In a few days, Jamil Umar will mark the fourth anniversary of the setting up of his photo studio. While people in the neighbourhood patronise the studio for their picture needs, the business is yet to be registered with the Corporate Affairs Commission. Jamil says he does not need a business name to thrive in business, moreover he does not have the money for registering a business name. “It is expensive,” he added.
But that was in the past, as the Federal Government recently slashed the cost of registering a business name from N10,000 to N5,000.
However, with just 26 days to the expiration of this concession, many Micro, Small and Medium Enterprises (MSMEs) owners are still yet to register their business names.
A tailor, Mustapha Jato, said he was not aware of the reduction in the cost of business name registration. “I am not aware that government has reduced the cost of business registration with CAC. But, I will try and do it,” he said.
A small scale farmer, Godwin Abu, said he has paid the sum of N5,000 to register his business name online but he has not gotten approval yet. “I am at the last stage; there is a particular document they are asking me to submit. When I do, the registration will be complete. I know some MSMEs that are trying to register as well, Abu said.”
However, experts say MSMEs have so much to lose by not having a business name.
“The first thing that qualifies you to be an entrepreneur is to own a business that legally exists”, a business analyst, Mr. John Iwuoha, said.
He said some people may be ignorant of what it means to have a registered business while others are concerned about the cost of doing it which the government has reduced drastically.
“For some of these people, it’s just plain ignorance; they don’t know or understand the importance of getting a business registered. The others, who aren’t totally ignorant, just choose to avoid the cost of registration when they start their business,” Iwuoha disclosed.
To further reduce the cost of registering a business name for MSMEs, the Abuja Enterprise Agency (AEA) has given a concession to those who register at the MSMES One Stop Shop located at the agency the opportunity to pay N2,500 instead of N5,000.
The Managing Director of AEA, Mal. Muhammed Arabi Tukur, in an interview with Daily Trust said this gesture was to further encourage small businesses in the FCT that may still find it difficult to pay the N5,000 CAC approved by the Federal Government.
“The reason why we further reduced the cost of registration for MSMEs is because we realised that some of the MSMEs may not have the financial capacity to bring out the N5,000, and if we really want to achieve the vision of the government on the Ease of Doing business, we must ensure that other incentives are giving out.
“They will pay the N2,500 and AEA will pay the remaining N2,500. This is for MSMEs in the FCT. N5,000 is still going to the CAC, ”Tukur explained.
Similarly, the Acting Registrar of the Corporate Affairs Commission, Lady Azuka Azinge, while speaking on reforms that the commission has done to help SMEs, said the procedure of registering a business was no longer cumbersome as anyone can register a business name within a short period.
“One of the reforms we carried out is that the payments are done online through the portal using the government approved platform. So they need an ATM card to do the online payment. They also need a passport, a government approved identity card i.e either a drivers’ licence, a national ID, international passport or the Permanent Voters card. Any of those is allowed.
She also stated that MSMEs could register their business names from the comfort of their homes or offices without requiring the services of a lawyer as was the case before. This is because all the procedures are done online – digitally – as the commission has stopped manual registration of business name.
Mr. Gabriel Anyebe, who ventured into aluminum supply business three years ago, told Daily Trust that although the business is not registered, he makes quiet a fortune.
However, he has his limitations as he can only submit quotations to government establishments through referrals. ‘Qualitech’, as he calls his business, cannot enter for any bid as it is not registered!
A lawyer, Abraham O. Paul Esq. Principal Partner, Petra Partners, explains: “If you have a business name, you can open an account with it because it gives you a unique identity and allows your clients to pay money into the account.
Source: Daily Trust