Registering your small business gives it credibility and ensures confidence. When you register your business, it simply means you’re telling the government and the general populace that your business exists and your business name is yours. In doing so, your business is regarded as a legal entity. As long as you have a business name in mind, register it. You can always change your mind when you have a complete business picture. However, registering your business name will protect your business name from any unauthorized use. The best part is that small business registration is straightforward and affordable.
Why is CAC registration important
One advantage of registering your small business is the separation of the legal identity of the owner from the business itself. Suppose you obtain a loan and there is a default in payment. In that case, the bank will only withhold the company’s property, not the business owner’s personal property.
In competitive marketing, registering one’s business has become necessary to protect your name and trademark. When your business name becomes recognized by many people, there is a tendency for people to imitate your business name. They might end up taking both your name and your customers. Thus, it is essential to register your business with CAC.
Since funding is critical in any business, securing loans from banks with a registered business is more accessible than a personal loan application. Suppose you try to source for loans or investors. In that case, your legal business documents facilitate the process since your company is seen as a legal entity and can be tracked and accounted for.
A registered business gives your prospects confidence that they are dealing with a reputable business and transforms them into customers. Customers turn into sales reps, bringing more referrals to the business as long as you maintain this reputation.
The government body responsible for business registration in Nigeria is The Corporate Affairs Commission (CAC). The Companies and Allied Matters Act established the CAC, promulgated in 1990 to regulate the formation and management of companies in Nigeria.
The Corporate Affairs Commission provided a portal – cac.gov.ng for business name registration. All business owners can sign up and apply.
The cac.gov.ng portal is the official registration portal for all business owners.
There are four steps to register a business name with CAC
- Pick a business name and check for its availability
- Finish your pre-registration form to register a business name
- Prepare your documents for upload and Pay for a filing fee
- Wait for approval and Download your certificate of incorporation.
Pick a business name and check for its availability.
The very first step is deciding on a name for your business. If you have a QShop Website for your business, that should be very easy. Sometimes, you can submit two business names so that if one is already in use, they will adopt the other.
It is important to note that the names you pick can also be rejected. This happens if the name already exists or includes prohibited words like National, Federal, Government or Holdings.
So, to avoid all of these, you should search for the availability of your chosen names. You can visit a CAC office nearest or request name availability and reservation online on their portal. If your chosen name is not in use, it will be reserved for you in 60 days for the cost of ₦500 (Five Hundred Naira Only).
Finish your CAC pre-registration form to register a business name
After confirming availability, you’ll receive a business name availability code. Register your company with your business name availability code. CAC provides you with a pre-registration form called CAC/BN/1. This form collects details about your business and scanned identification documents about the business owner, which include any one of these:
- National ID Card
- Driver’s License
- Voter’s Card
- International Passport
Prepare your documents for upload and Pay for a filing fee.
After filling out the CAC business registration form and submitting the original copies of your documents, you’ll be required to pay the sum of ₦10,000 (Ten Thousand Naira Only) for your business registration. The CAC portal provides a platform for online payments.
Wait for approval and Download your certificate of incorporation.
The CAC will approve your business name registration if all your documents are intact. After uploading all the required documents, the CAC will take some days to review all the information you have provided before approving your business name certificate.
The wait time for approval is between 3 to 7 working days if you have not made any mistake. CAC will have to search the entire database of all the registered names to ensure that your business doesn’t match any names in their database.
Also, It usually costs ₦10,000 (Ten Thousand Naira Only) to change an approved business name to a new business name.