FORMS OF BUSINESS ASSOCIATIONS
A form of business in which one person owns all the assets of the business and is liable for all the debts of the business. the business is tied to the owner's life and personality such that his death means the death of the business. A sole trader/proprietor is generally not required to register his business at the public registry.
A sole trader must be distinguished from a sole proprietor. If X owns a single shop at the front of her house which she runs herself, she is a sole trader. If on the other hand, she owns five shops at different spots in Lagos with workers positioned at the respective shops, she is a sole proprietor.
This involves two or more persons pooling their resources together to do business in common for the purpose of making profit. Here, the business does not revolve around the life and personality of one person; it is tied to the lives of the partners.
In most forms of partnerships, each partner has unlimited liability for the debts incurred by the business.
This is an equitable concept which permits a large group of persons to pool resources together and vest same in two or more of themselves as trustees to be held in trust for the benefit of themselves as beneficiaries or for the prosecution of a defined cause. The trustees hold the trust property for the benefit of the trust.
The objects of registered trustees are usually charitable and not profit making.
Corporation or Company:
This may be described as a commercial association of persons recognized by statute as a legal entity. A company can be either owned by the public or by private individuals who restrict public participation.
Features of a company include: a. It can sue and be sued in its corporate name b. It has perpetual existence c. It can acquire property, movable or immovable d. It can take loans and charge its property as security for the loans e. the liability of corporate debt is generally limited to the amount of money each member has invested in the corporation.
S. 573 PART B CAMA makes provision for the registration of business entities carried on in Nigeria by an individual, a firm or corporation, using a business name. The Corporate Affairs Commission is saddled with the responsibility of administering business names.
A business name is the name or style under which any business is carried on, whether in partnership or otherwise, for easy identification and to differentiate one business owner from another in the same field. The business name may be the actual name of a proprietor or an assumed name. A sole trader or partnership trading with a business name is therefore registerable under this section. However, a sole trader or partnership need not register under S. 573 where the business owners or group of partners use their actual names to operate the business. But a corporation whether or not registered under the Act may not carry on its business in its corporate name without registering the said names.
EFFECT OF FAILURE TO REGISTER A BUSINESS NAME
In Ogunmefun v Nigeria Airways Ltd, the court held that failure to register a business name under the provision of Part B of CAMA would not render any contract entered into with that name invalid. Thus, such non-registration can’t deprive that person of his legal right to sue for the price if any goods are sold by him to that other party. However, in Nurudeen Omotayo Alowonle v Haruna Ishola Bello, a couple of partners carried on business in the name of XYZ but this name was not registered. Later, the firm was dissolved and one sought to use the same name XYZ to start up a business. In an action brought by the other partners to restrain him from using the same name, the court held that since the initial firm was not registered in favor of the partnership either as a trade name or a trade mark, the defendant could not be restrained from registering his business in that name.