Small businesses have taken over the spotlight in Nigeria and the zealous population of undergraduate, youth corp members, politicians etc have now taken the bull by the horn and are bosses of their own, being champions at risk management and making profit . Social media influence has had its own turn on the mind of the youth and every youth is trying so hard to own a business which is very commendable but sadly social media is not the authorized body for the registration of companies and putting up your business on social media does not guarantee you any legal recognition or protection of your business name.

On the 4th of August I got a distress call from a close friend that her business name had been hijacked and the only thing differentiating both names was a full stop and that the same user was putting up pictures of her goods and claiming to be her. The first question I asked was if her business was registered with the Corporate Affairs Commission, because social media cannot afford you legal protection of your business name. The only response I got was silence followed by sobbing sounds. I immediately ran a name search on the C.A.C’s website and discovered that the name had already been registered with someone else’s business. The implication of this is that, my friend had no business all along because. in the eyes of the law the first person to register the name is the business owner and she had to start from the scratch as her business does not exist legally This brings me to the topic: THE IMPORTANCE OF BUSINESS REGISTRATION.

THE IMPORTANCE OF BUSINESS REGISTRATION IN NIGERIA

LEGAL RECOGNITION

The most important reason for company registration is legal recognition. This means that the law recognizes you as the business owner and no business can be registered in the name you already chose. If a person uses your name without your permission, he or she can be sued to court, as the first to register is entitled to legal protection of the business name.

RELIABILITY

Having a registered business name makes you a more reliable service provider and it builds your reputation with your clients. Having a registered business gives clients confidence to deal with you. When a business is unregistered, the possibility of growth is slim, as clients/customers do not trust you and even when they believe in your skill they can only entrust you with so much responsibilities. Also, with the daily  increase in fraud and fraudsters, every prospective client or customer wants a business or service provider that they can trust with their investments, as you will be identified with the Corporate Affairs Commission, therefore, clients are rest assured that you cannot elope with their investment because if anything goes wrong, they can easily make a report to the commission and you’ll therefore become traceable My friend who didn’t register her business might lose a lot of clients and in the event that she decides to continue with the business and the legal business owner becomes aware, she can be sued notwithstanding that she started the business first.

IDENTITY

A properly registered business gives your business its own identity. An unregistered business cannot have its own bank account and some clients prefer to deal with the business and not individuals especially when doing financial transfers.

Being eligible for grants and loans as a business is possible when the business is registered under the law. Most money lenders require a certificate of incorporation and where you are found wanting you miss out on such opportunities.

A survey conducted by SMEDAN {Small and Medium Scale Enterprise Development Agency} showed that only five million small businesses out of a number of thirty seven million businesses are actually registered with the corporate affairs commissions which means thirty two small businesses are likely to be taken advantage of, knocked out of business, not given loans or grants and not granted any legal rights or protection as it concerns the running of that business.

Reasons for non-registration of businesses includes failure to understand the benefits of registration and the disadvantages of refusal or neglect to business registration, and as stated above, the results of non-registration could be quite disheartening and heart breaking. Not to worry, 618bees limited is here to help you avoid the heartbreak that could result from not registering your business.

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.

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Lucklyn Audu

Team 618bees.