25 Top Importance of Business Registration in Nigeria
25 Top Importance of Business Registration in Nigeria – To get the most out of your business, you should register it. The Corporate Affairs Commission (CAC) in Nigeria is in charge of the registration of corporate companies in the country.
The benefits of business registration range from legal protection to guaranteeing business continuity, among other things. This post will teach you about the various advantages of registering your business with CAC.
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Table of Contents
List Of 25 Top Importance of Business Registration in Nigeria:
1. Business registration provides business owners with legal protection.
When you register your company with the Corporate Affairs Commission, you are legally protected from any liability that your company may incur. In essence, registering your business isolates you from your company, making you a separate legal entity from your company. For example, if your business (or corporation) takes a loan from a bank but fails to make payments due to unforeseen circumstances, your personal assets will be protected against seizure by the bank. The bank from whom you acquired your business loan can only detain the properties belonging to your firm.
2. Business registration facilitates the acquisition of funds.
Funding is an essential component of every business. Funding for your firm might come in the form of bank loans or government grants, among other options. So, regardless of how you receive financing for your firm, having documentation of business registration with the Corporate Affairs Commission simplifies the process of receiving bank loans and government grants. Furthermore, investors would prefer to engage with a registered firm rather than an unregistered one. Having your company registered with the Corporate Affairs Commission gives it credibility and trustworthiness to key authorities looking for your company.
3. Business registration safeguards a company’s trademark and name.
A critical function of business registration with the Corporate Affairs Commission (CAC) is to safeguard your company’s name and trademark. When a company gains popularity among clients, additional companies may come up with the intention of utilizing the successful company’s name and trademark to benefit from the previously established customer base. However, if your company is registered with the Corporate Affairs Commission (CAC), this unfair business conduct cannot be carried out since the name and trademark of a registered company are protected.
4. Business registration facilitates international travel.
One advantage of having your company registered with the Corporate Affairs Commission is the simplicity with which you may get a visa for business trips overseas. Business travel has a favorable influence on the economy of the visiting nation in terms of foreign exchange, thus embassies provide visas to foreign investors who want to visit the countries they represent on business. As a registered business owner in Nigeria, obtaining a business visa to other nations will be simple.
5. Customers’ Trust in a Company is Increased by Business Registration
Credibility and a strong reputation are critical in every business’s growth trajectory. A company that is registered with the Corporate Affairs Commission provides clients the assurance that the company is reliable and trustworthy. As a result, potential clients are more likely to patronize such a corporation or business organization. If the company’s good reputation is maintained, these consumers will recommend the company to others. And if potential clients who have never done business with the aforementioned firm (or business entity) come along, they would need assurance that the company is legitimate and legally recognized in Nigeria. Any business in Nigeria gains legitimacy from the Certificate of Incorporation granted to the firm owner following successful completion of the business registration process.
6. Registered Business Can Open a Corporate Account
A corporate account for a business is a valuable asset since it distinguishes the owner of the business from his business. However, documentation of incorporation with the Corporate Affairs Commission is required during the account opening procedure before you may create a business bank account. Customers feel more comfortable making monetary transactions into a business account in the name of the firm than into the business owner’s personal account. This method is more professional.
7. Business registration ensures business continuity.
Every business owner anticipates that his company will continue to exist even if he is not present. If you want to guarantee that your company stays relevant, you need register it with the Corporate Affairs Commission. Business registration with the Corporate Affairs Commission entails the business owner outlining the organizational structure of his company, among other facts that will be kept on file with the CAC. When the owner(s) of a business are unable to manage the business, the structure in the CAC is recognized, assuring the business’s continuance. Transferring ownership to another person or selling the business is conceivable provided the business is properly registered, as each business is considered an entity in its own right.
8. Civic Responsibility is Promoted by Business Registration
Tax payment is required as a registered business entity in Nigeria, and it is also a civic obligation of people and corporate entities. Tax deductions from your firm are used to fund economic development programs, public and social services, and government. As a result, company registration allows corporate citizens (business entities) to demonstrate their civic obligation in terms of tax payment.
9. Bidding for Government Contracts Is Made Possible Through Business Registration
Any business entity in Nigeria that want to compete on a government contract must first register with the Corporate Affairs Commission.
10. Proof of Authorship
The Certificate of Incorporation, which is provided following completion of business registration with the Corporate Affairs Commission, serves as proof that the company has been registered. This increases the credibility of the company, particularly small enterprises.