The Basics Of How To Register A Business In Nigeria

How To Register A Business In Nigeria

Over the years, there has been a significant increase in the number of businesses that have been established in Nigeria. While the registration of these businesses with their local or state government might not affect or play a role in their day-to-day transactions, they need to be legally recognized especially if they are new business enterprises. This is why it is important to register your business.

As is the law in Nigeria and many other countries, when starting a business one is required to register that business both for the sake of obeying the law and having a reputation as well as being recognized by the law. But other than these, other perks come with registering one’s business.

For instance, a registered business has a higher chance of securing a loan than one that is not registered.

Also, the registration of a business offers protection of a business name and trademark. So if you are an entrepreneur who has just established their business in Nigeria and you are confused as to how this business can be registered, then this article is for you.

In this article, we’ll provide a detailed guide on everything you need to know about registering your business in Nigeria.

What Is The Difference Between BN And RC?

For a start, BN is an acronym for Business Name while RC stands for Registered Code. But is there a difference between these two? Yes, there is.

A business name (BN) is a name and style an entrepreneur or business owner is known to trade with. Upon registration with the Corporate Affairs Commission, this entrepreneur or business owner is given a certificate of incorporation which serves as evidence that the business has been registered and that they are the legitimate owner of the business.

Usually, a well-established business tends for other new businesses to imitate its name and business pattern, thereby stealing its customers. What a business name does after it has been registered is protect that business from getting imitated by other businesses.

On the other hand, a registered code (RC) is a code that is issued by the Corporate Affairs Commission to businesses that have been registered with it. It is sometimes known as a Registered Company Number (RCN) or a Registration Number (RN). In some foreign countries, it is abbreviated to CRN or simply known as registration number or company number.

One of the importance of a registered code is that it can be used by anyone to verify the authenticity of a business on the database of the Corporate Affairs Commission.

On the difference between a business name (BN) and a registered code (RC), while the former is proof that a business has been registered and cannot be imitated by another, the other is a code issued to any business that has been registered with the Corporate Affairs Commission.

Where Do I Register My Business?

The only known place you can register a business in Nigeria is the office of the Corporate Affairs Commission. This body is responsible for registering companies in Nigeria as well as their business names and Incorporated trustees.

Although it has branches in some other states in Nigeria, the head office of the Corporate Affairs Commission is located in Abuja. You can simply walk into any of its offices to register your business.

What Are The Legal Requirements For Registering A Business In Nigeria?

As mentioned already, registering your business is important for you as a business owner as it not only solidifies you as the sole owner but also makes your business legally recognized. What then are the legal requirements needed for you to register your business in Nigeria?

The legal requirements for registering a business in Nigeria are:

1. A registered address of your business
2. The phone number and email address of the business
3. A means of identification of directors and shareholders in the business. This means of identification can be a driver’s license, an international passport, or a national identity card
4. The personal details of directors and shareholders in the business. They include their full names, date of birth, residential address, date of birth, and occupation
5. The shareholders’ sharing formula in the company
6. An approval note from the Corporate Affairs Commission stating the name reservation of the business
7. Stamp duty and statutory fees
8. Objective of the company
9. An incorporation certificate. In a situation where another business or company will be a subscriber or shareholder in the business, you would need to submit a company resolution.

How Can I Check If A Company Is Registered In Nigeria?

As a result of the increased rate of fraud in Nigeria, most people tend to doubt the authenticity of a business. If you happen to be one of these people, there are easy ways for you to check if a company or business has been registered.

There are two ways you can check if a company is registered in Nigeria. One is by contacting a Corporate Affairs Commission agent and the other is by checking online

1. Corporate Affairs Commission Agent: You can check if a company is registered in Nigeria by reaching out to a Corporate Affairs Commission agent who usually has access to the list of all the registered businesses in the country. The agent will ask you to provide the name of the company or its registration code. Once you can provide any of these two, they can help you check and confirm if the company is registered or not.

2. Checking Online: You can also check if a company is registered in Nigeria by using the Corporate Affairs Commission website. Simply:

  • Visit the official Corporate Affairs Commission website at https://www.cac.gov.ng/
  • Scroll down and click on the “Public Search” option
  • Insert the company’s name or its registration code and click on “Search”
  • After you’ve clicked on the search option, it will bring results for the business name or registration code you inserted if the business is registered. But in a situation where the business is not registered, it wouldn’t bring out any result.

What Types Of Companies Can Register With The CAC?

Five known types of companies can register with the CAC (Corporate Affairs Commission) in Nigeria. They include sole proprietorship (one-man company), private limited company, public limited company, public company limited by guarantee, and private unlimited company.

1. Sole Proprietorship: which is a one-man business. That is, a business owned by just one person who enjoys the profit and bears the loss of the business.

2. Private Limited Company: which is a business that is separate from its owners and shareholders.

3. Public Limited Company: which offers the opportunity to the public to become shareholders and part of its owners.

4. Public Company Limited By Guarantee: which is set up not to make a profit but to offer help in various ways to people.

5. Private Unlimited Company: which is usually a parent company with subsidiaries under it.

How Long Does It Take To Register A Business In Nigeria?

In case you are confused as to how long it would take you to register your business, here’s what you should know. It takes a minimum of 48 hours and a maximum of 72 hours to successfully register a business in Nigeria provided an applicant provides all the information required of them.

In a situation where an applicant does not have all the documents needed to register a business, it might take 48 to 72 hours to get their business registered.

Can Foreigners Register A Business In Nigeria?

Yes, they can. Here’s the process of registering your business in Nigeria as a foreigner:

1. Availability And Reservation Of Name: As a foreigner who wants to register a business in Nigeria, the first thing to do is to check the availability of your business name. That is, to check if the name does not exist or if it is already in use. Doing this would help you avoid issues that might come with imitating someone else’s business.

After you have checked and you are sure that the name is available for use, you will be issued a certificate of name reservation by the Corporate Affairs Commission. This certificate will be valid for 60 days and enable you to continue to the next stage of registration.

2. Application: After you have been issued a certificate of name reservation, you can now proceed to apply for the registration of your business. Documents that would be required of you as a foreigner at this stage include:

  • The type of business you want to register
  • The address of the business
  • The minimum issued shared capital of the business
  • The particulars of the proposed directors
  • The particulars of the proposed shareholders

3. Approval: After you have provided the necessary documents, your application will be forwarded to the Corporate Affairs Commission for vetting. At this stage, you would also be required to pay the filing fee and a stamp duty will be charged on the minimum issued shared capital of your business. The stamp duty is usually charged at the rate of 0.75%.

Once the Corporate Affairs Commission is satisfied with your application it will issue you a certificate of incorporation which shows that your business is now a legal entity and has the authority to start business activities in Nigeria.

At the same time, you would be issued a Tax Identification Number (TIN) by the Federal Inland Revenue Services (FIRS). This number would be used by your business in matters about tax in Nigeria.

How Much Does It Cost To Register A Business In Nigeria?

The cost of registering a business in Nigeria varies on the type of business one is operating. For instance, the cost of registering a public limited company is different from the cost of registering a private limited company.

Here’s a list of fees you would need to register a business in Nigeria:

  • ₦500 for name reservation of the business.
  • ₦10,000 for registering a private company with a share capital below ₦1 million naira. If the share per capital is between ₦1 million and ₦500 million naira, you would pay ₦5,000 for every share per capital, and if it is from ₦500 million and above, you would pay ₦7,500 for every share per capital.
  • ₦20,000 for registering a public company with a share capital below ₦1 million naira. If the share per capital is between ₦1 million and ₦500 million naira, you would pay ₦10,000 for every share per capital, and if it is from ₦500 million and above, you would pay ₦15,000. for every share per capital.
  • ₦20,000 for a company without a share capital.
  • ₦25,000 for relisting a company’s name.
  • ₦10,000 for registration charges of a private company for every ₦1 million naira it makes.
  • ₦20,000 for registration charges of a public company for ₦1 million naira it makes.

Ambassador Victor Chidera
Ambassador Victor ChideraAmbassador Victor Chidera is a business consultant, writer and a blogger. He provides lots of professional and expert advice to small businesses, entrepreneurs and organizations. He has many years of experience in business, teaching field, and research work. And his aim is to provide business articles that matters to you both nationally and internationally.
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