To get more out of your business, it is pertinent to get it registered. In Nigeria, the Corporate Affairs Commission (CAC) handles the registration of business entities in the country. The advantages of business registration range from legal protection to ensuring the continuity of the business, among other things. In this article, you will learn about the numerous benefits registering your business with CAC provides.
The importance of business registration in Nigeria is addressed below:
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Business Registration Offers Legal Protection to Business Owners
When you have your business registered with the Corporate Affairs Commission, it legally protects you from any liability that your business may incur. In essence, registering your business separates you from your business, thus making you a separate legal entity from that of your business. For instance, if your business (or company) obtains a loan from a bank but due to some challenges, there is a default in the payment, your personal properties will be safe from being withheld by the bank. The bank you obtained your business obtained the loan from can only withhold the properties belonging to your company.
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Business Registration Makes Sourcing for Funds Easier
Funding is a vital aspect of every business. Getting funds for your business may be in the form of loans from banks, and grants from the government, among other alternatives. So, whatever means you may source funds for your business, having proof of business registration with the Corporate Affairs Commission facilitates the process of obtaining loans from the bank, and benefiting from grants from the government. In addition, investors would be more interested in partnering with a registered business rather than one unregistered. Having your business registered with the Corporate Affairs Commission makes it credible and trustworthy to relevant authorities willing to find your business.
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Business Registration Protects Trademark and Name of a Business
A very crucial role of business registration with the Corporate Affairs Commission (CAC) is that it protects the name and trademark of your business. In the situation where a business has gained prominence amongst customers, other new businesses may spring up with the motive of using the name and trademark of the successful business to benefit from the already established customer base. But if your business is registered with the Corporate Affairs Commission (CAC), this unfair business practice cannot be orchestrated as the name and trademark of an already registered business are protected.
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Business Registration Makes International Travel Easier
A perk of having your business registered with the Corporate Affairs Commission is the ease of obtaining a visa when you want to go on business trips abroad. Business travels have a positive impact on the economy of the visiting country in terms of foreign exchange, and as such embassies grant visas to foreign investors who desire to go on business trips to the countries they represent. As a registered business owner in Nigeria, it will be easy to obtain a visa to other countries for business purposes.
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Business Registration Boosts Customers’ Confidence in the Business
Credibility and a good reputation are of importance in the growth trajectory of any business. A business registered with the Corporate Affairs Commission gives customers the conviction that such a business is credible and trustworthy. Hence, potential customers feel comfortable patronizing such a company or business entity. If the good reputation of the business is maintained, these customers would refer other people to patronize the business. And if these potential customers who haven’t done business with the said company (or business entity) come along, they will need assurance that the business is genuine and legally recognized in Nigeria. The Certificate of Incorporation issued to the business owner upon successful completion of the business registration confers legitimacy on any business in Nigeria.
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Registered Business Can Open a Corporate Account
Having a corporate account for a business is an important asset to businesses as it differentiates the owner of the business from his business. But before you can have a business bank account, proof of incorporation with the Corporate Affairs Commission is needed during the account opening procedure. Customers are more relaxed about making monetary transactions into a business account bearing the name of the business than to the personal account of the business owner. It is even more professional this way.
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Business Registration Ensures Continuity of the Business
Every business owner expects that his business can still exist even when he is no longer available. As a business owner, if you want to ensure that your business remains relevant, then, register your business with the Corporate Affairs Commission. Business registration with the Corporate Affairs Commission will involve the business owner laying down the organizational structure of his business, among other relevant details, which remain on the record of the CAC. When the owner(s) of a business is/are not available to run the business, the structure in the CAC is recognized, hence ensuring the continuity of the business. Transfer of ownership to another, or the sale of the business, is possible if the business is duly registered, being that every business is perceived as an entity in its own right.
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Business Registration Promotes Civic Responsibility
As a registered business entity in Nigeria, tax payment is compulsory, and also a civic responsibility of citizens and corporate organizations. Deductions for tax from your business are used to sponsor economic development projects, public and social services as well as governance. Hence, business registration provides corporate citizens (business entities) with the avenue to demonstrate their civic responsibility as regards tax payment.
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Business Registration Allows Bidding for Government Contracts
Before any business entity in Nigeria is allowed to bid for a government contract, it must have to be duly registered with the Corporate Affairs Commission.
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Proof of Legitimacy
The Certificate of Incorporation issued upon completion of business registration with the Corporate Affairs Commission serves as evidence that the business has been registered. This boosts the credibility of the business, especially small businesses.
To register your business, visit www.cac.gov.ng/