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:
- Log in or create an account
- Navigate to “Name Reservation”
- Search your preferred business name
- Submit for reservation
- Pay ₦500 reservation fee
- 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:
- Go to https://pre.cac.gov.ng
- Choose “New Registration” > Business Name > Partnership
- Fill in details:
- Proposed business name
- Nature of business
- Business address
- Full details of all partners (at least 2)
- Passport photographs and signatures
- Upload required documents:
- Valid ID cards (NIN, driver’s license, international passport, etc.)
- Passport photographs
- Partnership agreement (optional but recommended)
- Pay registration fee (currently ₦10,000 for business name + service charges)
- 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:
- Visit your nearest FIRS and LIRS offices
- Register the new business name for TIN (Tax Identification Number)
- If already registered, update your partnership details
- 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)
| Item | Estimated Cost (₦) |
|---|---|
| Name reservation | 500 |
| Business name registration (Partnership) | 30,000 |
| Professional fees (if using an agent) | 5,000 – 20,000 |
| TIN registration | Free (if self-managed) |
| Partnership agreement (drafted by lawyer) | 10,000 – 50,000 |
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.