Company registration in Nigeria is essential for a business to run smoothly. The entire registration process is done under the supervision of The Corporate Affairs Commission (CAC) which was built under the act of Companies and Allied Matters. If an entrepreneur comes up with new business ideas and is ready to invest a lot of money to expand the idea, acquiring the legal papers and proper permission from the Nigerian Government is a smart choice to avoid any future discrepancy. In this case, a Company Registration lawyer in Nigeria can assist the entrepreneur to register his/her business under Nigerian Law and avail of the business permit. However, let’s have a look at the five major benefits of incorporating a business in Nigeria.
- Limited Liability
Under Nigerian Law, incorporation offers protection to your personal asset. If you are the sole proprietor of your company, you are the only one who is responsible for any liabilities of the business. In this case, generally, your personal assets are seized to pay the company debt. But if your company is incorporated, your personal assets and properties are likely to be protected from potential debts your company may face. In this case, the risk of personal loss is limited to the amount you invest. You may consult a Company Registration lawyer in Nigeria to have a clearer idea.
- Tax Benefits
If the business is incorporated under the CAC, it separates your personal tax and business income. Corporations generally have different tax rates than individuals. For instance, if a shareholder of an incorporated company receives an amount of money as a salary, this amount is taxable at the rate of personal tax and on the other side, the company’s income is taxable at another rate. However, consult with your tax advisor or an experienced litigation lawyer to explore more benefits.
- Income splitting opportunities
One of the most important benefits is “income splitting” opportunities that can exist within a corporate structure. Incorporated companies can pay dividends to their shareholders from the company earnings. Shareholders don’t need to be active in the business plan to receive the profit. In this case, your spouse or child becomes the shareholder automatically. It provides the opportunity to redistribute the income among your family members who are considered in a lower tax bracket.
- Business Stabilization
According to Company Registration lawyers in Nigeria, incorporation offers a business a unique identity. It means that when a third party signs a contract with the company, they make the contract with a separate legal identity not with its directors or shareholders. It means that the company can survive even in the absence or death of the owner. In the case of the death of the owner, the sole proprietorship will pass to the heirs. All the plans and the contracts can continue. Incorporation has its advantages especially in lowering taxes. Don’t forget to hire a company management or Company Secretarial Service as your advisor before proceeding.
- Other Benefits
Along with the above benefits, an incorporated company possesses other advantages including raising funding, facilitating the process of giving remuneration to the employees, future planning, etc. Suppose, in the future, the owner wants to sell his or her business, he or she can proceed with the deal avoiding any legal complications.
Till now, we have discussed an overview of the benefits that an incorporated company can enjoy. However, if you want to incorporate your business in Nigeria, eLegal Consultants bring you the golden opportunity of company registration. With the team of veteran company Registration lawyers in Nigeria, we ensure a smooth service. Along with company registration, we offer premium Company Management Services and also assists business owners to register their business trademark with a team of worldwide Trademark Registration Experts. Contact us to learn more.