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Good day, my name is Gift Ogo, the ceo of giftnaija.com.
In our previous topic, we discussed on THE EASIEST WAY TO REGISTER A BUSINESS IN NIGERIA , so today lets look into the 7 BENEFITS OF REGISTERING A BUSINESS IN NIGERIA.

We noticed that most people seek for the benefits of something before diving into it.
have you come up with a great business idea?, and you are itching to launch and make loads of money in Nigeria. You might think, to start with you do want to keep your startup costs low, and one of the ways you wish to do that is by registering a business name, and not going down the route of company incorporation. While on paper this might sound like a good strategy, in reality it might not be so wise.

Here are 7 reasons why registering a Company incorporation in Nigeria is a smarter legal and business decision than registering a Business Name.

LIMITED LIABILITY

The first and most important reason why people incorporate is for something called corporate personality. Under Nigerian law (and the laws of almost every country in the world), there is a legal fiction where a company is deemed to be a separate legal entity from the individual(s) who created/run it. Therefore the company has powers to enter into contracts, buy property, own property etc.
The legal implication of this is if the company for instance owes a bank N10 million, it is the company that owes the bank and not the Directors, and the bank cannot then sue the Directors in their personal capacities in order to recover the debt (unless the Director(s) gave personal guarantees for the loan).
If you have a registered business name, there is no room so such ‘legal gymnastics’. The person who owns the company is one and the same as the company, and therefore if you borrow money from a bank, you are personally liable. Irrespective of the fact that you might have spent the entire money on the business, you are still personally liable.
Starting a new business in Nigeria is in most cases a risky venture, you put in your personal savings (and maybe borrow from your close friends and family) and in some instances you give up a secure and probably lucrative job. You need to be rest assured that your risk is limited to what you have already put in to start the business if the business fails. This way you are able to protect your property and personal assets from being used to pay the business debts. Without incorporating a company, the ultimate risk if your business fails, is personal bankruptcy.

TAX BENEFITS

Under Nigerian Tax Law, registered businesses do not pay companies tax, they pay Personal Income Tax. The implication of this in a Federal State like Nigeria is that if you have a Director of a company, you pay your company income tax to the Federal Inland Revenue Service (FIRS), and you pay your personal income tax to the relevant State Inland Revenue Service (in Lagos this is the LIRS).
If you are the sole proprietor of a registered business, you will only pay personal income tax to the relevant State Inland Revenue Service. Now, while on the face of it, dealing with two different tax bodies might seem tedious, there are inherent benefits to it. However, you have to plan your taxes very well, by consulting with a tax accountant or tax lawyer.
For instance, in an incorporated company the shareholder director will receive a salary that is subject to personal income tax at one rate, and then dividends that is taxable at another rate. What a savvy person will do therefore is elect to receive the most tax efficient mix of salary and dividends.
It is also worth noting that most benefits and expenses are taxable, however in a registered company in Nigeria, you could legally offset certain costs that would have been taxable as benefits in kind under personal income tax. You should always take professional tax or financial advice based on your specific circumstances. Please note that no tax advice is offered in this article.

PROFESSIONALISM AND COMPETITIVENESS

Electing to register a company rather than register a business name, projects a much more professional image. It signals that you are focused on the business and also committed to abiding by professional corporate governance structures, which the regulatory body in Nigeria (Corporate Affairs Commission) has created.
It suggests to the world that the business has permanence and is committed to effective and responsible management. It also instills a sense of confidence in customers and suppliers. On the other hand (and this is by no means a slight to registered business names), because of the low barrier to entry in order to operate as a business name in Nigeria, customers and suppliers are less likely to want to transact with such businesses, and therefore makes it an uneven playing field when competing with registered companies.
Also, in Nigeria certain Government departments and agencies, and multinational companies have rules that in order to tender for work or provide services to them, you would have to be a registered company. Therefore not incorporating could potentially hinder the growth of your business.

BUSINESS CONTINUITY

As discussed above, a registered company has its own legal identity, therefore when third parties contract with the ‘company’, they do so with a separate legal entity and not the individual directors and shareholders. This means that companies survive the death or incapacitation of the owners and it’s possible for the directors and shareholders involved with the company to change over time.
For those familiar with the concept of risk management, one of the key things in understanding the risk profile of a business is business continuity. If Mr. A, who owns the business, was to get hit by a bus, or get arrested the next week, what would happen to the business? This is important not inly from a day-to-day running of the business perspective, but also from a legal perspective. Who signs the cheques when he is not available? As the business is classified as a personal one, upon his death, it gets lumped into his estate and is subject to estate and probate laws etc.
Suffice to say that business continuity in a registered business is very risk-prone and therefore third parties are wary about over-commitment to such businesses. Apart from third parties, this is also important to employees, people are wary about working with a registered business because it is essentially a one-man show that can end abruptly and with little or no safety net for the employees.
However, if it is a registered company, its existence will only cease if it is formally wound up, liquidated or by other order of the Nigerian courts or Registrar of Companies. Amongst other benefits, this can provide more perceived security for employees and third parties than other business structures.

RAISING FUNDING

In very general, and oversimplified terms, there are two broad ways to raise funding – debt and equity. Debt is basically, give me X for my business and I will pay you back at a future date with X% interest; equity is give me X for my business and I will give you X number of shares in the business as well.
For debt, both business structures – registered business and registered company, can raise funding this way, however in the case of a registered business name, the proprietors are responsible personally for the debt until it is discharged, but for the registered company, as discussed earlier the company is the debtor and not the shareholders so they are in a sense more insulated.
For equity, registered businesses generally have to raise new capital from their own resources or from family and friends. However, registered companies in Nigeria are able to raise capital at any time by issuing new shares. The new shares can be offered to existing shareholders or new investors, although only public limited companies can offer shares to the public.

REMUNERATION FOR EMPLOYEES

This is more relevant for technology companies, where to commence operations you need highly skilled and in-demand workers. As most companies commence operations with limited funding, it is difficult to be able to hire the required employees easily at the beginning. The way this has been tackled is to offer ownership of the company to early stage employees by way of equity, the employees accept little or no pay secure in the knowledge that they have some ownership in the company that is being built, and their payday is when the company starts to become successful.
However, because a registered business does not have shares and cannot share equity, this path is closed for them and therefore it is more difficult to offer varied remuneration structures to employees.

7. FUTURE EXIT

If you have a registered business, upon retirement, it is very likely that the business will retire with you. However, registering a business as a limited company can aid the possibility of selling it in the future. The original shareholder/owner of the company will be able to achieve a completely clean break and get a pay out for the business.

WHAT SHOULD YOU DO NEXT?

If you would like to incorporate your own company, you may drop your comments below and we will get the lawyers in our network to send a free quote for the legal work to be done.

If you run a small business, chances are you are wondering if blogging is worth the time and effort. The short answer is a resounding YES! Blogging on a frequent basis is a relatively easy, inexpensive way to enhance your inbound marketing efforts, drive traffic to your site, and attract more perspective customers.
Statistics from Hubspot's2012 Inbound Marketing Report highlight the importance of blogging. According to the study, 57% of companies who have a blog reported acquiring a customer from their blog. In that same study, a survey of marketers revealed that 81% of businesses say that their business blog is useful to critical for their business.
The Case for Small Business Blogs
Here are some of the most important benefits of having a blog for your business:
1.Boost Search Engine Optimization-Search engines love fresh content. What better way to provide frequent content than with blog posts. By blogging consistently, you give Google and other search engines new content to index and you create opportunities to plug in those all-important keywords to increase your visibility on search engine results pages (SERPS).
2.Develop Relationships with Potential and Existing Customers-Blogging allows you to connect with your site visitors. This can be accomplished by asking your readers questions at the end of your posts to get the conversation going or by simply allowing comments and feedback. By reviewing and responding to readers’ comments, you can create a rapport with your audience, build trust, and gain valuable insight into what your customers are looking for.
3.Establish Your Business as an Industry Leader-No matter how small your business is, you can build trust and clout within your industry by providing valuable, expert information in your blog posts. Over time, you become a “go to” resource for helpful, informative content, which can ultimately lead to higher customer conversion rates. This is especially important for small businesses looking to gain credibility to compete with larger companies.
4.Connect People to Your Brand-Blog posting allows you to show a personal side of your business that perspective and current customers won’t see through outbound marketing techniques. Blogging gives others a sense of the corporate standards, vision, and personality of your company.
5.Create Opportunities for Sharing-Every time you blog, you create an opportunity for your audience to share your blog with others. Whether they link to your blog post, tweet it, or email it to others, it’s free marketing and it further validates you as a credible business.
From a practical standpoint, blogging just makes sense. With minimal effort and expense, you can build credibility, boost search engine rankings, increase website traffic, and foster relationships with potential and current customers. This is an opportunity no small business should pass up.
Are you interested in creating a blog for your organization? We can help. OpenVine offers a variety of web design solutionsto meet your needs. No time to blog? No problem. Our copywriting and content creationteam can work with you to create thoughtful, informative posts for your business blog

That ATM you’re using may not be safe.
As Daniel Roberts points out, citing a report in the Wall Street Journal: “withdrawing money from an ATM is more dangerous than it’s been in a long time—specifically, the worst it has been in two decades.”
The story features some alarming statistics from credit-scoring company FICO. Security compromises of debit card data that have been traced to ATMs on-site at banks rose 174% from the beginning of the year to April compared to the same time last year. And off-site ATM fraud spiked 317% in that time versus the same period last year.
In other words, criminals are having a heyday. So how can you remain safe when banking on the go? Here areFortune’stop tips to keep you from getting ripped off:
1. Cover up your personal identification number
Shielding the ATM keypad as you type in your security code will help prevent onlookers from glimpsing your PIN. It’s a simple solution but one of the best ways to thwart so-called shoulder surfers from stealing your passcode. (Be careful of video cameras, too.)
2. Check for compromised machines
One of the most popular means by which criminals steal payment card data is through a device known as a “skimmer.” A crook will plant one of these gadgets on the “swipe” or “dip” port on an ATM, where it may read the magnetic strip on your card and rip its data. The thief can then create counterfeit cards, or use the card information to make purchases online.
3. Use ATMs on bank premises
ATMs that are on-site at your bank are less easily tampered with than ones outside. Just look at the numbers provided by FICO, as mentioned above: 174% increase in compromises for bank-based ATMs versus 317% increase for the rest.
4. Limit your exposure
Using ATMs less frequently will lessen the risk that you’ll encounter a bad machine. Try taking out larger sums of cash less often, or conducting more business at the counter or via mobile apps.
5. Promptly notify your bank of any bad transactions
If you suspect that something is amiss, call your card-issuing bank immediately. Many of them require that you notify them of unauthorized transactions within a 60-day period after you receive your banking statement.
Heed this advice, and stay safe out there, friends.

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WHAT SHOULD YOU DO NEXT?

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Good day our Dear reader/listener, my name is Gift Ogo, i am the Ceo of giftnaija.com, today we will be discussing
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STEP 1 – NAME AVAILABILITY/RESERVATION

STEP 2 – REGISTER THE DETAILS OF THE SHAREHOLDERS

STEP 3 – PREPARE THE DOCUMENTATION

STEP 4 – PAYMENT, SUBMISSION AND PICK UP

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Labels

Search This Blog

Recent

About Nigeria Political Parties

Reasons Why You Should Join a Political Party

List of Political Parties in Nigeria

Admission into Membership of any Political Party in Nigeria

Procedures in Joining a Political Party

LIMITED LIABILITY

TAX BENEFITS

PROFESSIONALISM AND COMPETITIVENESS

BUSINESS CONTINUITY

RAISING FUNDING

REMUNERATION FOR EMPLOYEES

7. FUTURE EXIT

WHAT SHOULD YOU DO NEXT?

Good day our Dear reader/listener, my name is Gift Ogo, i am the Ceo of giftnaija.com, today we will be discussing HOW YOU CAN REGISTER A COMPANY IN NIGERIA

STEP 1 – NAME AVAILABILITY/RESERVATION

STEP 2 – REGISTER THE DETAILS OF THE SHAREHOLDERS

STEP 3 – PREPARE THE DOCUMENTATION

STEP 4 – PAYMENT, SUBMISSION AND PICK UP

POST-INCORPORATION OBLIGATIONS

Labels

Search This Blog

Good day our Dear reader/listener, my name is Gift Ogo, i am the Ceo of giftnaija.com, today we will be discussing
HOW YOU CAN REGISTER A COMPANY IN NIGERIA