The difference between a Business Name Registration and a Company Name Registration (all you need to know)
We have been getting loads of DMs from people asking what’s the difference between these two registrations. It’s should be known that both create a legal identity for any brand. One on the other hand is superior.
Business name registration is owned by one person.
- The owner has unlimited liability and can be held personally liable for debts incurred by the business. The owner and the business are same. The business cannot be sued or sue alone.
- You can’t use LTD or Limited for a business name registration.
- It’s also cheaper. This is because it requires lesser documents when registering and doesn’t require the assistance of a lawyer as you can register your business name yourself.
- It is more difficult to raise funds. Government and International bodies willing to give loans and grants would feel reluctant dealing with a Brand under business name registration since it can’t sue or be sued alone.
- Transfer of ownership from its original owner on death of the owner is almost impossible.
- It has less formality as decision making process is made by one person. There’s no need for annual meetings.
- Registration number starts with ‘BN’
Company name registration allows you use LTD or limited.
- It’s expensive. It requires the help of a lawyer because it consist of many documents during registration.
- The owner or shareholders of the business are not personally liable for debts incurred by the business. It means also that the business and the owner are different.
- The business can sue and be sued alone.
- The business would have board of directors, secretary, etc (although not always the case with new companies. One person can be the director).
- Ownership is transferable and this ensures continuity for the business in cases where one of the directors or original owner dies or leaves the brand.
- There is more formality when running a company as this requires annual meeting or board decision making process.
- The registration number starts with ‘RC’.
- Government bodies and international bodies feel more safe giving projects to a business registered as a company as against a business registered under business name; because the former can be sued.
Having said these, it is important to state that if you don’t have the financial capacity to do a company name registration now, it would be of your best interest and that of your brand to do a business name registration. Then later on, you can UPGRADE to a company name registration.SUSSAN APEH
Let’s help you then to register your BRAND under a Business Name registration or Company Name registration. You can chat us up directly here. OR visit our official website to make your bookings for your registration.
OR you can join over 50 participants in our Do-it-Yourself business name registration class on TELEGRAM who are registering their business names themselves. Either way we assure you of best results.