By Douglas Ogbankwa, Esq.
Having a Business is not just a venture, it is actually a legal entity that needs to acquire a legal capacity to be able to do all things provided for by Law.
The Following are the reasons you should Register your business with the Corporate Affairs Commission (CAC), the only body empowered by Law to register Businesses and other Corporate Entities in Nigeria.
It is appropriate to register a Business in Order for your Business to acquire a Legal Capacity. Once Your Business is registered, it is akin to a child being born. It acquires all Rights and liabilities provided for by Law for such business. It becomes a juristic person, it can transact in its business name and get cloth with corporate flavour.
- Once your business is registered it acquires the ability to sue and be sued in its own name. It becomes a body corporate and if it was a limited liability company, it acquires its own seal, so much so that if the iron seal is not inscribed in the documents showing transactions, such transactions becomes inchoate. Once you do business with a limited liability company insist they inscribe their common seal on the document indicating the transaction else the document becomes voidable and the Transaction becomes nondescript.
- Branding: A Registered Business acquires a brand and reputation and gives people the impression that they are dealing with a credible business. Once your business is registered your business automatically is put on the CAC Website and random search can be conducted on it to ascertain its authenticity or otherwise. People prefer to deal with registered businesses for certainty of records and a trail of transaction.
- Ease of Banking and doing Business: A Business can only have a Bank account in its name, when it is registered. If a customer or client asked you to send your account details, the Customer or Client will feel more comfortable dealing with you, when the person realises you have a corporate account. People prefer to deal with corporate entities than individuals, as it boosts their confidence to enter into higher transactions with you.
5.Dealing with Government and Corporate Entities: You can not do business with Government or Corporate Entities except you have a registered business .The First Document they will require of you, is your certificate of registration. You should also be on good standing with your tax clearance, compliance with the Pension Act (if Applicable), compliance with the Industrial Training Fund (ITF) and the National Social Insurance Trust Fund (NSITF), if applicable and other compulsory Business Regulatory Compliances as provided for, by Law.
6.Dealing With Foreign Agencies and Foreign Donors: You can not also deal with foreign Agencies and Donors as a vendor/ Service Provider or Partner as a Non-Govenmental Organization (NGO), if you were not registered with the Corporate Affairs Commission (CAC). These International Organizations only deal with Entities and not Individuals, except you are a Resource Person.
7 .Limited Liability of Businesses: A Business is separate from its owners. When a Company does business in its name, the liability arising from the transaction is limited to the share capital and assets of the Company and not its owners. That is why you should be careful how you transfer money from your business account to your personal account and how you pay business money into your personal account ,when you have a business account. You will be creating avoidable personal liability. Some Companies are said to be Limited Liability Companies, because the liability of the Company is limited to the authorized share capital as registered in the CAC and the assets of the Company.
For more Information please visit the CAC Website @: www.cac.gov.ng.
This Article is for Public Enlightenment Purpose only.
About the Author:
Douglas Ogbankwa Esq. @douglasogbankwa@gmail.com, is the Co-ordinator of the African Bar Association, AfBA Law Students’ Internship Programme- AfBA-LSIP and he is the immediate past Publicity Secretary of the Nigerian Bar Association Benin Branch-the Lion Bar. He is also the Founder of the Benin Writers’ Society.
Addendum:
HOW TO CHECK IF A COMPANY IS REGISTERED IN NIGERIA
Introduction
The question of how to know if a company is registered in Nigeria is one often asked by intending individuals or corporate bodies looking to do business or venture into an agreement with another company claiming legality. The write-ups will briefly summarize a process how to check if a company is registered in Nigeria.
A Registered Company
For a corporate body or form of business to do carry out services in Nigeria, it must be registered with the Corporate Affairs Commission (CAC), which was created under the Companies and Allied Matters Act of Nigeria. To successfully register a company, the company must have fulfilled all the necessary requirements of the commission by providing details of the company such as (Name of the company, registered address, directors, shareholders, shareholding formula etc) and it must have paid the filing fees required by the commission.
Upon the company registration by the commission, and after all the requirements have been fulfilled, the CAC will issue to the company a Certificate of Incorporation, which contains the name of the company and its status (a private or public company), an RC Number peculiar to that company used to verify the validity of that company as an incorporated entity. It also shows the date and the seal of the Registrar-General of the commission.
How to check if a company is registered
To reduce the risk of unsuspecting individuals or entities transacting with unregistered companies with no legitimate status, the Corporate Affairs Commission has launched a public search portal on its website where one can confirm the registration of a company. Prior to the technology innovation, one would have to go through the rigorous process of visiting the Commission to check the records of registered companies, but technology has made the search process easy with the creation of portals where one can check the database of the CAC to ascertain whether a company is registered with CAC or not.
To check the registration of a company, one must follow these easy steps:
Visit the website of the commission
Click on the public search engine
You will be directed to a search record by name; enter the name of the company.
Click on the search engine and verify you are not a robot
A result will be shown detailing the RC Number, Company name, registered address and date of registration
If the company is undergoing registration, the result will also detail the status of the company at that time.
As seen above the process to check if a company is registered is very easy and fast, without payment of any fee attached. Additionally, someone can check by requesting to see the certificate of incorporation of the company, and then confirm or verify the information contained therein with the ones obtained from the CAC’s portal.
Conclusion
For a company to enjoy legal backing, it must be duly registered by the Corporate Affairs Commission. It is important to conduct due diligence before engaging the service or transacting with a company to prevent being scammed. If a company is not registered, upon search the result will come up empty, at that point, one will know that such company is bogus.
However, the CAC’s online check will merely reflect whether the company is duly registered with the commission or not. It does not indicate the names or particulars of the directors and shareholders of the company. Anyone interested in knowing the full details of a registered company should consult a lawyer to assist in conducting a manual search at any CAC’s offices across the country.
