Starting a business in Nigeria requires proper registration to ensure legality and credibility. The Corporate Affairs Commission (CAC) is the regulatory body responsible for registering businesses in Nigeria. One of the key documents you’ll need is the CAC business certificate. Additionally, the Central Bank of Nigeria (CBN) now mandates that every business wanting to operate a bank account under its business name must be registered with the Corporate Affairs Commission. In this article, we will guide you through the process of obtaining a CAC business certificate, highlighting its importance, the steps involved, and frequently asked questions.
What is a CAC Business Certificate?
A CAC business certificate is an official document issued by the Corporate Affairs Commission that signifies the legal registration of a business in Nigeria. This certificate is crucial for businesses as it proves their legitimacy and allows them to operate within the legal framework of the country.
Types of Businesses and Their Required CAC Documents
The specific CAC documents you receive will vary depending on the type of business you register. The different types of businesses are:
Business Name
Also known as sole proprietorship, this form is available only to Nigerians. It’s suitable for individuals running a business on their own. However, the CAC may suggest registering as a private limited company depending on the business activity.
Company Limited by Shares
Shareholders in this company are liable only to the extent of their shares. This can be either a private or public company. This means incorporation creates a separate legal entity, meaning the business can own assets, incur liabilities, and enter contracts independently of its owners.
Incorporated Trustees
Suitable for NGOs, churches, mosques, charities, social clubs, and associations, allowing them to operate as legal entities.
Why is Registration or Incorporation of your Business is Important?
Legal Compliance and Protection
- Legitimacy: A CAC certificate validates your business as a legal entity, distinguishing it from personal assets. This provides a clear legal framework for your operations.
- Protection: It safeguards your business name and prevents others from using it illegally. In case of disputes or legal issues, the CAC certificate serves as essential evidence.
- CBN Mandate: The Central Bank of Nigeria (CBN) now explicitly requires all POS operators to register their businesses with the CAC. Non-compliance can lead to legal repercussions. In fact, to use any of Payzeep’s devices, one must have a CAC business certificate.
Financial Benefits
- Bank Account Opening: Most banks and Fintechs in Nigeria mandate a CAC certificate as a prerequisite for opening a business account. This is crucial for managing your business finances effectively.
- Access to Loans and Grants: Financial institutions and government agencies often prioritize registered businesses for loans, grants, and other financial support. A CAC certificate increases your credibility as a borrower.
Business Growth and Development
- Business Contracts: A CAC certificate empowers you to enter into legally binding contracts with clients, suppliers, and partners. This is fundamental for conducting business transactions.
- Reputation and Trust: Having a CAC certificate enhances your business’s reputation and credibility. It instills confidence in customers, suppliers, and investors, fostering stronger business relationships.
- Business Expansion: As your business grows, a CAC certificate becomes increasingly important. It facilitates business expansion, partnerships, and potential investments.
Steps to Obtain a CAC Business Certificate
You can start all forms of registration on the Corporate Affairs Commission website.
General Steps
To start your business registration, follow these steps:
- Check and Reserve a Business Name: Find your desired business name and secure it for your use.
- Complete the Pre-Registration Form: Fill out the required forms and gather necessary documents.
- Pay the Filing Fee: Submit the correct fee to the CAC.
- Get Your Certificate: Once approved, receive your electronic Certificate of Registration and Certified Extract.
Specific Steps (Depending on Business Type)
The steps you take depend on your business type:
- Business Name: Register your business name without needing a lawyer.
- Company (Private or Public): Complete additional forms and pay stamp duty.
- Incorporated Trustee: Use the CAC-IT01 form for registration.
What documents do you need to register a business with the CAC?
To register a business with the CAC, you will need the following documents:
- A valid form of identification for each director and shareholder (e.g., National ID, International Passport, Driver’s License).
- Passport photographs of the directors and shareholders.
- Your signature on a plain white background.
- Information about the business, including its name, address, and objectives.
- Completed pre-registration form (CAC1.1).
Common Questions About Registration or Incorporation of Business with CAC
What types of business registrations does Payzeep handle? Payzeep specializes in business name registration.
How much does it cost to register your Business Name with CAC with Payzeep? You can register your business name with Payzeep for a fee of 16,000 naira.
How long does it take to get a CAC business certificate? The entire process typically takes about 1-2 weeks, depending on the accuracy of your documentation and the workload of the CAC.
Can I register my business myself, or do I need a lawyer? You can register your business yourself through the CAC portal. However, if you find the process daunting, you can hire a lawyer or a business consultant.
What types of businesses need a CAC certificate? All businesses, including sole proprietorships, partnerships, and incorporated companies, need a CAC certificate to operate legally in Nigeria.
What happens if I don’t register my business? Operating an unregistered business is illegal and can result in penalties, fines, or closure by regulatory authorities.
Can I make changes to my business after registration? Yes, you can make changes such as updating your business name, address, or adding new partners through the CAC portal.
