Congratulations on starting your business! You’re probably telling your friends and family about your business idea, coming up with a marketing strategy, and thinking about opening a business bank account.
However, there’s one important thing you might have forgotten to put on your checklist: registering your business.
In this article, we’ll guide you through the basics of registering your business in Nigeria. We’ll explain the documents you’ll need, the step-by-step process, and what it will cost you.
But before we get into all that, let’s discuss why it’s a wise idea to register your business.
Why Should I Register My Business?
There are three important reasons you should add registering your business to your checklist:
- Legal recognition and protection
Registering your business means no one can use your business name to do shady activities, like pretending to be your business to scam people.
Plus, if you register as a private or public company, your business becomes a separate legal entity, which means your personal assets won’t be used to pay off business debts if your business fails.
- Boosts your credibility and reputation
People- customers, suppliers, investors- tend to trust a registered business because it proves you and your business are legitimate and can be tracked. This goes a long way in earning trust and making people take you and your business seriously.
- Access to financing opportunities
Being a registered business opens the door to financial possibilities. It makes it a whole lot easier for you to apply for loans, grants, and other investment opportunities.
So, don’t think of registering your business as unnecessary paperwork. Registering your business can help you protect your assets, build your reputation, and grant you access to the funding you need to grow your business.
What are the documents I need to register my business with CAC?
The Corporate Affairs Commission (CAC) is the body in charge of registering and regulating businesses in Nigeria.
The specific documents for registering your business with the CAC depend on the structure of your business.
However, some requirements apply to all businesses, including:
- Business name
- Proof of your business’s registered address, such as a utility bill or lease agreement.
- A valid form of government ID (National identity card, international passport, driver’s licence, voter’s card)
- National Identity Number (NIN)
- Statement of compliance by a legal practitioner (required for public and private companies)
- Articles of association (required for private and public companies )
- Memorandum of association (required for private and public companies)
Remember, you may also need to provide additional documents depending on the type of business you are registering.
You can find a complete list of the required documents for registering your business on CAC’s official website.
What are the factors to keep in mind when registering a business in Nigeria?
There is more to registering your business with the CAC than gathering documents. You’ll also need to consider two essential aspects: your business name and its structure.
Choosing the right business name
Apart from resonating with your brand, your business name must comply with the CAC’s naming guidelines, which are in place to make sure business names are special, fitting, and don’t infringe on someone else’s trademark.
Here are some of CAC’s naming guidelines:
- Your business name has to stand out and be different from other business names or trademarks. You can make sure of this by running a name check on the CAC’s portal.
- Your business name should be related to what your business does; It shouldn’t mislead or confuse folks. For example, your business name should not imply you own a makeup studio if you are running a fashion store
- Your business must not be offensive, rude, discriminatory, or go against what’s considered good behaviour in society.
- Your business name must follow all the laws and regulations in Nigeria. Don’t pick a name that suggests anything illegal or unethical. Also, don’t choose names that could trick or fool the public.
- Certain words are off-limits unless you get special permission. For example, words like “Federal,” “National,” and “Government” are reserved and need clearance from the right authorities before you can use them in your business name
Choosing the right business structure
It is important to choose the right business structure for your business because it can have a significant impact on your personal liability, taxes, and ability to raise capital
Plus, your business structure also determines the documents and requirements you’ll be asked for during the registration process.
Based on business structure, you can register your business in Nigeria as a:
- Sole Proprietorship
- Private Limited Company
- Public Limited Company
- Public Company Limited by Guarantee
- Private Unlimited Company
Choosing the right business registration method
There are two ways to register your business with the Corporate Affairs Commission (CAC) in Nigeria: by yourself or through a CAC-accredited agent.
Registering by yourself
Going the DIY route means you’ll handle all the paperwork, requirements, and registration by yourself. This isn’t difficult and can be done either through CAC’s online portal or by paying a visit to one of their local offices.
Registering with the CAC by yourself is advisable if you are running a sole proprietorship. However, for the smoothest experience, we recommend you visit a CAC office near you.
Registering through a CAC-accredited agent
You can think of CAC-accredited agents as middlemen between businesses and the Corporate Affairs Commission.
CAC-accredited agents are people or entities that have been authorised by the Corporate Affairs Commission (CAC) to process and submit pre-incorporation and post-incorporation filings on behalf of individuals and businesses.
This means they can be trusted to handle the entire process for you as they are experts and know the ins and outs of the business registration process
If you’re setting up a public or private company, using a CAC agent is a smart move.
How do I register my business in Nigeria?
Registering your business with the Corporate Affairs Commission (CAC) is a straightforward process. Here are the steps involved:
Step 1: Sign up on the CAC portal
Visit the CAC portal and sign up as a new member. You will need to provide some basic information like your name, date of birth, gender, nationality, phone number, email address, country, state, National Identification Number (NIN), and a valid government ID.
Step 2: Verify your account
Once you have signed up, check your email for a verification link sent by the CAC. Click on the link to verify your account and log in.
Step 3: Reserve your business name
Before you can reserve your business name, you need to check to see if it is available, which you can do on the CAC portal.
You can check the availability of a maximum of two business names. If your chosen name is available, you can then proceed to reserve it.
It’s important to remember that business names are reserved for 60 days, so you must register your business within that time frame.
Step 4: Provide your business details
Once your business name has been reserved, return to your dashboard and enter the availability code that was provided by the CAC.
Then, fill in your business details, such as your business address, start date, structure, etc.
Step 5: Particulars of directors
In this step, you will provide personal information about yourself and any other owners or directors associated with the business.
This includes names, email addresses, phone numbers, National Identity Numbers (NIN), etc
Step 6: Prepare Memorandum and Articles of Association documents
This step is only required for public and private companies. If you are a sole proprietor, you can skip it.
You may want to consult with a lawyer for assistance with this step, but you can also use a template provided by the CAC. You will also need to fill out the incorporation form on the CAC website.
Step 7: Upload the required documents
You are almost done! At this stage, you will be asked to upload documents such as utility bills, passport photos, means of identification, signatures, etc.
Step 8: Pay registration fees
Once you have confirmed that you have provided the correct information and that everything is in order, you will need to pay the registration fees, which include filing and stamp duty fees.
How long does it take to register a business with CAC
The time to register your business with CAC varies, usually taking anywhere from a week to two months.
How much does it cost to register a business with CAC
The cost of registering a business in Nigeria depends on the type of business, the state in which it is registered, and the services provided by the CAC-accredited agent.
However, here are some of the official prices listed on the CAC website:
- Reservation of name: 500 Naira
- Registration of business name (sole proprietorship): 10,000 Naira
- Registration of private company with share capital not exceeding 1 million Naira: 10,000 Naira
- Registration of private company with share capital exceeding 1 million Naira but less than 2 million Naira: 20,000 Naira
- Registration of public company with share capital not exceeding 1 million Naira: 20,000 Naira
- Registration of public company with share capital exceeding 1 million Naira but less than 2 million Naira: 30,000 Naira
- Filing of notice of change of business name: 5,000 Naira
- Filing of notice of change in business address: 1,000 Naira
- Filing of notice of change in proprietorship: 1,000 Naira
- Filing of annual returns: 1,000 Naira
- One set of incorporation forms: 500 Naira
Please note that these prices are subject to change, so it is always best to check with the CAC for up-to-date information.
Conclusion
The good news is that registering your business with the Corporate Affairs Commission (CAC) is not a complicated process. Plus, it’s an important step in protecting your business, opening doors to financial opportunities, and making people trust what you do.
Just follow the steps we’ve laid out in this article, and you’ll have your business officially registered quickly and easily.