7 Reasons Why You Need to Register Your Business with Corporate Affairs Commission
7 Reasons Why You Need to Register Your Business with Corporate Affairs Commission
Establishing a startup might not be enough most times until you have registered it with the government. Business registration comes with a lot of benefits than pitfalls and it is essential for every entrepreneur to do it.
As an entrepreneur, it is advisable for you to register your business, especially if you have a bigger picture of your business in mind. You might not know the essence today, but it will surely speak for you tomorrow when the time comes. Registering your business has a lot of advantages which are all for your own good.
Below are some of the reasons why you need to register your business
- Your business becomes a legal entity: by registering your business, your business becomes a separate legal entity. It has rights and privileges like humans have. Your business can own lands and properties which wouldn’t have been possible if it was not registered, as non-registered businesses cannot own any form of property, it will be declared illegal. Your business can take legal steps, it can sue and can be sued. In a nutshell, your business has rights.
As a separate legal entity, the risks attached to your business do not attach to you as an entrepreneur, since your personal life is different from your business. Your business can own a personal bank account, yet any debt incurred will not be attached to you. This makes it easier for you to take calculated risk and also easier for you to protect your assets from certain legal or business risk.
- Easy financing: your ability to raise money or convince investors to invest in your business will be easier. Investors are most times scared to invest in new businesses or businesses that are unregistered because of the risk attached. ; If eventually their investment doesn’t pay off, they won’t be able to take legal actions against you, but if your business is registered, they will be more convinced to invest in your business.
More so, you can raise money from equity financing if your business is registered. Equity financing deals with selling out shares to shareholders, angel investors and the likes. This kind of investment is profitable in that you do not have to pay back refund, rather you pay dividend to shareholders when you make profits.
7 Reasons Why You Need to Register Your Business with Corporate Affairs Commission
- Prestige and honor: there is a saying that the essence of money is to buy honor. A registered business can earn you honor, prestige and respects. Clients prefer mostly to deal with registered businesses than unregistered ones. Registering your business earns you respect and honor from clients, it shows you are a reputable and safe to deal with.
Many people believe unregistered businesses can be fraudulent or untrustworthy, which is why there is a higher patronage for registered businesses because clients have the assurance that you are real and are more likely to deliver on your promises to them, and if at all you eventually don’t, they can be sure to take your business to court and have a fair trial which might not have been possible if they worked with an registered business.
Registering your business makes prospective clients or customers perceive you as being stable and you stand a chance of winning multiple business deals than any unregistered business. Government and companies for instance will never sign a business contract or offer any deal with unregistered businesses, because they question their integrity and reputation.
- Loans: there might come a point in your business, when you will need to source for finance either from banks or other institutions, registering your business will give you an edge. Money lenders including banks always prefer to see your registration certificate before they lend you money as this is the only way they can be sure of your honesty and sincerity. Besides, by presenting your registration certificate from the Corporate Affairs Commission (CAC) to them, they will get convinced to lend you whatever amount you ask for. It also gives you the opportunity for an extensive loan and this can help grow your business.
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5. Corporate bank account: you appear more professional when you have a separate bank account for your business and another for your personal use and the only way you can achieve this is by incorporating or registering your account. Your registration certificate is what you will present in the bank when you are registering your account. Once this is done, your professionalism will step up as it is more professional when a client asks for your account details to give them your business account details, than giving out your personal account details.
More so, it also helps you control spending. Having separate bank accounts for your business and your personal use helps you spend wisely. It helps you spend wisely in that you wouldn’t have to spend from your business account for your upkeep neither will you have to restock your business from your personal money; it makes business easier.
7 Reasons Why You Need to Register Your Business with Corporate Affairs Commission
- Legal protection: once you register your business, it starts operating as a separate whole entity and it is protected by the Corporate Affairs Commission. It has rights like every human and its rights can never be infringed on. In cases of infringement, your business can sue whoever the infringer is. More so, by registering your business, the Corporate Affairs Commission registers your business or brand name, and once registered, no other business can use your business name again or it’s semblance. You get a unique business name meant for you alone and no one can toy with your business except such person is ready to face the wrath of the law.
- Succession: a registered and successful business is more likely to outlive the founder, much more than an unregistered business. By registering your business, it makes longevity and succession easy.
It will be at no one’s detriment but yours if you refuse to register your business because there are many reasons why you should. The ones we have talked about in this post are just a few of them.
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