With so many great ideas around the country, the choice of registering a business is a strategic decision which an entrepreneur must make in a bid to transform an idea into a profitable business venture. The law that deals with the registration and regulation of a business in Nigeria is the Company and Allied Matters Act (the “CAMA”). The CAMA deals with the various types of company structures, eligibility, the process for registration/incorporation, and rules for operation. The regulatory body charged with implementing the provisions of the CAMA is the Corporate Affairs Commission (“CAC”). When you register a business, you do not only comply with the CAMA which requires that you take this step, but you also protect yourself against someone else conducting business under the same name. Prior to registering a business, it is important to first determine the structure of the proposed business. In doing so, the entrepreneur has to decide whether to register as a Business Name or an Incorporated Entity. This decision would largely depend on factors such as;
- The Nature of the Business
- Capital requirements
- Potential for expansion
A business name requires at least one person for its set-up. Such an individual is referred to as the proprietor. For MSME’s the Business Name structure is more desirable due to its simplicity, tax advantage, and low cost. However, despite its relative desirability, it
should be noted that under a business name, the owner would have unlimited liability and can be personally liable for the debts of the business.