The concept of starting a business is an idea that many people like. While some go all out by investing heavily in a big enterprise, others go down the conservative route and start small. Whether you start small or big, there are certain laws that govern the operations of businesses in Nigeria. The principal legislation governing business name registration in Nigeria is the Companies and Allied Matters Act (CAMA) 2020. Please note that CAMA 2020 has repealed CAMA 2004.
There are different types of businesses that can be registered in Nigeria under the provisions of CAMA 2020. They are as follows:
- Business name
- Limited Liability Partnership (LLP)
The type of business to be registered depends on relevant factors. For instance, the nature of the business, available capital, and the number of persons involved could be relevant factors.
In this post, let’s focus on business name registration in Nigeria.
Business name registration in Nigeria
Business name registration in Nigeria is covered under Part E of CAMA. It is a much simpler form of doing business with fewer requirements when compared to a registered company or a limited liability partnership. As a result, the business name is a very common type of business registration in Nigeria. This is particularly common with small-scale businesses. Some of the reasons why this form of business is very common are as follows:
- It is easy to manage.
- low registration cost.
- It has a simpler registration process.
It also enjoys protection from parallel business name registration in Nigeria. This means that once your business name is registered, others would not be allowed to register the same name. In essence, your business name becomes unique after registration.
Business names that must be registered in Nigeria
The CAMA 2020 mandates the following categories of business names to be registered:
- Jointly owned businesses that do not bear the true name of individual partners
- Businesses owned by individuals that do not bear the true name of the owner
- Companies/Corporations whose business name does not bear their corporate name
Jointly owned businesses that do not bear the true name of individual partners
In other words, business names that do not consist of the surnames of all partners without any other addition. Such additions could be the first names of the individual partners or the initials of their first names.
For instance, two people decided to start a business. One is called Ahmed Obi and the other is called Wale Oni. Consider the circumstances below to get an idea of when registration would be required:
- Assuming that their business name is called Obi & Oni, registration of the business name is not compulsory.
- If their business name is called Ahmed Obi & Wale Oni, registration is not compulsory.
- If their business name is called Obi & Oni Electronics, registration is required.
CAMA also provides some exceptions where registration may not be required.
Exceptions to circumstances requiring business name registration in Nigeria are as follows:
- Where the addition to the surnames merely indicates that the business is being carried on in succession to a former owner of this business.
- If two or more of the partners have the same surname, registration is not compulsory. For instance, you could have ‘Onis’, ‘Johnsons’, etc.
- Lastly, where the business is carried on by a receiver or manager appointed by the court, registration would be unnecessary.
Businesses owned by individuals that do not bear the true name of the owner
The business name doesn’t consist of the surname of the owner without any addition. Such addition could be the first name or the initials of the first name of the owner.
Companies/Corporations whose business name does not bear their corporate name
Lastly, companies/corporations whether or not registered under the CAMA whose business name does not consist of their corporate name without any addition.
Procedure for business name registration in Nigeria
1. Business name availability check
The first step in registering a business name is to check for the availability of the proposed business name. Applicants will suggest two proposed names in the alternative for registration of the business. If one of the suggested names is available, CAC would reserve it for a period of Sixty (60) days.
To reduce the likelihood that your suggested name would be unavailable, you could do a prior check on the CAC online platform.
2. Fill out the prescribed CAC Form(s)
Complete the business registration form prescribed by the CAC. The prescribed form must be duly signed and contain the following details:
- Business name or names if it is carried on under two or more names;
- General nature of the business;
- Full address of the principal place of business;
- Full address of any other places of business (branches), if any;
- Date (or proposed date) of commencement of the business;
- Details of the owner of the business or each partner in the case of a firm.
3. Payment of fees
Make the required payment for the CAC filing fees. This can be done at the bank or online through the CAC payment portal.
4. Upload documents
You will upload the registration form alongside the proof of payment of the requisite fees. You would also attach a valid means of identification of the business owner or each partner as the case may be.
The CAC will review the submitted documents. CAC would then notify the applicant of its decision on the business name application.
CAC would issue a certificate of registration to you if your business name application is successful. You could also request a certified true copy of the certificate at CAC.
*It is however advisable to consult a lawyer before starting the process of registering your business*
You might also be interested in knowing about the required taxes for Nigerian Entrepreneurs.