First, note that if your business is not registered as required in the discussion in this article it is illegal, no matter how good it is, meaning that you should never get involved in any dispute with anybody in the course of the business otherwise the law will not protect you.
Doing business is a phrase commonly used to depict a relevant economic activity in any society and also includes all the intricacies and challenges associated with such an activity, from inception to operation and where time bound, dissolution.
Issues for Considerations Prior to Registration
Do note that certain businesses can only be registered in a particular way or are better if registered that way. For instance, law firms are not registered as companies because of the nature of the services provided. It is one of the exceptions stated under section 19 of CAMA.
A company limited by shares is one where the liability of the members(shareholders) are limited to the amount unpaid on the shares allotted to them.
This part is generally referred to as registration of business names. It is perhaps the most common registration option for small and medium scale enterprises (SMEs).
Other Relevant Considerations
Generally, investors and lenders will prefer a more formal entity such as a company. One major reason is that a company is an independent entity that can exist exclusive of its owners, which means the stake of the owner (shareholder) can be sold or transferred between parties. It is usually difficult to quantify this with Business Name registrations.