A lot of millennials in Nigeria have embraced the spirit of entrepreneurship, and have created several small scale businesses, some of which have boomed over the years. The Presidential Enabling Business Environment Council (PEBEC) has contributed immensely to the ease of doing business in Nigeria, with respect to trade, industry and investment.

In an effort to deepen the benefits of its reform initiatives, the Corporate Affairs Commission reduced the cost of Registration of Business Names from N10,000 to N5,000 after the Name Reservation of N500, with effect from the 1st October to 31st December 2018.

By a notice dated 31st December 2018, the registration window was extended to March 31, 2019. This reduction is to enable macro, small and medium enterprises to formalize their businesses, enabling them own corporate accounts with banks, and have access to loans, grants and other government interventions. The proliferation of registered business names has led to a lot of questions on what to do or not to do, with respect to legal and regulatory compliance of their business.

This Article seeks to provide guidance on the legal and regulatory compliance to be adhered to by these young “Serial Entrepreneurs” and “Creative Directors” as registered business owners.


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The primary law governing registered business names and their operation in Nigeria, is the Companies and Allied Matters Act, Cap C 20 LFN 2010[1] (CAMA) and the Companies Regulation 2012[2] administered by the Corporate Affairs Commission (CAC).[3] “Business name” refers to the name or style under which any business is carried on, whether in partnership or otherwise[4]. It is the legally recognised name and registered on a trade or business

A registered business name can function either as a Sole Proprietorship[5] or Partnership[6]. Where it functions as the latter, Partnership law of the respective states of the Federation of Nigeria will regulate its day to day running and operation. There are also regulatory bodies such as the State Internal Revenue Service, National Agency for Food and Drug Administration and Control (NAFDAC), Standard Organization of Nigeria (SON), Consumer Protection Council (CPC) and various sector regulators depending on the trade carried on by the business. Intellectual property rights are also worthy of note. In the event of an invention or a proprietor decides to register his trademark[7] alongside the business name, the relevant laws include the Patent and Design Act[8]; Trademarks Act[9] respectively.


A “Business name” is the name or style under which any business is carried on whether in partnership or otherwise[10]. It means registering a name to undertake a trade or business. In the event of registration, a Certificate will be issued by the Registrar of Business Names and this certifies that the name contained in it has been registered and contains no further particulars than the business name together with the distinguishing State Identification Letters in brackets at the end of the name[11].

The law does not prohibit anyone from carrying on a business either alone or in partnership with others under a name assumed for that purpose. However, in order to enable persons doing business discover who the person(s) behind the name is, the law requires these particulars be registered and the true names of the individuals or the partners have to be shown in all trade catalogues, trade circular and business letters sent out under the registered name. The essence of registration of business name is to secure the name and style of the business carried on.

It is also necessary to note the distinctions between a trade mark, a trade name and a business name. “While a ‘trade mark’ is a term identifying and distinguishing a business’ products, a ‘trade name’ is the name or title lawfully adopted and used by a particular organization engaged in commerce”[12]. A business name as earlier mentioned is the name or style under which business is carried on. What is secured is the name and style, nothing more. The registration of a similar business name does not give a right of action to an existing registered business name. The newly registered business name may however be cancelled by the Registrar.

A trade mark when registered will entitle the proprietor to sue and institute an action for any infringement of the trademark[13]. Registration entitles the applicant to the exclusive use of the trademark and also the right to sue for passing off of the goods of the applicant, as what is being protected is the goodwill of the business.[14] In addition, just like a business name, a trade mark cannot sue or be sued as it is not a juristic person. It is the proprietor who registers the trade mark that can sue or be sued.”[15]

In the relationship between business names and trademarks, the CAMA in Section 579 states that “where any business name under which the business of a person is carried on is to be carried on is similar to any trademark registered in Nigeria, and the Registrar is of the opinion that registration would likely mislead the public, then the Registrar shall refuse to register the business name or cancel the registration, unless the consent of the commission has been first obtained by the person”. Although business names and trademarks might be confused as to overlapping, they are both distinct areas with separate laws and regulations.

A registered business owner must always understand the difference between registering a business name and registering the trademark of the products or goods produced under a business name. Where the trademark is unregistered the party affected has no right of action under Section 3 of the Trademarks Act. The section provides “No person shall be entitled to institute any proceeding to prevent, or to recover damages for infringement of an unregistered trademark, but nothing in this Act shall be taken to affect rights of action against any person for passing off goods as the goods of another person or remedies in respect thereof”. The above section applies only to trademarks registered under the Act.

However, the common law action for the tort of passing off can arise from an infringement of registered and unregistered trademarks. The same Section 3 also states in the proviso that “…..but nothing in this Act shall be taken to affect rights of action against any person for passing off goods as the goods of another person or remedies in respect thereof.”[16]


Compliance with requirements for a registered business name is essential to prevent the name from being removed from the register[17]. A business owner who fails to comply shall also be liable to pay fines or worse, face conviction.[18] Although it is less rigorous and demanding, the importance of complying with the necessary provisions of the CAMA, Companies Regulations and various sectoral laws cannot be overemphasized. The provisions include;

  1. Publication of true name: Every individual or firm shall publish in all trade catalogues, trade circulars, show cards and business letters issued, the forenames or initials or surname and nationality. Where it is a corporation, the corporate name, the registration number of the business name will also be published.[19] Failure to do so will render every partner in the firm or individual guilty of an offence and liable to conviction to a fine of N250.00[20].

Annual Returns: The CAMA also requires that a registered business name shall file and deliver to the Commission, not later than June 30 in each year[21]. This filing will show the particulars of the firm or individuals, the nature of the business carried on and the state of the financial affairs of the business carried on from January 1 to December 31. It must also be signed by the individuals/proprietors in the case of an individual or firm consisting only of individuals.[22] The importance of filing annual return is to show that the business is still a going concern and is still operative. Where annual returns are not filed to the Commission, it is punishable with a fine of N200, and a daily default fine of N25.[23]

  1. Registration of Changes: In the course of business, change is inevitable. In the event that a partner exits the business willingly or by death, or there is a change in the registered business address, an addition of a partner, a change of a business name or the nature of business, the CAMA makes it mandatory that the Registrar be notified within 28 days after such change and this notice to the Registrar shall be in writing.[24]
  2. Taxation: Every Business Name owner who earns an income in Nigeria either from employment or from carrying on a business is subject to tax under the Personal Income Tax Act[25]. A Business Name owner in Nigeria shall pay tax for each year of assessment on the aggregate amount from every source of income for the year. This includes the profits from trade or business, salaries, wages, fees, allowances or other gains or profits from employment including compensations, bonuses, premiums or benefits given or granted by an employer to an employee, profits and premiums arising from rights granted to another person for the use or occupation of property, dividend, interest, annuity. [26]

The State Board of Internal Revenue collects Personal Income Taxes of business names. In addition, a business name owner must register with and obtain a Tax Identification Number (‘TIN’) from the State Board of Internal Revenue to enable the payment of taxes such as Personal Income Tax, Withholding Tax and also for Value Added Tax (VAT) purposes.

A TIN is an identification number for the business which is used by the Internal Revenue Service in the administration of Tax. A TIN must be furnished on Returns, Statement and other Tax related documents. The minimum tax rate for every business owner has been increased from 0.5% of gross emolument to 1% if the income is below N 300,000.00.

There are two ways of paying personal income tax; Self-assessment by self-employed persons or Pay-As-You-Earn. The former as the name implies is payable directly to the tax authorities (State Internal Revenue Service) after assessment by the business owner while the latter is for people in paid employment where the employer deducts tax at the source.

Failure to pay taxes is an offence under the relevant Personal Income Tax Laws, and failure to pay tax can result in an imposition of an additional 10% of the amount of tax not paid/remitted, in addition to the amount of tax due, and any costs incurred in the recovery of the sums due.[27]

  1. Sector Regulation: Depending on the Sector some of which include agriculture(fishery, horticulture), services, beauty & cosmetics, wholesale, retail,  human resources e.t.c in which business is carried on[28], some agencies and regulatory bodies have been set up to ensure compliance with the sector requirements. They include but are not limited to National Agency for Food Drugs and Administration Control (NAFDAC), Standard Organization of Nigeria (SON), Consumer Protection Council (CPC) , State Inland Revenue Boards, National Drug Law Enforcement Agency (NDLEA), the National Environmental Safety Regulatory Authority (NESREA),
  2. Notice of Cessation of Business: The Commission has stipulated, following the provisions of the CAMA in Section 578, that where the individual firm or company has ceased to carry on business, the individual or its representative shall give notice to the Registrar within three months after the cessation, stating that the firm or the individual has ceased to carry on business. On receipt of the notice by the Commission, the Registrar may remove the firm or individual from the register.


As a registered business owner whether carrying on business as an individual or firm, it is expected and mandatory that the requirements of the law are strictly complied with. It is hoped that this article will serve as a foundation to sensitize old and newly registered business owners on the requirements of the law and practice in Nigeria.

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Bunmi Ayo-Ogunmuko i

* Bunmi Ayo-Ogunmuko is an Associate of Kenna Partners.

[1] CAMA- Part B, Section 569-589

[2] CAMA, Section 16(1) empowers the CAC to make regulations generally for the purpose of the Act, prescribing the procedure for form and returns; obtaining any information required under this Act; requiring returns to be made within the period specified by any company or enterprise.

[3] Companies Regulation  2012, para 54-64.

[4] FBN Plc v. Maiwada (2013) 5 N.W.L.R (Pt.1348) 466 SC

[5] A Sole Proprietorship is a business entity owned and managed by one person.

[6] A Partnership is a business carried on common with a view to making profit. In addition to Part B OF CAMA, a partnership is also regulated by a partnership deed.

[7] A trademark when registered will entitle the proprietor to sue or institute an action for any infringement of the trademark. Registration entitles the proprietor to the exclusive use of the trademark and also the right to sue for passing off the goods of the proprietor- Per Belgore JCA in Dyktrade v. Omnia (2000) 12 N.W.L.R (Pt.680) 1 at 8

[8] Patent and Design Act Cap P2 LFN 2010.

[9] Trademarks Act Cap T13 LFN 2010.

[10] FBN Plc v. Maiwada (2013) 5 N.W.L.R (Pt.1348) 466 SC

[11] Companies and Allied Matters Act (2004), Section 576

[12] Deji Sasegbon, Nigerian Companies & Allied Matters Act Vol 2

[13] Maersk Line v. Addide Invest Ltd (2002) 11 N.W.L.R (Pt.778) 317 at 381

[14] Dyktrade v. Omnia (2000) 12 N.W.L.R (Pt.680) 1 at 8

[15] Dyktrade v. Omnia (Supra)

[16] Clearly, the Trademarks Act 1965 is an enactment relating to trademarks. The Act makes provisions for actions of infringement for registered trademarks. It bars actions in respect of unregistered trademarks. More significantly, it preserves in the proviso to Section 3 of the Act, a right of action against any person for passing off.” Per Nnamani JSC, PATKUN IND.LTD V. NIGER SHOES LTD (1988) N.W.L.R (Pt.93)

[17] CAMA, Section 578

[18]CAMA, Section 584.

[19] CAMA, Section 582.

[20] CAMA, Section 584 (3)

[21] Excluding the year in which the business was registered. A return in a prescribed form (Annual Returns for Business Name-CAC/BN/7) will also be filed.

[22] In the case of a company or a partner who is a company or a partner who is a company, by a director and the secretary. CAMA Section 587 (2)

[23] CAMA, Section 587 (3).

[24] CAMA, Section 577.

[25] Personal Income Tax (Amendment) Act, Cap P8 LFN 2011, Section 3b

[26] Dornim Solicitors and Legal Consultants, ‘Understanding the Tax Regime-Business names” published January 24, 2014.http://www.mondaq.com/Nigeria/x/288138/tax+authorities/Understanding+The+Tax+Regime+Business+Names. Last accessed February 4, 2019.

[27] Personal income Tax Amendment Act 2011, Cap P8 LFN 2011

[28] To be able to operate in certain sectors of the economy such as Banking, Insurance, Oil and Gas, Telecommunications and Air Transport, a corporate entity must be registered under Part A and the relevant license must be obtained from the Regulatory Agency in charge of the Sector.

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