Benefits of registering a business with the Corporate Affairs Commission

Benefits of registering a business with the Corporate Affairs Commission

May 09, 2019

Anyone can decide one day to start operating a business. All that the person needs to do is provide a product or service to another person in exchange for money or money’s worth to be “in business.” While registering your business with the” Corporate Affairs Commission” (CAC) isn’t necessarily required to complete certain business transactions, it is a smart choice for new and existing entrepreneurs for a variety of reasons which includes:

1.Opening Business Bank Accounts
You need to provide proof that your business is properly registered with the Corporate Affairs Commission (CAC) to open a business bank account in Nigeria. A business bank account is an important asset to a small business because you can separate your personal activities from your business activities. It is also more professional to give your clients / customers a business account details that carry your business name for payment instead of your own full name.

2. Safeguarding Your Business / Corporate Name
One huge advantage of registration with the Corporate Affairs Commission (CAC) is safeguarding your business name from being used by another person / business. No one else can register a business with that same name or a similar name.

3. Legal Liability Protection
Another benefit of registration is receiving some legal liability protection (note that a private company limited by share has a legal personality distinct from that of its subscribers). If you register or incorporate your business, you will not be held personally responsible for certain accidents and other liabilities incurred by the registered company.

4. Getting Loans
when you apply for business loans, you’re going to have to prove that you’re actually a business. Banks and investors will ask to see your business registration certificate along with other application requirements before approving your loan application.

5. Reputation with Customers
Customers and clients, especially people you’ve never worked with before, need assurance that you are a legitimate business. A potential client may suspect your business of being a “fly-by-night” operation if your company isn’t properly registered. When a business is registered with the Corporate Affairs Commission (CAC), it could put your clients at ease when making a decision about whether to spend money with / transact business with your company.

6. Supplier Arrangements / Government Contracts
A registered business also makes you eligible to receive supplier discounts that you wouldn’t normally receive as an unregistered business entity. Suppliers usually reserve special rates for business owners who can show official evidence of business name or company registration (certificate of incorporation) issued by the Corporate Affairs Commission (CAC). Also, if your plan is to be getting government contracts for your company, a business registration is one of the first requirements.

7. Perpetual Succession / Continuity
A final benefit of registration is the business continuing even if you die or become ill. A registered business is an entity in its own right; thus, another can assume ownership or control or your business can be sold. Neither is it possible without registration.

 

 

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 advice, 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 advice 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. 

  • What is an execution clause in a contract?

    This is the section in which the parties sign the contract or agreement.

  • What are the penalties for not registering my products with the SON?
      1. Seizure of goods by the Inspectorate and Compliance Directorate
      2. Payment of a fine.
      3. Prosecution

     

  • What is data protection?

    Data protection is a legal process of protecting sensitive data.

  • How long does a trademark registration in Nigeria Last?

    Trademark is valid for seven years from the date of application but you may renew the application for the trademark for an additional period of 14years.

  • What will happen if I buy the wrong category of forms with NAFDAC?

    Nothing, the purchased form will be in your account for future use.

     

  • What is the first thing I must do to register a business in Nigeria?

    To register a business in Nigeria; you would need to conduct a name search of the business. You can achieve this using your CAC-CRP account.

  • Will my trademark registration in Nigeria protect me worldwide?

    No, all intellectual property (IP) rights which includes trademarks are territorial, which means you are protected in the countries in which you register them.

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