WHY REGISTER YOUR BUSINESS IN NIGERIA
Mr. Edem had a fledgling company, one that specialized in making clothes of all materials. Seeing as it was still new (barely two years old), he was still trying to make a name for himself within the Clothes/Garments industry. One day, he ran into an old friend that had contacts within NYSC, and after exchanging pleasantries, this old friend learnt that Mr. Edem now had a company. Eager to help, this friend told Mr. Edem that he could link him to a higher official within the NYSC and they could see about awarding Mr. Edem’s company a contract to make NYSC uniforms for the coming year. Mr. Edem was dazed at first. This was a huge opportunity!!!
After days of frantic preparation, Mr. Edem and a brilliant member of his staff went to the NYSC secretariat to meet with the higher official they had to see. Armed with an impressive portfolio of jobs they had done, Mr. Edem was sure that if it were to be based on merit alone, his company would get the contract. They were ushered into the office of the person, who was a lady. After looking through the portfolio, the lady nodded in satisfaction. Mr. Edem exchanged a smile with his employee, confident that they had it in the bag. The lady looked up and asked a single question “Is your company registered?”
Mr. Edem was stumped. Of course, his company wasn’t registered. His lawyer has advised him about registering his company but he had been putting it off, and now, look!
Minutes later, he left the Secretariat dejected. Of course, he registered his company after that incident but he had already lost one of the biggest contracts he could ever have.
This story is a pointer to the fact that Business registrations are very important, and if overlooked, could cost your company financially. Businesses in Nigeria are registered under the Corporate Affairs Commission (CAC), and enumerated below are the underlying benefits of Business registrations.
• Corporate Personality
Upon the registration of a business organization in Nigeria, especially for the company, it acquires a separate legal entity/personality distinct from the individual(s) behind its formation. It absolves you of personal liabilities i.e., in the event of crisis, your personal assets cannot be tampered with and every liability is strictly that of the business organization. In the same token, the registered business enjoys perpetual succession.
• Establishment of a Corporate Bank Account
The establishment of a corporate account is only possible when the business is duly registered. When a business opens a corporate bank account, it can easily distinguish the financial activities of the business from personal activities. More so, in the Corporate world, it is more dignifying to put your corporate account forward than your personal account as Clients find it more reliable and business worthy.
• Securing Loans and Investment Opportunities
Any business that seeks to secure a loan for the operation of the business must present its credentials of registration, proof that it is duly registered under the relevant laws of Nigeria, before it may be considered by creditors and investors. Application for credit cards from creditors would certainly warrant the demand for registration paperwork.
• Reputation and Prestige
In desperate times like this, where scam/fraud has become the rave of the moment, businesses must strive to showcase genuineness by being duly registered in order to stand tall among other businesses that might be fraudulent and escape through being unregistered. When the business is registered, Clients would be at ease in investing their money and other resources. As an added advantage, it enhances the public perception and brand credibility.
• Government Contracts
No government would assign profit-oriented contractual obligations to an unregistered business. No matter how attractive and impressive your portfolio is, registration of the business would be the foremost ground for eligibility.
• Employment
It is advisable to register your business in Nigeria to take advantage of employment of workers and become a beneficiary of employment laws in the state. Taxes can be routed through the employment of salaried staff, as opposed to bearing that burden all alone.
In conclusion, registering your business has more pros and no cons. Registration cements your business as a reputable one as well as one that has been duly recognized by the Corporate Affairs Commission (CAC).
