The Benefits of Registering Your Business: Why Every Business Owner Should Do It

Introduction

Nothing is more exhilarating than the prospect of starting your own business. However, there are several processes when beginning your own business. Along with the day-to-day tasks of running a business, there are various legal factors to consider, one of which is registering your business. Every business owner wants to be successful, but many fail to see the significance of registering their companies with the appropriate authorities. Investing the extra time and resources to register your business is an important step that could help you achieve success and avoid some issues in the long run! This post will discuss the advantages of registering your business and why every business owner should do so.

By the way, every Nigerian citizen has a right, as protected by the Constitution, to engage in any business either as an individual or as a member of a group. But of course, this right is subject to some relevant laws. Click here to read more.

What is Business Registration?

Business registration is the process of officially registering your business with the government. Business registration allows the public to know who is operating a company, and you may register the business with the assistance of a lawyer or a registered agent. Some jurisdictions even allow ordinary citizens to register their enterprises without using a lawyer or a registered agent.

Benefits of Registering Your Business

There are numerous advantages to registering your business, and the effort is well worth it. While it may appear to be an extra step that takes up valuable time and resources, registering your business is a wise decision that can benefit you in the long term. Here are just a few reasons why you should register your business:

• Limited Liability Protection: when you establish your business, you create a legal entity for your business, which can help you escape personal liability for business debts and responsibilities. 
• Access to Financing, Licence and Credit: registering your business makes it easier to open a bank account and receive business licenses/permits. Many investors and lenders will not engage with unregistered enterprises, so taking this step is critical to access more external capital. If you are looking for financial aid to build your business, registering the company can help.
• Legitimate Status: registering your firm can give you credibility in the eyes of potential clients. Unregistered firms are frequently seen as less credible than registered businesses. Business registration also grants you the legal authority to operate your business and establishes a formal entity recognized by the government. As a result, you gain credibility with customers and partners, who are more willing to trust you with their business and money since they see that you have taken the time to register your business. 
• Protecting Your Business Name: registering your business grants you exclusive rights to use that name in your state/jurisdiction. This can also prevent others from using your company name and raising confusion in the market.
• Gaining Legal Rights: registering your business provides certain legal rights, including the right to sue for trademark infringement and the right to file for bankruptcy protection. Depending on your state legislation, you have numerous other legal rights. As a registered business, you will be afforded certain legal protections that unregistered businesses do not have. For example, if someone sues your company, they will only be able to go after your company's assets and not your personal assets. This can save you a lot of money and stress in the long run.
• IT CAN SAVE YOU MONEY 

Drawbacks to Not Registering Your Business

The disadvantages of not registering your business are basically the opposite of the advantages of registering, so I will just simply list them here.

• If you do not register your business, you may miss out on significant tax benefits you may be eligible for, depending on the form of your organization.
• Because most banks demand that your business be registered before opening an account for you, not registering your business can make it more challenging to open a business bank account.
• Failure to register your business may also make it more difficult to obtain licenses and permits, as governments often require businesses to be registered to receive the essential licenses and licences, without which you may be unable to conduct your business lawfully.
• Failure to register your business may expose you to personal liability since you may be held personally liable for any debts or obligations incurred by the business if it is not registered as a separate entity. This implies that if something goes wrong with your business, your personal assets, such as your home or money, could be at risk. O ti lọ niyen!
• Not registering your business might result in significant fines and penalties. If it is discovered that you have been operating without a licence where a licence is necessary, you may be obliged to pay accumulated taxes and penalties. You may also be subject to criminal charges and serve some jail time in some cases.
• If you eventually want to sell your business or bring in investors, not being registered can make the process unnecessarily difficult for you.

Legal Requirements and Steps to Register Your Business

We can all agree that launching a business is a difficult task. There are several legal requirements and paperwork to do, not to mention the cost of engaging a lawyer or accountant to assist you in getting your business started. However, by now, you would agree that registering your new business with the government is one of the most significant things you can do for it. So, how do you go about registering your business?

Before I continue, have you noticed that I keep using the term "business" rather than "company"? This is deliberate because a company is not the same as a business. While all companies are businesses, not all businesses are companies. This is a topic for a future post I intend to publish eventually.

Now, let's get back to business. The exact registration process will differ based on your state and type of business. Still, the first step is to select a legal structure for your firm, such as a sole proprietorship, partnership, limited liability company (LLC), or corporation. After deciding on a legal structure, you must obtain any required licenses and permissions from your state or local government, file means of identification for the business owners, articles of incorporation, and other paperwork with the authorized regulatory body. You may also need to open a bank account in your business name, pay any necessary fees, and submit any other documentation.

Common Mistakes to Avoid When Registering Your Business

When it comes to registering their enterprises, there are a few frequent mistakes that business owners make. Avoiding these blunders will save you time, money, and problems in the long run.

A common blunder is failing to conduct research. Before registering your business, you should learn about the various types of business structures and which is best for you and your business idea. Sole proprietorships, partnerships, limited liability companies, and corporations are all types of businesses, and every kind of business has its advantages and disadvantages. So it is critical to select the best for your business.

Another common mistake is not choosing the right business name. Your business name should reflect what your business does and be easy to remember. It is also essential to make sure that another business is not already using the name you choose. You can do a quick search online or on the website of the government agency in charge of business registrations to check for availability.

One other pitfall to avoid is failing to register your company with the appropriate government agencies or not submitting the necessary documentation. Depending on the type of business you operate, there may be varying registration requirements, and failure to register correctly can result in fines or even legal difficulties in the future. Certain businesses are required by law to be registered and structured in a certain way, so you must do your homework and be sure that you have selected the appropriate business structure.

Another blunder is failing to select the appropriate business name. Your business name should be descriptive of what your business provides, and it should be easy to remember. It is also critical to ensure that another company is not already using the name you select. To check for availability, conduct a quick search online or on the website of the government department in charge of business registrations.

Conclusion

If you are thinking about beginning a business, make sure to register your business first. It is a pretty quick and straightforward process, and it is a vital step in securing the success of your business venture because it gives legal protection, access to finance, and credibility with clients. With all these advantages, registering your company should be at the top of every business owner's priority list. Don't put it off any longer; register your business immediately and start reaping the benefits!