Starting a business in Nigeria is exciting but registering it with the Corporate Affairs Commission (CAC) can be frustrating if you make avoidable mistakes. Many business owners rush through the process, only to end up with errors that lead to delays, rejections, or even financial losses. If you’re about to register your business, save yourself the stress—here are some common errors you should avoid.
1. Choosing a Business Name Without Checking Availability
You’ve thought of the perfect name—something catchy, unique, and meaningful. But hold on! Have you checked if it’s available? Many people assume it must be free if no one around them uses the name. Wrong! CAC has a database of registered business names; if your application has already been taken, it will be rejected.
How to fix it: Before printing business cards or announcing your brand, check the availability of CAC names. You can do this online through the CAC portal or by visiting their office. Also, have backup name options in case your first choice is unavailable.
2. Registering the Wrong Business Structure
Not all businesses are the same, and your chosen structure affects your taxes, liabilities, and operations. Many entrepreneurs rush to register as a Business Name (BN) when they need a Limited Liability Company (LLC).
How to fix it: Know the difference! A Business Name might be enough if you’re a freelancer, sole trader, or small business owner. But if you’re planning to scale, raise funds, or limit personal liability, an LLC is the way to go. If unsure, consult a lawyer or CAC expert before registering.
3. Entering Incorrect Information
Imagine waiting weeks for your CAC certificate, only to find out your business name is misspelt or your details are incorrect. Correcting such mistakes can be a long and frustrating process.
How to fix it: Double-check all details before submitting your application. Ensure your business address, directors’ names, and other information are correctly spelt and match official identification documents like your NIN, BVN, or international passport.
4. Not Meeting the Minimum Requirements for Directors and Shareholders
If you’re registering an LLC, you need at least one director. However, some businesses, especially partnerships, fail to include the correct number of directors or shareholders. Some even list underage individuals (below 18) as directors, which CAC does not accept unless a guardian is appointed.
How to fix it: Make sure all directors and shareholders meet the required criteria. If you’re registering alone, ensure you’re selecting a structure that allows a single owner.
5. Using Unverified Agents or “Connections”
Scammers are everywhere, and CAC registration is no exception. Many people have lost money to “agents” who promise fast-track registration but disappear after collecting payment. Some even submit incorrect documents, causing unnecessary delays.
How to fix it: If you’re using an agent, make sure CAC accredits them. Register your business yourself through the CAC online portal—it’s now easier and more transparent.
6. Ignoring Tax Identification Number (TIN) Registration
Your CAC registration is complete—congrats! But wait, do you have a Tax Identification Number (TIN)? Many business owners ignore this, only to face problems when opening a business bank account or applying for government contracts.
How to fix it: After registering your business, immediately apply for a TIN with the Federal Inland Revenue Service (FIRS). It’s free and can now be done online.
7. Forgetting to File Annual Returns
Registering your business is just the first step. Many people think they’ll be done forever once they have their CAC certificate. Wrong! Every registered business must file annual returns to avoid being marked inactive or struck off the CAC register.
How to fix it: Mark your calendar and ensure you file your annual returns on time. The cost is minimal, but failure to file can result in penalties or even the loss of your business name.
Final Thoughts
Registering your business with CAC is important to building a legal and credible brand in Nigeria. However, small mistakes can cause significant problems, such as delays, rejections, or extra costs. To avoid these errors, follow the right process, and if in doubt, seek professional guidance.
Have you had challenges with CAC registration? Beebot helps you with business registration and makes your business formation journey in Nigeria seamless.
Register today with us.