When registering a business with the Corporate Affairs Commission (CAC) in Nigeria, one of the most common questions is:
👉 Should I register a Business Name (BN) or a Limited Liability Company (LLC / Ltd)?
Both options are legal and recognized, but they serve different purposes. Choosing the right one can affect how your business grows, the taxes you pay, and the opportunities available to you.
In this post, we’ll break down the differences in simple terms to help you make the best decision.
What is a Business Name (BN)?
A Business Name is the simplest form of business registration in Nigeria.
It is usually registered by:
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Sole proprietors (one person)
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Partnerships (two or more people working together)
Key Features:
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Simple and affordable to register.
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The owner is personally responsible for all debts and liabilities.
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Lower annual compliance requirements.
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Commonly used by freelancers, small shops, traders, and startups testing the market.
What is a Limited Liability Company (LLC / Ltd)?
A Limited Liability Company is a more structured form of business.
It separates the business from the owners, meaning the company has its own legal identity.
Key Features:
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Owners (shareholders) are not personally liable for business debts.
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More credibility with banks, investors, and government contracts.
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Higher compliance (must file annual returns, maintain proper records).
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Suitable for medium to large businesses, or those seeking expansion.
Business Name vs Limited Liability Company: Key Differences
| Feature | Business Name (BN) | Limited Liability Company (Ltd) |
|---|---|---|
| Legal Status | Owner and business are the same | Business is a separate legal entity |
| Liability | Owner is personally liable for debts | Owners’ liability is limited to their shares |
| Cost of Registration | Cheaper | More expensive |
| Taxation | Personal income tax | Company income tax |
| Compliance | Simple (annual return only) | More complex (annual returns, AGMs, records) |
| Credibility | Suitable for small businesses | Higher credibility for contracts, loans, investors |
| Ownership Transfer | Harder to transfer | Easy to transfer shares or ownership |
When Should You Register a Business Name?
Choose a Business Name if:
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You’re starting small and want to test the waters.
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You’re a freelancer, artisan, or trader.
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You want a simple and affordable registration.
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You don’t plan to raise capital from investors soon.
When Should You Register a Limited Liability Company?
Choose an Ltd Company if:
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You want to build a scalable, long-term business.
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You need credibility to secure contracts, partnerships, or loans.
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You want to separate personal assets from business risks.
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You plan to bring in investors or partners.
Conclusion
Both Business Name and Limited Liability Company registrations are valid and useful. The choice depends on your business goals, budget, and long-term vision.
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If you’re starting small → go with a Business Name.
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If you want to grow big and play in the corporate space → register a Limited Liability Company.
👉 At CDAMA, we help entrepreneurs register both Business Names and Limited Liability Companies with CAC. We also guide you on which structure best fits your business goals.
Call to Action:
📞 Contact us today to start your business registration with ease.