ADVERTISEMENT

The cost of running unregistered business for women

They ignore the need for licensing and business registration in most cases.
Failing to register one’s business with the appropriate authority right from the beginning is one of the most common mistakes new entrepreneurs make.
 Nigeria’s economic growth and development depend on the successful utilisation of its workforce. The World Bank reports that presently less than one in five women are entrepreneurs and majority of them are engaged more in the informal sector.
Most of these women do not bother registering their businesses because they are of the view that the businesses are really small and some mostly done at the backyards of their homes. Most of these women choose entrepreneurship based on necessity or due to lack of employment options.
While a few who want to expand their businesses have attempted to register, most of them do not complete it as a result of what they call “cumbersome registration process and lack of time” while some claim ignorance of the process of business registration.
 Licensing and registration of business allows business operators to operate without fear of closure for non-compliance; they are also the foundation to successful business. But in some cases registration is required for tax purposes or to be legally allowed to operate.
The benefit of registration is receiving some legal liability protection if you incorporate, and you will not be held personally responsible for certain accidents and other liabilities.
Another benefit of registration is that the business continues even if the owner dies or becomes ill. A registered business is an entity on its own right; thus, another can assume ownership or control, or your business can be sold; neither is possible without registration. This is mandatory and it will allow an authority to own or use something, do particular things, or carry on a trade. It gives you the basis to do business without much tension. Certain legalities involved in a business are essential to ensure that it is legitimate, and avoid legal issues in the course of time. ​Having the correct licenses and registrations is fundamental to your business.
Zainab Shehu, of ZeeFashions noted that some time last year she was at the Corporate Affairs Commission, CAC, but the many processes and procedures that were spanning beyond a month discouraged her. She added that one needs to bribe his way through the almost eight stages of registration before that business can be successfully registered.
Another business woman, Janet Alfa, who makes Alfa Bread says she operates her business from home, and since nobody has troubled her to register she wouldn’t want to draw attention to herself, so as a result has never bothered to try registering her bakery.
Madam Mary Biaji of Lady Beautician Hair Parlour is a big time hair technician that one could have thought her over 12 years business is a registered entity. She said she is a member of the Hair Dressers Association but had never thought of registering her business with the approved body.
“All we do is belong to our business association and pay our dues so that nobody will disturb our businesses. I think registering with the government is for the big time business people and not small business people like us,” she said.
Another hair dresser, Victoria Santos, who mistakes registering her business with her trade association with the CAC registration and licensing said: “It is good to register your business. For me I opened my shop for some months before I could register with our association. We pay N2,500 for a start to the association and after that we pay our monthly dues which is N500 monthly and our association will be the one to register the association with the revenue,”, she said.
Victoria said that the benefit is that if someone decides to go to another state they will give such person a reference letter that will enable her practise in her new location.
Chinyere Okechi a fashion designer explained how the revenue collector has been disturbing them to register their business.
The Corporate Affairs Commission (CAC) is the body that regulates the formation and management of companies in Nigeria. It is empowered by law to handle all issues associated with company registration, business names, and incorporated trustees in Nigeria. To register your business name in Nigeria without involving a third party (e.g. Lawyer, Agent etc), you will have to go directly to any of the CAC branches mostly found in most of the state capitals in the capital.
There are also the new accelerated options of online registration by visiting the CAC portal where you can initiate a name search, register and incorporate your business online and file changes to your existing business.
The Registrar General, Barrister  Mahmud Bello, said: “Registering your business name is very important because it gives you the legality or right to use the name to do business and make so many people to have confidence in doing business with you.
“It is important also because you will not be able to do business with government parastatals or even some big private companies.”
Barrister Mahmud said the CAC is gender sensitive knowing fully well, that most of the Micro, small and medium enterprises are owned and run by women which were part of the reason for the consideration and approval of the reduction of company registration fees by 50 percent.
“We have also created a window where you can go and register your company yourself without the help of any lawyer and if you choose this option, there is a desk in the commission that will help you do that. You do not need to be literate or even harbor the fear that the procedure is too complex and you may not be able to go through it without on your own. When you get to our desk, they will help you with all that you need to do to register your company.”
A check at the CAC website indicates that reservation of name cost  N500; registration of private company with share capital of N1 million or less cost N10,000; registration of private company/increase in Share Capital above N1 million and up to N500 million cost N5,000 for every N1 million share capital or part thereof, registration of company not having a share capital is N20,000.
For very small businesses where women mostly operate, registration of business name cost N10,000; filing of notice of change of business name is  N5,000; filing of notice of change in business address is N1,000; filing of notice of change in proprietorship, N1,000 and filing of annual returns N1,000 respectively.

ADVERTISEMENT

NOMINATE AFRICAN OF THE YEAR 2019

Download Daily Trust News App

Get it on Google Play
Share this article

Join us on


Share your story with us: 08189301900 (Whatsapp and SMS only) Email: dtonline@dailytrust.com

Complain about a story or Report an error and/or correction: +2348189301900

DISCLAIMER: Comments on this thread are that of the maker and they do not necessarily reflect the organizations stand or views on issues.