Business Names: The Why and the How
Perhaps more than ever before Micro, Small and Medium Enterprises (MSMEs) are being encouraged. This has led to the emergence of many small businesses. Unfortunately, many of these businesses do not have any legal cloak and are shut out from the advantages that registered businesses enjoy. This may be out of sheer ignorance or an attempt to evade tax. In this write-up you will get to know the benefits of registering your business name and how to go about the registration.
What is a business name?
A business name is the name and style with which a business operates. It could either be a registered business name or unregistered. Business name can be registered by a sole proprietor, partnership or a company. A business name is in simple terms, the name in which a person chooses to carry on his business. For example, Mr. Emmanuel Osunde who is about to set up a supermarket may choose to operate his store by the name ‘Classy Supermarket’. In such a situation, the law makes it mandatory that he registers the business name with the CAC within twenty-eight (28) days of commencement of business. On the other hand, it must be noted that registration is not mandatory when a business is carried on using only the surname, surname and forename or surname and initials of the business proprietor(s) or partners. In such an instance, Mr. Emmanuel Osunde may legally trade under either of the name combinations: “Emmanuel Osunde”, “Osunde Emmanuel”, “E. Osunde” or “Osunde E.” without registration of registration. However, the business proprietor, say Mr. Emmanuel, may choose to register the business name nevertheless. In-fact, it is advisable and desirable that all business names be registered in order to take advantage of the numerous benefits that are incidental to registered business names. It is needful to know that the Corporate Affairs Commission (CAC) is in charge the registration of business name.
Benefits of Registering Business Name.
Business name registration confers a lot of benefits on the business concern. The benefits are many but we will attempt to highlight some of such benefits that makes it necessary for all business persons take steps to get their business names registered. Some of the benefits of registering a business name are as follows:
- Registration of business name gives the name priority and security: When a business name is registered, no other person can legally trade under such name except with the registered owner’s prior authorization. Also, no other person can rightly register such name or any name identical or similar to such registered name unless with the authorization of the prior registered owners and consent of the Corporate Affairs Commission. Registration therefore protect your business name and makes your business name secured and unique to you. Where another person uses the name, without the registered owner’s authorization, an action may be maintained against such person.
- Business name registration protects your business’ goodwill: The success or failure of a business is dependent on the goodwill which accrues to the business. Such goodwill may stem from the reputation of the proprietors or other peculiar characteristics of the products or services of a business. Registering your business name serves to protect your goodwill. A ‘smart’ business person may take undue advantage of the growing goodwill of your business by trading under same name. In the extreme, such person may proceed to register the name and will be granted sole right to the use of the name. This is true of all unregistered business names and more so with business carried on under the true name of the proprietor or proprietors as it is not uncommon to hear of two persons bearing similar or identical surname and forenames.
- Registration of business name makes it easy to open a business account: Having a registered business is one of the criteria for opening a business account. With a registered BUSINESS NAME, you can open an account in the name of that business. More so, potential customers feel more comfortable paying into business account because they know their money can be traced. And you can open a business account with any bank of your choice with a registered business name.
- Ease of access to finance: Banks mostly extend credit facilities to registered businesses. This is because it is easy to track such businesses. Government Grants to micro, small and medium scale enterprises (MSMSE) can be easily accessed once the business is registered. Registration therefore gives recognition to a business. It gives the business a standard formal cloak necessary to apply for credit facilities from banks as well as government’s grants. In sum, with a registered business name you can easily access bank loans and grants that will provide the necessary finance for the success of your business.
- With a registered business name you gain the confidence and trust of your customers. Registration makes your business respectable. This particular advantage cannot be overemphasized. As a business person the way people perceive your business should matter a lot to you.
- With a registered business, you can easily obtain a visa and travel to any country for business purposes and conferences.
- Registering your business enhances the reputation and perception of your business to prospective clients. Customers perception of a business often determines the goodwill of that business. This is why the reputation of your business must matter to you. A registered business name advertised the proprietors as being serious minded. It shows that the proprietors have been vetted by government and approved. This is even do as the law authorized the Corporate Affairs Commission not to register a business name when it has evidence that an individual or firm seeking registration of a business name had been involved in fraudulent trade practices.
- There are other sundry benefits which registration confers on a registered business. One of such includes that as an owner of a registered business, you can apply to have corps members posted to your enterprise. This will enable such business to have access to trained manpower. Many schools take advantage of this privilege and have lots of corp members in their employment.
Apart from the above, failure to apply to register a business name that is required to be registered after twenty-eight (28) days of commencement of business constitute an offence under section 584 of the Companies and Allied Matters Act. Registration of a business name may therefore protect you from harassment of law enforcement officers.
How To Register Your Business With Corporate Affairs Commission (CAC):
1. Register Through CAC Online Portal: as a business owner, you can register your business name personally. The registration process involves:
a. Availability search and reservation of names: this may be done through the CAC online registration portal by following the steps below:
- Visit services.cac.gov.ng
- Create an account
- Log in
- Do a public search of your preferred name
- Reserve your business name
- Follow other procedures as directed.
Registration may also be done
2. Get An Expert To Help You Register
Registering yourself can be difficult if you lack the experience and expertise. So, it is always best to engage the services of a professional. Most times, people get stuck when they get to a particular stage. To avoid that, you can engage the services of a professional.
The primary asset of any business is its name. Business owners should take practical steps to protecting it and enjoying the exclusive goodwill that flows to it. The benefits in registering a business name are huge and they far outweigh the benefits of not registering one. Register your business today to take advantage of the numerous benefits that are available. As they say, “opportunity is for the prepared”: show the world that you are prepared for business by registering your business today.