Corporate Affairs Commission (CAC) GUIDELINES FOR NAME RESERVATION FOR BUSINESS NAMES
When registration a business or company in Nigeria, one of the first step is to search the availability of the intended name or company. This process is call “NAME RESERVATION”
In this blog, we explained the Corporate Affairs Commission (CAC) Name Reservation Guidelines for BUSINESS NAMES Registration in Nigeria.
The law governing availability and reservation of business name is contained in Section 579 (1) and (2) of CAMA which provides regulation for the approval of availability of business names.
The provisions of Section 579 under Part B and Section 30 under Part A of the Act affect and complement each other mutually.
It is however noteworthy that, the basic difference between limited liability company (LLC) and business names (BN) is the share capital requirement in LLC which does not exist in BN. Therefore, any name that suggests a business with minimum capital requirement should be refused under this part of the Act.
Read: Business / Company Registration Service
Examples of businesses with share capital that should not be allowed under this part are: Bureau de change, bank, insurance, security/guards, registrars, trustees, issuing house, fund managers, underwriter, pension fund administrators,/custodians, air transport, finance company, primary mortgage institution, etc.
RESTRICTED WORDS/NAMES:-
A literal reading of Section 579(1) of the Act indicates that the whole subsection deals with restricted words and thus words
mentioned there under may be registered with the consent of the Commission. That however is not the correct position of the law; as the sub-section also contains prohibited words/names.
Section 579(1) (a) & (b) which is similar both in substance and object with Section 30 (2) (a),(b) and(c) provide the requirement of Commission’s consent before any name containing “National” “Government” “Municipal” “State” “Federal” “Co-operative” can be registered, However, unlike Section 30, Section 662 did not mention the words “regional” and “chartered” while
“regional” may be allowed subject to Commission’s consent (since the word relates to a component of government and administration), whether or not the word “chartered” should be allowed depends on how the word is employed. Where the word chartered is employed after the name of a natural person who satisfies the Commission that, having regard to the relevant laws, he is qualified to use that title, such a name should be allowed.
Examples of such applications are:
Nasiru & Bello Chartered Accountants/Ifeoma and Seun Chartered Secretaries, Shamsudeen Bakori & Co Chartered Accountants. However, where the word is employed at the beginning of the name of a business entity or institution such as:
Chartered Institute of business, Chartered Fashion Design and Tailoring, Chartered Builders and Construction, the application should be denied since the word “chartered” applies only to institutions backed or supported by legislation.
Section 579(1) (c) mentioned “Chamber of Commerce” “Building Society” “Guarantee”/Trustees” “Investment” “Bank” “Insurance” or any word with similar connotation as belonging to the class of words that may be registered subject to the Commission’s consent. Paragraph (d) of the same section went as far as legalizing the registration of similar and identical names provided the consent of the Commission is sought and obtained.
However, a careful search through other laws and regulations indicates that not all words/names mentioned in section 662(1) (C) and (d) may be registered notwithstanding the Commission’s consent. E g.
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CHAMBER OF COMMERCE:-
Section 30 (1) (b) prohibits the registration of the name chamber of Commerce as a company limited by shares but as a company
limited by guarantee. The implication of the provision is that “Chamber of Commerce” should not be registered as a profit sharing venture but purely for the promotion of commerce. It follows therefore, that chamber of commerce cannot be registered as a business name.
BUILDING SOCIETY: – Building Society is not suitable for business name registration as it is capable of misleading as to the status of the business.
GUARANTEE:- This word especially when it appear at the end of a name should not be allowed as it is capable of being misconstrued as a company limited by guarantee e.g. Catering Development Service Guarantee.
However, where the word comes at the beginning of a name, it may be allowed subject to Commission’s consent Examples:
Guarantee Catering services, Guarantee mechanical Services, Guarantee Tailoring services.
TRUSTEE, BANK, INSURANCE:- Under regulations made by SEC, CBN, NAICOM, etc the above businesses can only be transacted by legal entities with certain minimum share capital. A business name has no share capital and therefore cannot utilize any of the above words.
INVESTMENT & CO-OPERATIVE:- The words investment and co-operative should be allowed subject to Commission’s consent as provided by the combined effect of section 579(1) (b), (c) and (e).
IDENTICAL AND SIMILAR NAMES:- A literal reading of Section 579(1)(d) suggest that, a business name may be registered notwithstanding the fact that, it is identical or similar with an existing registered business name, company or incorporated trustees; provided the prior consent of the Commission is sought and obtained. Such interpretation will however defeat the rule against passing off and consequently leads to absurdity. Thus, the interpretation applicable under section 30(1)(a) should apply with the same force to section 662(1)(d) of the Act.
Furthermore, the two words rule applicable under part ‘A’ shall apply mutatis mutandis to part ‘B’
PROHIBITED NAMES:-
Section 579(2) prohibits the registration of any name which:
1. Contains any word which in the opinion of Registrar is likely to mislead the public as to the nationality, race or religion of the person by whom the business is wholly or mainly owned or controlled.
This provision may appear difficult to implement at availability level since the only material before the approving officer is the proposed business name(s) and some details relating to the presenter of the application. An availability approving officer may not know the nationality, religion or race of the proprietor so as to determine whether or not the name presented is capable of
misleading as to the proprietor’s nationality, race or religion.
Read: How to Obtain DPR Permits for Oil & Gas Services in Nigeria
2. In the opinion of the Registrar, the name is deceptive or objectionable; in that it contains reference direct or otherwise to any personage, practice or institution or is otherwise unsuitable for a business name. Categories of these deceptive names may include such applications recently witnessed viz.
Barrack Obama Enterprises, barrack Obama Tailoring Service, Umaru Musa Yar’Adua Barbing Saloon, University of Lagos Barbing Saloon, NNPC Cafeteria, PTDF laundry Services etc.
Unless it could be established that the persons and institutions identifiable with the names are the proprietors or at least consent to the use of the name, such shall not be allowed for business name registration.
REGISTRATION OF SCHOOLS AND HIGHER INSITUTIONS:
As application under part “A”, the use of a name of state or local government or area council without the addition of the word “state” or “local government” to the name as the case may be, should also be allowed under part “B”. However, where such names are used with the addition of the word “state” or “local government”, or “Area Council” or “Municipal” prior consent of the
Commission or state/local government concerned should be sought and obtained.
Examples: – Zamfara Textile Ventures (no consent)
Zamfara State Textile Ventures (consent is required.)