Are you seeking to give your business an incorporated facelift this new year? You might decide to register either a business name or a company, whichever keeps your startup cost at a minimum. Registering a business name might not be wise, depending on your business type.
The benefits of incorporating your business are worth the hassle! Here are a few benefits of incorporation:
- Limited Liability: Incorporation of your business eliminates most of your liability and risks.
- Separate Legal Entity: When your business has its own legal identity distinct from its owner’s, you’ll be more willing to take calculated business risks while protecting your private assets from certain financial and legal risks.
- Legal Protection: Protects your business name and corporate image from unauthorized use.
- Easier Access to Funding: Investors are more likely to invest in a registered company rather than an unregistered business with no formal structure.
- Business Continuity: Incorporation allows your business to outlive you. A company’s existence ends only if it is formally wound up by order of the court.
- Easier Access to Loans: Lenders and credit institutions are more likely to lend money to an incorporated business since it is less likely to default.
- Professionalism & Brand Credibility: Enhances public perception of the brand and business, opening opportunities that might otherwise not be available.
The importance of company registration cannot be overstated, as you will usually require proof of company registration to qualify for most international and national grant and loan applications.
The Companies and Allied Matters Act 2020 has revamped the registration of a private limited liability company in Nigeria. Subject to several circumstances, the estimated cost of registering a company may range from N60,000 to N120,000. To register a company in Nigeria, you will need:
- Proposed name of the company (2 options).
- Nature of principal business of the company.
- The registered office address of the company.
- Type of company to be incorporated, either public or private.
- A minimum issued share capital of N100,000 for a private company and N2,000,000 for a public company.
- Memorandum and Articles of Association (CAC provides a generic MEMART, which can be adopted entirely or with additions/amendments by the new company).
- Particulars of the director(s): (Name, Date of Birth, Gender, Phone Number, Email address, Forms of Identification).
- Particulars of the shareholders: (Name, Date of Birth, Gender, Phone Number, Email address, Forms of Identification).
- The percentage of shares to be held by each shareholder if the company has more than one shareholder.
- Particulars of the company secretary. If the company is a small company (i.e., with a turnover of less than ₦25,000,000), this requirement is no longer mandatory.
Furthermore, the following steps outline the procedures for registering a private limited company in Nigeria starting from January 2021:
- Check for the availability of the proposed company name (click here). Read more about name reservation and reserve a new name (click here).
- Complete the pre-registration form and upload relevant documents (online using the Company Registration Portal).
- Pay filing and stamp duty fees.
- As a result of the ongoing pandemic, the commission will either send the Certificate of Incorporation by courier or send it electronically, thus limiting physical contact to only occasions where it is essential. Customers will bear delivery costs.
Conclusion
Regardless of the Corporate Affairs Commission’s attempts to simplify company registration processes through its online portal, it is still advisable that individuals seeking to register a company engage the services of an accredited agent for a smoother incorporation process. An accredited agent can also advise on supplementary matters such as the suitable type of incorporation and share capital requirements for a specialized sector or business, among others.
Registering your company remains the best way to do business in Nigeria since a company automatically acquires a separate legal personality immediately after its formation, thus opening opportunities for the owner.
For more inquiries on registration, reach out to us at businessmeetsmedia@gmail.com
