Essentially, The Nigerian business or working environment is not a safe place, plagued with a lot of conflicting government policies that end up negatively affecting small businesses. You can take a cover from these uncertainties by getting your business registered.
I will list 10 of the benefits here.
- Reserving Your Business Name – If you don’t register your business name on time, and someone else snaps up the name or something similar, you will not be able to register the same name or anything similar to it as the Corporate Affairs Commission are strict with name similarities.
- Gaining your Reputation – By registering your business name, you are sharing a pie of your reputation on the crowded business place. When reaching out to a new prospect, it is often times very difficult to earn their trust. One thing that could help with this is that your business is a registered business with CAC. You will want to let your customers know that your business is a reputable one by trying to let them know that it is a registered business with the government.
- Legal Protection – As a legal business, you will be protected from some liabilities because you are a distinct emtity from the business itself and therefore would not be personally held liable for the debts and liabilities that the business might incur. For instance if the company takes a loan or you take a loan in the name of the company, and defaults, the lenders can only lay claim to the company and its assets and not your personal assets nor you. This will play out if you choose to incorporate your business.
- Bank Account with Company Name – If you start a business today and do not register it, you will not be able to open a bank account with the name of that business and it is not safe or credible to use your personal bank account to do business with new clients, suppliers, and partners. Most firms will not trust doing business with you if the account you are asking them to pay into is a personal one and not on the business name.
- Access to Business Loans – There is a big difference between a personal loan and a business loan and it will be tedious to try to use a personal loan to run a business. Therefore, registering a business will make it much easier to secure a business loan. When applying for certain loans as a business, some lenders or investors will need your company documents to prove that they are actually dealing with a registered business.
- Legacy and Continuity – The main essence of starting a business was not supposed to start it and die wit it, but rather to build a legacy that will outlive you. So, a business that is not registered is bound to have no concrete structure, formation or continuity plan which makes it a business with a short life span.
- Government Paid Employees – As a registered company, you are able to legally employ staff for your various openings while also being able to get low-paid employees or government fully-paid employees to work for you. An example of this scenario is getting fresh graduates from the National Youth Service Corps(NYSC) which are low paid or the SURE-P programme which is fully paid by the government for 12-months.
- Access to Government Grants – There are certain types of government grants and funding that you would not be able to apply to if your business is not properly and a legal registered business entity in Nigeria, even if its the most simplest and basic business registration which is the Business Name of Sole Proprietorship registration. Your business can benefit from government grants to small and medium sized businesses as was seen with the COVID-19 small business support.
- Business Trips to Countries – Most people who travel to different countries for business or vacation do so in the name of their business. While applying for a business visa, it is most certain that your business documents or reference will be required to prove that such business exist.
- Certificate of Incorporation – The certificate is more than just a certificate. It is an identity or seal that proves to your customers that you mean business and that you are there to stay. Most companies paste a copy of their CAC certificate in their business premises or office to show credibility and good intent.