The ease of setting up sole proprietorships (One man business)

The ease of setting up sole proprietorships (One man business)

October 19, 2018

Sole proprietorships also widely known as one man business are very easy to set up and manage. It can be incredibly easy to set up hence its popularity amongst many business owners. So, apart from the fact that they are very affordable, the registration process is very straightforward.

Unlike limited liability companies, Sole proprietorships generally don’t need a list of directors or shareholders and you don’t need a Memorandum and Articles of Association (MEMART) but you are able to open and operate a corporate account in the name of the business. All that is required are the details of the proprietor, passport photograph and maximum of three (3) objects.

While setting up a sole proprietorship is easy and affordable, it is crucial to note that setting up your business as a sole proprietorship means that as the owner, you are held personally liable for business related obligations. You re personally liable for the debts of the business and your personal assets can be used to satisfy those debts if the need arises. Personal liability for business obligations stems from the fundamental legal attribute of being a sole proprietor. You and your business are legally one and the same person. In other words, it’s you trading under an alias.

The few set backs notwithstanding, sole proprietorships are very easy to set up and maintain and they are the most suitable for small, one owner managed businesses that require a little structure to operate.

Best regards,

Efe Ugboro

CEO, 618 Bees

The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advise, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advise from the particular facts and circumstances at issue from a lawyer.

This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached.

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Frequently Asked

  • What additional documents do I require to file my Annual Returns?
  • What’s the difference between a business name and an LLC?

    • A business name is a sole proprietorship, usually owned and managed by one individual only. Legally, the sole proprietor and his business are one. It simply means an individual trading with an alias. The sole proprietor is personally liable for all business related obligations.

    • A limited liability company on the other hand is a separate business entity from the individuals that hold its shares and act as directors. Legally, it’s a separate business entity and a person on its own who can transact business, own property separate from its owners and can sue or be sued. 
  • If I have NAFDAC Registration number, do I still need SON registration number?

    SON Product Registration scheme is mandatory for all SON’s regulated products as mandated by SON Act 56 of 1971, 20 of 1984, 18 of 1990 as amended.

    This is irrespective of the registration done by NAFDAC
  • What’s the difference between a business name and an LLC?

    • A business name is a sole proprietorship, usually owned and managed by one individual only. Legally, the sole proprietor and his business are one. It simply means an individual trading with an alias. The sole proprietor is personally liable for all business related obligations.

    • A limited liability company on the other hand is a separate business entity from the individuals that hold its shares and act as directors. Legally, it’s a separate business entity and a person on its own who can transact business, own property separate from its owners and can sue or be sued. 
  • Why do I need a trademark?

    You need to register your trademark because if you don’t register it, someone else can! It helps identify you as the source ad indicates a consistent level of quality of your products and services. Securing a registered trademark protects your brand, and provides you with tools to prevent someone else from using similar signs and riding off the back of your business.
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