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

  • When are Annual Returns due for filing?

    A company’s first Annual Returns are due for filing after 18 months of its inception, subsequently it should be filed annually as the name implies. The filing dates could differ for each company depending on their financial year end but must be filed not later than 42 days after its Annual General Meeting.

    The Annual Returns for Business Names is due not later than the 30th of June each year except in the year the business was registered.

  • Must my Company Secretary be a Lawyer?

    Although it’s ideal to have a lawyer as a company secretary, it is not compulsory for small private businesses.

  • 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 is classified as personal data?

    Name, photograph, personal health/bio information, account/financial information, phone number, Address, date of birth, place of birth, Email address, etc.

  • Who benefits from copyright protection?

    The creator of a copyright work, usually referred to as the “author” of the work owns the copyright in the work in the first instance. However, the author is at liberty to transfer his rights to a third party. In such a case, the person who has obtained the right by transfer or other legal means becomes the owner of the copyright.

  • When can I start renewal of the registration of my product(s) with NAFDAC?

    You can start renewal 6 months to the date of expiry.

  • How many directors do I need to start a company?

    A minimum number of two (2) directors is required to form a company.

  • 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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