Is a Business Name a company?

Is a Business Name a company?

June 06, 2019

The answer is No. A company is entirely different from a business name in the sense that a business name when incorporated has the backing of law however the owners of the business and the business itself are not separate entities. But for a company it’s a little bit different because here there is something called corporate identity and of course the veil of incorporation. The long and short of what this means is that the company and its members are separate entities and bear separate identities. Thus, the members cannot be sued for wrongs done by the company except in exceptional circumstances.

To explain this better, a business name is the name and style with which you trade; remember that it is just a “style”, and it is therefore not different from you. Being a mere style, the business does not assume a separate legal entity; cannot sue, nor be sued and properties cannot be purchased in the name of the business. Also, this is the reason why when the owner dies, the business also dies (since in the first place, it does not have a life of its own).

While the moment a Company is registered, it becomes a separate entity different from you (otherwise known in law as an “Artificial person”). The best way to understand this severance process is to consider pregnancy, and delivery process- once a child is born, the child has an independent life; can grow, stand-alone (with time), and even die. The process of the growth of the child is not hinged as such on that of the mother. Thus, the company is considered to be different from its owners after registration; it means that they can be broke while the company is rich, and the death of the founder does not necessarily mean the death of the company because the company has a life of its own.

It is worthy of note at this point that some other striking differences include: that a business name cannot hold shares, debenture, stocks etc. but a company can. Also, the legal minimum for a business name is one while the legal minimum for a company is two.

Many more differences exist but these are the most striking of them. Hope you learnt something new. Need to register a business name or a company? Then choose 618bees because we know and make the difference.

 

 

 

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.

  • Do I need a Company Secretary?

    A limited liability company (LLC) must have a company secretary.

  • Is there a penalty for late renewal of registration of products with NAFDAC?

    Yes, there is a late renewal fee, which is dependent on the category of the product.

  • Can I process/register multiple products at NAFDAC at the same time?

    Yes, you can process/register multiple products at the same time

  • Why do i need a Shareholders Agreement?

    You need a Shareholders Agreement to protect your investment in a company.  The shareholders Agreement establishes a fair relationship between all shareholders and sets out how the company is run.

  • Can I trademark my logo and name separately? Why is this a good idea?

    Yes you can. The advantage is that it gives you the opportunity to have more than one logo or the opportunity to change your logo easily as opposed to registering the name and the logo as one trademark.

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