Is CAC compulsory? This question has been a bone in the neck of countless business owners who express their doubt in the recognition which registering their business can bring.
No doubt, the short answer to this is Yes, registering with the Corporate Affairs Commission (CAC) is compulsory for starting a business in Nigeria.
The CAC is the government body that registers new businesses. Practically. While registration with the CAC is not directly enforced for all businesses, having a registered business is the foundation for establishing and growing a legitimate enterprise in Nigeria.
The aim of this article is to provide clarity on how to register a business name in Nigeria, as many business owners have shown increasing interest in having their brands officially recognized.
What are the requirements for a CAC business name?
The Corporate Affairs Commission (CAC) offers two main types of business registrations which includes; Business Name (Enterprise) and Limited Liability Company.
For Business Name registration, designed for entrepreneurs and small-medium enterprises, you need the following: two preferred business name options, a business address, your residential address, the nature of your business, a valid ID card, a passport photograph, your phone number, and an email address.
This process gives your business full rights to operate as a recognized brand in Nigeria.
For Limited Liability registration, additional details are required to set up your company. These include two preferred company name options, the share capital, the company’s address, your residential address, the nature of your business, ID cards for directors, passport photographs, contact details, share allotment structure, and the Memorandum and Articles of Association.
Acceptable ID cards for either registration include a national ID, driver’s license, international passport, or voter’s card.
Having known the necessary requirement to register your business in Nigeria, below are the steps that are to be followed to make your business fully recognised by the Corporate Affairs Commision in Nigeria.
Steps to register a business name in nigeria
Here are the steps to register a business name in Nigeria with the Corporate Affairs Commission (CAC):
1. Create a CAC Account
To get started with registering your business name in Nigeria, head over to the official CAC website at www.cac.gov.ng and create a new account. During the account creation process, you’ll need to provide your personal details, including your email address.
During the registration process, you will be asked to specify your role in the business, whether you are a director, trustee, or a proprietor/partner. Make sure to have this information ready.
You will also need to provide either your National Identification Number (NIN) or your phone number for verification, so keep that on hand as well.
If you’re not a Nigerian, you can select the option to create an account as a Non-Nigerian and choose your country from a dropdown list. Once your account is set up, you’ll be able to continue with the registration process or resume any existing or pending registrations.
2. Name Reservation
After creating your CAC account, the next step is to submit two preferred names for your business, a process known as name reservation.
This means submitting two name options to the CAC for availability check and approval. Once approved, the CAC will reserve the chosen name for you for 60 days. During this period, no one else will be able to register these names because they’ve been exclusively reserved for you.
Many people ask, can two people register a business name? The answer is no. Once a name is approved and reserved or registered, it cannot be used by anyone else.
However, if you don’t complete your registration within the 60-day reservation period, the name will be released and made available for others to claim. To avoid losing your preferred name, be sure to finalize the process within the given timeframe.
3. Complete the Registration Form
After approval, you should go on to fill out the online business name registration form (CAC/BN1) with the following details:
- Approved business name
- Business address and nature of business
- Owner’s personal details (residential address, phone number, email, ID card details).
4. Upload Required Documents
Series of confidential details would be required from you. You will be mandated to upload scanned copies of the required documents, such as:
- Approved name reservation slip
- Valid ID card
- Passport photograph
- Evidence of payment.
5. Pay the Registration Fee
To complete your business name registration, you must pay the registration fee through the CAC portal. This is a mandatory step in the process.
If you’re wondering, how much does it cost to register a business name in Nigeria or what is the cost of registering a business in Nigeria in 2024, the CAC filing fee is typically affordable for small and medium-sized businesses.
As of 2024, how much is CAC registration varies depending on the type of business being registered, but for business names, the fee generally starts at ₦10,000.
However, ensure you confirm the exact amount on the CAC portal or follow this link to view the updated prices before making payment.
6. Submission and Review
Submit your application and allow the CAC to review the documents and details provided. On average, it takes about 3 to 7 working days for the CAC to complete the business name registration process, depending on how promptly the required information is verified and approved.
7. Certificate of Registration
Once your application is approved, the CAC will issue a Certificate of Business Name Registration, which you can easily download from your CAC dashboard.
With this certificate, you can open a corporate bank account in your business name. Simply take the certificate, along with a valid ID, passport photograph, and proof of address, to your preferred bank to set up the account.
Having a bank account in your business name not only makes transactions more professional but also helps you separate personal and business finances.
As for taxes, registering a business name means you’re obligated to pay taxes based on your operations. Sole proprietors typically pay Personal Income Tax, while businesses offering goods or services are required to remit Value Added Tax (VAT).
To comply, you’ll need to register with the Federal Inland Revenue Service (FIRS) to obtain a Tax Identification Number (TIN), which enables you to handle tax payments and stay on the right side of the law.
8. Print and Keep Your Certificate
Once your business name is registered, download the certificate from your CAC dashboard and print it out. This certificate isn’t just a formality—it’s an essential document for your business. It serves as legal proof that your business is recognized by the Nigerian government.
Keep the printed copy in a safe, accessible place, and consider making additional copies or scanning it for digital storage. This ensures you’re always prepared for situations where proof of registration is required.
Frequently asked questions (FAQs)
How much does it cost to register a business name in Nigeria?
The cost of registering a business name in Nigeria with the CAC typically starts at ₦10,000, depending on the type of registration. Additional fees may apply for name reservation and filing.
Can I register my business name by myself in Nigeria?
Yes, you can register your business name online by visiting the CAC website and following the step-by-step process.
How long does it take CAC to register a business name?
It usually takes 3 to 7 working days for the CAC to process and approve your business name registration if all documents are in order.
Does business name pay tax in Nigeria?
Yes, businesses operating under a registered name are required to pay taxes such as Personal Income Tax or Value Added Tax (VAT) based on their earnings and nature of business.
How much is the CAC filing fee?
The filing fee for a business name with the CAC is approximately ₦10,000, but it varies depending on the specifics of your registration.
Can I open a bank account with my business name in Nigeria?
Yes, once you register your business name, you can use the certificate to open a corporate bank account in your business name.
What is the difference between business name and company registration?
A business name is for sole proprietorships or small partnerships, while company registration creates a limited liability entity with separate legal status from its owners.
How many days does it take to register a business in Nigeria?
The registration process typically takes between 3 to 7 working days, depending on the workload at CAC and the accuracy of your submitted documents.
How do I check if a business name is available on CAC?
You can search for business name availability using the CAC’s online portal. Enter your desired name to check if it’s already registered.
Can I start a business without registering it in Nigeria?
Yes, but operating without registration is illegal for most formal businesses, and you won’t be able to open a corporate bank account or bid for contracts.
Can two people register a business name?
No, once a business name is reserved or registered, it cannot be used by anyone else.
What is the difference between CAC and business name registration?
The CAC is the government body responsible for regulating all types of business registrations in Nigeria, including business names, companies, and incorporated trustees.
What are the disadvantages of registering a business name in Nigeria?
The main drawbacks are that business names offer no legal separation between the owner and the business, which means unlimited liability, and they may lack credibility for certain corporate clients compared to limited liability companies.