Registering a company over a business name comes with massive benefits. However, it is important to note that corporate structures vary with design and purpose.
There are varying structures tailored to meet different business needs. Many business owners opt for business name registration over more complex forms like Limited Partnerships and Companies due to the ease and affordability.
However, there are apparent advantages that accompany corporate structures – registering a company over a business name. We would highlight a few of them in this post.
5 Benefits Of Registering A Company Over A Business Name
A lot of benefits come with registering a company over a business name.
Listed below are 5 of these benefits.
1. Commercial Expediency
This is one of the focal merits of incorporation.
As a company, you are perceived as commercially viable and business savvy. Investors and partners are more inclined to make fiscal commitments to businesses who have corporate structures rather than those having a business name.
2. Liability
Limited Liability is one of the benefits that accrue to select corporate forms.
As a limited company or limited liability partnership, you can have your liability limited unlike the sole and unlimited liability that ordinarily accompany the business name structure.
3. Perpetual Succession
Business names end with the death of the proprietor and does not outlast the founder.
On the other hand, with proper structures in place, companies outlive the founders and co-founders. Individuals who want legacy businesses should consider switching to corporate forms to ensure they outlive their demise.
4. Government Bids
In Nigeria, a large chunk of the Federal and State government contracts are only available to companies and not accessible to business name owners.
Funding
- This is a corollary to the point on commercial expediency raised above. With a corporate structure in a place, you are better positioned to secure funding from investors. VC firms are also more willing to invest funds into structures that seem more commercially viable.
- Other advantages range from tax incentives, capacity to own landed property, etc.
Importantly, while business names seem quite easy to set up and do not involve a lot of incorporation complexities, corporate establishments have a number of advantages that accompany the form. Business name owners should carefully weigh these advantages highlighted above before taking a decision. Regardless, it is vital to seek legal advisory pre and post incorporation.
Have any questions? Book a call with us today!
https://calendly.com/info-whe/30min
References
- MSME Africa, “Benefits of a Company over a Business Name” available at https://msmeafricaonline.com/benefits-of-a-company-over-business-name/amp/ accessed on September 18 2023
- Legacy Benjamin, “Advantages of a Company Over a Business Name Certificate” available at https://legacytips.com/advantages-of-company-over-business-name-certificate/ accessed on September 18 2023
Do you seek redress or consultation on legal matters?
Our Law Firm – Scotts Legal – offers legal services in areas including but not limited to the following:
- Real Estate Services (Property Acquisition, Investigation, Registration, Property Management)
- Company Registration and Post-Incorporation Services
- Corporate and Commercial Law solutions
- Domestic Violence and Child Custody
- Cross Border Transactions
- Debt Recovery Services
- Commercial Litigation
- Intellectual Property
- International Trade
- Criminal Litigation
- Employment Law
- Client Advisory
- Civil Litigation
- Mining Law
- Tax Law
Book a FREE CALL to inquire about any of the services above.
Follow us on our social media handles:
Constantly get our news updates