If you’re an entrepreneur, my candid advice to you is to set out with a firm business mindset. Having your business personality and your personal personality segregated helps your business to be more structured, with an operating culture that facilitates business growth, while also establishing it as a legal entity, able to sue and be sued in its own name.
Your first step towards having a business structure from the beginning would be to create your business name. You would need a unique name to identify your business.
Companies and businesses can be registered in four different ways, namely.
- Sole proprietorship,
- limited liability
- and corporation).
This quick guide will focus on registering a business in Nigeria with the CAC (Corporate Affairs Commission). If you are looking for more in-depth information on your country’s business registration policy, you can start by visiting the official website of your country’s business/corporate affairs.
I assume you want to start a Nigerian company, so we will limit our discussion to sole proprietorship registration because it’s easier.
However, if you would prefer to go with the Limited liability company registration, this is equally great. Limited Liability company set up has the benefits of separating the business liability from the owner’s.
Therefore, should a company go bankrupt, it will be the business’ assets that will be pursued under law, not the owners’ individual assets. Although not unusual, owners of an LTD/LLC company still must satisfy the needs of the business under such circumstances
Those looking to enter the Nigerian market as a foreign investor and establish a new Nigerian company or subsidiary should seek assistance from a Solicitor to draft a MEMART to suit their business objectives and file a copy with the Corporate Affairs Commission.
REGISTRATION OF BUSINESS NAME
The first thing to note is that you can register your business online yourself through an online business registration portal. The process can be completed by yourself without the assistance of a legal or financial adviser.
- Decide on a name for your company- There is no fast rule to this.
although in Nigeria for instance tags such as Chamber of Commerce”, “Federal”, “National”, “Regional”, “State”, “Government”, “Municipal and etc are restricted to be used by individuals as it’s assumed will be misleading to the public.
- Pick a name that best resonates with you and your business overall personality. You can use this business name generator tool to check different name variations you can choose.
- Your name should be short and memorable, and you can be creative to coin some nice letters together, however, your choice of name should be something you will be proud to have many years down the road, meaning it shouldn’t be a name you are only excited about at the moment or some name in trend, it should have longevity value.
The Procedure for Business Name Registration:
- To begin the procedure for business registration, you must register on the Corporate Affairs registration portal- fill in your name, residential or business address, and other information.
After the registration process is complete, the email address you provided during the registration will be used for the verification of your account. To register with the CAC click here.
- Name Availability search -Check for availability of proposed company name (Click here to reserve a name)
- After the name has been approved, use the availability code provided to you to start the process of registration and fill all necessary forms on the Company Registration Portal.
- Pay the filing fees – To file an application for registration, a business registration fee typically costs about 10,750 naira (as at the time this post was published). You can find the current registration fee here.
As soon as you complete the registration process for any entity on the portal, the commission will approve your registration and you will automatically receive an E-Certificate and Certified Extract of Registration information on your dashboard for downloading at your convenience.
For A Detailed Step By Step Business Name Registration in Nigeria Check HERE
Once you have completed your business name registration and received your certificate of registration or incorporation certificate. The next step is to obtain your Tax Identification Number.
Having this is very important when opening a new corporate bank account with a Nigerian bank.
Below are the steps to follow.
NOTE: this guide applies to getting a Tax Identification Number (TIN) in Nigeria, please check with the Internal Revenue Service (IRS) of your country to determine the requirements.
In Nigeria this is regarded as TIN, in some countries, it’s regarded as EIN [Employer Identification Number]. Your TIN is the means of identifying business entities, in this case- your company. The TIN is issued to businesses already registered as a business by FIRS (otherwise known as Federal Inland Revenue Service).
TINs are free, so there is no need to worry. Follow these steps to obtain your TIN:
- Complete your company’s business name registration with your state’s Corporate Affairs Commission
- Download your Business name registration E-certificate- (Note- Upon completion of the registration on the portal, your registration is approved by the Commission seamlessly, the certificate is automatically generated to your dashboard where you can download at your convenience.)
- Approach the nearest FIRS office in your locality requesting to have a TIN for your business.
Here are the required documents to process your TIN
- Write an application letter requesting a TIN on your company letterhead (you can make one quickly with MS Word, all you will need is a bold caption of your company logo) – address the letter to FIRS, stating that you are a newly registered business. You can also mention your business registration number and what your business is.
Note: if you state when applying for the TIN that your company has been in operation for more than six months from your registration date, then FIRS may probably ask you to declare your income and expenses for that period of time, and you will need to pay the tax already accrued. If your company is new, the whole process is free of charge.
- Company stamp (you can approach an artist who specializes in awards and branded items to create the stamp quickly)- the stamp should bear your company name as it appears on your certificate. This stamp is used to certify the authenticity of your document.
- A copy of your utility bill
- A copy of your business name certificate.
- Ownership proof or a Receipt of the rent/lease of your proposed business facility- (note this could be your home occupancy evidence/house rent receipt, that is, if you will be running your home business from and do not have an office location)
These are all the requirements you need to have a TIN in Nigeria. Usually, the entire process takes 48-72 hours and you will receive your TIN certificate free of charge.
Tax payment begins when your business starts operating. For more information on how to pay taxes, please contact a local Tax official.
Some of the benefits of registering your business name
- It helps you to distinguish your brand from others- once you have chosen a name you wish to trade under, you should register this name right away to prevent it from being used or taken by others.
- Business bank account- this allows you to give customers your company account number for transactions, and it also increases customer trust. Having a bank account immediately makes you look very credible.
- Being a business owner, there are times when you may need financial assistance from your financial institution to back up a quick business arrangement. Having the necessary registration and license is a huge advantage that enables you to be considered for such financial assistance. In addition to that, you can avail of supplier discounts in your industry if you can present your document as a registered company.
- Customer reputation- customers will feel more at ease when they do business with a registered company, especially when that deal is high.
- Employing personnel – when your business is registered, you are also able to hire full-time employees and pay them according to your country’s minimum wage policy as well as pay your employees’ taxes on their behalf through the use of their tax identification number.
Please leave a comment in the section below if you found this guide useful.