When formalising a business in Nigeria, one of the first decisions a founder must make is selecting the legal structure. The two most common choices are a Business Name (Sole Proprietorship/Partnership) and a Private Limited Liability Company (Ltd).
Comparison Table
| Feature | Business Name | Limited Liability Company (Ltd) |
|---|---|---|
| Legal Status | Treated as one with the owner | Separate legal entity distinct from owners |
| Personal Liability | Unlimited (owner is liable for debts) | Limited to the value of shares owned |
| Capital & Shares | No share capital; cannot sell stock | Has share capital (minimum 100,000 shares) |
| Filing Costs | Affordable and fast | Higher government fees and stamp duties |
When to Register a Business Name
A Business Name is ideal for small retail traders, freelancers, consultants, and artisans who operate independently, want a quick setup, and do not intend to raise venture capital or take heavy bank loans.
When to Register a Limited Company
You should register a Limited Liability Company if you are launching a tech startup, raising venture funds from angel investors, partnering with multiple co-founders, or bidding for institutional and government tenders where an LLC is a mandatory criteria.