Are You Legally in Business? The Complete CAC Compliance Checklist for Nigerian Entrepreneurs

In Nigeria, the entrepreneurial spirit is booming. From bustling social media stores to innovative tech startups, thousands of ventures are launched every year. You might be making sales, have a growing customer base, and even have a team. But here’s a crucial question you must ask yourself: are you just operating a business, or are you legally in business?

The difference is monumental. Simply making money doesn’t make your business a legal entity. Being legally in business means you are formally recognized by the law, specifically by the Corporate Affairs Commission (CAC). This recognition provides you with protection, credibility, and access to opportunities that are completely out of reach for an informal operation.

Many entrepreneurs stop at the first hurdle, while others register their company and then forget about the ongoing responsibilities. This checklist provides a complete, end-to-end guide to ensure your venture is, and remains, legally compliant in Nigeria.

Part 1: The Pre-Registration Checklist (The Foundation)

Before you even log onto the CAC portal, you need to lay the proper groundwork.

✅ 1. Choose Your Business Structure This is your first major decision. The two most common options for SMEs are:

• Business Name: Perfect for sole proprietors, freelancers, and small partnerships. It’s simpler to register and manage, but it offers no legal separation between you and the business. Your personal assets are at risk.
• Private Limited Company (LTD): Ideal for startups, businesses seeking investment, and any venture where you want to protect your personal assets. It creates a separate legal entity.

For instance,  Tola, a freelance writer, registers “Tola Writes” as a Business Name because she is a sole operator. Femi and Funke, co-founding a fintech app, incorporate “PaySwift Solutions LTD” to protect their personal finances and to be able to offer shares to future investors.

✅ 2. Choose and Reserve Your Business Name Your business name is your identity. It must be unique and not already registered with the CAC. The first step in any registration is to conduct a name search and, once you find an available name, reserve it on the CAC portal.

For example: Ade wants to start a logistics company called “Lagos Express.” He searches on the CAC portal and finds it’s already taken. He has to brainstorm alternatives. He tries “Lagos Swift Logistics” and “AdeLink Couriers,” finds the second one is available, and immediately pays the fee to reserve it for 60 days while he gathers the rest of his registration documents.

Part 2: The Registration Checklist (Making it Official)

This is the core process of bringing your business to life legally.

✅ 3. Gather Required Documents and Information For any registration, you’ll need details for all proprietors or directors, including:

• Full names, addresses, and phone numbers.
• A valid government-issued ID (NIN is now standard).
• Scanned signatures.
• For a LTD, you must also define the share capital and the percentage of shares each shareholder holds.

✅ 4. Complete the Official Registration The entire process is done online via the CAC portal. You will fill out the required forms, upload your documents, and pay the official filing fees. Once approved, the CAC will issue your official documents, such as the Certificate of Incorporation/Registration and the Status Report.

Part 3: The Post-Registration Checklist (Staying Compliant)

This is where many businesses fail. Registration is a starting point, not the finish line. To remain legally in business, you must do the following:

✅ 5. Open a Corporate Bank Account This is non-negotiable. It separates your business finances from your personal funds, which is crucial for bookkeeping, professionalism, and building trust with clients and banks. You cannot get a business loan or major contract without one.

✅ 6. Register with the Tax Authorities (FIRS) Upon incorporation of a Limited Company, the CAC now automatically generates a Tax Identification Number (TIN) for you. Your next step is to formally register this TIN with the Federal Inland Revenue Service (FIRS) to handle your Company Income Tax (CIT) and Value Added Tax (VAT) obligations.

✅ 7. File Your Annual Returns EVERY Year This is a mandatory annual update filed with the CAC. It confirms that your business is still a going concern. Failing to file your annual returns leads to penalties and, more importantly, your company’s status being changed to “Inactive.“

“BuildRight Construction LTD” has been registered for three years but has never filed its annual returns. They bid for a lucrative contract with a major oil company. During the due diligence process, the oil company checks the CAC public search portal and sees that BuildRight’s status is “Inactive.” They are immediately disqualified for non-compliance, losing a multi-million Naira contract over a simple filing that would have cost a fraction of that.

✅ 8. Notify the CAC of Significant Changes Your business will evolve. Whenever there’s a significant change, you must officially notify the CAC by filing the relevant post-incorporation forms. These changes include:

• Change of registered business address.
• Appointment or removal of a director.
• Changes in shareholding.
• Increase in share capital.

Being “legally in business” in Nigeria is an ongoing commitment to transparency and compliance. It’s not just about having a certificate hanging on the wall; it’s about actively maintaining your company’s good standing with the authorities. This checklist serves as your roadmap. Following it ensures you build a business that is not only profitable but also credible, resilient, and ready to seize the opportunities that only come to those who operate within the bounds of the law.

Ochidoz Ltd can handle your CAC registrations and  Annual Returns Filing in Nigeria. Click here to send us a WhatsApp chat or give us a call at +2349061182744.