The verdict in three sentences
A Business Name / sole proprietorship is the anglophone equivalent of a simplified self-employed status: it lets you invoice legally from your first job with bookkeeping reduced to a revenue log. Its registration cost is minimal (GHS 60, KSh 1,050 or ₦15,000 orders) and it unlocks a business account, optional VAT below the threshold and access to contracts. Once turnover passes the small-business threshold, you upgrade to a Limited company.
Sole proprietorship: cost and thresholds by country
Each country sets its turnover thresholds and starting tax regime. 2026 orders of magnitude.
| Country | Registration fee | Indicative turnover cap | Starting tax regime |
|---|---|---|---|
| Nigeria | ₦10,000 - 20,000 | ~₦25 M | Small company / presumptive |
| Ghana | GHS 60 - 120 | ~GHS 500 K | Presumptive / flat rate |
| Kenya | KSh 950 - 1,050 | ~KSh 5 M (turnover tax) | Turnover tax (3 %) |
| Uganda | UGX 50,000 - 100,000 | ~UGX 150 M | Presumptive |
| Rwanda | RWF 0 - 15,000 | ~RWF 20 M | Flat / lump-sum |
Below these thresholds, tax is flat and simplified, often a percentage of turnover or a fixed annual amount, keeping the burden predictable.
Obligations and benefits of the simplified status
The simplified status is not just convenient: it structures your activity. Obligations compared.
| Obligation | Sole prop / small | Limited company |
|---|---|---|
| Bookkeeping | Revenue log | Full accounts + balance sheet |
| VAT | Optional below threshold | Mandatory above threshold |
| Invoicing | Immediate & legal | Immediate & legal |
| Business account | Yes | Yes |
| Liability | Unlimited | Limited to shares |
| Annual admin cost | Low | Higher (audit/filing) |
Optional VAT is a plus: below the threshold you do not charge it (more competitive prices), but you can register to reclaim VAT on your purchases if your clients are businesses.
Mini case study
Awa, a freelance web writer in Lagos, registers a Business Name for ₦15,000. She invoices ₦2,700,000 for the year, well under the threshold. Under the small-company regime, her flat tax stays modest and predictable, with no accountant. In parallel, she refers two showcase sites to Kolonell (2 x ₦900,000): 2 x 15 % = ₦270,000 in commissions, collected on her business account. Her ₦15,000 status therefore earns far beyond her writing alone.
Become a Kolonell referral partner
The simplified status is the ideal springboard to become a Kolonell referral partner: light bookkeeping, business account, immediate invoicing. The 2026 rates:
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| Referred project type | Sale commission | Recurring |
|---|---|---|
| Showcase site | 15 % | 5 % |
| E-commerce | 12 % | 5 % |
| Marketplace | 10 % | - |
| Institutional | 8 % | - |
Three showcase sites referred in a year (3 x ₦900,000) = ₦405,000 in commissions, plus recurring on maintenance.
FAQ
What is a sole proprietorship / Business Name?
A simplified status that lets you invoice legally with bookkeeping reduced to a revenue log, for a registration cost of roughly GHS 60, KSh 1,050 or ₦15,000.
Do I charge VAT as a sole proprietor?
Below the turnover threshold, VAT is optional. You can skip it to stay competitive, or register to reclaim VAT on purchases.
When should I upgrade to a Limited company?
When turnover passes the small-business threshold, or when you want to cap your personal liability.
Does the simplified status open a business account?
Yes, with your registration certificate and tax ID you open a bank or merchant mobile money account at reduced fees (1 - 1.5 %).
Can I combine freelancing and referral work?
Yes, the same status covers both: you invoice your services and collect referral commissions on the same business account.
Let's talk about your project. Register as a sole proprietor and launch your referral activity with us. 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.
