Sole Proprietorship Registration

A sole proprietor has complete control over the revenue and operations of their business. However, the sole proprietor is also personally responsible for all debts, lawsuits, and taxes their company accrues. So, if their business is sued, personal assets like their home, credit score, and savings are unprotected.

Here are some of the salient features of a Sole Proprietorship entity;

1. Single Ownership
   A sole trading concern is owned by one individual. It is run entirely at his risk of loss. The sole trader provides both capital and management to the business.
2. Personal Organization or Common Identity
   A sole tradership concern has no separate legal entity independent of the owner. The owner and the business concern are one and the same. The owner owns everything the business owns and he owes everything the business owns.
3. Capital
   In a sole proprietorship, the capital is employed by the owner himself from personal resources. May also borrow money from friends and relatives if he/she cannot depend solely on personal resources.
4. Unlimited Liability
   The liability of the proprietor for the debts of the business is unlimited. The creditors have the right to recover their dues even from the personal property of the proprietor in case the business assets are not sufficient to pay their debts.
5. One Person Control
   A sole proprietorship is a one-man show. The sole trader provides management to the business. He takes all the decisions, procures material resources, employs persons, and directs and controls the affairs of the enterprise. He is not required to consult anyone else in taking any decision.
6. Profits and Losses
   The surplus arising in the business of the sole trader entirely belongs to him and similarly, all the business losses and risks are to be borne by him alone.
7. Risk Bearing
   In this form of organization, the proprietor is the sole beneficiary of profits. If there is a loss, he alone has to bear it. Thus, the risks of the business are borne by the proprietor himself.
8. No Special Legislation
   The sole proprietorship is not governed by any special legislation. A partnership firm is governed by the Partnership Act, a joint stock company is governed by the Companies Act and a co-operative society are by the Co-operative Societies Act. Any person who is competent to contract can start his business as a sole trader.

The key benefits of Sole Proprietorship are listed below:

• A Unique Identity:
  Registration of your new business name makes it unique as nobody can bear such a business name subsequently.
• Certificate of Registration:
  After registering with CAC, You will get the Certificate Of Registration of Business Name and the Certified True Copy of Application Form.
• Seek Minimal Investment:
  Since the Sole Proprietorship model is a boon for low-cost business ideas, it is often chosen by small businesses like retail shop outlets, grocery retailers, and so on and so forth.
• Bank Account Opening:
  The bank account for your business can bear your BUSINESS NAME, and these brands your business on a whole formal level.
• Business Trip to Other Country:
  Another great benefit of business registration is that you can easily obtain a visa and travel to any country for business purposes.
• Tax Benefit:
  Sole proprietors in Nigeria don’t pay any corporate income tax, since they are not legal entities. Instead, they only pay the PIT – Personal Income Tax (salary from employment or earnings as a sole trader).
• Incentives:
  When you register your business name, you stand a chance of growing your business through the various business incentives extended to Micro, Small, and Medium Enterprises (MSMEs) by the Federal Government.
• Ease:
  It is cheaper to register a Business Name for your new business than to incorporate a company. When a new business name is registered, it is not required to have formal meetings and rigid corporate governance meetings like companies that are incorporated.
• Complete Authority:
  Sole proprietorship business has complete privacy and does not report to anyone, submit an annual report, or publish audited statements for anybody like the Limited liability companies do.

You’ll have to provide the following details upon Submission;

To complete the Registration of Your Sole-Proprietorship Firm in Nigeria, you’ll have to provide the following details upon Submission;

• Proposed Name of the Business (2 Names).
• The objectives and nature of business.
• Address of the Business (Can also be a residential Address).
• Particulars of the Proprietor – Such as; Name, occupation, residential address, email address, phone number, and means of identification (National Identification Card, Data Page of International Passport, Driver’s Licence, or Voter’s Card)

Below we will list some examples of Sole proprietorship businesses that are run by sole owners.

• Grocery store
• Computer repair services
• Tutorial services
• Small traders
• Fast food vendors
• Manufacturing businesses
• Home healthcare ( such as cooking meals, cleaning homes, etc.)
• Online Vendors
• Freelancers, and others.

Name Search: 6 – 24 hours from submission.
Grant of Certificate of Registration: 24 -96 Hours from filing.
Total time: Approximately 2 – 7 days.

Sole proprietorship and One-Person Company are two different forms of ownership. In a sole proprietorship, a business is managed and controlled by a person.

However, in the case of an OPC, an individual can commence the operation as per the rules and regulations of laws. Moreover, an OPC is registered under the Registrar of the Company.

A limited liability company (LTD) provides the business owner with liability protection and tax advantages, while sole proprietors bear personal liability for their business. Additionally, an LTD can be owned by investors, while a sole proprietorship is usually owned and managed by an individual.