In the United States and Canada, business owners know it is mandatory to register their businesses. They do this not just because of the legal requirements but also because of the other benefits of doing so.
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However, in some developing economies, such as Nigeria, business owners are most often forced to register their business with the appropriate authority.
So, what are the advantages of having legal backing for your business? How will it improve its standing?
1) It serves as a legal identity and protection
If you have a registered Nanny Centre, it becomes very difficult for anyone in your line of business to use the same name as you. This protects your business name from being used by others, thereby giving you exclusive rights to use that name in your industry.
Your legal identity establishes your ownership of it. Your business name is also useful in case of legal disputes.
2) It gives you international partnerships and opportunities
You can attract indigenous and foreign investors if your business is legally registered. It offers potential partners the confidence that they are doing business with a legal entity.
For instance, on August 31, 2020, an American financial services firm, Payoneer Global Inc., announced a significant partnership with Kuda Bank, Africa’s digital microfinance financial service provider.
One crucial point highlighted in Payoneer’s announcement in a blog post is that Nigerians who have evidence of business registration with Nigeria’s Corporate Affairs Commission (CAC) will be able to open a Payoneer Account and “receive payments and make quick transfers from Payoneer to their Kuda.”
It makes others and institutions want to do business with you and creates a sense of responsibility for the business owners.
3) Fulfilling legal requirements
When you abide by the legal compliance of the country where your business is domiciled, you will avoid harassment from law enforcement agents, allowing you to concentrate on more important things.
In most countries, it is a legal requirement for operating certain types of businesses, ensuring compliance with local regulations.
For instance, the Corporate Affairs Commission in Nigeria has stated that operators of PoS who failed to register their business after July 7, 2024, will be arrested.
4) It gives you access to a credit facility
Registering your business name separates you from the pack. There are credit facilities that are exclusively designed for only registered businesses.
Non-governmental organizations, bodies that give grants to small businesses prefer to do so to registered ventures. Also, you can use your company to establish a credit history, which can be beneficial when applying for loans.
5) It allows for clarity among consumers
No other business can use the exact name of yours because you took the bold move to carve a name for your business. This can help prevent confusion among consumers.
6) It gives you a brand recognition
Registering your business can help you build trust with customers, suppliers, and partners within and beyond borders because it adds credibility and professionalism to your brand.
7) It gives your business access to corporate banking services
Another benefit you will get from registering your business with appropriate authority is that you can open a business or corporate account that will give you access to top-notch banking services reserved for corporate or business account owners.
For instance, you will get a dedicated Account officer who will guide and advise you whenever the need arises, meaning you will most likely get top-notch support rather than someone who only has a savings account.
Also, having a business account will allow you to separate your business expenses from personal spending.
8) Tax benefits
Apart from some tax-friendly countries such as Switzerland, Cayman Islands, Malta, and Singapore, registering your business name may also give you access to tax benefits, which is one of the moves by the government to boost foreign business investment.