What’s in a name?

So you have a business idea, you have identified a need in the market and have come up with a product or service to meet that need. You are excited about your new venture, you start thinking of a name for your business. You consider a name that will stand out or mean something to you. You may wish to use your name or a combination of names of family members, or it could be some abstract name with no meaning whatsoever, but which for you sounds catchy and will represent the business well. Whatever you decide, there are things to consider in choosing a name for your business. For starters, you should be convinced about the name that you choose because you want this name to go the long haul with you. You are always free to change the name of your business at any point in the life of the business but the time and costs associated with such changes must be considered before that happens. The effect on the business of a change of name should also be considered. Also, we are now operating in a business world where national borders are almost invisible and companies are carrying on cross-border trades and establishing strong international identities. In deciding on a name, care should be taken to ensure, as far as is practicable, that no other companies or organisations exist within and outside Nigeria, that may cause some confusion for your customers. The starting point is this – you do not have to register your business with the Corporate Affairs Commission (CAC) in order to carry on a business in Nigeria. However, there are advantages to registering a business with the CAC. The Companies and Allied Matters Act 1990 (CAMA) regulates the registration and operation of businesses and companies in Nigeria. Part A of the Act deals with Companies; Part B with Business Names; and Part C with Incorporated Trustees. The Senate recently passed a repeal and re-enactment of CAMA. While the new law is yet to come into effect, there are some things to note from CAMA 1990 on the name of a company. Under Part A of CAMA, the ending of the name of the company will depend on the type of company registered, that is “Limited” (Ltd) for private company limited by shares; “Public Limited Company” (PLC) for a public company limited by shares; “Limited by Guarantee” (Ltd/Gte) for a company limited by guarantee; and “Unlimited” (Ultd) for unlimited companies. The new CAMA introduces a new type of company to Nigeria, the “Limited Liability Partnership” (LLP). When commencing the process for registering your business or company name, you will typically provide two names – your preferred name and an alternative should the preferred name be unavailable. When giving instructions to your lawyer for the registration of your company, it is advisable to have more than two names listed in order of preference, just in case there are issues with both the preferred and alternative names. It is not unusual for people to go back and forth with the CAC before a name is accepted for registration. There are some prohibited and restricted names that cannot be registered. Section 30 of CAMA 1990 provides: (1) No company shall be registered under this Act by a name which- (a) is identical with that by which a company in existence is already registered, or so nearly resembles that name as to be calculated to deceive, except where the company in existence is in the course of being dissolved and signifies its consent in such manner as the’ Commission requires; or (b) contains the words “Chamber of Commerce” unless it is a company limited by guarantee; or (c) in the opinion of the Commission is capable of misleading as to the nature or extent of its activities or is undesirable, offensive or otherwise contrary to public policy; or (d) in the opinion of the Commission would violate any existing trademark or business name registered in Nigeria unless the consent of the owner of the trademark or business name has been obtained. (2) Except with the consent of the Commission, no company shall be registered by a name which- (a) includes the word “Federal”, “National’, “Regional”, “State”, “Government”, or any other word which in the opinion of the Commission suggests or is calculated to suggest that it enjoys the patronage of the Government of the Federation or the Government of a State in Nigeria, as the case may be, or any Ministry or Department of Government; or (b) contains the word “Municipal” or “Chartered” or in the opinion of the Commission suggests, or is calculated to suggest, connection with any municipality or other local authority; or (c) contains the word “Co-operative” or the words “Building Society”; or (d) contains the word “Group” or “Holding”. Due to computerisation of the processes of registration and the Register of companies, inadvertent registration of a name identical with or similar to an existing name on the register is no longer a common occurrence. However, the law makes provision for what would happen under such circumstances. Under Part B, there is no need to register if the name of the business is restricted to the surname; the surname plus the forename; or the surname plus the initials of the business owner. Just like in Part A, under this part there are also restricted and prohibited names.These would be names that suggest that the business enjoys the patronage of government at any level; names that contain the word “co-operative”, “Chamber of Commerce”, “Building Society” “Guarantee”, “Trustee”, “Investment”, “Bank”, “Insurance”, or any word of similar connotation; or names that are identical with or similar to a name already registered as a business; or is similar to any trademark registered in Nigeria, and the Registrar is of opinion that registration would likely mislead the public. In addition, where the name is likely to mislead the public as to the nationality, race or religion of the persons by whom the business is wholly or mainly owned or controlled; or is, in the opinion of the Registrar, deceptive or objectionable in that it contains a reference direct or otherwise to any personage, practice or institution, or is otherwise unsuitable as a business name, the Registrar shall refuse to register the business name. Persons who are aggrieved by a decision of the Registrar may, within one month of the decision, appeal to the Commission. So, now you know. Pick a great name.]]>