Upgrade from Business Name to Limited Liability Company

Last Updated on: June 29, 2025

There is a tendency for startups that lack strong financing backing to register a business name with the hope of converting it into a company in the future. If this is you, then here are the steps to upgrade from a business name to a limited liability company.

While the economy, technology and global market grow, businesses also grow to meet customer demands and regulatory compliance as well.

If you registered a sole proprietor (Business Name) with CAC, there comes a time when you are dealing with clients that are dispersed, all over the world, competition increases, and so does the number of transactions you have.

While having a Business Name registration document may be sufficient for securing your brand name, gaining credibility, and even operating a corporate account, bidding for grants and small contracts. This document may not be reliable for the future and larger business transactions

Company registration provides some advantages that Business names do not. For this reason, Business Names may wish to upgrade to a limited liability company in Nigeria.

Differences Between Business Name and Limited Liability Company

Before we proceed with the upgrade, let’s examine the key differences between a Business Name and a company.

Feature Business Name (BN) Limited Liability Company (Ltd/LLC)
Legal Status Not a separate legal entity A separate legal entity distinct from the owners
Liability The sole trader has liability Shareholders have limited liability to the amount of shares they own in the company
Ownership Sole proprietor or partnership Owned by shareholders (can be individuals or corporate bodies)
Name Structure Just the name (e.g., ” Midas Perfumery Enterprise” Company name ends with “Limited” or “Ltd” (e.g., “Midas Perfumery Enterprise LTD”)
CAC Registration Simpler and faster process More detailed and formal registration process
Corporate Governance No formal structure required Companies are required to appoint directors and comply with corporate governance
Raising Capital Through personal savings Through debt or equity financing
Taxation Business names pay (PIT) Companies pay Company Income Tax (CIT)
Credibility Lower business credibility Higher credibility with banks, clients, and investors
Perpetual Succession Once the owner dies, the business ceases There is continuity of business even after the death of the owners
Regulatory Compliance Minimal (mostly annual returns) Strict compliance (AGMs, audited financial statements, etc.)
Ideal For Small sole traders and startups Growing businesses, SMEs, investors, or corporate structures

Why You Should Upgrade from Business Name to Limited Liability

Upgrade from a business name to a limited liability company comes with so many advantages. Below are some benefits you will enjoy as a company over a Business Name.

1. Limited Liability Protection

As a company, you will enjoy the power of limited liability. This means that the liability you will incur is limited to the amount of shares owned in the company.

Let’s say your company goes into a bad deal and suffers a liability. In this scenario, the assets of the company will be seized and frozen while you, the owner, are free. Your assets and personal belongings will be.

2. Legal Personality

A company is a legal person in law. This means the owners and the company are distinct from each other. The company is seen as an artificial person in the eyes of the law and can acquire assets, incure liabilities, sue and be sued.

The problem now emerges with governance, since a company is an artificial business person, it needs a human being who can direct and pilot the affairs of the company.

This now further gives rise to Directors and Shareholders, whereas in business names the business is only owned and managed by one person.

Shareholders own companies. They employ directors to manage the affairs of the company and report to them periodically through the preparation of financial statements. Directors can be executive or non-executive directors.

3. Credibility

Upgrading from a sole proprietor (Business Name) to a limited liability company also boosts your brand credibility.

In today’s world, many companies, corporate clients, government agencies, and international partners prefer dealing with a registered company (Ltd). It gives your brand a more professional and trustworthy image, opening doors to bigger contracts and partnerships.

There are some deals and government contracts you will never be able to secure if you are not using company documents. Operating as a business name does you a disadvantage.

Furthermore, companies prepare annual financial statements and sustainability reporting, which provides an insight into the company’s performance. This further helps to build credibility and trust among investors

4. Perpetual Succession

There is continuity of business when you upgrade to a company. For a business name, since the owner is the same person who carries out all activities of the company, there is no succession of business once the owner dies.

Upgrading from Business Name to LLC presents you with the opportunity to enjoy perpetual succession of the company. For companies, there is continuity of operations even after the death of one or members of the company.

Also, ownership of the company is by ownership of shares. Many people can own shares in a company and be regarded as part owners. Business name ownership is not by owning shares.

5. Ability To Accommodate Multiple Objectives

Migrating from a business name to a limited liability company(LLC) allows you to accommodate as many businesses as possible.

A company can have as many as 20 activities or businesses registered under its one name. This feature is not available when you are operating as a business name.

There are certain business activities that you can not include under your objectives when registering a Business name (e.g. Real estate services, security and investigation, school, etc.). Therefore, upgrading to a company gives you more opportunities.

6. Name & Ownership

A company name ends with Limited with an RC number, whereas a Business name doesn’t end with Limited and has a BN number in place of an RC number.

There is proper governance structures in companies, share capital, and there is proper segregation of duties leading to transparency, accountability and efficient operations

Requirements for Converting a Business Name to an LLC in Nigeria

Below are what you need to have in place before proceeding with the upgrade

  • Your business name must not be defaulting annual returns
  • The name of the company you wish to upgrade to. In most cases, people just add Limited or LTD at the end of the Business Name. While in some cases, you can completely change the name of your business
  • A well-drafted consent letter to be submitted to the Registrar of CAC
  • Information about the Directors and shareholders of the company, as well as their ID
  • Clearly define the objectives of the company
  • A witness
  • Share capital of such a company and ownership percentage
  • An authorized CAC agent to process the filing
  • Cost to upgrade

Guide to Upgrade From Business Name to Limited Company with CAC

Upgrading from a Business to a company limited by shares can only be carried out in an accredited agent account.

You will also need a consent letter well drafted and addressed to the registrar general of CAC. If you need help with drafting a consent letter, or you need someone to do the upgrade entirely, send us a DM on WhatsApp 08066018299

If you already have access to the agent account, follow the steps below.

  • Log in to the agent account
  • Proceed to name reservation under the company
  • Under a specific type of company, select a private company limited by shares
  • Type in the name of the new company (E.g if you wish to upgrade from Emmy Enterprise to Emmy Enterprise Limited, Insert Emmy Enterprise Limited as the name you want to reserve)
  • On the next page, select the reason for the reservation to be “Registration of a business name as a limited liability company”
  • A new page will appear with a search button. Search for the Business name you are upgrading from and click on it.
  • Under the remarks section, include something like, “I want to upgrade from Business Name to a Limited Liability Company”
  • Click to Apply for the reservation code
  • Fill in the short description of the company (objectives), fill in the company address and move to the next page
  • The next page will allow you to update the company objectives. Here you will state all the activities carried out by the company. E.g  TO ENGAGE IN REAL ESTATE BUSINESS INCLUDING THE PURCHASE, SALE, LEASE, DEVELOPMENT, MANAGEMENT AND DISPOSAL OF LANDS, BUILDINGS AND OTHER IMMOVABLE PROPERTIES OF ALL DESCRIPTIONS. TO ACT AS REAL ESTATE CONSULTANTS AND ADVISORS IN ALL BRANCHES OF PROPERTY MANAGEMENT, VALUATION, PROPERTY ACQUISITION, PROPERTY DEVELOPMENT, AND REAL ESTATE INVESTMENT. Ensure that all your inputs are in capital letters, and always close the column for each input
  • On the next page, fill in information about the witness, and they adopt the default articles
  • Small companies do not require a secretary, so skip it to the Director’s Page and fill in the details accordingly.
  • Fill in the statement of compliance. This page is to be filed by the agent processing the upgrade.
  • Under supporting documents, Document 1 should be the consent letter, and Document 2 should be the Status Report. Upload these documents, make a payment of 5,000 and submit.
  • After a while, log in to the CAC pre-incorporation portal and, in your account, check if the name is approved or queried. If approved, follow the below.
  • Click on start registration
  • Proceed to the shareholders’ page and fill it out. Specify the type of company share capital, divide and allot the shares accordingly, as the client prefers
  • For small companies, 1 million share capital is enough unless the activities of the company do not permit it to be registered under 1 million shares, or the company has foreign participation, or the client expressly wants to register it with a higher share capital.
  • Fill in the statement of compliance
  • Upload Documents, make payment to CAC and stamp duty, verify it and submit

Cost of Upgrading From Business Name to Limited Liability Company

The cost of upgrading from a Business name to a Limited Liability company varies. Different CAC agents will charge varying fees depending on their expertise and the technicalities of the company (e.g if the share capital is higher)

Legacy Benjamin Consult fees for upgrading from Business Name to Company is just 65,000

Cost of Upgrading From Business Name to Limited Liability Company

If you require our services, send us a DM via WhatsApp 08066108299

What Happens to Your Business Name After Upgrading to a Limited Company?

Once the upgrade is successful, you will now be operating as a company with a New RC number. You will also enjoy the numerous benefits that come with running a company.

It is vital to note that the previous Business Name does not automatically get delisted from the CAC database; you will have to apply to CAC to get it removed permanently. This comes at a cost

FAQs on Upgrading From BN to RC

These FAQs and answers will guide you through everything you need to know about upgrading from BN to RC

⚖️ Can I convert my existing business name to an LLC in Nigeria?

Yes, you can do this via an agent portal

⚖️ What are the steps to upgrade from a business name to a limited company with CAC?

Follow the steps we have documented above

⚖️ How much to upgrade a business name to a limited liability company?

Upgrade fees for Legacy Benjamin Consult cost 65,000

⚖️ What documents are required to upgrade from BN to RC?

IDs, Company Information, Signature, Directors, Witness and Shareholders

⚖️ How long does the CAC upgrade process take in Nigeria?

It takes about 10 to 15 days to complete this process

⚖️ Do I need to file a new tax registration after upgrading to a limited company?

Yes, through FIRS

⚖️ Will I lose my current business name after upgrading to a company?

No, you will not. However, it is wise to attempt to delist the previous business name from CAC records

⚖️ Is professional help required to convert a business name to a company?

Yes, it will be risky attempting such registration and upgrade without skill, competency and experience

⚖️ Can I use my business bank account after converting to a limited liability company?

Yes. However, you will need to visit your bank to update your corporate account to reflect a company and change signatories where necessary

⚖️ Do I need a partner or multiple directors to register a limited company?

No. 1 person can form and register a company

⚖️ Is the upgrade process available online through the CAC portal?

Yes. The new CAC portal enables seamless online updates.

Conclusion:

We hope this article has provided an insightful guide to help you migrate from running a Business Under a Business name to a limited liability company in Nigeria.

If you need guidance, don’t forget to send us an email