Company Name Registration
A Company/Business Name is the cheapest and the simplest form of business registration. In this class of registration ‘Proprietor’ is used and not shareholders, majority of sole proprietors embrace this kind of registration due to its fee and the simplicity, it is suitable for artisans, accountants, lawyers etc.
The word Enterprises, Concept, Company Ventures are mostly used for its suffixes.
Proprietor membership ranges from 1-20
Certificate of proficiency is necessary for professional services like law firm
Proprietor must be person of sound mind and must be more than 18 years old
Proprietor must not be a fraudulent person
For Consulting firms a minimum of Masters Degree is required and for Educational firms a minimum of Teaching Certificate is required e.g NCE
Private Limited Company
Private Limited Company is formed by a minimum of two to a maximum of fifty people, who make financial contributions to the business and have limited liability. They are limited by the monetary value of the shares they hold. The private limited company does not offer its shares to the general public. This means that such shares cannot be traded on a public stock exchange such as the Nigerian Stock Exchange.
Also, it does not make its accounts public nor publish audited reports in the dailies, but sends the reports to the registrar of companies as required by the law. This is important as sending it to the registrar confirms that it is not selling its shares to the public. These are the major features of the private limited company that mark it different from the public limited company.
Other features that mark it different are:
– Sources of capital: Apart from financial contributions made by the shareholders, capital can be raised through contributions made by newly joined shareholders, loans and overdrafts from financial institutions, ploughed back profits/retained earnings, and credit facilities from business’ suppliers.
– A shareholder cannot transfer his shares to another shareholder or a third party without the approval of other shareholders.
– The suffix ‘Limited’ ( Ltd.) is added at the end as part of the name of a private limited company. For example, XYZ. Ltd.
– The company is managed by a board of directors, alongside a managing director and chairman of the board, who are elected from among the shareholders.
– The company can sue and be sued.
FEATURES OF A PRIVATE LIMITED COMPANY
1. Shareholders are only limited by the value of the shares they hold.
2. Shareholders jointly bear the business’ risks together.
3. As a separate legal entity (an imaginary person), the company can sue and be sued in its own name.
4. The company enjoys some privacy as its books of accounts are not made public.
5. The death or withdrawal of a shareholder does not bring the business to an end.
6. The private limited company has more sources of capital compared to the sole proprietorship and partnership forms of business organizations. This is because it has a higher limit of fifty people who can co-own the business and make financial contributions, compared to the limit of twenty people in the partnership and one person in the sole proprietorship.
7. A greater number of shareholders means a greater pool of knowledge, ideas, skills, abilities and expertise. This is an advantage to the private limited company compared to the sole proprietorship and the partnership.
8. Growth and expansion can be achieved since there are more sources of capital.
9. The starting up and running of a private limited company requires huge capital.
To be a Director:
He/she must be more 18 years old
Possess a valid Identification Card e.g. Driver’s License or International Passport or National ID card
For professional-related companies photocopies of certificate of proficiency is required
This includes the Non-governmental organizations (NGOs, Clubs, Churches and Mosques). These are organizations that are NOT meant for profit they are specifically set-up for the public or a particular section of the public and in this vein they are exempted from tax payment. If members receive payment or benefits, it is only in the form of a reasonable salary and benefits in return for the work that is done as an employee of the organization.
Any profit that is produced is used by the organization to make a greater impact in terms of their public purpose. Examples include Yoruba Tennis Club, Ikoyi Club, The Progressive Women Club, Ibadan etc.
Unlike in Company name where Proprietor features and Private Limited where shareholders feature, Trustes is the integral part of this class of registration. Suffixes as Ministry, Inc. and a host of others feature in this class of registration.