The world is evolving, and so are Nigerians. It is quite common to see vendors both online and in their stores, claiming to have registered their businesses and having proof of same in their bios or hung in their stores. It has also become so easy to own a business or company and register same, without needing to visit the Corporate Affairs Commission in person.
Under the Companies and Allied Matters Act, there are different types of companies. We have:
1. Company limited by shares
2. Company limited by guarantee
3. Unlimited company
There are also different types of businesses which are:
1. Sole proprietorship
A lot of people make the mistake of not consulting a solicitor before going through registration. As such, many businesses that should be registered as business names end up being registered as companies, and vice versa. If you’re in a fix, and you’re wondering what to upgrade your business to, then this would assist you. Listed below are 3 differences between a business name and a company. They include:
1. A company can be sued, a business name can not.
When a company has a matter in court, the name to be written on the court processes is the company name. In the case of a business name, it is the name of the owner that appears, and the court decision binds the owner not the business.
2. A company enjoys perpetual succession, a business name doesn’t.
Even when the founders of a company die, the company can live on for years with proper management. A business name on the other hand would likely die when the owner dies.
3. A company has the power to hold and dispose land.
Being an artificial person, a company can buy and sell land for its use without the help of the founder(s). This is unlike a business name where only the owner can buy or sell land to pursue the interests of the business.
It is pertinent to note that there would be instances where the directors of a company would be held responsible for certain actions of the company. That will however not take away the distinct legal personality exclusive to companies. Do comment and ask whatever questions you might have below.