Think CAC Registration is Expensive and Hard? Let’s Debunk the Common Myths

The Corporate Affairs Commission (CAC) registration is a foundational step for any legitimate business in Nigeria. Yet, for countless aspiring entrepreneurs and small business owners, the process remains shrouded in mystery, fear, and misinformation. Many avoid it, believing it to be prohibitively expensive, excruciatingly complex, or a bureaucratic nightmare designed only for large corporations.

These common myths are not just harmless misconceptions; they are significant barriers preventing promising businesses from formalizing, accessing opportunities, and ultimately thriving in the Nigerian economy. It’s time to set the record straight. CAC registration is more accessible and affordable than you might think, especially in the digital age.

Let’s debunk the most pervasive myths about CAC registration and empower you to take this crucial step.

Myth 1: “It’s too expensive; I can’t afford it.”

This is perhaps the most common deterrent. Many believe that CAC registration requires a massive upfront investment that small businesses simply cannot bear.

The Reality: The official government fees for registering a business name (sole proprietorship or partnership) or a private limited company are surprisingly affordable.

• Business Name Registration: As of recent updates, the official CAC filing fee is generally around NGN NGN 21,000. When you add professional fees (if you use a lawyer or accredited agent), the total cost might range from NGN 35,000 to NGN 40,000.
• Private Limited Company Registration: Official CAC filing fees are higher, but still manageable, typically ranging from NGN 19,000 and above depending on share capital. With professional fees, the total cost for incorporating a limited company can range from NGN 50,000 and above, depending on the agent and complexity.

For example, Imagine a budding caterer, Bola, who needs a business name registered to open a corporate account. She finds an accredited agent who charges her NGN 35,000 for the entire process, including CAC fees and their service charge. Bola covers this by setting aside a portion of her first two catering jobs. This small investment unlocks access to corporate accounts, which then enables her to pitch for larger, more lucrative corporate contracts. The perceived “expensive” cost quickly proves to be a valuable investment.

Myth 2: “The process is too complicated and requires lawyers.”

Many entrepreneurs believe that CAC registration involves navigating complex legal jargon, endless forms, and mandatory engagement with expensive lawyers.

The Reality: While you can use a lawyer, the CAC has significantly streamlined the registration process, making it much more accessible online.

• Online Portal: The CAC now operates a user-friendly online portal where you can search for names, apply for registration, and submit documents electronically.
• Accredited Agents: You can use an accredited agent (lawyer, chartered accountant, or chartered secretary) who specializes in CAC filings. They handle the technicalities for a fee, but their services are often more affordable than retaining a full-time lawyer.
• Business Name Simplicity: Registering a business name is particularly straightforward, often requiring just basic personal and business details.

Femi, an aspiring digital marketer, wants to register his business name, “Femi Digital Solutions.” Instead of hiring an expensive lawyer, he finds an agent online platform that guides him through the CAC portal. He follows the step-by-step instructions, uploads his documents, and pays the fees online. Within a few days, he receives his registration certificate digitally. The process, while requiring attention to detail, was far from the complex legal maze he had imagined.

Myth 3: “It takes too long; I need to start now!”

The urgency to start operations often leads entrepreneurs to postpone formal registration, fearing lengthy delays that will hinder their momentum.

The Reality: The CAC has made significant strides in reducing processing times, especially for online applications.

• Digital Efficiency: Once all required documents are correctly uploaded and fees paid, business name registration can be completed within a few hours. Limited company registrations, while slightly longer, are also much quicker than in previous years, often taking 7-14 days if all details are correctly provided.
• Proactive Planning: Delays often arise from incomplete applications or incorrect information. By preparing all necessary documents (valid IDs, passport photos, etc.) beforehand, you can significantly expedite the process.

For instance, Halima wants to launch her online boutique. She anticipates a two-month delay for CAC registration and decides to start selling without it. However, after two weeks, she realizes she can’t get a corporate bank account, limiting her payment options and credibility. Meanwhile, her friend who started the registration process immediately receives her business name certificate in 7 working days, opens a corporate account, and starts accepting online payments with full legitimacy. Halima’s “fast start” actually slowed her down.

Myth 4: “It’s only for big companies, not my small business/side hustle.”

This myth is particularly prevalent among solopreneurs and those running small, home-based businesses. They feel that CAC registration is an unnecessary formality for their scale of operation.

The Reality: Formal registration is crucial for all businesses, regardless of size, if you intend to operate legitimately and grow.

• Protection for You: As discussed in previously, registration protects your personal assets from business liabilities and secures your business name.
• Access to Opportunities: Even small businesses need corporate bank accounts, eligibility for grants, and the ability to sign formal contracts—all of which require CAC registration.
• Scalability: What starts as a side hustle can quickly grow. Having the registration in place from the start prepares you for that growth without disrupting operations later.

Dayo started a small laundry and dry-cleaning service from his apartment. For months, he operated informally. When a local hotel approached him for a large, recurring contract, they requested his CAC certificate and corporate account details. Dayo, having none, had to scramble to register his business, delaying the contract and nearly losing the opportunity. Had he registered early, even as a small operation, he would have been ready to seize the major growth opportunity immediately.

The myths surrounding CAC registration are outdated and detrimental to entrepreneurial growth in Nigeria. It is neither prohibitively expensive nor excessively difficult. With the advent of online processes and the availability of accredited agents, formalizing your business is more accessible than ever before.

By debunking these common misconceptions, you can overcome the fear and procrastination that hold many businesses back. CAC registration is not a bureaucratic hurdle; it is a strategic step that unlocks credibility, financial opportunities, legal protection, and ultimately, the sustainable growth of your Nigerian business. Don’t let myths prevent you from building a solid foundation for your success.

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.