Detailed process to change CAC classification of existing small business to partnership

As your business grows, your structure might need to evolve. For many entrepreneurs in Nigeria, starting as a sole proprietor is simple and affordable. But as operations expand, partnerships may offer better flexibility, shared responsibility, and broader access to funding.

Suppose you already have a registered business name with the Corporate Affairs Commission (CAC) and want to convert it into a partnership. In that case, this guide explains how to change your CAC classification from a sole proprietorship (or enterprise) to a partnership, legally and correctly, in 2025.

Understand the Difference: Sole Proprietorship vs. Partnership

Before proceeding, let’s clarify the two business types:

Sole Proprietorship (Business Name)

• Owned and operated by one individual
• Simple and low-cost to register
• Limited legal recognition
• The owner bears full liability

Partnership

• Owned by two or more people (up to 20 under Nigerian law)
• Requires shared contributions and responsibilities
• Can be more structured legally
• Still registered under “Business Name,” unless incorporated as LLP or LLC

Can You Change CAC Business Type Directly?

Short Answer: No, You cannot directly “Convert” a Sole Proprietorship to a Partnership

As of 2025, CAC Nigeria does not allow direct reclassification of a registered business name from sole proprietorship to partnership via a single “edit.”

Instead, the CAC requires a re-registration process, which involves:

• Closing or abandoning the existing business name
• Registering a new business name under a partnership
• Transferring assets (if necessary)
• Notifying tax authorities (FIRS/LIRS)

We will go through this step by step.

Step-by-Step Guide to Change CAC Classification to Partnership

Step 1: Consult Your Business Partners

Before registration, all future partners must agree on:

• Business name
• Capital contribution
• Profit sharing ratio
• Roles and responsibilities
• Duties and liabilities

It is advisable to prepare a Partnership Agreement, although CAC doesn’t require it at registration, it helps avoid future disputes.

Step 2: Search and Reserve a New Business Name

Visit the CAC Public Search portal:
https://search.cac.gov.ng

Then go to:
https://pre.cac.gov.ng and:

1. Log in or create an account
2. Navigate to “Name Reservation”
3. Search your preferred business name
4. Submit for reservation
5. Pay ₦500 reservation fee
6. Wait for approval (usually within 24–48 hours)

Use a name that reflects your joint business (avoid names similar to your former sole proprietorship).

Step 3: Register the New Partnership Business Name

Once the name is approved:

1. Go to https://pre.cac.gov.ng
2. Choose “New Registration” > Business Name > Partnership
3. Fill in details:
   • Proposed business name
   • Nature of business
   • Business address
   • Full details of all partners (at least 2)
   • Passport photographs and signatures
4. Upload required documents:
   • Valid ID cards (NIN, driver’s license, international passport, etc.)
   • Passport photographs
   • Partnership agreement (optional but recommended)
5. Pay registration fee (currently ₦10,000 for business name + service charges)
6. Submit for CAC approval

Step 4: Download Certificate and CAC Documents

If approved, CAC will issue:

• Certificate of Registration
• CAC Form BN 1 (Particulars of Partners)

Download and print them for record-keeping and compliance.

Step 5: Close or Abandon Previous Sole Proprietorship (If Necessary)

While CAC doesn’t offer an automated process to delete a sole proprietorship, you can:

• Officially notify CAC through a letter to mark the old business as inactive
• Abandon the old business name — CAC will delist it after some years if it’s inactive and not renewed

There is currently no online form for the closure of a business name in CAC. You must send a physical letter to CAC’s office, or let it expire and become inactive.

Step 6: Update Your Business with Tax Authorities

After registering your new partnership, you must:

1. Visit your nearest FIRS and LIRS offices
2. Register the new business name for TIN (Tax Identification Number)
3. If already registered, update your partnership details
4. Use your TIN for:
   • VAT filing
   • Withholding tax
   • Annual tax compliance

You may need to present:

• CAC certificate
• Form BN 1
• Partnership agreement

Step 7: Open a Business Bank Account

With your new partnership registration:

• Visit your preferred bank
• Submit:
  • CAC certificate
  • CAC BN 1 form
  • Valid IDs of partners
  • Passport photographs
  • TIN
  • Partnership agreement
• Complete KYC process

Ensure the bank captures two or more signatories (you can set signatory rules: e.g., “any two to sign”).

Legal Implications to Keep in Mind

• Liability: Partnerships do not offer limited liability like registered companies. All partners are personally liable unless a Limited Partnership or LLP is used.
• Disputes: Without a proper agreement, profit sharing and dispute resolution can become contentious.
• Compliance: You’re required to file annual returns with CAC and stay tax-compliant.

Can You Register a Limited Liability Partnership Instead?

Yes. As of recent CAC reforms, you can also register as a Limited Liability Partnership (LLP) if you want a partnership with legal protection and corporate status.

Benefits:

• Separate legal identity
• Limited liability for partners
• Greater credibility

However, it comes with:

• Higher fees
• More complex annual compliance

LLP registration costs ₦25,000 – ₦40,000 depending on the authorized capital.

Cost Breakdown (As of 2025)

Conclusion

Changing your business structure from a sole proprietorship to a partnership in Nigeria is not a one-click update. It requires strategic re-registration, tax updates, and a clear partnership agreement. But with the right steps, you can build a more sustainable and collaborative business model.

Stay compliant, involve professionals where needed, and follow the CAC’s evolving digital process to avoid future legal or financial issues.

FAQs

1. Can I edit my business type on the CAC portal?

No. Re-registering a new business and abandoning the old one is the required process, as direct modification of business type is not permitted..

2. Can one person register a partnership?

No. You must have at least two individuals as partners.

3. Is the process entirely online?

Yes, CAC business name registration is 100% online. Closure must be done manually.

4. What if I want to upgrade to a company (Ltd)?

To proceed, you will need to register a Limited Liability Company (LLC) separately. This process has its own requirements and associated fees.