How to Register Your Business With Corporate Affairs Commission of Nigeria
Why you require a Business License
Most times, it is very easy to neglect the need for a license; especially when the thrills of finally starting your dream business overwhelms you. Nonetheless, it is important to note that permits and licenses are compulsory. In fact, you cannot legally commence business operations until all the licenses are in place. In addition, if you have employees in your business, or you sell taxable products and services, you will need to enlist yourself with the taxing authorities. The prerequisites vary across industries, and they also depend on the location and manner in which your business is run.
Getting your business name registered with the Corporate Affairs Commission (CAC) can prove to be a herculean task, especially if you do not have adequate information on the technicalities involved and the mysteries behind the success. Nonetheless, adhering to the steps outlined below can help you do it personally and successfully in Nigeria. Here goes:
- Visit the office of the CAC in your state to search for your business name
- Select a unique business name. When you want to register your business name, think of something that is not rampant. Many business names have been turned down, to the dismay of the business owners, simply because the name they chose was already in use by another person. So you have to be really innovative with the name. Once you have selected a unique business name, there will be no need to purchase another ‘availability form’ for the same purpose. Asides the main name, have an alternative name as a second or back-up option. You will be asked to provide two second-choice names to back up the first name; so that just in case the first has been taken up by some other person, the other two can be considered. You can equally have more than two back-up names kept in mind.
- Be informed about the business type it is that you’re registering. While in the process of registering the business name, ensure that you know the kind of business name you want to register with the CAC. On the ‘availability form’ (costs N200), you will see ‘Private Limited Company’, ‘Public Limited Company (PLC)’, ‘Unlimited Company (ULTD)’, ‘Change of Name’, ‘Business Name’, ‘Company Limited by Guarantee (LTD/GTE)’, and ‘Incorporate Trustees’. What you’re interested in is a business name; so simply tick the area beside ‘Business Name’ on the form.
- Avoid making use of business names that mandate credential back-up. Shun names bearing words like ‘expert’, ‘guru’, ‘consult’ and etcetera; you might just be asked to bring a certificate lending credence to your claims as a proficient professional in that field. If you still want to use them, get an affiliate who has all the obligatory certificates to use such names. Also, it must be from an institution approved by the government.
- Always track your application. Check back after like 2 or 3 weeks; otherwise, your business name may just be taken up by somebody else who probably applied after you but monitored it more closely.
Why are Business Permits Mandatory?
They are required for three main reasons:
- To monitor your finances for tax objectives
- More importantly, many agencies that mean business only pay attention and transact with registered companies.
- To make your business unique, and to ensure that you are responsible for your decisions and actions. You will agree that most people – including ourselves – prefer paying for transactions into corporate accounts bearing the name of an organization, rather than into personal accounts. The assumption is that if the transaction goes bad, the organization involved can quickly be clamped down on. If your company is registered, the documents can be used to create a corporate account easily.
What happens if you do not get licensed?
Refusal to get required permits, licenses, and tax registration documents could expose you to dangers, penalties and untold business risks that have fatal tendencies. In recent times, governments have begun scouting for more potential streams of revenue – due to pressure against increasing customary taxes. This means that there is an increased awareness of those who try to evade business licenses. A lot of them eventually hire third-party agents for collection. The disadvantages of not acquiring the necessary licenses comprise of the following and more:
- You may be issued expensive penalties and interest, or even personal liens
- Your location may be kept under lock and key
- You will be unable to access your new location
What are the regular Permits, Licenses and Tax Registrations?
The regular permits, licenses and tax registrations a business may require, consist of the following listed below and more:
- Business license
- Zoning permit
- Building permit
- Home occupation permit
- Sellers permit
- Health Department Permit
- Withholding Tax Registration
- Sales Tax License
- Fire and Police Department Permit
Which permits would I need for my business?
If you need an answer to the above question, you are just like many others. In fact, almost every entrepreneur asks this same question. You may decide to make some personal findings – even though it is almost impossible to do so, and it seldom ever yields adequate results. You can contact your local town officer, but even that will not get you all the information you need pertaining to district and state requirements, and otherwise. Governments do not actually provide a direct solution or office where you can visit and get all the permits, licenses and tax registrations you’ll ever need.
Photo Credit: http://new.cac.gov.ng/