What if you’re caught running an unregistered business in Cameroon?
Can someone start a business in Cameroon without registering it? The answer is yes, because there are many unregistered businesses running all over the country.
In Cameroon, a business owner is required to complete a number of requirements in order to carry out business legally.
Many people have been asking me if they can start a business without registering it. It’s very possible to run an unregistered business in Cameroon, but you have to be ready to take the risk and face certain restrictions.
You can run an unregistered business in Cameroon as long as your business is legal and meets the tax and licensing requirements.
However, if your business is not a limited liability company, you’ll not benefit from the protection against personal liability when there’s any loss or damage related to your business.
Don’t also forget the fine and consequences for carrying an economic activity with an unregistered business in Cameroon.
Remember, an unregistered business doesn’t have a license to operate, hence, you may not have a business location or make it public.
If you make your unregistered business public with having the appropriate license, the authorities may force your to close down and fines applied.
As said above, you will be personally liable for your business when it’s not registered. In this case, if someone files a lawsuit against your business, you show know that (s)he is suing you.
By not registering a limited liability company (which you can do with us), you will be personally liable for any debt your business incurred.
Your customers may have doubts to your ability to do business if you’re caught buy the authorities doing business without a license. They may question the quality of your work, which can be devastating.
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What do you need to run a business legally?
You need to complete a required number of procedures in order to legally operate a business in Cameroon. In the case of a sole proprietor business, partnership and limited companies, you need to register with the Trade and Personal Property Credit Register.
Sole proprietor businesses under XAF10,000,000 turnover are required to register with the local council where they operate. Freelancers need to obtain a Unique Identification Number (UIN) and make sure they pay the required income taxes.
If your business activity requires a business license, you will need to obtain it within 15 days following the start of operations.
Check out the compliant and legal requirements needed to have your business registered in Cameroon
Penalties for carrying unregistered businesses
In Cameroon, anyone who carries out an economic activity prior to registration is liable to a fine of XAF100,000 (one hundred thousand francs CFA) per month.
Carrying out an activity without a business license
Anyone operating an activity liable to a business license, who fails to pay shall be levied a penalty. The business shall be assessed for the entire year and an additional fine of between 50% to 100% maybe levied.
Not paying the business license on time
A fine is levied for not paying your business license within the prescribed time-limit. You will be fined between 10% to 30% of the business license tax due per month of lateness.
Carrying out an illegal or prohibited activity
Where the activity is illegal or prohibited, the defaulter shall pay an additional 100% of the normal business license tax. However, the business license tax will not be issued in such a case.
How can you run an unregistered business legally?
It is possible to operate an unregistered business in Cameroon, but you should be ready to bear the consequences and risks involved especially in the case where the business requires a business license. See business license tax exemption in Cameroon.
That notwithstanding, you can run an unregistered business so long as it is legal and you meet up with the tax requirements. You will have to obtain a Unique Identification Number (UIN) and make sure they pay the required income taxes.
You are required to register your business with the Trade and Personal Property Credit Register in order to obtain a business license.
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This content has been prepared for information purposes only. It is not intended to provide, and should not be relied on for, tax, accounting or legal advice. You need to consult your own tax, accounting or legal advisors before engaging in any transaction.