and incorporation by walking in to be physically present, which can be tedious, time-consuming, and non-economical.
2. The Business Becomes A Separate Legal Entity:
Registering a business name with CAC makes a business a separate legal entity. This means that the business is like a person recognised by the law. The incorporated business is regarded by the law to be a separate entity and will be independent of the members or people controlling it. This also means that it can be sued and be sued and can get into financial transactions and processes as a separate entity.
3. It Attracts Investors:
The ability of a business to attract investors is higher and is easier when a business is registered. Investors feel safer investing in a registered company rather than an unregistered business without a formal structure. This way, it is easier to raise significant capital.
4. Improves The Reputation Of A Business With Customers:
It can be considered a public relations strategy. Registering a business with CAC enhances a brand image credibility and the perception of a business. It also improves the trust of customers in a business as they have more confidence to deal with an o registered organisation that can be tracked. They feel safe and comfortable paying for services and products into a business account with the name of a business instead of paying into a personal account.
5. Provides Business Legal Protection:
When a business is incorporated with the Corporate Affairs Commission, the business name is protected from being used by any other business in Nigeria, which means the possibility of the company’s name being used for fraudulent purposes is mitigated.
6. Flexibility In Obtaining Loans:
Getting a loan becomes easier for a business incorporated with the CAC. It improves the confidence of investors and lenders in a business by providing credibility and trust.
7. Saves Business From Sanctions:
Registering a business name is a compulsory regulation in Nigeria and saves businesses from complications that can be avoided, including sanctions and impersonation.
8. Protects Businesses From Liability:
A business registered as a private liability company protects business owners from having to pay with personal properties when they fail to meet up with loans since the business is now a separate legal entity. Businesses can be registered as a sole proprietorship, partnership, public limited liability, or private limited liability company.
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How To Get Incorporated With CAC In Nigeria?
Thankfully, the registration process is not fully manual any more. It can be simply done from the comfort of your home or wherever even if you choose to be mobile. However, it takes some thoughtful and careful processes:
1. Think About A Business Name:
A business owner needs to come up with a business name. Of course, certain factors have to be considered, such as the values of the business, the industry of the business, customer appeal, and, almost most importantly, a business owner needs to check that the business name is available. Business owners can search for the business names they have in mind here on the CAC portal.
2. Reserve Your Business Name:
Once it is confirmed that a business name is not in use, then the business name can be submitted for application. If the business name is approved, it is reserved for a 60-day period. The business owner must complete the registration process within this period. You can rather do it in person or online by visiting the official CAC website.
3. Preparing The Memorandum and Articles of Association:
Business owners will be required to write a memorandum and article of association, which depends on the type of the company. This is a very legal stage, and the services of a lawyer will be needed. The lawyer prepares the documents, which require the names of the first directors or partners as well as the shareholders if they are. The participants in the agreement or documents must be age 8 and above. And they must have valid documents to verify their identity, which can include identity cards. All these will come under the scrutiny of the CAC.
4. Filling out The Incorporation Form:
Another stage in registering a business name with the CAC is acquiring and filling out the incorporation form. This comes after the memorandum and articles of association have been fully formed and processed. The form is expected to be submitted along with other documents. This For Might also need the assistance of a lawyer or a secretary. The following forms will be filled out:
- CAC Form 7: this is to be filled by the directors, and all particulars of the directors must be filled.
- CAC Form 2: This is filled by a director, and it includes share capital and return of allotment form.
- CAC Form 3: A director and secretary of the company will fill out the notice of situation or change of address form.
- CAC Form 4: This is filled by another individual or company accredited by CAC; this is the declaration of compliance along with the requirements of the CAMA form.
- Two directors will fill out a form that appoints a secretary for the company.
5. Submission Of The Forms:
Once the forms listed above have been completed online or onsite, along with payments for these forms. The next step to take is to submit the forms once the payments have been approved. The CAC will then scrutinise the documents before notifying the entrepreneur of approval. The entire process typically takes a week.
After that, the business name is ready for collection. However, the duration could also be dependent on lagging factors such as bureaucracy, workload, low quantity of staff, geographical location or distance or unavailability of personnel on the entrepreneur's part.
List Of Documents Needed to Complete the CAC Registration Process
Here is a list of the documents you need to provide during the CAC registration process:
- The proposed name of the business.
- The proposed objective of the business
- The business memorandum and articles of association
- Statement of the authorised share capital
- Form CACC 1, reservation and availability of Name.
- Names and addresses of the parties incorporating the company
- Two recent passport photographs of every director and authentic means of identification.
- Statutory declaration of compliance by a legal practitioner.
- Name and address of the company secretary
- Address of the principal business office
- Filing with the Federal Inland Revenue Service for the purpose of tax.
- All other documents or fees that may be needed by the commission to satisfy any law or condition.
Registering a Business Name with CAC is a positive forward-tracking step to take for your business. And it can promote sales and customers' confidence and trust in a brand. Overall, registering a business name is not a hectic procedure as most processes now occur online. The information embedded in this article could make the process easier for any business owner, agent or entrepreneur.