- July 4, 2024
- Posted by: Eunoia Law
- Category: Corporate Law
The drive to bring financial services and products within reach of all individuals and businesses, irrespective of their location and income, has accelerated the growth of Point-of-Sale (POS) agency businesses in Nigeria. From thriving city hubs to distant rural settlements, POS businesses are transforming the way people and businesses access their money.
So, if you are looking at making a social impact while earning on the side, you may want to consider starting the POS agency business. However, before you explore this possibility, it is important to consider this vital question – Can you run a POS agency business in Nigeria without registering your business?
Addressing this legal question will determine the feasibility of your aspiration, and this article will guide you through the essential steps to ensure your POS agency business’ compliance and success in Nigeria.
Why Should You Register Your POS Agency Business?
Ensuring that your POS agency business is legally registered in Nigeria offers several benefits:
- Legal Compliance: You will comply with a mandatory legal requirement, thereby avoiding the risk of penalties. Generally, it is illegal for any individual or group to conduct business in Nigeria as a company, limited liability partnership, limited partnership, or under a business name without registering in accordance with the Companies and Allied Matters Act, (‘CAMA’) 2020 (Section 863 CAMA 2020). In line with the above, the Central Bank of Nigeria (CBN) has issued a deadline to existing POS vendors to register their businesses with the Corporate Affairs Commission (CAC) by 7th July 2024. Failure to register can result in default fees, arrest by security agencies and prosecution.
- Access to Financial Institutions: Registration will provide the necessary access to banks and fintech companies, which are the primary sources for your POS agency business, as they are bound to comply with legal requirements.
- Eligibility for Institutional Support: Your POS agency business may be eligible for support from government and corporate bodies if registered.
How Do You Register Your POS Agency Business?
Now that you have decided to venture into the entrepreneurial world, the registration of your business is the next line of action. In Nigeria, you can register your business under a business name, company or partnership. Generally, your preference should depend on your business needs.
For a POS agency business, registering under the business name category will typically be sufficient to fulfil the legal requirement. Setting up a business name is relatively easy and less costly compared to other options. However, a business name offers limited protection, as the liabilities of the business are directly borne by the business owner.
The registration is done on the CAC electronic portal, and begins with an application to reserve the name for the business. You have the option to propose 2 (two) names for consideration, and the CAC will either approve one or deny both. A pro tip is to make your chosen name as unique as possible, so it does not closely resemble the name of another business already registered, as this could serve as a basis for denial by the CAC.
If the name reservation is successful, a second application will be made in the prescribed form to register the business under the approved name. Typically, the registration process is completed within a week of the application.
Recently, to ensure compliance with the approaching deadline for existing POS vendors, the CAC has provided alternative options to fast-track the registration process.
What Next?
Whether you are an existing POS vendor or a prospective one, registering your business with the CAC is an essential step towards ensuring the legitimacy and success of your business venture. Registration not only ensures your business’ compliance with laws but also opens numerous opportunities that can help your business grow and thrive.
If you need further guidance or require assistance in registering your POS agency business in Nigeria, we are here to help. Get in touch with our team on +[234] 803 534 8690 or email us at shola@eunoialaw.com.ng; taiwo@eunoialaw.com.ng