For many entrepreneurs in Nigeria, business registration feels like an afterthought. Some see it as “just paperwork,” while others delay it because of what they have heard from friends, colleagues, or social media. Unfortunately, a lot of these beliefs are myths that hold businesses back.
Let us clear the air. Here are some of the most common misconceptions about business registration and company incorporation in Nigeria, and the truth behind them.
Myth 1: Business registration is too expensive for small businesses
Truth: The Corporate Affairs Commission (CAC) has made registration accessible with different options. You do not always have to start with a company limited by shares. A simple Business Name registration is affordable, and as your business grows, you can upgrade to a company structure.
Myth 2: You can not run a business without registering it
Truth: You can, but you will be limited. Without registration, you can not:
- Open a corporate bank account
- Apply for grants, loans, or contracts
- Protect your business name or identity
Operating unregistered is like driving without a license, you may move for a while, but sooner or later, you will face unnecessary risks.
Myth 3: Once you register, you are automatically tax-free for life
Truth: Registration does not exempt you from tax obligations. Depending on your structure, you will need to register for taxes. The good news? Being tax-compliant builds credibility and keeps you safe from penalties.
Myth 4: Incorporating a company means you lose control
Truth: Incorporation actually protects you. A company is a separate legal entity, which means your personal assets are shielded if the business runs into debt or disputes. You do not lose control; instead, you gain structure, credibility, and legal backing.
Myth 5: Business registration is only for “big” businesses
Truth: Registration is for anyone serious about business, whether you are a freelancer, a small shop owner, or a growing startup. The earlier you register, the better your chances of scaling and attracting opportunities.
Myth 6: Registering a Business Name means your brand name is fully protected
Truth: This is one of the most dangerous assumptions. Registering a business name only gives you the right to operate under that name, it does not give you complete ownership of the brand itself.
If you truly want to protect your brand name, logo, or slogan from being copied, you need to register a trademark with the relevant authorities. Without this, another business could still use a similar or even identical brand name in a different sector, leaving you with little legal recourse.
What Many Do Not Know
- You can reserve a business name online for a short period before registration.
- Share capital can be adjusted depending on your business needs.
- Some industries require special licenses or minimum share capital beyond standard registration.
- Business structures can evolve, you may start with a Business Name and later convert it into a Limited Liability Company.
Do not let myths and half-truths keep you from giving your business the identity and protection it deserves. Business registration and company incorporation are not just formalities, they are powerful steps that unlock credibility, opportunities, and growth.
At Metalex Legal, we help businesses register, incorporate, and stay compliant with Nigerian regulations.Whether you are just starting or scaling, we will guide you through every step.
