Farming is one of the most lucrative businesses in Nigeria at the moment. One may never know there are so many farmers (small, medium and large) until you attend a farmers’ show, forum, meeting etc. or like us, set up a supply and consulting poultry firm.
Setting up a farm is one major decision and whether you decide to go into arable (crops), pastoral (animals) or mixed (both crops and animals) farming, one thing is needful: registration of your farm with Corporate Affairs Commission (CAC)! This is the first step to setting up that farm.
Your farm is like any other company running its own business.
The Corporate Affairs Commission is the governmental body responsible for registering business names and companies in Nigeria.
You may even already have a farm which is not yet registered, it is also important that it be registered as soon as possible. One of the first questions we ask anyone who wants to set up a farm is “Is your farm registered with CAC?”
Some people think this registration is not as important as it is hyped. Below are the reasons why you should endeavor to register your farm.
1. OWNERSHIP OF YOUR OWN BUSINESS NAME:
When you register your unique name, you secure the name to yourself; no one else can register it again or use it. The earlier you register your fond name, the better before you get frustrated at the fact that someone else is already using it. No one will wait for you.
The most frustrating thing in registering your name is that if someone has already registered a name which is not exactly but a bit similar, your own name will be denied.
Early registration helps secure your choice name.
For example Farmafric Nigeria Limited will be denied if Farmafrica Limited is already registered.
Each business name can only be registered with CAC once, which means no two business names are duplicated. The company has the advantage of knowing that their business name is protected from competitive usage within the Nigerian territory.
Registering your farm validates your business. It also makes it more formal and serious in the eyes of your clients/customers. When people deal with you on the basis of how formal your business is, it helps to increase your drive towards success in other to be highly placed and accepted in the eyes of your clients/customers. It makes you feel more responsible and work harder towards establishing your farm/business and brand. It also makes you better organized.
Your potential customers will have confidence in doing business with you.
3. CORPORATE TAX IDENTIFICATION NUMBER:
Once your incorporation at the CAC is through and done with, the next step you must take is to obtain a Tax Identification Number. You will be asked at the Tax office to submit photocopies of some of your incorporation paperwork. A Tax Identification Number is required to pay your tax and to open a corporate bank account.
4. CORPORATE ACCOUNT OPENING:
The requirement of opening a corporate current account with any bank in Nigeria is that your business is registered with CAC. You will be asked to submit photocopies of Forms CAC 2, CAC 7 and Certificate of incorporation at the bank and make no mistake, they will do a search at CAC to find out if you truly registered your farm/business with CAC or not. You will be able to open a corporate account with your business name only if it is registered with CAC.
The importance of having a corporate current account cannot be over emphasized– it gives people more trust to transact business with you knowing that their money can be traced if they run into any kind of hitch.
A business bank account is an important asset to your business because you can separate your personal activities from your business activities. It is also more professional to give your clients a business name for payment instead of your personal account.
5. LEGAL LIABILITY PROTECTION:
When your farm is registered, you receive some legal liability protection. You will not be held personally responsible for certain accidents and other liabilities. Thus, you may find it easier to obtain business insurance, or attract investors, since they will know you are not personally responsible for the company’s well-being. If someone were to become injured on company grounds and sue, that person can only seek punitive damages from company assets, not personal. In summary, in the event of liquidation, no one can lay claims to your personal properties/assets.
Most farms invest in insurance coverage in case of accidents, loss or lawsuits. Farms that are incorporated are more insurable than those that are not; simply because incorporated businesses have less risk attached to them.
Another benefit of registering a business name with CAC is that the name can live longer than the business owner. In summation, if the business owner dies suddenly the business name lives on.
Also, in the event that the owner of the business becomes ill or bedridden and can no longer manage the business himself, another person can take it up from where he stopped. Only registered businesses can keep the name after the death of the owner.
8. LOANS PURSUIT:
When you apply for business loans, you’re going to have to prove that you’re actually in business. Lenders and investors will ask to see your business registration along with other application requirements before approving you for a loan. If you apply for a credit facility as a business owner, creditors may also ask to see your registration paperwork.
9. REPUTATION WITH CUSTOMERS:
Many times, especially in this era of wide internet reach, many customers/clients who have never set their eyes on you would want to do business with you but are also very careful enough to know if your business is legitimate or not. When a business is on file with CAC, it will put your clients at ease when making a decision about whether to spend money with your company.
Many times as accompany, we have had to refer such skeptical customers/clients to previous customers/clients within their locality, who have visited our office and done business with us in the past and who can convince these prospective customers/clients that we are credible. Just imagine if we were not registered, did not have an office or even satisfied those customers/clients.
10. GOVERNMENT CONTRACTS:
If you plan to get government contracts for your farm, a business registration is one of the first requirements. No government agency is ready to award a government contract to any unregistered business. They also go to the length of verifying if your business is registered with CAC.
11. RELATIONSHIP WITH EMPLOYEES:
Every employee desires to work with a credible company/organization. As they work with you, they always look out for their own good too. If they know that you are not registered, they will believe every business transacted there is short-lived and in such cases, they will look somewhere else for employment.
A business registration allows you to hire full-time employees and work with them in a formal setting.
The foregoing is however not a conclusive list of why you should register your farms with CAC.
I am yet to find any disadvantage involved in the registration of your farm with CAC.
I hope you have learnt something new and useful?
Please do share this post with your friends and keep them informed!