Registering your business is an important first step. We compare the two most common options under the Companies and Allied Matters Act 2020.

Every entrepreneur eventually faces the question: should I register a business name or incorporate a company? The Companies and Allied Matters Act 2020 (CAMA 2020), administered by the Corporate Affairs Commission, provides for both. The right choice depends on your goals, your appetite for risk and your plans for growth.

Business name

A business name registration allows an individual or partners to trade under a name other than their own. It is relatively simple and inexpensive to set up and maintain.

However, a business name is not a separate legal entity. In law, the owner and the business are the same — which means the owner may be personally liable for the debts and obligations of the business.

Private limited company

A private company limited by shares is a separate legal person, distinct from its shareholders and directors. It can own property, enter into contracts, and sue or be sued in its own name. Shareholders’ liability is generally limited to any amount unpaid on their shares.

CAMA 2020 made incorporation more accessible, including by permitting a private company to be formed by a single person. Companies do, however, carry more ongoing compliance obligations, such as filing annual returns and maintaining statutory registers.

Questions to ask before you decide

  • Do you need to protect your personal assets from business liabilities?
  • Do you plan to bring in investors or co-founders?
  • Will clients, lenders or regulators expect to deal with a company?
  • Are you prepared for the ongoing compliance obligations?

Choosing the right structure at the outset can make growth, investment and succession far smoother. It is worth taking advice before you register.