Business Name vs. Limited Company in Nigeria: Which is Right for You?

The Two Most Common Business Structures in Nigeria

When starting a business in Nigeria, the two most common registration options are a Business Name (sole proprietorship/partnership) and a Private Limited Company (Ltd). Choosing the right structure from the start can save you time, money, and legal headaches.

Business Name Registration

A business name registration under CAMA 2020 is ideal for small-scale businesses. Key features include:

• Simple and affordable to register (₦45,000 with Paul & Associates)
• No separate legal personality — you and the business are the same entity
• Personal liability for business debts
• Cannot raise capital through share issuance
• Best for sole traders, freelancers, and informal SMEs

Private Limited Company (Ltd)

A Private Limited Liability Company (RC number) is a separate legal entity distinct from its owners. Benefits include:

• Limited liability — personal assets protected from business debts
• Can raise capital through shares (up to 50 shareholders)
• More credible for contracts, bank loans, and government tenders
• Can own property and sue/be sued independently
• Starts at ₦100,000 with Paul & Associates

Which Should You Choose?

Choose a Business Name if: you're a solo freelancer, a small trader, or just testing a business idea with minimal investment.

Choose a Limited Company if: you plan to scale, attract investors, win government contracts, or need limited liability protection.

Not sure which is best for your situation? Chat with us on WhatsApp — we provide free advisory to help you choose the right structure.