In Africa, up to 70 percent of people who regard themselves as ‘entrepreneurs’ do not own a registered business.
It is important to note that business owners register their businesses to show that it legally exists.
Here are some of these reasons you should register your business soon:
- Unique and Authentic Identity:
There is a certain pride that comes with the identity of your own business. It’s no longer that big idea you’ve had in your head all these years. It’s now a real thing that legally exists; with its own name and address.
Whatever name you choose, and for whatever reason, is totally up to you. Once you’re ready to register your business, the first thing the Business Registration Office does is to check that no other business already exists with the same name. Under law, no two businesses should have the same name to avoid confusing the public.
Once it is confirmed that the name you’ve chosen for your dream business is available (that is, nobody else is already using it), you will be allowed to go ahead with the rest of the business registration processes HERE
Once registered with the name you chose for it, you’re legally free to go ahead and design a logo, create business cards and letterheads, and do anything you want with the name.
- Protection from Personal Liability
This is arguably the most important reason entrepreneurs register their business.
Without the legal protection of limited liability, you could lose your business and personal property if something goes wrong (In a case where your business is sued to court for heavy damages).
If your business is registered as a limited liability entity, 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.
However, if you were running an unregistered business, you may not be entirely safe. This is because your personal assets (house, cars, money in the bank etc) maybe used to settle any outstanding debts the business cannot settle.
Not all company types can offer this protection. Only Limited Liability type companies can do this. Sole-proprietorships and partnerships (except Limited Liability Partnerships) cannot provide protection from personal liability.
- Gives Your Business a serious Outlook to Customers
In today’s modern world, most customers, especially corporate customers, expect a serious and responsible business to be registered. In fact, most companies will not do business with an unregistered business. In certain cases, it’s against the law for regulatory and tax reasons.
Unless your plan for your business is to become and remain a petty trading business that sells stuff off street corners, registration is important it to attract more discerning customers.
Nobody says you can’t survive with a business that isn’t registered. The likely outcome is that you may not grow and will probably remain small for a long time.
- Investment Opportunities from Investors
For banks, there are basically two categories of loans; Personal and Business loans. They’re both totally different and one cannot be used to represent the other.
As a result, most banks will easily lend you money to buy a new car or house but none will give you money to fund a business that isn’t registered. To qualify for a business loan, the non-negotiable requirement is that your business must be registered.
Similarly, Investors are interested in giving you money for a share of your business, and not to finance your personal lifestyle.
Investors want to know that your business is organized, exists legally and is separate from your personal life and finances.
No investor would take you seriously if you’re asking for investment but you don’t already have your business registered. It reeks unprofessionalism
A registered business is an asset (like a house, car and other properties) that can be passed down (as an inheritance) or sold by its owners to a new generation of people who can continue to own and run the business.
Finally, it may cost you some money, time and effort but it’s really a small price to pay to avoid costly damages and regret down the road. Getting your business registered is not only the right thing to do, it’s also the smart thing to do in today’s complex and fast changing business world.