How to Register Business Name on CAC

As a business owner in Nigeria, it is as important as anything else to register your business name with the Corporate Affairs Commission (CAC). It gives your business legal recognition, helps you avoid legal issues, and makes it easier to get loans.

With a registered business name, you can open a corporate bank account, apply for loans, and send invoices. As of the last statistics released by CAC in October 2022, about 225,587 business names were registered with the Corporate Affairs Commission (CAC), showing that many people are starting businesses in Nigeria.

Every business owner starts somewhere, and while their paths may differ, they all agree that registering your business name is essential. In this article, we’ll walk you through the entire step-by-step business name registration process on CAC, so you can get your business up and running smoothly.

What is CAC, and What does it have to do with Business Owners?
Why Should I Register My Business Name with CAC?
Step-by-Step Guide to Register Your Business Name in Nigeria with CAC
Post- CAC Registration Requirements
Common Mistakes to Avoid During CAC Registration
How Much is CAC Registration 2024?
FAQs
Conclusion
References
Recommendations

What is CAC, and What does it have to do with Business Owners?

The Corporate Affairs Commission (CAC) is the government body that handles the registration and management of companies in Nigeria. It was created by the Companies and Allied Matters Act (CAMA) in 1990 and oversees all company and business registrations in the country.

With so many lucrative business ideas to start in Nigeria, one must do the CAC registration. The main reason you need to register your business name with the CAC is that it’s a legal requirement. Every business operating in Nigeria must be registered with the CAC, and not doing so can lead to serious consequences like heavy fines, legal trouble, or even your business being shut down.

Why Should I Register My Business Name with CAC?

As a business owner, you might be wondering why registering your business name is so important. The simple answer is that registering your business name in Nigeria gives you legal recognition, access to loans, and protection from legal liability. These benefits are essential for the growth and success of your business.

When you register your business name, you make your business a separate legal entity from yourself. This separation is important because it lets you run your business independently.

For example, you’ll be able to open a corporate bank account, issue invoices, and sign contracts easily. It also boosts your business’s credibility, making it more appealing to potential customers and business partners.

Registering your business name also helps you access loans for business startups and other financial opportunities. Lenders and investors want to know that they’re dealing with a legitimate business, so having a registered name makes it easier to secure funding for growth, new projects, or expansion.

In addition, registering your business protects you from legal liability. This means your personal assets are safe from risks related to your business, so you can focus on growing your company without worrying about losing your personal savings or property.

Step-by-Step Guide to Register Your Business Name in Nigeria with CAC

Here is a step to step guide on how you can register your business name in Nigeria with CAC:

Step 1: Ensure you Have all the Requirements for the Business Registration

Before you begin the process of registering your business name in Nigeria with CAC, it’s important to gather all the required documents and information. The key requirements for registering a business include your age, proposed business names, business objectives, identification, type of business, and business address.

First, you must be at least 18 years old to meet the age requirement. This is a legal condition that ensures you’re old enough to enter into contracts and agreements.

Then, prepare two business name options in case your first choice is already taken. It’s also important to clearly define your business objectives, explaining the purpose and goals of your business. This helps you stay on track and ensures your business operates according to your vision.

You’ll also need a valid form of identification, such as your National Identity Number (NIN), driver’s license, international passport, or voter’s card. This is necessary to confirm your identity and prove you’re the rightful owner of the business. Next, you must clarify what type of business structure you have, whether it’s a private limited company, a company limited by guarantee, or another structure.

Lastly, be ready to provide your business address, which will be the official location for your business. Once you have all these details, you’ll be well-prepared to register your business name in Nigeria and kickstart your entrepreneurial journey.

Step 2: Create a CAC Account

The first step to register your business name in Nigeria is to create an account with the Corporate Affairs Commission (CAC). This account will allow you to access all the services you need for your business registration. To do this, visit the CAC portal, fill in your details, and verify your email.

Start by going to the CAC website and registering on the CAC registration Portal. You’ll be directed to the registration page where you’ll need to enter your personal details, such as your name, email address, and phone number.

Make sure you provide accurate information because this will be used for communication throughout the process.

After filling out the form, the next step is to verify your email address. This is important because it helps secure your account and ensures no one can access it without your permission.

Once your email is verified, you’ll be able to log in to your CAC account and proceed with registering your business name.

Step 3: Reserve Your Business Name

Before you register your business name, make sure the name is still available. To do this, you’ll need to check if the name is available, reserve it, and understand how long the reservation lasts. This is an important step to avoid delays in the registration process.

Start by checking if your desired business name is already taken by visiting the CAC registration portal. If the name is available, you can reserve it by paying a reservation fee of ₦500 to ₦700. This fee ensures that your name is secured for you while you complete the registration.

The name reservation lasts for 60 days, so you have enough time to finish your registration without worrying about losing the name. By reserving your business name, you’re taking a big step forward in the process of registering your business in Nigeria and moving closer to starting your own business.

Step 4: Complete the Online Registration

Once you’ve reserved your business name, it’s time to complete the online registration process. To do this, you’ll need to log into your CAC account, select your reserved name, fill in the necessary details, upload the required documents, review your information, and make the payment.

First, log into your CAC account with your login details. After logging in, choose the business name you want to register from your list of reserved names. Then, you’ll need to fill in your business details, such as the business address, objectives, and structure. Be sure that all the information you provide is accurate and complete.

Next, upload the necessary documents, including your ID, photo, and signature. Make sure all documents are clear, scanned, and uploaded correctly to avoid any issues.

Once you’ve filled out everything, take a moment to review and confirm that all your information is correct. Finally, pay the registration fee of ₦10,500 along with ₦1,500 for bank charges.

Post- CAC Registration Requirements

After you have now registered your business name with the CAC, there are a few additional steps you need to take to make sure your business is fully set up. They are:

#1. Obtain a tax identification number (TIN)

Every company in Nigeria needs to get a tax identification number (TIN) from the Federal Inland Revenue Service (FIRS). This unique number is crucial for handling taxes, opening a business bank account, filing tax returns, and making financial transactions. Without it, your business won’t be able to operate smoothly with the financial system.

#2. Register for value-added tax (VAT)

If your business has to do with selling goods or services, you’ll need to register for value-added tax (VAT). You’ll need to register with the FIRS to comply with this requirement. VAT is a tax charged on the added value at every stage of the production and distribution of goods and services, and it’s usually set at a rate of 5%. As a business owner, knowing the various revenue models can help you generate more income.

#3. Register with other regulatory bodies

Depending on what type of business you’re running, you may need to register with other regulatory bodies, like NAFDAC, NCC, or the Central Bank of Nigeria (CBN). These organizations regulate specific sectors, and your registration will depend on what products or services your company offers. Completing these post-registration requirements ensures your business is fully compliant with Nigerian laws and regulations.

Common Mistakes to Avoid During CAC Registration

When you want to register a business name in Nigeria, you must be careful to avoid common mistakes that could delay or stop your registration. These mistakes can lead to rejections, delays, or even legal problems, so it’s important to pay attention to details.

One big mistake is providing incorrect information, like wrong personal details or an incorrect business address. This can cause problems because the wrong details lead to confusion and delays in the registration process. For example, if the business address is wrong, you might miss important updates or notifications from the Corporate Affairs Commission (CAC), making it harder to finish the registration.

Another mistake is not having all the required documents. You need to make sure you have everything ready, such as identification, proof of address, and details about your business goals. If any of these documents are missing, your registration will be delayed, wasting time and money.

Also, skipping the name search is a big issue. If you don’t check if your business name is already in use, your application might get rejected, and you’ll have to start over. By paying attention to these details, you’ll make the registration process smoother and quicker.

How Much is CAC Registration 2024?

The cost of registering a business in Nigeria can vary, but according to CAC-accredited registration lawyers, it usually ranges between N20,000 and N40,000. If you’re registering a limited liability company, the price can go higher, ranging from N70,000 to N100,000, depending on the share capital of your company.

If you fail to comply with CAC registration requirements, there are penalties you will be charged:

Small company – 5,000.
Company Private other than small – 10,000.
Company limited by guarantee – 10,000.
Public Company – 25,000.
Limited Liability Partnership (LLP) – 10,000.
Limited Partnership (LP) – 10,000.
Business Names – 5,000.
Incorporated Trustees – 10,000.

FAQs

How long does it take for a business name to be approved?

Getting your business name approved in Nigeria usually takes about 1-2 weeks. This can vary depending on how busy the Corporate Affairs Commission (CAC) is. After you submit your application, the CAC will review it and let you know if anything is missing or needs to be fixed. Once everything is good, your business name will be approved, and you can continue with the registration.

Can I do my CAC registration myself?

The CAC reserves a business name for 60 days. During that time, no one else can use the name. If you don’t finish the registration within 60 days, the name will be available for others to register. You can extend the reservation for another 60 days by paying a fee.

How long does CAC reserve a name?

The CAC reserves a business name for 60 days. During this period, the name is exclusively reserved for your use, and no one else can register it. If you fail to complete the registration process within this timeframe, the name will be made available for others to register. You can renew the name reservation for an additional 60 days by paying the required fee.

Can I start a business without registering it in Nigeria?

No, you can’t legally start a business in Nigeria without registering it. It’s required by law, and if you don’t register, you could face fines or legal issues. Plus, without registration, it will be hard to get loans or government contracts. Registering gives your business legal recognition, protects your business name, and lets you operate legally.

Conclusion

Registering your business name with the CAC is important, but it’s easier than it might seem. It’s a crucial step to make your business officially legal in Nigeria. By following the simple guide in this article, you can quickly complete the registration and make sure your business follows Nigerian laws.

CAC registration does more than just meet legal requirements – it also makes your business look trustworthy to customers and investors. So, don’t wait any longer. Start your registration today and take the first step toward creating a successful business in Nigeria.

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References

Cac.gov.ng – Registration steps for Business Names
Blog.sycamore.ng – How to register your business name in Nigeria (2024)
Invoice.ng – CAC Registration: A Guide on How to Register a Company Online in Nigeria