Starting your entrepreneurial journey can be exciting and one major legal step in this process is registering your venture with the Corporate Affairs Commission. However, you need to understand what kind of registration to do, be it a business name or a company name.

Contrary to what some business owners think, a business name and a company name are not the same as there are key differences between the two. 

In this article, we’ll explore what a business and company name is and the major differences between the two to help you make informed decisions when registering.

Does a Business / Company Name Matter?

Your business or company name is probably the only thing a potential customer will remember when looking up your brand online or making comparisons. It is your brand’s identity and it goes a long way in boosting customer/ investor loyalty, and brand consistency which leads to long-term revenue growth. 

A business name does wonders for your brand’s growth and knowing the differences that come with the various registration types is vital for every business owner.

What is a Business Name? 

Before we explain what a business name is, let’s see what a business actually is. A business is any activity undertaken to earn profit. It comprises a wide range of operations such as partnerships, sole proprietorships, and corporations, and can vary in legal structure, size, or complexity. 

So basically speaking, those goods or commodities you exchange for profit to other people, or the services you decide to sell online is a business activity. 

Now what is a business name? A business name is the title a venture operates under for commercial purposes and it is also known as an enterprise. The Companies and Allied Matters Act (CAMA) 2020 further defines a business name as a style or name under which businesses are carried on, be it in a partnership or otherwise”

So what does it mean to register a business name? A business name registration is the process of registering your business with the Corporate Affairs Commission (CAC), thus allowing you to legally operate under that name. 

Additionally, once you have successfully registered your business name with the CAC on the Moniepoint Business Banking App, you receive a Certificate of Registration and a Certified Extract of Registration Information, ensuring your business is recognised and compliant. 

Some requirements to register a business name with the CAC include;

• 2 Preferred business names

• Your Business Address

• Your Residential Address

• The Nature of your business company,

• Identification Card, i.e., National Identity Card (NIN), voter's card, or driver's license.

• Your Passport Photograph

• Your Phone Number

• Your email address

What is a Company Name? 

Firstly, a company is comprised of people who come together for the common goal of doing business and earning profit. Once registered, a company is a separate legal entity different from its owners. 

Furthermore, A limited liability company is a type of company that limits the amount of liability or responsibility the owners can personally bear in the case of company debt. It can be a private or public company and can be further divided into ‘limited by shares', ‘limited by guarantee’ or ‘unlimited' depending on their structure. 

To break it down, in the case of “limited by shares”, the owners own shares in the company representing how much of the company they own. Whereas, in “limited by guarantee”, the members’ liabilities are limited to the amount they have decided to contribute to the company’s assets in case of any company bankruptcy. 

Therefore, an individual’s liability for debts incurred by the company is limited to the extent of capital the shareholder contributes or the guarantee offered. 

Now, what is a Company name registration? A Company name registration legally establishes your business as a public or private limited company with the Corporate Affairs Commission (CAC). 

It gives your company its legal identity, separate from its owners. When registering your company, you'll need to provide the following details or documents;

• Two preferred names for your company

• Company Address

• Nature of Business

• Residential Address

• Memorandum and Articles of Association

• Share Allotment

• Email

• Phone Number

• ID Card of Directors

• Signature of Directors

Company Name VS. Business Name Registration

Now that you know what a business and a company name are and the requirements for registering both, let's look at their differences.

As a business owner, you can decide to convert your business name to a company name. Some factors that might influence this decision are the need to raise capital, loan processing, acquiring assets, etc. 

Whatever the case may be, ensure that the process is properly done via the CAC portal with the necessary proof and documents. 

Wrapping Up

Understanding the difference between registering a business name and a company name is essential for any budding entrepreneur. 

As much as both terms are used when referring to commercial activities, you should know how they differ concerning legality, taxation, liability protection, and more. 

Thinking of registering your business or company with the CAC on the Moniepoint Business Banking? Ensure to properly analyze your goals and long-term plans as this enables you to make the right choice.