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You Have Been Making A BIG Mistake With Your Online Business

You Have Been Making A BIG Mistake With Your Online Business


On Thursday, I told a short story of a person that lost his online business because of carelessness and ignorance. What I did not tell you is that, that actually is a true life story and it happened to my friend. Of course, he has moved on now, rebranded and his new brand is flourishing. Obviously, he learnt a serious lesson first hand and I do not want you to experience it. It is horrible really because shortly after he lost the case, he slipped into depression and did not work for three months.

Today we will be talking about how to register your business and the several types of registration you can do.
The body responsible for registering all businesses in Nigeria is called CAC (Corporate Affairs Commission). They offer different types of registrations and requirements.

Types of Registrations With The CAC

Business Name:

Business name is the easiest form of registration you can do and you can complete the registration online without the help of a lawyer.

You firstly do a public search on the desired name to check the availability of the name. This will cost you a token of five hundred Naira only. However, if you want to get an accredited agent (usually a lawyer or a law firm)to help you with this, they will be charging you in the range of two thousand Naira to Five Thousand Naira.

After this process, you only need to fill the online form and you are good to go.
You will get a response between 24 to 72 hours and your business will be duly registered.

The cost for this was originally ten thousand Naira but they are running a promo till ending of March, you will be paying only five thousand Naira. However, if you were to hire someone, you will have to pay between fifteen thousand Naira to Thirty Thousand Naira.


Incorporation

There are two types of incorporation you can try. Public Limited Liability Company or Private Limited Liability Company. You may want to stick to the Private Limited Liability Company as it is less constricting and it is ideal for a small business.
For this, you have to do the above name search and then reservation. The name will be reserved for you for 60 days, so you have 60 days to register the company with that name before it becomes available to the public again.

Incorporation is a bit more complicated as compared to Business Name, we advise you hire a lawyer or one of the companies that specialize in doing that.
You can use Wingman Formation Company for the registration. I have used them several times and they are reliable.
To Check the process for Incorporation, you can check here.


Reasons Why You Should Register Your Business Now!

 It gives you a unique identity (and protects it too)


There is a certain pride that comes with the identity of your own business.

It’s no longer that big idea you’ve had in your head all these years. It’s now a real thing that legally exists; with its own name and address.


Once it is confirmed that the name you’ve chosen for your dream business is available (that is, nobody else is already using it), you will be allowed to go ahead with the rest of the business registration processes.

And unless your business goes bankrupt and is formally dissolved, no other person can use or register the same name ever. (image credit: businessmasons.com)


It protects you from personal liability


This is arguably the biggest reason why many people have to register their business.

Without the legal protection of limited liability, you could lose your business and personal property if something goes wrong (say somebody sues you to court for heavy damages).

Imagine starting an online store, you started getting orders for all over the country. Unfortunately one of the products you sold was bad and the buyer is not happy, perhaps it even caused an injury.

The buyer decides to sue you for damages of N1,000,000. If your business is registered as a limited liability entity, the worst that could happen is that ONLY your business will be responsible for paying the damages because it is a separate entity from you.

However, if you were running an unregistered business, you may not be entirely safe. Why? Because your personal stuff (house, cars, money in the bank etc) may be used to settle any outstanding debts the business cannot settle.

Don’t forget, not all company types can offer this protection. Only Limited Liability type companies can do this. Business Name cannot provide protection from personal liability.


It makes you look serious and attracts more customers


In today’s modern world, most customers, especially corporate customers, expect a serious and responsible business to be registered even if you are operating solely online.

In fact, most companies will not do business with an unregistered business. In certain cases, it’s against the law for regulatory and tax reasons.

Think about it for a moment: If your business is not registered, how can you issue receipts to customers for products you sell or services delivered?

You can’t!

And who exactly pays for something these days without demanding a receipt? Unless your plan for your business is to become and remain a petty trading business that sells stuff online, you just have to register it to attract more discerning customers.

Nobody says you can’t survive with a business that isn’t registered. The likely outcome is that you may not grow and will probably remain small for a long time.


It’s easier to get bank credit and investment from investors


For banks, there are basically two categories of loans; Personal and Business Loans. They’re both totally different and one cannot be used to represent the other.

As a result, most banks will gladly lend you money to buy a new car or house but none will give you money to fund a business that isn’t registered. To qualify for a business loan, the Number 1 and non-negotiable requirement is that your business must be registered. Period!

For investors, it’s the same thing. Investors are interested in giving you money for a share of your business, and not to finance your personal lifestyle.

If there’s no registered business, what exactly will you be giving them a share of?

Investors want to know that your business is organized, exists legally and is separate from your personal life and finances.

No investor would take you seriously if you’re asking for investment but you don’t already have your business registered. To them, it’s a sign of unseriousness and a lack of professionalism. You don’t want anybody to have that impression of you.


It’s important for continuity sake


Jumia, Amazon, Konga, Click Bank, and Lina Ikeji's Blog. Do these names ring a bell?

Of course, they do.

These names are big multi-billion Naira businesses that have existed for a while and if the finders decide to retire today, Another CEO can be chosen to continue the business.

Nevertheless, these businesses, which were quite small when they started many years ago, remain very big and successful today.

It’s called continuity; human beings live and die but businesses have the ability to last forever as they are transferred from one generation to another.

What steps have you taken to register your business today?

If you will like to learn Affiliate Marketing and earn a sizable passive income, I can teach you.
You can sign up as a freelancer on Fiverrcashng to earn extra money for your business registration today.

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