Important things to know about registration of business in Nigeria

Many businesses are registered with the Corporate Affairs Commission, but it is also true (at least in practice) that not all businesses are registered. As a matter of fact, the common notion is that registration has little or nothing to do with the success of a start-up business.

If that is the case, does it leave anything to be desired about registering a business? Are unregistered businesses legal? Are there advantages that registered brands stand to benefit? Are there obligations attached to a registered business? When is the appropriate time to register a business? What are the requirements in registering a business? These questions and some others will be answered in this article.

Just before we start, it may be essential for you to understand the differences between a Business name registration, and company registration, I will therefore recommend that you read my article Amazing Differences between Business Name, and Company Registration in Nigeria before you continue with this.

If you need help in creating a Business name, you may view my article 6 Practical Hints on How to Create a Registrable Business Name in Nigeria

Do I need to register my business brand?

COMPANY:

BUSINESS NAME:

Yes, you must register your company. OTHERWISE, your business will not be considered as a corporate body, and will not be able to exercise the powers and functions of an incorporated company (i.e. you will not be able to enter contracts in the name of the company, sue or be sued in company’s name, neither will your unregistered company be considered as an artificial person etc.)

You must register your business name EXCEPT you are using your actual names- your surname with or without your other true names or the initials of those names- as a business name, then, it does not have to be registered. In addition, if there is an addition that merely indicates that the business is carried on in succession to a former owner of the business; or where two or more partner have the same surname and decided to add an “s” at the end of that surname; or where the business is carried on by a receiver or manager appointed by any court, registration will not be necessary.

                                               

WHY YOU MAY NOT BE ABLE TO DO WITHOUT REGISTERING YOUR BUSINESS NAME:

1.    Banks usually request for certificate of business registration before opening a corporate account for corporate clients. By implication, you may not be able to open a corporate account.

2.    It is almost impracticable to have your name alone (without any addition) for a business name. For example “Eyitayo Ogunyemi”- looks quite absurd without any addition like “Law Office of Eyitayo Ogunyemi” “Eyitayo Ogunyemi & Co” etc.

When must I register my business brand?

Company:	Business Name:
A company must be registered before the commencement of business	Must be registered within 28 days of commencing the business in respect of which registration is required

What do I need to register my business brand?

Company:

Business Name:

After you have been given a Company name, the checklist of other requirements is as follows: ·  Details of your Directors: These include surname, other names, date of birth, Nationality, residential address, P.O.Box, E-mail, and Telephone number of each director. You need a minimum of two (2) directors to register a company. ·    Details of Share Capital Structure: “Shares” are used to denote the extent of ownership of Shareholders of a company. Your company must have a minimum of 1,000,000 (One Million) Share Capital and at least 25% of the Share Capital must have been taken by the Shareholders. ·       Details of Shareholders: These include name, address, E-mail, number and type of Shares allotted to each Shareholder. You need a minimum of two (2) shareholders for your company. ·       Details of Company Secretary: These include the surname, other names (or name of firm or corporation- in the event that the secretary is a firm or corporation), address, telephone number, P.O. Box, and E-mail contact of proposed Secretary. ·    Details of proposed registered address (usually the head office address): ·  Details of the Objects of your proposed company (i.e. summation of the objectives of, or statement of the businesses that your company intend to be doing) ·    You will need a legal practitioner to depose before a Commissioner of Oaths or a Notary Public that you have complied with the Companies and Allied Matters Act in respect of matters precedent to the registration of your company. That is why only a legal practitioner can help you to commence and complete the registration of your company.

After you must have conducted search for a Business name, below is a checklist of other requirements: · Surname and other names ·  Full address of head office (and addresses of branches if there are) · Other details are: Gender, Date of Birth, Telephone Number, Nationality, Residential Address, Occupation, and Email Address. (where it’s a partnership, you will provide similar details for other partners). ·       If the business is to be owned by a company, or a company is a partner, you will need to supply the name and registered address of the company. · Two passport photographs of business owner(s). ·       Deposition of Affidavit before a Commissioner for Oaths ·    Statement of the general nature of your proposed business.

What are the benefits of registering my business brand?

1.    If your business name matters, then you must register it so that you can have monopoly of the use of the name.

2.  Registering your business prevents you from mistakenly using the name of another registered business to transact business.

3.  Registration makes it easy for the details of your business to be publicly accessible. Easy access to the details of the structure of your business will also help investors to decide whether your business is viable, and banks can also decide on partnering or offering you loans.

4.    Registration is a prerequisite in most banks for the opening of corporate account.

What are the obligations that accrue upon the registration of your brand?

COMPANY:

BUSINESS NAME:

a.  You must clearly display your registered company name and registration number (R.C. No) in a conspicuous position and clear letters outside of your business offices. b.  Your company must possess a seal (metallic or rubber) on which your company name is engraved in clear characters c.   You must publish your registered name on all business letters of the company and in all notices, advertisements, and other official publications of the company, and in all bills of exchange, promissory notes, endorsements, cheques, and others for money or goods purporting to be signed by or on behalf of the company, and in all bills or parcels, invoices, receipts, and letters of credit of the company. d.  You must give notice of any change in the address of your company within 14 days of the change to the commission. e.  As soon as you register your company, purchase a standard notebook to record the details of the shareholders of your new company. The records of each member should include their names, address, extent of ownership in the company, date on which each person became a member, date on which the person ceased to be a member (i.e. where the person has ceased to be a member). You must take inventory of the members that started the company within 28 days of registering your company, and you must take inventory of all subsequent members within 28 days of the conclusion of agreement for them to become members. Where a person ceases to be a member, you must take record of that fact within 28 days too. You may decide to keep your Members’ Register at your registered office, or in another office of your company (if that is the place where you make up the content of the Register), otherwise, you can keep it with your Legal Adviser/ Solicitor particularly if he/she is responsible for using his/her professional competence to manage the Register on behalf of your company. If you prefer to keep the Register at an office other than your registered office, or with your Legal Adviser/Solicitor, make sure that either your company secretary or your Solicitor notifies the Corporate Affairs Commission of the place where the Register is kept within 28 days of the company’s decision. f.    Where your company has more than 50 members (maybe because there are members that are joint holders of your company’s shares or for some other reasons), you may either choose to keep an Index of the members of your company in your Register of Members, or buy a separate Standard Notebook to take inventory of the Index of members. The index of your company will contain the alphabetic list of the names of the members of your company and must, at all times, be kept at the same place with the Register of Members. Where you make any alteration in your company’s Register of Members which makes it necessary that a consequential alteration be made in your Index of Members, you must make the consequential alteration within 14 days after the date on which the alteration is made in the register of members. g.  Your company must hold its first annual general meeting within 18 months of its registration, and within every 15 months thereafter. An “Annual General Meeting” is the yearly general meeting of the members of a company to deliberate on the businesses of the company. By implication, the following people are entitled to receive notice of your company’s general meeting: Ø Every member Ø Every person upon whom the ownership of a share devolves by reason of law Ø Every director of your company Ø Every auditor for the time being of your company Ø Your company Secretary At the Annual General Meeting, your company may present the financial statements for the year ending, present directors and auditors’ report, elect new directors in place of those retiring, appoint members of Audit Committee, declare dividends, and fix remuneration for company’s auditor etc. Every member is entitled to a 21 days’ notice prior to the day of meeting. A shorter notice may be valid if only all the members entitled to attend and vote at the meeting agreed for a shorter date. You may opt to engage your solicitor to prepare the notice of meeting to be sent to the members of your company or otherwise get your company secretary to prepare it. In a similar vein, you are not allowed to discuss any issue which you have not stated in your letter of notice of general meeting, and failure to give notice of your company’s general meeting will invalidate the meeting unless the failure was an accidental omission on the part of the person(s) giving the notice. It is therefore necessary that you seek proper legal advice while planning to hold the annual general meeting of your company. You may contact me for further information or explanation. h.  Your company must keep minutes of its meetings. To do this effectively, I will suggest that you dedicate special notebooks for that purpose so that your minutes can be sequential and orderly. The meetings which the Corporate Affairs Commission envisages that your company should take record of are: Ø Proceedings of all General Meetings Ø Proceedings of Meetings of Directors Ø Proceedings of Meetings of Managers (where there are Managers) i.    Your company must have at least two (2) directors. Anytime the number of Directors fall below two, your company must appoint new directors within one month, otherwise, it will be illegal to continue doing business after one month of refusal to appoint a director. The power to appoint the directors reside in the members of your company and it may be exercised at the Annual General Meeting of the company. The first meeting of your board of directors must be held not later than 6 months after you register your company. All other meetings may be held at any time whatsoever. Any issue that is to be resolved at the Board of Directors’ meeting must be decided by a majority vote, and if there is an equality of votes, the chairman may have a second vote. j.    You must buy a standard notebook to take record of your company’s directors and secretaries. Your company is expected to file its first update with the corporate affairs commission within 14 days from the day it is registered with the corporate affairs commission, and 14 days after every subsequent change. The Register of the Directors and Secretaries of your company is supposed to be accessible to the public. k.   Where your company changes its registered address, you must notify the Corporate Affairs Commission within fourteen days of such change. Your Company Secretary may purchase and file the appropriate form for that purpose, or otherwise, engage a competent Solicitor to assist with the process. l.    Your company must prepare and submit to the Corporate Affairs Commission an annual report on matters specified in the Companies and Allied Matters Act which are applicable to your company. The annual report is otherwise known as ANNUAL RETURNS, and if you are operating a limited company, It will usually contain your company’s registered address, address of place where the register of members is kept, summary of share capital and debenture, particulars of indebtedness of your company (if any), list of past and present members of your company, balance sheet, auditor’s report, and profit and loss account etc. Keeping your annual returns up to date with the Corporate Affairs Commission is about the most important obligation that you must keep up with as soon as you register your company, and considering the technical nature of the task, it is important that your company secretary should be given the necessary training to handle the task, or otherwise, same should be outsourced completely. m.   Register your company for Tax Identification Number and Value Added Tax at the Federal Inland Revenue Services (FIRS). To apply for TIN and VAT, you may have to design your company letterhead, rubber stamp/metallic seal, and company logo.

a.  You must display your certificate of registration in a self-revealing position at your principal place of business, and likewise display photocopies that have been certified by the Corporate Affairs Commission at your other places of business. b. You must file your annual returns not later than the 30th day of June of every year (minus the year when the business was registered). c.  Whenever a change occurs in any of the details stated below, you must notify the Corporate Affairs Commission within 28 days of such change. The details are as follows: o  Any change in the name of owner or any partner. o  Address of head office (and branches if there are) o Telephone number, nationality, residential address, occupation or Email address of owner or any of the partners. o  Where a Business Name is owned by a company, or a company is a partner, you must communicate any change in the name, or registered address of the company. d. Where a registered business name ceases to carry on business, the owner, or any of the partners must deliver a notice to the Corporate Affairs Commission within three months after the business has ceased to be carried on. Where the owner(s) has passed on, the personal representative is obliged to deliver the notice stated above. e.  In issuing your trade catalogues, trade circulars, show cards or business letters, you must provide the details of the business owner, or partners. The details to be provided are as follows: ·       Full names (including former names) and nationality of owner or each partner (where a company is a partner or owner, you must mention the corporate name of the company); ·       The registration number of the business name. NOTE that if the business is owned by a person under the age of 18, or the person is a partner, the word “a minor” must be added in bracket after the person’s name.

CONCLUSION:

On a final note, i will be glad to do an assessment of your business brand for free if you simply mail me the details of your business, aspects of this article that you have not been applying, and the ones that you have applied.

This article has been designed for information purposes alone and is not intended to take the place of a legal advice. Readers are therefore advised to seek proper legal advice.

For more enquiries, you can contact me on my mobile contact: 08060623454, or address a mail to me via eyitayoogunyemi@gmail.com