7 reasons why you should register your Business
Company or any form of Business entity is an opportunity for an entrepreneur to reveal his/her Business talent. Entrepreneurship is an opportunity for any individual to explore his/her. It provides you the platform to showcase your talent without the interference of any third person.
Business registration is a step for establishment of any Business firm. Business registration mainly performed to form organisation such as Company, LLP, Partnership firm or proprietorship. Public Audience has more trust on the Registered Business entity in the market as compared with the unregistered Business.
Legitimacy — There are certain Corporate law which should be followed after every business to be registered within 10 days of commencement of operations. In case the company fails it can create an offence and appropriate sanctions will be applied to offenders as ignorance of the law does not excuse anyone. You may think that the long arm of the law is far from you until the day you get a visit from the regulatory authorities. It’s always safer to be on the right side of the law.
Corporate law has certain exception under which a business registration is not mandatory. Therefore any business that falls under the exceptions will not be in breach of the law. A business is exempted from registration if the business.
1. In the case of a firm/partnership, bears only the true forenames and surnames of all the partners; e.g. Chinedu Ibe, Herbert Odu, & Philip Ene
2. In the case of an individual, bears the true forenames and surname of that individual, for example, Juliet Ineba Barango; and
3. In the case of a corporation, the name consists of the corporate name with an addition e.g. Red Grapes Ltd & Sons.
Apart from the fact that it is illegal to operate a business without registration, (where the above exceptions do not apply), there are other benefits of registration of a business.
Reputation/recognition/distinction — People mainly trust on registered entities for the purpose of business than individuals. People show their interest in dealing with a particular corporate entity to conduct due diligence from the regulatory authorities as to the nature of the entity they want to deal with. There are certain categories such as Creditors, Customers, Suppliers and Financiers for whom registration of a business would provide some form of security. Business Registration protects the name of such entity so that no other business is allowed to use the same name as far as the jurisdiction of registration is concerned.
Succession and structure -Registered business gain more market and is more likely to outlive the founder especially if it is registered as a company. Business registration helps to to lay a foundation for a proper structure in terms of management, accounting, etc.
Bank account — Corporate bank account can be opened only if an entity is a registered entity. The benefit of having a corporate financial balance is a partition of business assets from individual assets which is central for any entrepreneur that looks to gain ground with the business wander.
Financing –Business registration is helpful in the process of financing Businesses will need financing at different stages of their growth in form of grants, loans, investments etc. Financiers will always prefer more established and duly registered entities especially for small or start-up businesses. There is a need for more structural form in place of which registration is crucial foundation.
Contract bids — Business Registration is more significant eligibility standard for contract bids in most public and private institutions. There are several other criteria such as up-to-date annual and tax returns but these cannot even be achieved without first having the business registered.
Value Added Services — As Micro, small and medium enterprises gain more recognition due to their contribution to economies of countries, there are many organisations that now offer services to this category of corporate entities which may not be readily available to individuals. For e.g financial institutions like Diamond Bank and Heritage Bank have initiated SME clinics aimed at providing support and adding value to corporate entities that are at their foundational stages.
Despite these benefits, it is imperative to note that there are also responsibilities attached to registration and this includes tax liabilities, as well as other post-registration requirements such as filing of appointment of company secretary (for companies), annual returns, and updating the business records at the Corporate Affairs Commission.