What if I told you your business name is on CAC’s list of restricted and prohibited names, and can’t even be used?
Every entrepreneur knows that choosing the right name for a business is crucial, as the name reflects your brand, values, and vision. However, when it comes to registering the name with the Corporate Affairs Commission (CAC), many people are surprised to find out that there are certain names you can and cannot use.
A person can carry on business without registration with the Corporate Affairs Commission when they use their natural names or a combination of their natural names as sole proprietors or general partnerships. However, when a business is to be carried on as a company, limited liability partnership, limited partnership, or under a business name, such a name must be registered with the Corporate Affairs Commission. This is the position of the law in Section 863(1) of CAMA 2020.
A promoter advising on the name of the proposed business must not only pay attention to the preferences of the business owner but also consider the legal limitations placed by CAMA regarding the names that can be registered. These legal limitations are in place to protect existing businesses, the government, and the general public from any mishap that may arise from confusion due to similar names.
In this article, we will break down everything you need to know about prohibited and restricted names under Nigerian law. You will learn why certain names are flagged, the words to avoid, and how to successfully choose a name that aligns with CAC’s requirements.
Prohibited Names in CAC
Section 852(1) of CAMA provides seven categories of names that are prohibited. These are names that cannot be registered as a company, limited liability partnership, limited partnership, or business name.
- Names that are identical to the name of an existing company or limited liability partnership, or closely resemble such names and are capable of deceiving the public into believing the companies are the same, are prohibited. An exception can only occur if the company or limited liability partnership in existence is in the course of being dissolved and consents to the use of the name in the manner required by the Corporate Affairs Commission (CAC).
- Names that contain the words “Chamber of Commerce” are prohibited, except the company is limited by guarantee.
- Names that, in the opinion of the Commission, are capable of misleading as to the nature or extent of its activities, or are undesirable, offensive, or contrary to public policy, are prohibited.
- Names that, in the opinion of the Commission, would violate or conflict with any existing trademarks, business/company names, or body corporates that have been registered or existing in Nigeria are prohibited. Such names can be used where the consent of the trademark or business name owner or trustees of the body corporate has been obtained.
- Names that contain any word which, in the opinion of the Commission, is likely to mislead the public as to the nationality, race, or religion of the persons who wholly or mainly own or control the business are prohibited.
- Names that are, in the opinion of the Commission, deceptive or objectionable because they contain a reference or suggest an association with any practice, institution, personage, foreign state or government, international organization, or brand, or are considered by the Commission to be otherwise unsuitable, are prohibited.
- Names that are capable of undermining public peace and national security are also prohibited.
Restricted Names in CAC
Section 852(2) of CAMA provides a number of names that are restricted. These are names that cannot be registered as a company, limited liability partnership, limited partnership, or business name, except with the consent of the Corporate Affairs Commission (CAC).
- Names that include the words “Federal”, “National”, “Regional”, or “State” are restricted.
- Names that include the word “Government” or any word which, in the opinion of the Commission, suggests or is calculated to suggest that the company enjoys the patronage of the Federal Government, a State Government in Nigeria, any Ministry or Department of Government, or contains the word “Municipal” or “Chartered”, or suggests connection with any municipality or local authority, are restricted.
- Names that contain the word “Cooperative” or its equivalent in any other language or any abbreviation, or the words “Building Society” are restricted.
- Names that contain the word “Group” or “Holding” are restricted.
Conclusion
The above provisions support the Commission’s practice of disqualifying any names for registration that fall under these categories. It is therefore important that a promoter should decide on a name that does not violate the limitations placed by the Commission. By avoiding prohibited words and obtaining consent where necessary, businesses and companies can avoid costly delays that may arise from the name being queried or disapproved.
Frequently Asked Questions
What words are not allowed in a business name?
Certain words are not allowed in a business name. Some of these words include: Trust, Firm, PLC, Cooperative, Co, Elite, Finance, and others.
Can the names under the restricted list be used in registering a business?
Yes. However, restricted names can only be used upon obtaining the requisite consent from the Corporate Affairs Commission.
Do You Need Expert Help in Choosing a Suitable Name for Your Business?
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Disclaimer
This publication has been prepared for general guidance on matters of interest only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. For specific legal advice, contact us.
WRITTEN BY:
OGHENEYOMA E. IBUJE LL.B, BL, ACIS
LEGAL ASSOCIATE
TCORPORATE LEGAL ADVISORY