When you eventually decide to register a business for that brilliant idea, one of the first questions likely to pop up in your mind is “how do I really get started?” In getting started, you are likely to wonder how to package the venture so that it wins the acceptance of relevant stakeholders. For example, how would you describe the venture? What name is likely to appeal to financiers, customers and just anyone whose support is required to get the ball rolling in the right direction? You probably want to think of a name that is unique, easily relatable and inspires confidence to the new brand. Take your time in choosing a name, because a name-change mid-stream could have an undesirable impact on brand equity if not managed carefully.
After a name, What next?
When you have sorted out your preferred name, the next step would be to register that name as your business identifier. This would be the name of your vehicle.
Why is the choice of a vehicle important?
Then, it is time to choose your vehicle. Let’s put it in perspective. You visit an auto mart and are presented with a vast array of vehicles to choose from, with which to accomplish any given task. My guess is your choice of a vehicle would depend on the task at hand. So, if you were going to be working in a marshy farmland, you probably would opt for a truck with a powerful engine, sturdy build and ruggedness. However, if it was a construction site and you were looking to pull down some heavy concrete boulder, you probably would fancy a bulldozer. But if you were going racing, you’d love a sport car, wouldn’t you? In just the same manner, the vehicle you choose to drive your business matters a great deal. Just as auto-makers design different vehicles for different occasions, commercial law prescribes a variety of vehicles that the entrepreneur may choose from in pursuing her objectives. You want to make the right choice, same way as you don’t want to enter a Formula 1 race with a lorry, or drive your sleek sports car on a desert safari. Simply put, you want to be careful which vehicle carries your dreams. It is very important to understand these rules as, often, they could mean the difference between a successful business and a sad tale. So how do you know which vehicle is the perfect fit for your idea?
How do I know what vehicle is appropriate for my endeavor?
As we have stated earlier, Nigerian law provides options for the type of vehicle a budding entrepreneur may choose from in pursuing her ideas. The law also recognizes that the idea could either be a not-for-profit, or profit-driven (in fact a good majority of start-ups are set up to with profit as an objective). For not-for-profits, vehicles available include ‘incorporated trustees’, companies limited by guarantee and to some extent, cooperative societies.
For profit-driven businesses, the available vehicles include sole proprietorship, partnership (in Lagos there is a variant called the Limited Partnership), limited liability company and public limited companies and cooperative societies.
Suppose my choice is a Sole Proprietorship?
Many entrepreneurs start up their businesses as sole proprietorships, and so we will commence by examining how to register sole proprietorships.
The mode of registering your business differs from one jurisdiction to another. In Nigeria for example, the Corporate Affairs Commission (CAC) superintends over the registration of most corporate organization structures.
Assuming you are starting the business from scratch, maybe with not so much material resource, you may wish to consider registering a business name (let’s call it “Business Name”), and plying your trade under this business name until you are prepared to incorporate. (This refers to registering a vehicle with separate legal personality from the owners. The most common variant of this class of vehicles has names that end with ‘Limited’ or ‘Ltd’.) The Business Name looks like an obvious choice if you would like to opt for simplicity and a low-cost profile. Not only is the Business Name being easier and cheaper to register, you really do not need a lawyer or any other intermediary to register the business name – in fact the CAC encourages promoters to register the business names themselves rather than go through middle men.
A few things to note about the Business Name:
So how do I register a Business Name?
Below are quick steps to registering your business name.
The CAC has designed a form for it called AVAILABILITY CHECK AND RESERVATION OF NAME form. This form may be purchased at any of the CAC’s offices nationwide at an average cost of N100 or downloaded free from CAC’s website. Better still, the CAC has hosted a new website: new.cac.gov.ng, where you can conduct an availability from the comfort of your device. You will however need to register following the step-by-step procedure provided on the site before accessing the availability search portal.
The CAC charges the sum of N500 for each availability search. If the search result indicates that the name is available for use, the CAC will automatically reserve the name for you, and issue a written communication that the name stands reserved for 60 days. You will need to expedite action to ensure that the registration of the Business Name is completed before the expiration of the 60 days, otherwise, you may need to re-apply for another availability and there are no guarantees that the name would be available on this second trip.
The receipt of the certificate of registration means that you have successfully registered a Business Name.