After you’ve strived for months on what name you can name your business and infact got a beautiful and “unique” one, you may lose the name if established that you’ve not registered it with the Cooperate Affairs Commision (CAC) in compliance with the Companies and Allied Matters Act (CAMA). It’s a law under section 863 (1) of CAMA 2020 (as amended), that “a person or association of persons shall not carry on business in Nigeria as a company, limited liability partnership, limited partnership or under a business name without being registered under this Act.” Meaning, you must register your business before you can be said to be operating legally and if another person has registered with the name you’ve chosen, you’re commiting an offence under S.863 (1 and 2) of CAMA 2020. Meanwhile, in the case of International Tobacco Nig. Ltd v. British American Tobacco Nig. Ltd, the court held that tort of passing off in Nigeria “consists of the making of false representation to the public, or to a third person(s), which is likely to induce them to believe that the goods and services of another are those of the plaintiff. The applicable test is not whether a customer can distinguish the two marks when placed side by side but whether when he has only his own recollections of the one he likes to go by, he may not accept the other in mistake for it.”
The provision of section 30(1) of the CAMA, 2020 (as amended) also protects the original owner you stole the name from and then may ask a competent court to stop the continuance use of the name.
In the court of public opinion, a friend, neighbor, enemy or even stranger stole your name because you’ve personalized it for years but in the court of law where fact is always the concern, the person, probably friend or stranger that registered the business with his/her name in compliance with the CAMA would be protected under the law, come rain, come sunshine!
The only evidence court will admit in proving your business is incorporated is your certificate. Thus, in the case of Dikko and Sons Limited v. Corporate Affairs Commission (2014)LCN/7718(CA). The plaintiff claimed it was registered by the respondent as a limited liability company on the 4th of September, 2008, with registration No. 771050 and in breach of section 30(1) (a) of the CAMA, the defendant negligently registered another company called A Dikko and Sons Nigeria Limited on the 17th of December, 2008, with registration No. 791987. But failed to present the certificate, the lower Court dismissed the case then the plaintiff appealed. At the Supreme Court, Uwais, JSC (as he then was), pointedly observed as follows: “The appellant sued the respondent as a company incorporated under the Companies Act, 1968. He failed to prove the incorporation by the production of the certificate of incorporation. As the averment in the statement of claim that the defendant was so incorporated was categorically denied by the respondent in its statement of defence the failure to prove the incorporation was fatal to the appellant’s case…”
Know this! Registering your business will give you many chances which include:
1. Uniqueness: Once you get your business registered in accordance with the provision of law and in accordance with section 30(1 & 2) of CAMA 2020, your business name becomes unique, i.e., no one can claim the business name. If, by mistake, the body regulating business registration in Nigeria, CAC, gives same to other person, it can be suspended as it’s provided for under section 31(4) of the CAMA, 2020, this was also confirmed in the case of Maersk (Nig) Ltd. & Anor. v. Maersk Nig. Ltd. & Anor.
Note that registering your business will make your customer identify your business anywhere and anytime. Thus, in the case of Niger Chemists Ltd v. Nigeria Chemists, the Plaintiff established a chemist business with “Niger Chemist” later the defendant also started a chemist with the name “Nigeria Chemist”, and their shops were on the same street. The plaintiff sued the defendant claiming that the name was too similar and could deceive the public. The court granted an injunction restraining the defendant from using the name “Nigeria Chemist” and held thus: “In an action to refrain the defendant from using a business name similar to that of the plaintiff it is not necessary to prove either intent to deceive or actual deception. The plaintiff needs only prove that the name used by the defendant is so similar to his own as to be likely to cause confusion in the mind of the public.” The court then refrained the defendant (Nigeria Chemist) from using the name. By restating the responsibility of the CAC to protect registered members’ right to own unique names, the Court in the case of Mustapha vs CAC, held that “It is clear from the provisions of Section 30(1)(a),(b),(c) and (d) that the respondent is under a mandatory duty to refuse to register any company in Nigeria with a name identical or so resembling another company already registered….Where in the course of such comparison it is discovered that there are already names registered which have semblance or identical features with the proposed names, the respondent has the responsibility to refuse to register such names….”
2. Limited liability: limited liability means you’re not going to be held responsible for any debt owed by your business likewise your business will not be treated as you except in special circumstances where you waive this right and guarantee the creditor what you’ll be liable. This means Once a company is incorporated, it becomes a ‘separate legal entity’ and as 1 a mortgage or collateral. This principle is know as Limited Liability and was established in the case of Salomon v Salomon & Co Ltd [1896] UKHL 1, [1897]
Like earlier said, to prove your company is incorporated you must present your certificate, thus, in ACB v. EMOSTRADE it was held that: “The legal personality of a corporate body can only be established as a matter of law, by the production in evidence of the certificate of incorporation, admission inter parties notwithstanding…”
3. Reliability and Trustability: when your business is registered, you will have no problem of convincing customers to trade with you. Why? You’re registered with the government and no amount is too much to transact with you, if you’re not, people will reverse when it comes to contract or business of huge amount.
4. Loan Opportunity: Government particularly will not, some private business investors may also not, consider an unregistered business for loan.
5. Finally, the enforceability of an agreement made with an unregistered business entity is so unlikely or not feasible. That is, the court may not enforce an agreement made with an unregistered business, hence if you are yet to register your business people may be holding back to enter business with you.
With these, it’s clear that if you’re not recognized under the law to own a business name, someone would, one day, probably after years you’ve been answering the name, charge you to court for stealing his business name, appeal to the court to refrain you from using the name, which the court after establishing you aren’t real, will grant, and then (the defendant may) claim damages. Do not forget that it’s an offence to start business without registration under Section 863(2) of the CAMA.
However, plus all these disadvantages, you may be missing some opportunities like those itemised above and many more as a result of non registration.
It takes you little steps to register your business. You may visit the nearest CAC office today or consult a legal practitioner. If you’ve registered your business, keep your certificate safe and good.
Therefore, register your business today!
Adigun Uthman Akinkunmi is a Level 300 pupil of Law at Bayero University, Kano. Can be reached via adewaleadiguna@gmail.com
