Steps To Registering a Company
With the economic situation and the rising level of unemployment, there is a need for one to venture into entrepreneurship. In venturing into entrepreneurship, it is of utmost importance to get registered in order to build the confidence of your client or customers.
As such, this article is written to guide you through the processes involved in registering your company; as well as some salient information needed before registering a business or company.
Step 1 – Getting Acquainted with the Portal
Over the years, registering a company or business name required either going to the headquarters of the Corporate Affairs Commission (CAC), or the office closest to you. But in this era of technological advancement, such narrative has been swept into the dustbin of history.
Also, the Corporate Allied Matters Act (CAMA 2020) now permits a CAC agent, or individual (applicant) to register a company. The Corporate Affairs Commission in Nigeria is the body saddled with the responsibility of business name or company registration. Hence, proceed to the official CAC portal: www.CAC.gov.ng.
Once you’ve accessed the portal, you create an account with all your details and a means of identification.
At this point, you’re a few steps away from registering your company. But before proceeding with this, you must understand some basics.
Step 2 – Know the basics
Registration of a Business Name and a company are not the same. A business name is mostly obtained by small-scale businesses for purpose of legality. e.g. one who owns a store, a small borehole drilling company.
- A company is a larger scale business where one, two, or more persons could pool their resources together to generate capital.
- Both the business name and company have advantages and disadvantages.
- Both the business name and company pay fines for failure to pay annual returns.
In the case of business name; little capital is required, tax is minimal, annual returns is also moderate, and it is a sole-proprietorship style of business; hence decisions regarding the basic economic problems (what, where, and how to produce) could be answered by the individual.
Also, the major disadvantage of a business name is that it cannot be sued without the owner being sued as well (i.e. it cannot sue or be sued in its own name).
For a company, it can sue and be sued in its own name. This is because the law sees a company’s name as an entity different from its directors and shareholders. For this reason, customers prefer working with companies rather than ventures with only a business name.
As such, if one has a cause to sue a company, the owners of the company would not be sued as well. A company has the privilege of having a board of directors; who answer the basic economic questions of the company, carry out checks and balances, and continue the company in event of unforeseen circumstances.
On the other hand, the major problems of companies are; the tax rate, and annual returns. One who initially created a business name can upgrade to the status of a company, but one cannot degrade from a company to a business name.
To convert a business name to a company, the CAC has stipulated the following;
- An official application has to be made to the commission
- A complete and up-to-date account of the Annual return
- A processing fee would be paid
- Documents re-uploaded.
Incorporated trustees are companies that don’t do business, but depend on the support of the general public, or other organizations. The members cannot share the profit as the funds obtained are usually geared towards a particular project. NGOs fall into this category.
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Step 3 – Company Registration
Upon completion of the initial account creation, you can now log in. Once you log in, I’ll advise you to start by checking the cost of the services you need. Therefore, click on the “summary of fees” tab; here you’ll see the cost of each service to be rendered, so that you may have an idea of the financial implication.
If you’re comfortable with the charge, proceed to the online registration tab. From there, you’ll see the steps which include; public search, reserving a name, and so on. If you’ve already logged in, it takes you to your profile where you could see at a glance, your registered companies, submitted/unsubmitted name reservations, and pending approval.
After your Dashboard, there are two other tabs which are “New name reservation” and ” Registration”. Once you click “name reservation”, there is a drop-down menu with two sub-options; “my reservation” and a second “new name reservation”.
You’re required to click on the second “new name reservation” and the next page that comes up is a four-sectioned form.
Step 4 – Filling the Form
The form consists of
Name and type:
In this area, you’ll be required to classify your company ( here you select “company” or any other option that suits your business).
You would be required to state the specific type of your company and the proposed name. You fill the objective section, preview, and thereafter proceed to pay for the name search.
Within a maximum of 24hrs, you would be notified of the status of your company alongside an availability code. Once your company name has been approved, you now proceed to “new registration” and type in the availability code sent to you.
You would be required to upload certain documents some of which could be pdfs or JPEGs. Once you’ve completed your company name registration, you can print your valid e-certificate from the portal.
The last phase of your registration is the post-incorporation process. This stage is needed in a case where you wish to make future changes to your company, such as change of address, change of trustees, etc.
The registration process for a company has been simplified by the Corporate Allied Matters Act (CAMA 2020). But I strongly recommend the services of a legal practitioner; who will enlighten the applicant on the necessary terms, obligations, and rights the company has. Thereby preventing the company from defaulting.
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