The number of business opportunities in the Federal Republic of Nigeria is increasing day by day. Even though there are infrastructural deficits in the country, the increasing population of the country, the re-evaluation of the country’s economy and the statement given by World Bank according to which the per capita GDP of the country is on a growing trend make Nigeria one of the best options for investment. A Sole Proprietorship is the easiest and the least costing types of business structure in Nigeria and also is one of the first business structures which come into the mind while thinking of setting up a business in Nigeria.
What is a Sole Proprietorship?
A Sole trader is a person who is the head of the Sole Proprietorship. This kind of business model is usually run by a single person and this owner is liable for all the losses and profits of the company. This business structure is generally used by budding entrepreneurs and businessmen because of the requirement of less number of documents and the ease of starting the business and there is no legal distinction between the owner and the organization.
Advantages of Sole Proprietorship in Nigeria
- A sole proprietor is answerable to no one as he has complete control over the business
- The profits made by the business belong to the owner and similarly, the losses do too
- The owner has complete privacy regarding all the business decisions he makes
- This business can be started easily and requires only certain legal documents
- Personal attention to the needs of the different consumers
- As a sole proprietorship is not legally different from the owner, only the personal income tax in Nigeriais paid
Corporate Affairs Authority (CAC)
The Corporate Affairs Commission or CAC for short was established on 1990 is an autonomous body which is made with the aim to regulate the formation of the various companies and also handles the management of these companies in Nigeria. It was established by the companies and Allied Matters Act 1990. Their mission is to provide regulatory and registration services for companies so that the companies could benefit the economy of the country.
How to Set Up a Sole Proprietorshipin Nigeria?
A sole trader is a person who is the owner of the business and is not legally separate from the business. This means that the owner can enjoy the profits of the business but is also responsible for any losses caused by the business. Setting up a sole proprietorship business is comparatively easy and does not have many individual steps to it. You can register your venture both online (on the portal of CAC) or by going to the respective Corporate Affair Commission office:
- Visit the official website and go to the company registration portal
- In the portal, conduct a search if the business is available
- Create an account to register On the CAC website
- Choose the name and also keep another alternative in case the first is not accepted
- Fill the required information and Click on ‘Submit’
For registering a business name, one is not required to avail the services of a lawyer. You can just go to the nearest office of the Corporate Affairs Commission, Nigeria (CAC) and can take a registration form by paying N10,000.
In both of the cases, it is necessary for the entrepreneur to actually go to the office of the Corporate Affairs Commission to complete the final registration process.
Documents Required for Sole Proprietorship
For the registration process to finish off quickly it is necessary to search and prepare certain documents such as the following:
- Government Issued ID
- Statement of Share Capital
- Return of Allotment to each Shareholder
- Details of the first Director
- Details of the Business
- Details of the Company Secretary (not necessary)
- Memorandum and Article of Association
Business Setup Worldwide acts as a platform for the budding entrepreneurs, businessmen and investors to establish their business in Nigeria by providing a range of services such as Company Secretarial Services, Intellectual Property services, accounting and bookkeeping services and many others. Our experts would provide you with expert and professional advice on the various processes during the incorporation of your company and will leave you in peace so that you can attend to other necessary matters of the business. If you are looking toset up a business in Nigeria or are having questions about any of our services, do contact us– we would be happy to help.