The lockdown birthed some teen entrepreneurs in Nigeria. Some of these teens are now better off than their colleagues although they were all locked down at home at the peak of the pandemic.
While teens take steps to bolster their businesses after the lockdown, it is important for you to also consider registering your business name.
Here are reasons why you should consider taking that step in owning that business.
Business continuity: When your business has its own legal identity, it affords its perpetual succession and enables continuity of such business. This is because a registered business will continue to be in existence, especially when the business has a well laid out structure, even when the owner is dead or may not be able to run the business anymore. This means your business has an unlimited life span; the business’ existence will only cease if it is formally wound up by order of the court.
Incentive benefits: When you register your business name, your business gets the opportunity of expansion. These come through the various business incentives made only available to registered Micro, Small and Medium Enterprises (MSMEs) by the Federal Government of Nigeria. The government has several agencies that see to the development of small and medium enterprises including the Small and Medium Enterprises Development Agency (SMEDAN).
The importance of registering your business can’t be overemphasised. Not only does it grant your business legitimacy, but the law also protects you. You can also enjoy the maximum operational business benefits and gain access to funding.
Ownership of your business name: One of the advantages of registering your business name is to give you certain uniqueness, and also control. Apart from that, when you register your business with the Corporate Affairs Commission (CAC), it provides you with legal and exclusive rights to your business name. That means you have to register your business with a name that no one has, and will ever use; as a certificate of incorporation will be issued to you, which will serve as a legal document that will enable you to operate with your business name.
Credibility: There is a lack of trust for most businesses because of the high rate of fraud. But when you register your business name, it gives you credibility with your potential customers as well as with the existing ones. Suppose you are willing to register your company name. In that case, it is usually perceived as strong signs of responsibility and trustworthiness as your prospective clients know that they can sue or take up matters arising with the law.
Also, registering your company enhances your business image, credibility, and overall perception of your business. This can play a part in improving your future business dealings with third parties, as many businesses will only hire or engage with registered companies rather than with individuals.
It is a great way to build your business reputation; being on the government’s records confirms your legal existence, which may make your client more comfortable transacting with your business.
Attract investors: As a business owner, you would like to expand your business reach, and your ability to attract investors and raise money for your business will revolve around how legal your business is.
Investors are likely to invest in a registered company that is recognised by the government rather than an unregistered business that has no formal structure in place. If your business is registered, you can raise money by equity financing, which involves selling shares in your business to prospective shareholders, angel investors, or venture capitalists.
Tax benefits: A registered business won’t have to pay company tax, instead you will be accustomed to paying Personal Income Tax. The implication of this in a federal state like Nigeria is that if you have a director of a company, you pay your company income tax to the Federal Inland Revenue Service (FIRS), and you pay your personal income tax to the relevant State Inland Revenue Services.
Most benefits and expenses are taxable, but in a registered company in Nigeria, you could legally offset certain costs that would have been taxable as benefits in kind under personal income tax.
Hire employees legally: When your business is registered, that affords you the ability to employ staff legally. You gain access to hire and recruit quality and skilled employees easily from job recruitment agencies and other online platforms. You can even request for NYSC members to work at your company if it is registered.
