A lot of people ask why business registration is essential. Many retired people even avoid registering their businesses with the Corporate Affairs Commission (CAC) in Nigeria. They think business registration is a lot of stress. However, if you choose to take this option, you will lose many opportunities to grow your business.
Funny right, you thought business registration was just to help the taxman identify you?
Nope, a registered business has access to several opportunities.
This article will discuss three opportunities available to grow your business if you register it.
Table of contents
- A registered business allows you to open a bank account.
- The government offers financial and non-financial assistance to registered businesses.
- Regulatory authorities like National Agency for Food and Drug Administration and Control (NAFDA)C only certify registered businesses.
A registered business allows you to open a bank account.
Banks always ask business owners for some documents before opening accounts for them. One of these documents is evidence that the business is registered.
If you have a bank account, you can:
Get loans from your Bank.
A loan can be the difference between staying small or expanding your business. A loan can also be the difference between closing down or staying open.
If you have not been operating an account for some time, you might not get a loan from your bank.
I would advise you to shop around before you choose a bank. Find out what each Bank is offering business owners in terms of loans and business training.
You should also make sure that it is easy to operate a business account with the bank you choose. For example, check if there is a branch close to your house or business location.
Develop a credible statement of account.
Some government financial institutions give loans to business owners at lower interest rates than commercial banks. An example of this is the Bank of Industry. However, one of the documents you will submit before you qualify to get the loan is the bank statement for your business account.
To build a credible account statement, you can develop the practice of putting every kobo you make in your business into your account.
If you need to use money, you can withdraw immediately after depositing the money to pay your suppliers, etc.
You will be able to separate your money from your business finances properly.
One of the fastest ways for your business to fail is to use the business money as personal money. A business account will help you stay disciplined.
In addition, the bank account will allow you separate business funds from private funds.
You will also get access to free business management training from banks.
Nigerian Banks now provide business training for their customers. The seminars cover topics like business plan writing, marketing, and human resource management. Business training is a bonus because you will have access to experienced trainers.
Recommended Reading: Top 3 tips to help you select a consultant when starting a retirement business in Nigeria.
The government offers financial and non-financial assistance to registered businesses.
Secondly, one of the ways the government assists business owners in Nigeria is through loans from development banks like the Bank of Industry (BOI). As a registered business, you can get loans at low-interest rates from the Bank of industry. The interest rates could be as low as 9% for five years.
Another form of assistance from the government to business owners is non-financial. For example, business owners can get coaching and consulting services. A recent example was the World Bank/ Growth & Employment (GEM) Project. Business owners also obtained grants from this project.
A lot of business owners have expanded their business with assistance from such government programs.
While some programs allow unregistered businesses to participate, others limit participation to registered companies.
Another example of the government’s assistance to business owners is the COVID relief fund. This fund provided financial aid to business owners to pay staff salaries.
Regulatory authorities like National Agency for Food and Drug Administration and Control (NAFDAC ) certify only registered businesses.
The third reason is that you need to certify your products. Certification with regulatory authorities is one of the factors that helps a business grows. For example, if you manufacture food or drugs (bakery, herbal teas, processed food), a certified product will show customers that your product is safe.
If you have a school, you need to be certified by the relevant agency of the Ministry of Education.
However, you cannot get any regulatory body to certify you if your business is not registered.
Recommended Reading: List of 52 businesses you can start for 2 million Naira or less after you retire in Nigeria.
One last word.
You might think that registering a business with the Corporate Affairs Commission (CAC) is too much hassle. However, this might mean the difference between your business becoming profitable or closing down.
The first thing you should do after you decide on your business name is to contact a lawyer. A lawyer will advise you on the best structure for your business. The lawyer will also help you register your business.
You should also ask an accountant about tax obligations for your business structure before you register the business.
The benefits of registering a business are too many for you to leave your business unregistered.
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