Why you need to reg­is­ter a busi­ness name

Daily Trust - - BUSINESS - By Vic­to­ria Onehi & Si­mon Echewo­fun Sun­day

It has been ob­served in Nige­ria that many starters of small busi­nesses pay lit­tle at­ten­tion to hav­ing their en­ti­ties reg­is­tered but ex­perts and other ex­pe­ri­enced en­trepreneurs say they may have a lot to lose than gain for the in­ac­tion.

To­mor­row, it will be ex­actly five years when God­win Afam set up his barb­ing sa­lon in Lugbe , a satel­lite town in Abuja. Writ­ten boldly on his mini shop is God­dys Barb­ing Sa­lon but this name has not been reg­is­tered with the Cor­po­rate Af­fairs Com­mis­sion (CAC).

“Ev­ery­body in this neigh­bor­hood knows me and calls me bar­ber. Some even call me for home ser­vices. So, why do I need to go and reg­is­ter my busi­ness name with CAC?,” Afam asked.

Afam like many Small and Medium En­ter­prises (SMEs) think alike but ex­perts say they have so much to lose by this ac­tion.

The first thing that qual­i­fies you to be an en­tre­pre­neur is to own a busi­ness that legally ex­ists, one busi­ness an­a­lyst, Mr. John Iwuoha said.

He said some per­sons may just be ig­no­rant of what it means to have a reg­is­tered busi­ness why oth­ers are con­cerned about the cost of do­ing it.

“For some of these peo­ple, it’s just plain ig­no­rance; they don’t know or un­der­stand the im­por­tance of get­ting a busi­ness reg­is­tered. The oth­ers, who aren’t to­tally ig­no­rant, just choose to avoid the cost of reg­is­tra­tion when they start their busi­ness,” Iwuoha dis­closed.

One of the key losses of not reg­is­ter­ing a brand in time is the loss of iden­tity. You must have toiled hard to gain recog­ni­tion but if such busi­ness is not reg­is­tered, some­one else could just reg­is­ter and claim your iden­tity.

In com­plete terms, a reg­is­tered busi­ness is one that legally ex­ists and is rec­og­nized by law. Such firm en­joys cer­tain rights, ben­e­fits and priv­i­leges that an un­reg­is­tered busi­ness can­not en­joy.

Mr. Gabriel Anyebe ven­tured into an alu­minium sup­ply busi­ness three years ago. He told Daily Trust that al­though the busi­ness is not reg­is­tered, he makes quiet a for­tune. How­ever, he has his lim­i­ta­tions as he can only sub­mit quo­ta­tions to es­tab­lish­ments or per­sons he is ac­quainted with or through re­fer­rals. ‘Qualitech’ as he calls it can­not en­ter for any bid as it is not reg­is­tered!

“When we try to sub­mit bids, the cri­te­ria listed are usu­ally too much: three years ev­i­dence of tax pay­ment, demon­stra­tion of ca­pac­ity on sim­i­lar job, reg­is­tra­tion cer­tifi­cate and tax iden­ti­fi­ca­tion num­ber… it goes on,” Mr. Anyebe said.

On why he has not reg­is­tered it, he said he was told the pro­ce­dures at the Cor­po­rate Af­fairs Com­mis­sion (CAC) is cum­ber­some and has huge cost. How­ever, af­ter speak­ing with one of our re­porters, the young en­tre­pre­neur vowed to walk to the CAC and do it no mat­ter what.

The is­sue of cost and the bot­tle­necks in hav­ing a busi­ness reg­is­tered is the ma­jor prob­lems of starters. Sadly, most of them have not taken time to en­quire what it ac­tu­ally costs to get a reg­is­tra­tion.

A lawyer, Abra­ham O.Paul Esq. Prin­ci­pal Part­ner, Pe­tra Part­ners ex­plains the pro­ce­dure for reg­is­tra­tion of a busi­ness name.

“If you want to start a com­pany, one of the things you need is a busi­ness name. Lawyers will rec­om­mend that you give them two or three names. The rea­son is that the name you choose may have been reg­is­tered by an­other per­son at the Cor­po­rate Af­fairs Com­mis­sion (CAC). If it is al­ready reg­is­tered, they will pick the sec­ond or third one.”

Ac­cord­ing to him, to reg­is­ter a busi­ness name, you will re­quire about 20,000 to 25,000 and four pass­ports and within 1428 days, the name will be in­cor­po­rated with the CAC.

He states the ad­van­tages of hav­ing a busi­ness name.

“If you have a busi­ness name, you can open an ac­count with it be­cause it gives you a unique iden­tity and al­lows your clients to pay money into the ac­count. Hav­ing a busi­ness name reg­is­tered is a ma­jor cri­te­ria to ac­cess loans from the gov­ern­ment, a co­op­er­a­tive or any other in­sti­tu­tion, ” Paul said.

An awardee of the erst­while Youth With In­no­va­tion in Nige­ria (YOUWIN), Femi Akin said on scal­ing through the first stage of the fed­eral gov­ern­ment in­ter­ven­tion scheme in 2012, he was man­dated to reg­is­ter his firm with the CAC be­fore he will be given busi­ness grants in tranches.

Akin who has set up his food pro­cess­ing busi­ness in Kaduna said the de­ci­sion has now em­pow­ered his busi­ness to go for soft loans from fi­nan­cial en­ti­ties in­clud­ing the Small and Medium Scale En­ter­prises De­vel­op­ment Agency of Nige­ria (SMEDAN) and at the Bank of Agri­cul­ture.

A sur­vey con­ducted by SMEDAN shows that out of the 37 mil­lion Mi­cro Small and Medium En­ter­prises (MSMEs) in Nige­ria, less than five mil­lion are reg­is­tered with the Cor­po­rate Af­fairs Com­mis­sion. 95 % of them are still in­for­mal.

The Act­ing Di­rec­tor-Gen­eral of the Bank of In­dus­try (BOI), Mr Wa­heed Ola­gunju said for MSMEs to ac­cess loan, they must be reg­is­tered. “If MSMEs are not reg­is­tered with the CAC, they can­not talk of ac­cess to fi­nance. You must be reg­is­tered be­fore you will talk about ac­cess to fi­nance,” Ola­gunju said.

Newspapers in English

Newspapers from Nigeria

© PressReader. All rights reserved.