In Nigeria, it is required that every business is registered with the Corporate Affairs Commission (CAC), be it a small business, large business, company or any kind of business. Registering a business with the CAC gives you the full legal backing for the operation of that business.
A registered business means the Government is aware of that business, and has given you approval to do the business. But if you don’t register your business, you are just on your own operating a business without the approval of the Government.
Aside from all these, when you register your business, people take you more seriously in your business and feel safer doing business with you, since the Government is already aware of you and your business. This in all translates to more customers and better growth of the business.
Most importantly, registering your business protects you from any legal problem that may come to the business which would have affected you as an individual. For example: For someone doing POS business; if cr!minals come and make transactions of stolen money in his shop, and he is not aware of the car!me. If the transaction was traced to him and he is arrested, the only thing that will save him is if his business is registered.
What Does it Mean to Register a Business?
Registering a business is a legal process that certifies the owner or operation of a business to the public. It helps to tell the public about the owner of a business and how the business operates. Once registered, your business gets legal backing, a certificate of registration, and the right to operate under your chosen name across the country. This step also builds trust with customers, partners, and even banks.
Agency Responsible For Business Registration In Nigeria
In Nigeria, the body in charge of registering businesses or establishments in the country is known as the Corporate Affairs Commission (CAC).
CAC was established in 1990 and is an autonomous body that is entrusted with the responsibility of regulating the formation and management of businesses or companies in Nigeria.
CAC Affiliated Bodies
For CAC to carry out its responsibilities, there are affiliated bodies and members that help them to achieve their tasks legally. It carries out its function through accredited members of:👇
- Association of National Accountants of Nigeria.
- Institute of Chartered Accountants of Nigeria
- Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN).
- The Nigerian Bar Association (NBA).
CAC Offices in Nigeria
CAC has branches in all the 36 States in Nigeria, so if you want to visit their office for any reason; just seek for their office in that particular State you are.
How Much Does it Cost to Register a Business in Nigeria?
The cost of registering a business with CAC in Nigeria may range from N12,000 to over N50,000. Depending on the type of registration, like: business name, company, incorporated trustee, etc. Registration types like company, incorporated trustee, and so on, may cost higher than registering a business name.
Also, the agent doing the registering for you usually charges the service fee, which may depend on the agent doing it for you.
Classifications of Business Registration
In registering your business with CAC, there are about 4 or 5 classifications under which a business can be registered; all depending on the nature and type of the establishment.
- Business Name
- Company
- Limited Partnership
- Limited Liability partnership
Each of the 4 classifications above has different types also. For example: Business name can either be sole proprietor or partnership. We are going to be discussing them one after another.
| S/N | Business Classification | Business Types |
| 1. | Business Name | Sole proprietorPartnership |
| 2. | Company | Private company limited by sharePrivate unlimited companyPublic company limited by sharePublic unlimited company |
| 3. | Limited Partnership | Limited Partnership |
| 4. | Limited Liability Partnership | Limited Liability Partnership |
1. Business Name
This is the easiest and cheapest way to register a business in Nigeria. It’s mostly used by small business owners and side hustlers. There are two categories here:
- Sole Proprietorship
This means the business is owned and run by one person. You control everything, keep all the money, and also bear all the risks.these could be small businesses like running a POS business, salon, baking, and so many others.
- Partnership
This means two or more people own the business together. You all bring in money, share the work, and also share the profit or loss. For example, two friends running a barbershop together.
Note: This type of registration doesn’t make your business a separate legal entity. In simple terms, you and your business are the same.
2. Company
This type is more official and suitable for people who want to build a serious or long-term business. A company is treated as a separate person in the eyes of the law, it can own things, make money, pay tax, and be sued on its own. There are about 4 categories of companies here:
- Private Company Limited by Shares (Ltd)
This is the most common company type. Your liability (or risk) is limited to the shares you own in the company. If the company runs into debt, no one can take your personal property. This is great if you are looking to grow your business or bring in investors.
- Private Unlimited Company
In this type, there is no limit to your liability. If the company is owing, you may have to use your personal money or property to pay. Not common in Nigeria.
- Public Company Limited by Shares (PLC)
This is for very big companies that want to sell shares to the public. Like banks, telecoms, and big companies listed on the stock exchange.
- Public Unlimited Company
This is similar to the above but without limits on liability. Also very rare.
3. Limited Partnership (LP)
This is a mix of two types of people in one business:
- One person (or more) handles the day-to-day business and takes full responsibility.
- The other person only invests money and doesn’t get involved in managing the business. Their risk is limited to how much they invested.
This type is good if someone wants to support your business with money without getting involved.
4. Limited Liability Partnership (LLP)
This is like a partnership but more protected. All the partners in the business have limited risk, nobody’s personal property is touched if the business fails.
It also works like a company, the business is seen as a separate legal person.
This is perfect for professionals (like lawyers, consultants, or architects) who want to run a business together but don’t want to risk their personal belongings.
5. Incorporated Trustees
An Incorporated Trustees is the registered trustees of a Not-for-Profit Association.
The objects of the Association must be religious, educational, literary, scientific, social, developmental, cultural, sporting or charitable.
The Trustees are the legal representatives of the Association and can acquire property, sue and be sued in the name of the Association.
Documents Needed to Register a Business with CAC
While registering a business with CAC, there are certain documents you may need to provide. The type of document you will be required to submit may depend on the classification of the business you want to register. The table below summarises the documents and the business classification they may be required.
| S/N | Classification of Business | Required Documents for Registration |
| 1. | Business name | Name choices, IDs, photos, proof of address, etc. |
| 2. | Private Limited Company | Directors/shareholders IDs & photos, capital statement, proof of address, stamp duty receipt. |
| 3. | Limited Partnership | Partner IDs, partnership details, address proof, etc. |
| 4. | Limited Liability Partnership | Partner IDs, partnership details, proof of address proof. |
| 5. | Incorporated Trustees | Constitution, trustees’ details, meeting minutes, address proof,etc. |
Step by step Guide on How to Register a Business with CAC
Registering a business with CAC can be done purely online on the CAC official registration portal. If you cannot do this yourself, you can alternatively visit any CAC agent to handle the registration for you.
Step1: Visit CAC gov ng New Portal
To register a business with the CAC, you have to start by going to the official CAC registration portal at: https://icrp.cac.gov.ng
Step 2: Create Account On The New CAC gov ng portal
Before you can take any further step in registering a business on the CAC website, you will need to create an account there if you don’t have one. You can follow here directly to signup and create account: https://icrp.cac.gov.ng/auth/new-account
Step 3: Search For Name Availability on the CAC gov ng portal.
Having created your account on the CAC portal, the next thing you should do is to search for name availability. This is also known as CAC public search. CAC public search is a process of searching on the CAC website to know if a business or company is available for registration or it has been registered by another person.
Since there are a large number of people registering businesses almost on a daily basis, there are always chances that the business name you chose may have been registered by another person.
So before you register any business with CAC, you will always be required to search for the name to know if it’s available for registration. Another person has registered it.
Step 4: Log in And Pay For Name Reservation
Once you have searched and made sure that your chosen business name is free and has not been registered by any person, then the next thing you have to do is to proceed to the CAC portal and login and pay for the name reservation.
Name reservation can cost from N600 and above, depending on the business classification you want to register.
After paying for a name reservation, it usually takes up to 2 days or above for it to be approved or rejected.
But if unfortunately your application was not rejected for any reason, then you will have to fix the reason and apply and pay again for the name reservation.
Once your application is approved, your proposed business name will be reserved for you, and a reservation code will be issued to you which you will use during the main registrateration.
NB: Once your business name has been reserved, the name reservation would be cancelled after 60 days if you fail to proceed to the main registrateration.
Step 5: Proceed To The Main Registration
Once your name has been reserved, you can now head to the CAC portal and apply for the main registration of your business. In this, you will be expected to upload your Identity Card (any valid one), your passport, and any other relevant document.
The cost of the main business name registrateration is usually N10,000, which you may pay through your ATM Card or any other payment means. After which you will have to wait for approval, before your certificate would be available for printing.
After completing the application and payment for your business registration, CAC would have to review your application to know if it is free from error. During this time, CAC would always issue you queries and tell you the particular errors you need to fix in your application before they would finally approve your business registration.
Once CAC has approved your business registration, your certificate will automatically be available on the CAC account. You may not really need to visit any CAC office before you could access your CAC certificate.
All you need to do is to access the CAC and download the CAC certificate there. The interesting thing about this is that your certificate is always available there and you download it as many times as possible.
Benefits Of Registering Your Business with CAC
There are a lot of benefits that come with registering your business. You are registering your business not just because your friends or other people did, there are actually reasons, importance or advantages that surrounds a registered business:
- Registering your business with CAC gives you the legal right as the true owner of your business, both the brand name and operational methods.
- It protects you from any legal problem that may come to the business that should have affected you as an individual.
- Customers always have special and great trust for any registered business.
- With a registered business, you can easily secure funding: like loans, grants, etc. from the Government or other establishments.
- You can easily get investors to invest in your business.
Conclusion
Registering a business is not to be optional, it’s not for professional people only. Any legal business in Nigeria is required to be registered, no matter how small or big the business is. The essence of the Government requiring the registration to verify and be aware of the business you want to do. To register a business with CAC, you first need to go to CAC portal at: https://icrp.cac.gov.ng, create account, and do name search for the business. Then pay for name reservation and proceed to complete the main registration.
