Are you looking for how to upgrade your business name to a limited company in Nigeria? This guide will walk you through the whole process.
The process of converting your business name to a limited liability company can be done by a Corporate Affairs Commission accredited agent.
We strongly advise that you carefully read this article to the end to avoid making mistakes that would cost you more money.
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When Should you Consider Upgrading your Business Name to a Limited Company?
Upgrading from a business name to a limited liability company (LTD) is a strategic move that can bring new opportunities, provide structure and add more credibility to your business. But when exactly should you consider making the switch? Here are some clear signs that it’s time to upgrade:
1. You want Bigger Contracts
If you want to move from doing small individual jobs to doing business with bigger companies, organisations or even the government, then it’s time to upgrade your business to a company. Most large clients require that vendors or service providers be registered as limited liability companies before they can be awarded contracts.
2. You want bigger loans or investments
Accessing loans with a business registered as a business name is possible, however, commercial banks, microfinance banks or cooperative societies see business names as small entities; and rightly so, since they are run by one person and have limited structure. To access better loans, upgrading to a company is the right thing to do.
While it is possible to access investments as a registered business name, it is not easy because most times, investors want something back; which is most likely a share of the business. You cannot issue shares with a business name, this makes it less attractive to investors.
3. Grow from Being a Solopreneur
A business name is widely known as a one-man business, there’s a limit to what one person can do compared to what a team of professionals in a company structure can achieve.
As your business grows and does more numbers, you want to hire the right team and add structure, thereby positioning your business for sustainable growth, operational efficiency, and long term success.
A limited company lets you achieve all this by clearly defining roles, delegate responsibilities, and even offer equity or shares to attract top talent and partners.
4. Credibility and Trust
There’s a perception people get when the word “LTD” is attached to the name of your business. They think “Oh, that must be a big business, I can trust them”.
By upgrading your business name to a limited company, you can add the word “Limited company” or “LTD” to your business name and shape customers’ perceptions.
5. Get Licences
There are certain industries where you cannot get the licence to operate in that industry with a business name registration. Regulatory bodies often require a limited liability company before issuing operational licenses; especially in sectors like finance, oil and gas, telecommunications, healthcare, insurance, and logistics.
If you’re planning to operate in a regulated industry or scale your operations legally, upgrading to a company becomes a necessary step.
Requirements to Upgrade your Business Name to Company
- Your business name must be registered.
- Business name certificate. If you don’t have it, you can see how to download a new CAC business certificate here.
- Your business name annual returns must be filed and up to date.
- Write a consent letter with your company letter headed paper informing the corporate affairs commission that you want to register your business name as a LTD company.
Step by Step Guide to Upgrade from Business Name to Limited Company
Follow the four simple steps below to upgrade your business name to a company;
Step 1: Confirm that you have filed your annual returns
You cannot upgrade to a limited company if you have not filed annual returns and your business is inactive.
You can read our article on how to file annual returns for business.
Step 2: Fill in your details
Now, visit the GrowthPal business name upgrade checkout page.
Fill in your correct name as they appear on your ID, email address and phone number.
Enter your home address, including the state where you reside.
In the order summary, type in the name you want you want for your company e.g “BlueBond Express LTD”
Read and accept the terms and conditions page the proceed to make payment.
Step 3: Make Payment
Click the place order button. You will be redirected to a Paystack payment gateway where you can pay via transfer, card or Opay.
After payment, you will receive an email and phone call/WhatsApp message from us to request other documents needed in completing your business name upgrade to limited company.
Step 4: Send the required documents
We will request for your CAC certificate to be sent to us. You can snap or scan a copy and send either via Email or WhatsApp (anyone you prefer).
For the consent letter, we will send you a template you can replicate, sign and send to us.
After sending your documents, GrowthPal will commence the business name upgrade process. The process will be completed within 3-7 working days.
What to do after upgrading your business to a company
Update your bank account
After successfully upgrading your business name to a limited company, you need to reach out to your bank and inform them about the new entity type or corporate identity so they can guide you on making changes to your business bank account.
If you don’t make these changes, the bank will still have your old information and your previous name will still appear when customers want to send you money.
Register or Update your Tax Records
Once your limited company is officially incorporated, a new tax identification number (TIN) will be automatically generated and attached to your CAC certificate. This is necessary because your former business name and the new limited company are separate legal entities. Your new TIN will be used for tax payments.
Since you will no longer be operating under the old business entity, it’s important to inform the tax authorities to close the Tax account for your previous business. This helps prevent future penalties or compliance issues.
You’ll also need to register for Value Added Tax (VAT) if it applies to your business and Company Income Tax (CIT). Note that CIT applies to all companies in Nigeria.
If you will be hiring employees, you need to register for Pay-As-You-Earn with the state government where your business is domiciled.
Inform your customers
It’s also important to communicate the new changes to your customers and stakeholders (suppliers,distributors, etc). This helps maintain trust, avoid confusion, and ensure a smooth transition; especially if you’re issuing new invoices, contracts, or payment details.
You can make an official announcement via an email or social media pages informing your customers about the changes. Be clear that your core products or services remain the same, but the business is now operating under a new legal identity. Let them know this move is part of your growth and commitment to better service.
Update your Branding, Social media pages and business profiles
Make sure your website, social media pages, business profiles (Google business and other listing websites), invoices and receipts are updated to reflect the new changes.
Use Blog and Media Publications to Spread the Word
Depending on how big your business is, it’s a smart move to create online content announcing the change. This helps bridge the gap between your old brand identity and your new one, especially for returning customers who may still be searching for your business name online.
If you have a website or blog, you can write about it there. Include the previous business name, the new company name, and what customers can expect moving forward.
If you do not have a website or blog, you can publish it on popular local blogs or media outlets.
Frequently Asked Questions on Upgrading Business Name to Limited Company
How much does it cost to convert a business name to a limited company in Nigeria?
GrowthPal currently charges ₦43,500 (including service fees and VAT) to upgrade business names to Limited company on the Corporate Affairs Commissions website.
How long does the Upgrade take?
It takes about 3-7 working days. However, it could take more time if CAC queries the application.
What document do I receive after Upgrading my Business Name to Company
After the upgrade has been completed, you will get a new CAC certificate that contains a Tax Identification Number. You will also get a Memorandum of Articles and Association (MEMART). It will be sent to you in a PDF copy.
Can the upgrade be declined?
Yes, the upgrade can be declined if there are issues such as incomplete documentation, unpaid annual returns on the existing business name, or if the proposed company name is already in use or conflicts with CAC naming rules. Once these issues are solved, the upgrade will be approved.
Is it possible to retain my business name as the company name?
Yes, it is possible if CAC approves the name after we have conducted a name search. If the name is not approved, unfortunately, you have to choose a different name, preferably one that is similar e.g Upgrade from Bluebond ventures to Bluebond express LTD.
We hope you have learnt how to upgrade your business name to a limited company in Nigeria. Upgrading your business to an LTD company is a smart step for entrepreneurs looking looking to scale and structure their operations more professionally. If you’re ready to make the move, start the process today and give your business the corporate edge it deserves.
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