A Guide On How To Start A Business In Nigeria

Welcome To Busco Registrars Nigeria's guide to setting up a business right here in Nigeria.

Presently, a lot of people in Nigeria have given up the chase on white collar jobs, and have embraced entrepreneurship instead. This however, is a great movement towards improving the nation's economy and providing more and more employment opportunities for the youth.

While most people are not aware of the amazing benefits that come with owning a business, some others have established one form of business or the other, and surprisingly, even people who do white collar jobs have businesses as well.

However, most people will gladly say, "I have a business" but the question here is not whether you do one form of buying or selling, but the question is, "Do you have a brand?" 

And What Is A Brand?

A brand is a product, service, or concept that is publicly distinguished from other products, services, or concepts so that it can be easily communicated and usually marketed. A brand name is the name of the distinctive product, service, or concept.

Brands are usually protected from use by others by securing a trademark or service mark from an authorized agency, which is The Corporate Affairs Commission in this regard.

How To Create A Business That Is A Brand In Nigeria

Step 1 - Conceptualizing The Business Idea

The first step in getting started with a business is to conceptualize an idea. This may be overwhelming for the most part, but is the most vital step in trying to setup a business. There are a lot of businesses that could be done here in Nigeria, but you have to be able to identify which business suits your passion.

For any particular business idea conceptualized, you should be able to ask yourself the following questions:
*  Why do I want to start a business?
*  What kind of business do I have passion for?
*  Would my business be able to provide solutions to a particular problem?
*  Can I be able to find a market for my business?
* Can I be able to market this business effectively, and what options are available for me to achieve this purpose?

If you can effectively answer these questions for a particular business idea, then that's the business idea that would be a brand for you.

Step 2 -  Gathering The Requisite Human And Material Resources

After  having conceptualized a business idea, the next step is to put together the requisite human and material resources for the business. For instance, if you are setting up a building construction business, you should be able to have qualified personnel, an office and the required basic equipments for running a building construction business, etc.
For any particular business, once you've had this figured out, then you can move to the next very vital step.

Step 3 - Getting Registered  With The Corporate Affairs Commission

This is yet another very important aspect of setting up a business, because it is what stands your business out from the crowd and gives you a brand name.
Business registration in Nigeria can be done under the following categories/business structures, and with the Corporate Affairs Commission (CAC):

a.  SOLE PROPRIETORSHIP (Registrable under the Business Name Category) 
 

A sole proprietorship is a business venture which has only one owner. Professionals, retailers and service providers can be sole proprietors. Sole proprietorships have no separate legal standing, in other words, the business is the owner and the owner is the business. Although this fact means that sole proprietors are liable for any debts incurred by the business, many consider the benefits to outweigh the disadvantages. The major advantages that make sole proprietorships the most common form of business ownership revolve around simplicity and economics.

Sole proprietorships could be registered with the Corporate Affairs Commission under the Business Name category alone.
 

b.  PARTNERSHIP (Registrable both as a Business Name or as a Limited/Unlimited Company, Incorporated Trustees, etc) 

This is another form of business entity. A partnership is a single business where two or more people share ownership. A minimum of 2 people and a maximum of 20 people are needed to form a Partnership Business in Nigeria as per the stipulations in the Companies and Allied Matters Act (CAMA).

Each partner contributes to all aspects of the business, including money, property, labor or skill. In return, each partner shares in the profits and losses of the business.

Because partnerships entail more than one person in the decision-making process, it’s important to discuss a wide variety of issues up front and develop a legal partnership agreement. This agreement should document how future business decisions will be made, including how the partners will divide profits, resolve disputes, change ownership (bring in new partners or buy out current partners) and how to dissolve the partnership. Although partnership agreements are not legally required, they are strongly recommended and it is considered extremely risky to operate without one.

TYPES OF PARTNERSHIPS       

There are three general types of partnership arrangements:

General Partnerships: 

In general partnerships,profits, liability and management duties are divided equally among partners. If you opt for an unequal distribution, the percentages assigned to each partner must be documented in the partnership agreement.

Limited Partnerships:

This form of partnership is more complex than general partnerships. Limited partnerships give partners the leverage to have limited liability as well as limited input. These limits depend on the extent of each partner’s investment percentage or share capital.

Joint Ventures: 

This type of partnership is similar to general partnership, but for only a limited period of time or for a single project. Partners in a joint venture can be recognized as an ongoing partnership if they continue the venture, but they must make filings to that effect to the relevant authorities.

In Nigeria, partnerships can be registered as a:

Business Name:

Where the partners do not wish to state their individual inputs into the affairs of the company on a written document, or where the partners do not look forward to raising capital through issuance of shares.

Limited/Unlimited Liability Company (Private or Public):

Where the partners wish to enjoy much more legal benefits, and also where the business wish to raise funds from issuance of shares.

Incorporated Trustees:

Where the partners do not come together for the purpose of making profits. This form of partnership could be seen in churches, alumni associations, None-Governmental-Organizations, and the likes.

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