Benefits Of Registering Your Business With Corporate Affairs Commission (CAC)
Practically, all business owners ask this kind of question. In fact, a lot of entrepreneurs in Nigeria are yet to register their businesses with Corporate Affairs Commission.
Business registration happens to be an essential aspect of business startup owing to the fact that registering a business is the passport to making it a legal entity. Of course, your business in Nigeria has to be registered with the Corporate Affairs Commission (CAC) before you can expect it to operate with limitless potential.
Broadly, CAC is an agency established in 1990 with the aim of registering business names and companies in Nigeria. While CAC has remained operative since its establishment, it is noteworthy that the registration agency maintains physical service outlets (precisely offices) in every of Nigeria’s 36 states including the Federal Capital Territory.
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In this article, you’ll find out how business name or company registration can be done with the CAC and the top 3 reasons why you should register your business.
Steps for the Registration of a Business Name in Nigeria
Business name registration happens to be the lowest (as well as easiest) form of business registration in Nigeria. Below are the steps involved in the registration of a business name in Nigeria:
Step I: Choosing your business names
Obviously, the choice of a suitable and non-existing business name is what comes first in the process of business name registration. By reason of this, you’ll have to create several names before visiting a nearby CAC office. Although it’s just one name you’ll register for your business, you have to think up a couple of befitting names as any name you’re eventually registering for your business must not have been registered by someone else.
At the CAC office you’re visiting for business name registration, a check will be run on the list of names you’re submitting to see which of the names isn’t in current use. This may then be chosen and registered as your business name.
Step II: Form filing
This step entails getting a form (at the CAC office) and providing the names you intend to check in the form. The other things you’ll be required to provide in the form are personal details such as your residential address, your full name, passport photographs and your other contact details including telephone number. In the course of this form filing, you’ll be charged a certain filing fee and it’s possible you find out the available name(s) for your business registration on the day of form filing.
Step III: Picking up your business certificate
Once your business name registration has been successfully executed, you can expect to obtain your business certificate in the next couple of days. While this certificate serves as a written confirmation of your successful business name registration, it is noteworthy that business name registration actually occurs in 24 hours as soon as you’ve chosen the name to register for your business.
Steps for the Registration of a Company in Nigeria
Unlike business name registration, company registration appears more procedural and elaborate. Below are the three steps you should follow for successful company registration in Nigeria:
Step I: Thinking up company names
This is likely some homework required of you so that you can eventually have a company name that has not been registered before. CAC will check whatever names you’re sending to it for availability and as such, you have to think up several names you consider befitting for your company.
Step II: Engaging the service of a reliable registration expert
For you to safely and legally register your company, it’s highly recommended that you work with a registration expert such as a chartered accountant or legal practitioner who should offer you professional guidance regarding the filling of several registration forms as well as sailing past certain technical issues.
Step III: Completing the forms
To carry out this step, you’ll have to visit the company registration portal (CRP) of the CAC. Follow the instructions below to proceed with your company registration on CRP:
- Fill necessary details in the pre-registration form CAC1.1
- Make necessary payment for filing and stamp duty
- Get the signed copies of your pre-registration documents ready. You’ll have to scan these copies and upload them on CRP in the following ways:
- Form CAC1.1
- Memorandum and Article of Association
- Recognized identification form for Director/Subscriber/Secretary
- Evidence of payment made to CAC
- After uploading the scanned copies for processing, prepare the original copies of the uploaded documents for submission to your preferred CAC office. It’s at this CAC office that you’ll receive the Certified True copies as well as your (company registration) certificate in return for the original copies you’re submitting
- Note that the business/company (registration) certificate is an essential document which you’ll receive at the end of the company registration process. Endeavour to safely keep the certificate as it could be required in future for essential purposes such as visa application, loan application, bank account creation and tax registration for your company
CORPORATE AFFAIRS COMMISSION –THINGS YOU SHOULD KNOW
The Corporate Affairs Commission (CAC) is regarded as Nigeria’s incumbent corporate registry set up vis-à-vis the Companies and Allied Matters Act (CAMA). Promulgated in 1990, CAMA was enacted as a basis for overseeing company establishment and management in Nigeria.
Prior to the establishment of the Corporate Affairs Commission, Company Registry –which regulated the administration of the defunct Companies Act of 1968 –was the body initially performing the corporate regulatory functions of present-day CAC.
Company Registry, which was a department in the Federal Ministry of Commerce and Tourism, failed to discharge its duties effectively. Therefore, it is notable that the establishment of CAC as an independent body was borne out of the need for an effective alternative to the previously existing Company Registry.
Under the leadership of its Registrar-General, CAC discharges its roles through authorized members of relevant associations including:
- The Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN)
- The Institute of Chartered Accountants of Nigeria (ICAN)
- The Nigerian Bar Association (NBA)
- The Association of National Accountants of Nigeria (ANA)
Functions Performed by the Corporate Affairs Commission
As per the provision of Section 7 of the Companies and Allied Matters Act (CAMA), the Corporate Affairs Commission is vested with the power to carry out the following functions:
- Establishment and maintenance of company office and registry in every of Nigeria’s 36 states wherein such office and registry are well equipped to perform the Commission’s duties, as provided under the Act or any relevant law
- Administration of the Act (CAMA) and the supervision/regulation of company establishment, incorporation, management and winding up
- Registration of Business Names and Incorporated Trustees
- The undertaking of activities considered relevant for the full implementation of CAMA’s provisions
- Providing a broad array of additional services
- The organization and conduct of inquiries into any company actions/relationships provided that such inquiries are in tandem with both public and shareholders’ interests
- Overseeing the initial stage of the accreditation process for authorized professionals and users of the Companies Registry. These professional users are precisely regarded as Chartered Secretaries, Lawyers and Chartered Accountants
- Provision of responses to grievances or questions relating to the services offered by the Commission
- Sale of the Commission’s statutory publications and forms
- Performing an oversight function over companies’ compliance with the provisions of CAMA
Types of Companies Registered by CAC
In tandem with the regulatory authority of CAC, only four types of companies can be established for the conduct of business in Nigeria. Therefore, CAC specializes in the registration of the following company types:
- Public Limited Company (PLC)
- Private Limited Company (LTD)
- Unlimited Companies
- Companies Limited by Guaranty
3 Benefits Of Registering Your Business With Corporate Affairs Commission (CAC)
Although some people neglect the need for registering their businesses, this doesn’t erase the fact that business registration is an indispensable requisite for formal business operation. Without any doubt, a number of benefits are attributable to business registration and these benefits are described (in this article) as the top 3 reasons why you should register your business:
- Separating your business from yourself –This is described as legal separation and it’s a beneficial way of ensuring that there’s no collision between your business liability and your personal liability. Although it isn’t all forms of business registration that offer it, legal separation likely guarantees some assurance of limited loss in the event of business or personal disaster.
- Giving proper identity to your business –This, undeniably, is one of the reasons why serious-minded people cannot undermine the importance of business registration. Of course, many people like doing formal transactions with registered businesses. They do this not only to assure themselves financial safety but also to ensure they’re doing business on a formal note. Importantly, people will likely take you seriously if you’re running your business under a registered business name rather than your personal name.
- Eligibility for external funding –It’s very possible that the funds at your disposal aren’t enough for your business needs. In this case, you might need to source funds externally and before you’re deemed qualified to obtain funds from a governmental body or even a serious financial institution, your business must have been duly registered with the CAC
Finally,We hope that this article has helped you find out how business registration is done in Nigeria. Also, we believe you’re convinced about the explained reasons on why you should register your business.