Think incorporating your business is too expensive and tedious? You will change your mind after reading these top 6 Top Reasons You Must Register Your Business With the Corporate Affairs Commission by Starterbag Business Analyst Moses Bassey
As a business owner you are making a big mistake if your business is not yet registered. In Africa, up to 70 percent of people who regard themselves as ‘entrepreneurs’ do not own a registered business. Are you one of them? This eye opening article will help you understand the importance of registering your business and save you the immense benefits you have been losing by not registering your business. Here are top 6 reasons I have identified:In Africa, up to 70 percent of people who regard themselves as ‘entrepreneurs’ do not own a registered business. Are you one of them? Click To Tweet
Unique Identity and Competitive Advantage
Are you aware that your rival can register his or her business in your current business name if you have not registered it and the law will be in favour of him? The impact of this will be confusion for your customers and you may likely have to change the business name you love or get out of business. Business registration gives your business a unique identity. Before your business name is registered the Registration Office will check if there is any other business with the same name. Once it is confirmed that the name you’ve chosen for your business is available, you will be allowed to go ahead with the rest of the business registration processes and no other person can use that name.
After this, you can now use your unique identity to harness the power of branding and marketing (logo designs, business kits, SEO, social media platforms, etc.) to capture potential customers to your business.
Getting Loans and Investment
No bank or financial institution will give you money to fund a business that is not registered. To qualify for a business loan, the foremost and non-negotiable requirement is that your business must be registered. When you apply for business loans, you’re going to have to prove that you’re actually a business. Lenders and investors will ask to see your business registration along with other application requirements before approving you for a loan.
Protection of Personal assets
This is one the best reasons to register your business. Take for instance your business is registered as a limited liability, the law protects you from losing your personal property in the event of a damage, death, or court case. Imagine you are in renting business and you have five pick-up vans that distributes your rentals around your city or town. Unfortunately, one day, one of your pick-ups had a fatal accident and killed a child and you are being sued for damages, the worst that could happen is that ONLY your business will be responsible for paying the damages because it is a separate entity from you. If it is so much, that it cripples your business, at least you can afford to lose your business but have your personal properties or assets to start again and provide for your family in the meantime.
Legitimacy and Credibility
In today’s business environment anybody can claim to be anything. People are being duped often and scam is on the rise. Customers and clients, especially people you’ve never worked with before, need assurance that you are a genuine or authentic business. A potential client may suspect your business of being a sham or a competitor could discredit you before your target market by throwing mantra that clients should be careful of unregistered business. But if it’s registered your customers or clients can do business with you with confidence.
The great Solomon thousands of years ago penned down this words of wisdom: “a good man leaveth an inheritance to his children’s children”. Your business when registered is just like a house or any other tangible property that can be passed down to your descendants. But sadly in Africa when the founder dies he dies with the business because the business was never separate from him. Have you ever wondered how Guinness a company started by an Irish man Arthur Guinness is still alive after 259 years in over 120 countries? It was a separate entity, with its structure and processes that can be handed down.
Structure and Growth
A registered business can open a business account with the bank. This separates your individual funds from the business funds and gives more health to the business. Apart from that it’s more professional to give your clients the business account for transaction than yours. On the growth side, it’s extremely difficult to grow a business that is not registered. For instance, landing of big contracts is impossible without registration and other programs that big corporations may want to offer to smaller businesses.
Need help incorporating your business? Check out our Business and Company Registration options.