A Business Name (BN) refers to the name under which an individual or group conducts their business activities. It does not create a separate legal entity from the shareholders, and they are personally liable for the business's debts and obligations.A Company (Coy), on the other hand, is a separate legal entity from its shareholders. It provides limited liability protection, meaning the owners' personal assets are generally safeguarded in case of business debts or legal claims. A company has its own legal rights and obligations, can enter into contracts, and can own property.Differences Between a BN and Coy.1. Legal Personality:A business name is not considered a separate legal entity from its owner(s), meaning the owner(s) and the business are seen as one. For example, Mr. Sa'ad operates a grocery store under the business name "Sa'ad's Grocery."In contrast, a company is a distinct legal entity separate from its shareholders. For instance, Sa'ad's Grocery Ltd. is a company that operates a chain of supermarkets. The company has its own legal status and is separate from its shareholders, who own a respective number of shares in the company. E.g. Ms. Aisha with 700, 000 shares and Mr. Dobi with 300, 000 Shares.2. Legal Liability:In a business name, the shareholders have unlimited personal liability for the business's debts and legal obligations. For example, if the business incurs debts, the owner's personal assets, like their house or car, can be used to settle those debts.On the other hand, a company provides limited liability protection to its shareholders. This means that their personal assets are generally safeguarded, and their liability is limited to the amount they have invested in the company. For instance, if Sa'ad's Grocery Ltd. faces financial difficulties and owes money, Ms. Aisha and Mr. Dobi are generally not personally responsible beyond the value of their shares.3. Formalities and Regulations:Establishing a business name in Nigeria requires registration with the Corporate Affairs Commission (CAC). The process is relatively simple, involving the submission of required documents, payment of fees, and filing returns. Hence, there are fewer formalities and legal obligations for a Business Name.In contrast, setting up a company involves more formalities and compliance requirements. This includes registering the company with the CAC, preparing a memorandum and articles of association, appointing directors, and adhering to Sector-specific regulations, filing returns, statutory reporting, and governance obligations.Understanding the differences between a Business Name and a Company is essential for entrepreneurs because it helps protect personal assets, enhance credibility, comply with regulations, access financing opportunities, and plan for long-term success.By choosing the right structure, such as a company, individuals can limit their liability, present a more professional image, meet legal requirements, attract investors, and ensure business continuity. Having this knowledge enables entrepreneurs to make informed decisions and set their businesses on a path toward growth and prosperity.compiled <a href="https://www.facebook.com/sanisaadbunzaa?__cft__[0]=AZWUa_mSeACPaWTu7hv0Hvi_sM8jHH6jtw9N_3N_9_6tfqaPKBjFOAaVf-8e8ETkAgM1jVjkPv6KoM_aZhX46QDKJiXVh3X1-0MqPN4wQBe36A1tPRQl7r-cmIvcQ3_5eC8wKUDjUocgsjPHqdQvsbch&amp;__tn__=-]K-R">Sani Sa'ad Bunza</a>sanisaadbunza@gmail.com•••<a href="https://www.facebook.com/hashtag/thelegalplatform?__eep__=6&amp;__cft__[0]=AZWUa_mSeACPaWTu7hv0Hvi_sM8jHH6jtw9N_3N_9_6tfqaPKBjFOAaVf-8e8ETkAgM1jVjkPv6KoM_aZhX46QDKJiXVh3X1-0MqPN4wQBe36A1tPRQl7r-cmIvcQ3_5eC8wKUDjUocgsjPHqdQvsbch&amp;__tn__=*NK-R">#TheLegalPlatform</a> <a href="https://www.facebook.com/hashtag/legalenlightenment?__eep__=6&amp;__cft__[0]=AZWUa_mSeACPaWTu7hv0Hvi_sM8jHH6jtw9N_3N_9_6tfqaPKBjFOAaVf-8e8ETkAgM1jVjkPv6KoM_aZhX46QDKJiXVh3X1-0MqPN4wQBe36A1tPRQl7r-cmIvcQ3_5eC8wKUDjUocgsjPHqdQvsbch&amp;__tn__=*NK-R">#LegalEnlightenment</a> <a href="https://www.facebook.com/hashtag/legalawareness?__eep__=6&amp;__cft__[0]=AZWUa_mSeACPaWTu7hv0Hvi_sM8jHH6jtw9N_3N_9_6tfqaPKBjFOAaVf-8e8ETkAgM1jVjkPv6KoM_aZhX46QDKJiXVh3X1-0MqPN4wQBe36A1tPRQl7r-cmIvcQ3_5eC8wKUDjUocgsjPHqdQvsbch&amp;__tn__=*NK-R">#LegalAwareness</a> <a href="https://www.facebook.com/hashtag/knowyourlaws?__eep__=6&amp;__cft__[0]=AZWUa_mSeACPaWTu7hv0Hvi_sM8jHH6jtw9N_3N_9_6tfqaPKBjFOAaVf-8e8ETkAgM1jVjkPv6KoM_aZhX46QDKJiXVh3X1-0MqPN4wQBe36A1tPRQl7r-cmIvcQ3_5eC8wKUDjUocgsjPHqdQvsbch&amp;__tn__=*NK-R">#KnowYourLaws</a> <a href="https://www.facebook.com/hashtag/knowyourrights?__eep__=6&amp;__cft__[0]=AZWUa_mSeACPaWTu7hv0Hvi_sM8jHH6jtw9N_3N_9_6tfqaPKBjFOAaVf-8e8ETkAgM1jVjkPv6KoM_aZhX46QDKJiXVh3X1-0MqPN4wQBe36A1tPRQl7r-cmIvcQ3_5eC8wKUDjUocgsjPHqdQvsbch&amp;__tn__=*NK-R">#KnowYourRights</a> <a href="https://www.facebook.com/hashtag/belegallyaware?__eep__=6&amp;__cft__[0]=AZWUa_mSeACPaWTu7hv0Hvi_sM8jHH6jtw9N_3N_9_6tfqaPKBjFOAaVf-8e8ETkAgM1jVjkPv6KoM_aZhX46QDKJiXVh3X1-0MqPN4wQBe36A1tPRQl7r-cmIvcQ3_5eC8wKUDjUocgsjPHqdQvsbch&amp;__tn__=*NK-R">#BeLegallyAware</a>

DIFFERENCES BETWEEN A BUSINESS NAME AND COMPANY

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