How to choose a company name in Nigeria.
One of the most important decisions you can make for your company is the name. A name means a lot. It can in some cases become the definition of the company. As a corporate attorney involved in company incorporation, I have come across of sorts of names given or proposed for companies. In as much as name is subjective and there can be no wrong name per se, here are some of the dos and don’ts while naming your company.
Name Reservation
The Company and Allied Matters Act 2004 of Nigeria stipulates that all company names must be reserved by the Corporate Affairs Commission of Nigeria. This means that if you do not reserve your company name with the commission, then you have not yet named your company. Reserve your company name even if you are not ready to start the business yet.
Barred Names
Not every company name will be reserved by the commission. The Corporate Affairs Commission has the right to reject any name it feels violates the act. Here are some of the reasons
· Similar Name already reserved
· Misleading Name
· Inciting/immoral names
· Limited Names
· Special Names
Similar Names: this is the most common reason for name denial. There are over two million already registered companies in Nigeria. The Corporate Affairs Commission tries to ensure that no two names can be similar to the extent that it causes confusion to the general public. The solution for this is to always try to come up with a unique and distinct name for your company.
Misleading Names can also be denied. If the commission feels that a company name is purposefully misleading, then it will be denied. An example of a misleading name that promises something that is unattainable such as “Get Rich Quick Ltd”
Inciting or Immoral names are quite self-explanatory. It is subjective and the commission will determine what is inciteful or immoral on case-by-case bases.
Limited Names are names that the commission will allow you to use if you meet its criteria. The criteria can be determined by share capital, certification, location etc. An example is when a name has Marine Shipping in it, then it must have a share capital of 25 million shares.
Special Names are reserved for special categories of companies. For example, only government agencies can have the name “Authority”.
Company Name Vs Trading Name
A company name is not the same thing as a trading name. I always advise my clients that the name of your company does not limit the kind of business it can do. Trading names can be flamboyant or persuasive
Duration of Name Reservation
Once a company name has been approved by the Corporate Affairs Commission, the name is reserved for a period of sixty days. No one else can use that name or a similar name for his company in Nigeria again. However, failure to incorporate within sixty days will make the name available for anyone to use again.
Changing the name of a company
You can change the name of your company at any stage in the company’s existence. There are procedures by which the name of a company can be changed.
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