Entrepreneurship has become prevalent in today’s society. Given the lack of employment opportunities and poor remuneration of a large part of the employed population among other things there has been a deplorable rate of unemployment and employee financial satisfaction. Nigerians, ever so resourceful as we are, have refused to sit idly and wait for what may never come, the dream job that pays more than enough or any job at all. A plethora of Nigerians today have ventured into one business or the other ranging from Makeup art, head gear production, footwear production, clothing production and fashion design to clothes and accessories importation, distribution and sales, the list goes on really. Almost everyone has their hands in some business of their own either as their main business or as a side hustle. Can you blame them really, ‘’man must wack’’, If it’s an honest living and it’s putting food on the table, why not if not.
Now, the pertinent question is “What do you have in mind for your business?” “What is your plan?” As a good business person you must be strategic, where do you see your business five or ten years from today? Do you even see it at all? Some people are just into business to hold bele, if you will, until something good comes along. Some, however, are in it for the long haul. If you fall in the category of the “long haul” then I hope for the sake of your business you have a five and/or ten year projection that you are working with, no matter how small your business is because it will help you make decisions that will sustain and grow your business.
Now, it goes without saying that if you want a sustainable business, you would have to register such business. I mean, customers grow business and what better way is there to attract customers and retain their patronage than to assure them of your genuineness thus establishing yourself as a trustworthy venture than to have your business registered. That is not to mention the many other perks that come with registering your business.
As a business owner you can register your business in several ways depending on the kind of business you run, your intention for the business and the object of the business. The business can be registered as a business name, a company or an incorporated trustee under the Companies and Allied Matters Act (CAMA). Each one comes with its own advantages and disadvantages. For the purpose of this paper, I will discuss expressly the benefits or advantages of registering your business as a company. There are several of them but I will limit myself to four which I believe are very important for you to know. They are as follows:
Incorporating your company i.e. registering your business as a company is one of the surest ways to secure your assets and conduct business safely. When you register your business as a company, the law recognise the company as a person on its own, different from you. E.g. My name is Amaka. I register my company as “Babe Hair and Makeup”. Babe Hair and Makeup becomes a person at law, and this person, Babe Hair and Makeup can own property, do business, borrow money, sue and be sued as well, nice right. As such, where I borrow money through my company (Babe Hair and Makeup), and I can’t pay back, I run at a loss, creditors and the like cannot come after me (Amaka) personally, they can only hold Babe Hair and Makeup responsible, Amaka is safe. That, more or less, is what is called limited liability. So, if I, Amaka, have 10 million naira in the account, personal bank account and my company, Babe Hair and Makeup is owing 50,000 or 50 million, My 10 million naira is safe because Amaka and Babe Hair and Makeup are two different people. Babe Hair and Makeup is owing, not Amaka. Just imagine the possibilities with this feature, you can do business without fear that if you make one tiny mistake all of your debtors will come after you and render you penniless.
Enhance Your Business’ Credibility
As I mentioned earlier in this paper, registering your business gives of the aura of stability, credibility and permanence. Things that any investor or client will want to see in any business they plan to transact with. When it is now a company, even better, you take on a look of sophistication, class, forte, like you can take on anything, like you can meet their needs and expectations. You know it’s all about packaging. Also, all those answering CEO for namesake, you could be a CEO in the actual sense of it. Just imagine it on your business card or on your social media profile. Amaka Habib, CEO Babe Hair and Make-up Ltd or Queen’s Closet Plc (I know I’ve given someone name of business); but just imagine it, that right there, that’s class and who doesn’t love class.
As humans, for whatever reason, we don’t like to be forgotten, we like for the memories of us to live on or our name and our deeds to live on after us. That is why we value the male child more, that is why institutions are named after people and statues built in honor of some. We want some kind of evidence of our presence in this life and the impact thereof and we want it to remain. A company, because of its distinct personality, that is the fact that it is a person in itself, can achieve this because it lives on long after you. It does not end upon your demise. I am not saying that you’ll die but in the event that that happens your company lives on, what you have labored to build, the name you have created, your corporate child, if I may, will outlive you and people who never saw you or even met you will know what you have done.
The subject of money is always a touchy one. Making it, spending it, saving it, etc but among all these the most pertinent is making it; making money. The funny thing about money is that it takes money to make money. I’m sure a lot of people will agree. To run a business, you need money, and to make money to run the business, you also need money, so what now. What are your options, borrow, beg, steal, etc. If you have a company, you would have shareholders from whom you could get money, in simple terms, its like saying, I’m dividing my business into 500, i.e. 500 shares of my business. I’m going to sell each share for N1000. People can then buy shares of your company, thereby providing you with money to do business because when profit comes they will get a share of the profit to the tune of the amount of shares they bought (If you don’t get it just read it a few more times, you will). It’s a win-win really. Another angle is that you can borrow money and if acceptable by the lender, pay back with shares; you can also purchase an asset with shares. See, makes things easier.
In conclusion, choose now whether you want a future for your business and if you do, what kind? And what are you willing to do about it? Registering your business is important, registering your business as a company is even better. There are many other perks to it and if you choose to go ahead, please do the needful by consulting your lawyer to advice you on the most appropriate type of company for your business as companies come in various forms so you can be properly guided.
Written by Mbachu Chinenye