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Types of CAC Registrations

Basically, there are three types of registrations that can be done under CAC. They are Business Names, Companies, and Incorporated Trustees.

Business Name
A business name is the name and style under which a business is carried on. Common examples of business names are the enterprises, ventures and “& Co”. The following are some of the features of a Business Name:
  1. A business name may be a Sole Proprietorship or a Partnership. It is a Sole Proprietorship if it is registered or carried on by just one person. That person’s name is used to register the business. He is the only proprietor. A business name is a Partnership if it is carried on by two or more persons.
  2. Under the law, a business name does not enjoy legal personality; that is, it is not separate from the proprietor or partners for the purpose of liability. This means that, if the business runs into any kind of trouble, like defaulting to repay a bank loan, the bank can sue the proprietor or partners to get back their money. The fact that they borrowed the money in the name of the business will not or cannot absolve them from liability.
  3. In a nutshell, the liability of the proprietor or partners in a business name is not limited by any shares which they hold in the company.
  4. Another way to put is that the owner(s) of a business name do not have a separate identity from the business name that they registered. They are one and the same with the business name.
  5. There is a limit to the number of businesses that you can register under a business name.
  6. Not all businesses can be registered under a business name; for instance, clearing and forwarding, banking, insurance, security etc.
Company
A company is a business arrangement which enjoys legal personality. There are different types of companies.

  1. Company limited by shares: here, the liability of members is limited to the number of shares they have in the company.
  2. Company limited by guarantee: here, the liability of members is limited to the amount they pledge to contribute to the assets of the company if it is wound-up or goes into debt.
  3. Unlimited Company: here, the liability of members is unlimited.
Also, a company may be a private or public. The major difference between the two is that, while a public company can ask members of the public to subscribe for shares or debentures of the company, a private company cannot. A private company must source for its members privately. Also, whereas a private company cannot have more than 50 members or shareholders at any given time, a public company can have more than 50 members. 

Limited Liability Company
The commonest form of company is a Private Company Limited by Shares or Private Limited Liability Company. Some of its features are:
  1. The name of the company must end with Limited.
  2. The shareholders of the company are the owners.
  3. At registration the company must have a minimum issued share capital. The minimum share capital for a private limited liability company is N100,000.
  4. The company must have at least two directors who manage the affairs of the company. However, it is now possible for one person to be the only director of a company.
  5. The nature of the business carried on by the company is contained in its objects. The objects can have several natures of businesses as long as they meet the share capital for the nature of businesses listed.
  6. It is a corporate body and separate/different from its members.
  7. The company enjoys a separate legal entity from its members. That is, it can enter into contract, sue and be sued, and own a property in its name.
  8. The liability of the shareholders is limited to the amount of shares that they own in the company.
Incorporated Trustees (NGO)
An Incorporated Trustees (otherwise referred to as NGOs) is a Not-for-Profit Association. They are Associations established for various purposes, such as religious, educational, literary, scientific, social, developments, cultural, sporting or charitable.
The trustees are the legal representatives of the Association and can acquire property, sue and be sued in the name of the Association. The Trustees are subject to the directions of the Association and its Governing Council. The basic features of an Incorporated Trustees are that they are generally regarded as non-profit and they must have a minimum of two trustees at incorporation. 
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