If you are starting a new business or want to grow your business, you are probably thinking about starting a company. While registering a company may seem like a big step, there are also many benefits to doing your business under a registered structure. In this article, we will outline 5 benefits of registering your company and how this might affect your business growth.
1.your personal liability will be limited
As a single trader or partnership you are legally responsible for all aspects of your business, including liabilities and losses. In addition, if you sell a defective product or make a mistake, you will have a personal obligation. Doing business in this way can be dangerous, as it means that your personal belongings are also in line.
In contrast, a company is a separate legal entity and is an easy way to protect your own assets from the actions of your business. Any Debts incurred by the company will not stick to you, this allows you to focus on building your business.
2. your tax liability will be reduced
When a business in Nigeria is registered, the business owner has a separate legal entity than the business itself. Thus, the business owner receives separate legal protection. Where credit arises from the business, the owner will not be held personally liable. If the loan is repaid and there is a default, the bank will not hold the personal property of the business owner; they will only reserve company assets.Furthermore, depending on your country, your business will be eligible for a variety of tax deductions, including advertising, education and training, and repairs and upkeep.
3. You can avoid disputes with your co-directors or founders.
Registering a company is very helpful when a dispute arises with your co-directors or founders. When you register your company, the owners' control is based on the number of shares each member owns. Owners will have a clear understanding that their investment in the company is not through any oral or written pre-registration promises. In case a dispute arises, the allocation of shares will determine who has the most power to make decisions.
Similarly, companies may allow you to separate business ownership and management. For example, you may have a few shareholders, but appoint managers who are not owners of the company. This allows the business to be managed by professionals who are experts in the business, with the objective of maximizing profits for the business, to the benefit of the shareholders
4. Trustworthiness and brand recognition
Think of the biggest brands in the world today - Yahoo, Google, Facebook. All of these are legitimately registered companies. For a business to thrive and grow as much as possible, having a company structure is essential.
Registering your company enhances the reputation and vision of your business. The company is its own organization, working separately from you. You will be accountable to the authorities of your country and work under the registration bodies for example in nigeria, Corporate Affairs Commission, (CAC) Federal Inland Revenue Services (FIRS), etc.
Being a registered company is also important in any future partnership with foreign companies, as most businesses will only hire or partner with registered companies. This means that your business contracts will have your company name on it, rather than yours.
5. As a corporate entity You can raise more money for you business
As a company, your ability to attract investors and raise money for your business will be easier. Registering your company gives you the ability to borrow and lend but most importantly, sell stocks and raise equity. If you have another business plan, you will need to pay taxes on your personal tax statement even if that money stays in the business.
Ability to raise money can be important in developing and growing your business. Investors prefer to invest in a registered company than to invest in a single trader or partnership, especially since they know that there is a legal framework in place to protect their investments.
Summary
One of the most effective strategies to grow your business and assure its success is to register your business. You will not only be free of liability, but you will also benefit from lower tax rates, allowing you to focus on growing your business into the profitable endeavor that you desire. A business expert can assist you in determining which business structure is best for you if you're unsure.
What are the Requirements for a Private Limited Liability Company (commonly known as a "LLC") to be Registered?
In Nigeria, the most prominent kind of company for business operations is a private limited liability company. One or more shareholders can incorporate a small company limited by shares under section 18 of the Companies and Allied Matters Act 2020 ("CAMA"). A company is considered small if it has a revenue of less than N25,000,000 (about US$50,000) and no foreigner, government, or government entity as a stakeholder, among other things.
So, except for banks, mortgage institutions, bureau de change, and other businesses that require a permission in principle from the Central Bank of Nigeria ("CBN") before being incorporated, any other corporation can be registered immediately.
The Corporate Affairs Commission's ("CAC") Same Day Incorporation desk now allows companies to be registered within 24-48hours. under CAMA 2020, section 271, a corporation must have at least two (2) directors, whereas small companies may have one (1) director
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* Directors: The company's board of directors must be supplied. (In Nigeria, a corporation may be operated by one person.) The previous requirement that a business have at least two (2) directors has been removed. CAC must be supplied with the director/s' names, contact and residence addresses, phone number, email address, occupation, electronic signature(s), and government-issued identity. For business name registration, Personal passport is needed.
* 2 Names of companies: CAC will be supplied with two suggested names for the proposed company for Name Availability Search and Reservation. One of the names if approved, will be reserved for sixty (60) days to allow the proponents to finish the registration process before the reserved name expires.
*Shareholders: During the registration of a corporation, a list of shareholders must be submitted. (In Nigeria, a company may be owned by an individual. The former requirement that a corporation have at least two (2) shareholders has been removed as earlier mentioned). CAC must receive the shareholder's names, contact and residence addresses, phone number, email address, occupation, electronic signature(s), and government-issued identity (Nat. ID, Driver Licence, Int. Passport, Permanent Voters Card(PVC) Birth Certificate for Minors below 18 years). Structure: To know who gets what number of shares, the share distribution among the initial shareholders must be clearly spelled out. Each shareholder must declare the quantity of shares he or she will own. If the shareholders have a shareholders' agreement, it may be important to record their agreement of the members' rights.
*Share Capital Issued: The entire number of shares to be distributed among the company's shareholders is known as the issued share capital. At the time of incorporation, the amount of the company's issued share capital must be indicated unambiguously. If your business is a small or medium-sized company, the minimum issued share capital of a private company, which is N100,000, is recommended. Although a public company's minimum issued share capital is N2,000,000, it is believed that a startup would not go public right away, therefore it may be established with a N100,000 share capital. Please keep in mind that you might have more than 100,000 or 2,000,000 shares in your company (or may be required by a regulatory guideline to register with a higher amount of share capital, depending on the sector).
*Nature of business/OBJECTIVE: For the incorporation of a company, a brief description of the type and sector of the company's activities is also needed. An outline of the company's prospective business must be provided in order for the CAC to decide if the promoters are required to furnish qualifying certificates or not. Please keep in mind that some industries, such as the financial sector, insurance, pensions, and energy, are highly regulated, and CAC may require a regulator's permission in principle before approving the registration of any firm wanting to conduct business in such an industry.
Registration of Business name with CAC
Duration varies • 23,500
Requirement for Business name registration
1. Name of presenter
2. Address of the business
3. Two proposed business name
4. passport
5. Description of the Business
6. Valid ID(Not Work ID, supply any government ID as shown above)
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INCORPORATION OF PRIVATE LIMITED COMPANY
Duration varies • N59,750 (for 1,000,000 shares capital only)
1. Name of presenter (Director)
2. Address (location of the business )
3. Two proposed name of your business
4 Valid ID - see above
COMPLETION: 21 working days.
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INCORPORATION of NGOs
Duration varies • N129,750
we can help in incorporating NGO (school, Church, Club and association)
Details of all participants as mentioned in company's incorporation
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For Trademark Registration In Nigeria - CONTACT US
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CONTACT CREATIVE DYNAMIC BUSINESS ON +2349053534800,+2348108180001
REF: https://koriatlaw.com/
https://lawpath.com.au/blog/
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