7 BENEFITS OF REGISTERING YOUR BUSINESS AS A BUSINESS NAME (VENTURE OR ENTERPRISE) IN NIGERIA

You must have heard that a CAC Business Name (BN) registration is not such a good choice for doing business, as it is the least model structure in the business type rankings. Well, I’m here to tell you that it isn’t entirely the position. Although unlike a company limited by shares, a Business Name is not a legal entity, it however exists mainly for the purpose of convenience.

And more importantly, it is a creation of the Companies and Allied Matters Act (CAMA) 2020. So why don’t we make good use of that ‘convenience’ afforded potential business owners? The creators of the Business Name registration type/model had a purpose in mind when it was making provisions for its registration.

So, irrespective of the fact that a BN doesn’t enjoy the benefits just like a company does, it is still acceptable for business ideas that want to start up something small and official, but with a plan to upgrade it in the shortest possible time or in the nearest future, so as to make use of the opportunity afforded bigger structure business types.

So here are the benefits of registering your business as a Business Name with the CAC:

• it is the most affordable and convenient in terms of registration modalities with the CAC as it comes with simpler requirements and procedure.
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• - A BN can commence on a small-scale plan
• - The registration is an expression of an intention to do legitimate business
• - The business can be micromanaged by a sole proprietor or a partnership
• - It has its business trade name in the CAC’s registers and obligated to do its regulatory annual returns filing and fulfill other statutory obligations
• - Expenditure is manageable and financial business operations is at par with the income/profits
• - The proprietor(s) is capable of managing a considerable size of transactions.
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CONS OF A BUSINESS NAME

What this video intends is to give a holistic view of the benefits of a BN. So, on the flip side, a BN not being a legal entity means:

•  - It does not have, so cannot enjoy the benefits of a corporate legal personality…
• - The liabilities of the proprietor(s) is personal and unlimited. He is obligated to resolve business issues in his own name and not in the business’...
• - Because it lacks an adequate financial structure of a capital base (share capital) it may not conveniently settle creditors or other 3rd parties…
• - The business name may lose its identity to a trademarks registration…
• - The BN model may not be suitable for the actual business goals in comparison to the market needs it is intended to meet…
• - It may lose out on capital investment partnerships from interested investors
• - It is capable of being grounded with the exit of the proprietor(s).
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CONCLUSION

So, whatever it takes, as a new or existing proprietor, ensure that you manage your business properly on the one hand, and that there is a plan in place to upscale the BN in the shortest possible time; on the other hand. And yes, there is the option to register a BN as a Limited Company on the CAC portal while maintaining the same name and clientele base. There, you have every reason to get started on your business formation and achievement.