The first decision in registering with CAC is the structure: business name (enterprise) or private limited company (Ltd). Choosing wrong costs money later. Here is a plain comparison for Nigerian SMEs in 2026.
Business name vs limited company at a glance
| Business name | Limited company (Ltd) | |
|---|---|---|
| Legal status | Not separate from the owner | Separate legal entity |
| Liability | Unlimited — personal assets at risk | Limited to share capital |
| Owners | 1 or more proprietors (partners) | 1 or more shareholders; 1+ director |
| Registration cost | from ₦25,000 all-in | from ₦60,000 all-in (₦1m capital) |
| Time | 3–7 working days | 1–2 weeks |
| Annual returns | ₦3,000/yr | ₦5,000/yr |
| Tax | Personal income tax | Companies income tax (small companies under ₦25m turnover pay 0%) |
| Government contracts | Limited | Yes |
| Investors / partners | Hard | Easy — issue shares |
| Perception | Small business | Established company |
Choose a business name if…
- You are a sole trader, freelancer, shop, salon, artisan or small service business.
- You mainly need a bank account, POS and a registered name.
- You want the cheapest, fastest option and can upgrade later.
Choose a limited company if…
- You have or will have partners or investors.
- You will bid for government or corporate contracts that require an RC number.
- You want limited liability — the business’s debts are not your personal debts.
- You operate in a regulated sector (finance, oil & gas, tech with investor funding, import/export at scale).
Neither? Non-profits use incorporated trustees
NGOs, churches, foundations and associations register as incorporated trustees, not as a business name or company.
Still unsure?
Send us what your business does and your plans for the next 2 years on WhatsApp. We’ll recommend the structure in one message — no charge.
Frequently asked questions
Can I convert my business name to a limited company?
Not directly — you incorporate a new company (new RC number) and can reserve the same name. We handle the incorporation and, if you like, deregistering the old business name.
Which one do banks prefer?
Both can open a corporate account. Banks and large clients tend to view an Ltd as more established; government tenders often require an RC number (company).
Which is cheaper to maintain?
A business name: ₦3,000 annual returns vs ₦5,000 for a small company, and no corporate income tax filings (a business name’s income is taxed as personal income).