If you are planning to register your business with the Corporate Affairs Commission, one of the biggest decisions you must make is choosing between a Business Name and a Limited Liability Company (LLC).
Both are legally recognized, both give your business structure, and both allow you to operate officially.
However, they are not the same. One offers full liability protection, while the other is simpler and more affordable.
This guide will help you understand the key differences so you can choose the structure that fits your business goals in 2025.
What Is a Business Name?
A Business Name is the simplest form of business registration in Nigeria.
It is also known as an Enterprise, Venture, or Sole Proprietorship.
A Business Name is best for individuals who want to start small and run the business alone or with a partner.
Key Features of a Business Name
- Easy and fast to register
- Cheap to maintain
- Suitable for small businesses and freelancers
- Owner is the business and the business is the owner
Limitations of a Business Name
- The owner has full personal liability for debts and losses
- Harder to attract investors
- Cannot issue shares
- Some corporate clients may not accept it for big contracts
What Is a Limited Liability Company (LLC)?
A Limited Liability Company is a legally separate entity from its owners.
It offers stronger protection, more credibility, and more opportunities for expansion.
Key Features of an LLC
- Owners are protected by limited liability
- The company is a separate legal identity
- Can bring in investors and shareholders
- Suitable for medium and large businesses
Limitations of an LLC
- More expensive to register
- Requires more documentation
- Requires proper record-keeping and structure
Business Name vs Limited Liability Company: The Major Differences
1. Legal Protection
Business Name
The owner is fully responsible for debts, losses, or legal issues. Your personal assets can be affected.
Limited Liability Company
The owners are protected. Their personal assets cannot be seized for company debts.
Winner: Limited Liability Company
2. Cost of Registration
Business Name
Very affordable. Registration is simple and cost-effective.
Limited Liability Company
More expensive due to share structure and extra documentation.
Winner: Business Name
3. Credibility and Growth Potential
Business Name
Good for small businesses but not ideal for large corporate dealings.
Limited Liability Company
Highly credible. Accepted by banks, investors, government agencies, and bigger organizations.
Winner: Limited Liability Company
4. Taxation
Business Name
The owner pays personal income tax only.
Limited Liability Company
Companies pay corporate tax, file annual returns, and maintain proper financial records.
Winner: Depends on your business size
5. Ability to Raise Funds
Business Name
Cannot sell shares or attract formal investors.
Limited Liability Company
Can issue shares and attract investors or business partners.
Winner: Limited Liability Company
6. Ownership Structure
Business Name
Owned by one person or a partnership.
Limited Liability Company
Can have one person or multiple directors or shareholders.
Winner: Limited Liability Company
Which One Should You Choose in 2025?
Choose a Business Name if:
- You want something affordable and simple
- You are a freelancer or small business owner
- You want to start quickly with low overhead
- You do not need investors or major contracts
Choose a Limited Liability Company if:
- You want to protect your personal assets
- You want to scale the business or enter corporate markets
- You need credibility for contracts and partnerships
- You want to attract investors
- You want a long-term business structure
Conclusion
Both Business Names and Limited Liability Companies are excellent in their own ways.
Your choice depends on your business goals, growth plans, and the level of protection you want.
If you want a simple, fast, and affordable setup, a Business Name is perfect. But if you want protection, credibility, and the ability to grow big, an LLC is the better option.
Call to Action:
If you are ready to register your Business Name or Limited Liability Company, Send WhatsApp message (08111858651) contact Brand Growth Expert today. We help you handle CAC registration, SCUML, TIN, and full business compliance quickly and professionally. Let us help you start your business the right way.