Tuesday, 16 May 2017

6 Legal Ways to Operate an Unregistered Business Name in Nigeria



Quoted as we understand it, section 573 of the Companies and Allied Matters Act says that:

You do not have to register your business name if:

(a) As a firm, your firm’s name is the combination of the surname of all partners, or the surnames and their other names.

(b) Your individual business is operated in your real names

(c)  Your Company (i.e. LTD, PLC, GTE, and ULTD) decides to operate a business name that does not consist of any addition to its corporate name
 
The following instances are additionally allowed:

(a) Situation where the word added is merely to show that the business operates in succession to a former owner. This is common in family businesses.

(b) Situations where the partners have the same surname and “s” is added at the end of the last surname. For instance Akinyele & Akinyele’s Firm

(c) The business is carried on by a receiver or manager appointed by any court.

In summary, you do not have to register your business name if you are using your actual names- your surname with or without your other true names or initials of those names to run your business.

Furthermore, 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.

It is understandable that you can do business in your natural names because you are a legal person by reason of your natural names (particularly if you are 18 years or above). So, I as EYITAYO OGUNYEMI could decide to have a legal retainership with your company in my natural names. If I however operate as “Law Accent”, I need to register it because it is not my natural name.
It is not surprising that a person that does business in a name other than a natural name must register because there is a need for the public to put a face to anybody behind transactions done in unnatural names.

Here are however some reasons that may necessitate that you register your business name either ways:

Ø  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.

Ø  Foreign investors prefer to deal with entities that are registered with government agencies, and that begins with the Corporate Affairs Commission.

Ø  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.  It is however assumed under this heading that the law will be reviewed to capture this situation because the law ought not to be construed in such a way as to demand the impossible.

You may therefore conclude on registering your business name notwithstanding the leverage allowed by the law as this puts your business in a prime position for opportunities.