After deciding on the type of business to register, whether it should be a business name or a limited liability company, the next step is choosing a name.
As simple as this may sound, it’s not that simple. Certain names require certain prerequisites before they can be registered, others have financial implications while some words are prohibited by the Company and Allied Matters Act (CAMA) and as such names with those words cannot be registered.
Let’s take them one by one starting with words that cannot be used when registering a name. Names containing the words National, Government, State, Federal and Municipal are not likely to be registered as they are likely to mislead the public and give the impression that such a company or business enjoys government backing. A name containing any of these words can only be registered after consent has been obtained from the Corporate Affairs Commission.
Names containing the words co-operative, Chamber of Commerce, Building Society, Guarantee, Trustee, Investment, Bank and Insurance can only be used for specific businesses and with the consent of the Corporate Affairs Commission.
A company or business name cannot be registered with the name of an existing company or business name or a name that is similar to an existing company or business name.
With respect to business names, if a person intends to do business in his own name, i.e. his first and surnames without any addition, then the name need not be registered. This is simply doing business in your own name as an individual. However should the person decide to add “and Company, & Co., Ventures, Concepts, Consult, Consultancy, Enterprises etc” after his name then the name can be registered.
When a name contains the word “Consultancy” it is a requirement of the Corporate Affairs Commission that the individual or partners in the case of a business name or one of the directors in the case of a limited liability company, must show proficiency – expertise in the area of business that the company is doing. For example if it is a firm of engineers, evidence of COREN registration is required, accountants, an ICAN certificate etc.
Also to register a company with certain words in the name such as “financial” or “travel agency” have certain cost implications as it a requirement of the Corporate Affairs Commission that a company registered with the word “financial” in its name must have a share capital of at least
N10,000,000.00(ten million Naira). The required share capital for a company with the words “travel agency” is N2,000,000.00 (two million Naira)). The requisite share capital for names containing certain words varies and as such it is best to make enquiries when choosing a name.
For a limited liability company, whatever name is chosen must end with the word “Limited”.
It is best to choose a name that best suits the business you intend to do and not one that gives a false impression or may be denied by the Corporate Affairs Commission on the grounds that it is misleading. Names with the words “Security” and “Intelligence” may be denied depending on the other words in the name and the impression it may give members of the public.
Once a name is chosen, the next step is to run the name in the Corporate Affairs Commission, a process known as a request for the “Availability of a Name”. Once this process is done, the Commission will either approve the name for usage or deny it. If the name is approved, it is reserved for the person’s use for a period of 60 days. During this period of sixty days the person is expected to file the requisite documents with the Corporate Affairs Commission for registration.