Importance of Registering Your Business in Nigeria

From an office building, a classroom or by posting on social media platforms, every successful entrepreneur starts somewhere. But even more important than where they start, is how they start.


One of the most important ways to start your business enterprise is by registering your business entity. Unconvinced? In this post, I will highlight several reasons you should register your business entity at the early stage.



2 years ago, you started your own business. Formulated a perfect name for the business. Designed a beautiful logo for it.


Business was booming, your customer base was growing, the sky was the limit. Then, for whatever reason, you realised you needed to register the business. You therefore filed an application for business registration with the Corporate Affairs Commission (CAC). 24 hours later, you received a notice of denial from CAC. The name you painstakingly built your business around, for 2 solid years, would not be available for registration.


How would you feel? Sad and devastated, right?


One of my clients, a logistic company promoter, felt the same way. He was forced to modify the business name.


It is just unwise to build your business around a name which is not legally recognised as yours.


Legal Protection

Your business name becomes yours upon successful registration with the CAC. Your business is recognised by law to be existing. Your registered business name or a name similar to it cannot be registered by another business entity in Nigeria any longer.



As a sole proprietorship, partnership, or company, if you carry on an unregistered business which is required by law to be registered in Nigeria, your default to register the business within 28 days after commencing business operations amounts to an offence. You may also be liable on conviction to a fine for every day during which the default continues.


Improved Access to Finance, Markets and Networks

Certificate of business registration is one of the common requirements for getting business loan from lenders, according to Lendigo Nigeria, a fintech company that provides loans and financing opportunities for SMEs. “If your business is not registered, you might want to consider getting a personal loan for your business or getting it registered,” Lendigo writes.


A registered business entity gives you better access to financing your business through investors, financial institutions, government schemes, among other financing opportunities.


Branding and Legitimacy

Branding is about controlling people’s perceptions of your business. You want your potential customers or clients to see you as someone they can trust, someone serious with their business, and someone legitimate.


“To prove that you have a legitimate business, legally operating in Nigeria, you will be required to provide proof of business registration,” Lendigo notes. “For a Nigeria-based business, this proof is your business registration certificate (BN or RC).”


A registered business helps in building reputation with your suppliers, customers, and employees. And when you enter business with big corporations, you want them to easily find you if they decide to conduct background check on you and your business with the CAC. It is good for the business.


Business Bank Account

Providing your business bank account details as a means of receiving payment from a customer or client, instead of your personal bank account details, shows professionalism, credibility, and diligence.


A business bank account, separate from your personal bank account, makes it easier for you to separate your personal financial activities from those of your business. And to open a business bank account with any bank in Nigeria, certificate of business registration is a prerequisite.



When you register your business as a company, it means you are only liable to the number of shares or guarantee you hold in the company.


This benefit flows from the principle of corporate personality. Corporate personality means that upon successful registration of your company, you create another “person” under the law. This person, your company, will be responsible for its own activities: it can employ its management; it can own properties; it can sue and be sued. Your only liability to the company is the amount you undertake to contribute to the company in the event of its insolvency or death.


Thus, your undertaking is the number of shares or guarantee you own in the company during the registration process or later. And when creditors come for the company and the company is unable to pay its debt, you will only be liable for the number of shares or guarantee you own in the company. You and your personal properties are safe.



The Coca-Cola Company was incorporated in 1892 by Asa Griggs Candler. Mr. Candler died in 1929. Over 100 years later, the company continues to exist.


Continuity. Perpetual succession. This benefit flows from the same principle of corporate personality.


While you are susceptible to death as a human being, your company as an artificial person can be in existence for years with proper management and structure in place.


A registered company is a legacy your children can inherit. You can run your family business through it, just like the fictional Shelby Company Limited through which the Shelbys run their family business in Peaky Blinders, one of my favourite TV series.


And for generations to come, the family business continues to grow and expand through the registered company.




There are many more advantages of registering your business entity, including the ease of obtaining visa and travel to any country for business purposes; applying for licences in your business sector or industry; among others. If you carry on an unregistered business right now, take a pause from other business activities and get your business registered, so that you can access all these benefits and save your business from future troubles.