Can All Types of Businesses Be Registered Under a Business Name?

When it comes to business registration in Nigeria, one common question people ask is: "Can all the nature of business be registered under a business name?" The simple answer is no. There are certain types of businesses that cannot be registered under a business name. In this post, I will break down the reasons why, and which types of businesses are affected by this regulation.

A Brief History: Schools and Business Name Registration

Before 2022, schools were commonly registered under business names without any issues. However, in 2022, the Corporate Affairs Commission (CAC) issued a directive that changed this practice. A memo was released stating that anything related to schools, education, academies, or institutions must now be registered as a limited liability company (LLC). This marked a significant shift in how businesses in the education sector could be legally registered in Nigeria.

The Change in 2022: New Restrictions on Name Registration

Since the release of this memo, any attempt to register businesses related to education under a business name has been denied. The restriction begins at the name reservation stage. If the business name you're trying to register contains certain words like "school," "academy," or "institution," the application will be immediately rejected.

But here's something important to note, it's not just schools that are affected by these restrictions. There are several other types of businesses that the CAC no longer allows to be registered under business names.

Why the Change?

You might wonder,?Why was a certain business registered under a business name last year, but now it's being rejected? The reason is simple: the CAC is not a static entity. Regulations evolve, and what worked last year may not be allowed today. This is why staying updated with CAC's regulations is crucial, especially for those in the business of registering company names and offering related services.

As professionals, we keep a close eye on the changes so we can guide our clients accordingly. And that's exactly why you're reading this post so you can stay informed.

Businesses Limited by Guarantee or Incorporated Trustees

It's also important to understand that there are different categories of business registration beyond just business names and limited liability companies. Some businesses, like institutes, can only be registered under a category known as "Limited by Guarantee," while others, such as associations or foundations, fall under "Incorporated Trustees."

Knowing which category your business falls under can save you time and prevent unnecessary rejections from the CAC.

Restricted Names for Business Name Registration

To help you further, here's a list of names that you should avoid when registering a business name, as the CAC will likely deny them:

TV

Empire

Association

Crypto

Centre

Conglomerate

School

Academic

Institution

Training

Pay

Money

Insurance

Travel and Tour

Marine

Group

Education

Coaching

Mining

Institute

If your business name includes any of these words, it's best to rethink the structure of your business. For example, if you are setting up an institute or academy, registering as a limited liability company or under incorporated trustees may be the way forward.

Conclusion

In conclusion, while it may seem easy to assume that any kind of business can be registered under a business name, CAC regulations have made it clear that certain types of businesses, especially those related to education and finance, require a more formal registration process. Staying updated on these changes will help ensure that your business is compliant with CAC rules and avoids unnecessary delays or denials.

If you? 're unsure about how to proceed with your business registration, consulting with professionals like us who are knowledgeable about CAC's current regulations is always a wise step.

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