The verdict in three sentences
Staying informal cuts you off from corporate bank accounts, formal contracts and verified merchant status with payment providers. Registering with the CAC (Corporate Affairs Commission) takes 1-3 weeks and costs from NGN 10,000-20,000 for a business name or from NGN 60,000 for a Limited company. Once you hold a CAC certificate and a TIN, you can open a corporate account and sign contracts under your company name.
Business Name vs Limited company: choose your structure
Your legal structure determines liability, tax and credibility with banks. Here are the common options for a digital entrepreneur in 2026.
| Structure | Owners | Liability | Credibility | Ideal profile |
|---|---|---|---|---|
| Business Name (Enterprise) | 1+ | Unlimited (personal assets exposed) | Basic | Freelancer, small trader |
| Limited by Shares (Ltd) | 1-50 | Limited to shares | High | Growth, B2B, funding |
| Incorporated Trustees | Members | Non-profit | For NGOs | Associations, NGOs |
| Public Company (Plc) | 50+ | Limited to shares | Very high | Large, listed firms |
For an online store or a services agency, a Limited company is the best long-term choice: limited liability, ability to raise funds, and credibility with corporate clients.
The CAC path step by step
The CAC now runs an online portal that centralises registration. Here are estimated 2026 costs and timelines (order of magnitude).
| Step | Document / action | Estimated cost | Timeline |
|---|---|---|---|
| Name reservation | Uniqueness check | NGN 500 - 1,000 | 1-2 days |
| Business Name registration | Enterprise filing | NGN 10,000 - 20,000 | 3-7 days |
| Ltd incorporation | MEMART + shares | from NGN 60,000 | 1-2 weeks |
| TIN (FIRS) | Tax Identification Number | Free | 2-5 days |
| Stamp duty | On share capital (Ltd) | ~0.75% of capital | Variable |
| Total Ltd | from NGN 60,000+ | 1-3 weeks |
Documents to prepare: valid ID, proof of address, directors' details, and for a Ltd the MEMART (Memorandum and Articles of Association).
Unlocking a merchant account after registration
Once you hold your CAC certificate and TIN, you level up. A corporate bank account becomes possible, and you can request a verified merchant account with providers like Paystack, Flutterwave or your bank: traceable settlements, dashboards, higher limits. This is essential for an online store that wants to collect cleanly and prove its revenue to a lender.
Mini case study
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Chidi runs a cosmetics shop in Lagos, so far collecting on a personal transfer number. He registers a Ltd: name reservation NGN 1,000 + incorporation NGN 60,000 = about NGN 61,000, in roughly two weeks. Result: a verified merchant account with higher limits, invoices bearing a TIN that corporate clients accept, and a credible file for a stock loan. The monthly bookkeeping cost (part-time accountant) of around NGN 25,000 is quickly covered by new B2B contracts.
FAQ
How much does CAC registration really cost in 2026?
A business name is an order of magnitude of NGN 10,000-20,000; a Limited company starts from around NGN 60,000 plus stamp duty on capital. Using an accredited agent adds professional fees on top.
How long does registration take?
A business name can be ready in a few days; a Limited company typically takes 1-3 weeks if your file is complete. A taken name or missing document adds a week.
Do I need a TIN to sell online?
To run a verified merchant account and invoice companies, yes, it is strongly recommended. The TIN proves your tax existence and unlocks merchant onboarding with most providers.
Business Name or Limited company for e-commerce?
A business name is cheaper to start, but a Limited company gives limited liability and far more credibility with banks and B2B buyers. If you aim to grow, start as a Ltd.
Can I upgrade a business name to a Limited company later?
Yes, but it means new filings and fees. It is often cheaper to start as a Ltd directly if you target growth and corporate clients.
Let's talk about your project. We build your store or showcase site and connect your merchant payments the moment your registration is done. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
