If you are starting a business, you may have considered registering a business name or incorporating a limited liability company.
If you are an entrepreneur who is starting a business in Nigeria and are thinking about incorporating a limited liability company (LTD), there are a few things that you need to know about before making that decision. Keep in mind, while you can incorporate a LTD in Nigeria on your own, an experienced lawyer at your side can help you avoid Legal pitfalls.
Either way, it’s important to be abreast with the important issues at stake.
What is a Limited Liability Company?
A limited liability company is a type of business entity that is completely separate from the business owners. It is a distinct legal entity that is responsible for its assets and liabilities. The reason why an LTD is considered a “limited liability” business entity is because the owners of the company are not personally liable for the debts incurred by the business. If an LTD has to file for bankruptcy, the business owners would only lose whatever they invested in the company and creditors can not come after them individually for the Company’s debts.
How to Form a LTD IN Nigeria
Establishing a LTD requires more than the creation of a sole proprietorship (Business Name). While you can fill out the Corporate Affairs Commission (CAC) forms for starting a LTD yourself, you should consider consulting with a business savvy Lawyer to customize your new business entity to your specific needs.
To incorporate a company or register a business name, you need to follow these steps;
Choose a Name and Business Structure
Choose a name that is memorable, spellable and engaging. You will need to choose between a business name and a limited liability company. The major difference between the two forms of business is limited liability protection. Limited liability protection is how business owners protect their personal assets in case of legal trouble. We explain limited liability protection more extensively here.
You will need to provide some basic information about yourself (and partners/shareholders) as well as a means of identification (government issued identification).
At AffordableLaw we charge N25,000 for Business Name Registrations and N50,000 for Limited Liability Incorporation.
The timeline for registering a business name or incorporating a company is typically 7 working days and we try to deliver your certificate of incorporation within 10 working days. This may be longer in the light or the lockdown restrictions to working days and office hours.
After incorporating your company you may choose may take these next steps;
Need help with legal documentation or business/legal advisory?
After you register or incorporate your business, what next? Do you need help with legal documentation with partners, investors, employees, vendors etc? Do you need a dedicated business lawyer on-call to help you make smarter business decisions and avoid legal challenges? Do you simply need to protect your business (idea)?
You’re in luck.
Check out the AffordableLaw Legal Program designed for ambitious entrepreneurs like yourself. We provide you with all the legal solutions you need to strategy, protect and scale your business. Our legal subscription starts at $70 (N25,000)/year.