The verdict in three sentences
With Nigeria's Corporate Affairs Commission (CAC), a business name registers in 1-3 days for roughly NGN 20,000-25,000, while a private limited company (LTD) costs NGN 30,000-70,000 in official fees over 3-7 days. The LTD is the only structure that shields your personal assets and unlocks corporate bank accounts, tenders and investor money. The real trap isn't the filing fee but the post-registration duties (TIN, VAT, annual returns) that surface two years later as penalties.
The steps and their real cost on the CAC portal
The CAC's online portal handles name reservation, incorporation and issuance of the RC number and certificate. Here are 2026 order-of-magnitude figures by structure.
| Step | Business Name | Private Limited (LTD) | Timeline |
|---|---|---|---|
| Name reservation | NGN 500-1,000 | NGN 500-1,000 | Same day |
| CAC filing fee | NGN 18,000-22,000 | NGN 20,000-35,000 | 1-3 days |
| Stamp duty (capital) | N/A | 0.75% of share capital | 1-2 days |
| Agent/professional fee | Optional | NGN 15,000-40,000 | Varies |
| TIN (FIRS) | Free | Free (auto with RC) | 1-5 days |
| Certificate issuance | Included | Included | 1-3 days |
| Indicative total | NGN 20,000-25,000 | NGN 30,000-70,000 | 1-7 days |
For a fully digital venture (agency, e-commerce, tech freelancing), a business name is fine to start; upgrade to an LTD once you seek investment, hire staff or bid for corporate contracts.
Structure choice: business name vs LTD for a digital project
| Criterion | Business Name | Private Limited (LTD) |
|---|---|---|
| Minimum share capital | None | NGN 100,000 (common) |
| Personal asset protection | None (unlimited liability) | Limited to shares |
| 2026 setup cost | NGN 20,000-25,000 | NGN 30,000-70,000 |
| Corporate bank account | Limited | Full access |
| Investor/tender credibility | Low | High |
| Best for | Freelancers, market tests | Founders scaling up |
Your first post-registration duties in Lagos
Right after incorporation, the state expects: a Tax Identification Number (TIN) from the FIRS (now often auto-issued with the RC number), VAT registration at 7.5% once you cross the threshold, and annual returns to the CAC (from around NGN 3,000 for a business name). Miss the annual return and penalties stack up fast, and the company risks being struck off. Budget also for state-level levies and, if you employ staff, PAYE and pension remittances.
Mini case study
Need a professional website?
Kolonell builds websites that attract clients, optimized for the Sénégalese market. Free quote in 2 minutes.
Chidi, a developer in Lekki, launches a micro web agency. He registers a business name: name reservation (NGN 1,000) + CAC fee (NGN 20,000) + optional agent (NGN 15,000) = about NGN 36,000, completed in 3 days. In year one, on revenue of NGN 12,000,000, he stays below the VAT threshold logic early on but files his TIN and keeps books. When a corporate client demands an invoice from a limited company, he upgrades to an LTD for roughly NGN 50,000 and gains a proper corporate account. Total to exist legally and invoice: under NGN 40,000 and three days.
FAQ
What's the cheapest legal way to start? A CAC business name costs about NGN 20,000-25,000 all-in and registers in 1-3 days. It's the fastest, cheapest route to test a digital venture.
How long does registration really take? A business name is typically 1-3 days on the CAC portal; an LTD takes 3-7 days because of stamp duty, share capital details and document review.
Is there a minimum share capital? None for a business name. For an LTD, NGN 100,000 is the common starting share capital, with stamp duty at 0.75% of that capital.
Can I invoice before I have my RC number? Practically no. Serious clients and corporates require an RC number and TIN before payment, and you need registration to open a proper business account.
Do I really need to file annual returns? Yes. Annual returns start at around NGN 3,000 for a business name; skipping them triggers penalties and risks the company being struck off the register.
Become a Kolonell referral partner
Do you help founders register businesses in Lagos? Refer them to Kolonell for their website or online store and earn a commission: 15% on a showcase site + 5% recurring, 12% on e-commerce, 10% on a marketplace, 8% on institutional projects. One qualified introduction can be worth hundreds of thousands of naira.
Let's talk about your project. From incorporation to a store that sells, we get you live in Nigeria. 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.
