Do you want to register a startup in Cameroon? Do you have a startup that you have not registered and wants to get external funding? One of our leads told me she had put up a concept and a strategy for her startup. She said she had already bought a domain name for her startup and is in the process of designing the website.
What was her problem? She wanted to know at what stage is it recommended for her to actually register a startup in Cameroon so that it becomes a legal entity. This was in regards to getting external funding and other 3rd party services.
Is your business going to incur liabilities?
If your case is like hers and the business is going to incur liabilities, then I will advise you incorporate your company now. It’s safe for you to incorporate quickly in order to get personal protection and reduce your liability. The moment you engage in activities that you may become personally liable, know that it’s time to register a startup in Cameroon as a limited company.
What do I mean by your business incurring liabilities?
- If your business has more than one founder
- If you are going in for external finance (debt or equity)
- When you want to launch a product or service (3rd party comes in)
- Once you have to enter into agreements, hire employees, advisors or consultants
To know more, make sure you read these 9 Benefits Of A Private Limited Company and these 5 Easy Steps to Form a Limited Liability Company in Cameroon
Protect your company name
Incorporating your startup is the first step of branding. It’s risky going out to the public with an attractive brand when you have not yet incorporated the business. A smart competitor who may have insider information can take advantage of this and incorporate before you do. Note that protecting your brand is recommended if you plan to keep running the business under the name you choose.
I don’t think you will want to put all your efforts into developing a brand and then lose it to someone else who has incorporated the same name. Just imagine the effort you have put in branding – designing the logos, website, colors, etc.
Benefits of registering your startup as a limited company
- Limited liability and protection of personal assets – for instance, when you need to raise funds, borrow or take things for credit, your personal property or savings won’t be at risk like in the case of a general partnership or sole proprietorship. In a limited company, only the investment in the business is liable to loss in case you the startup is unable to repay its loan. See also Which will you choose – sole proprietorship or limited company?
- Credibility and better image – customers, vendors, big companies and government agencies prefer to deal with limited liability companies instead of partnerships and sole proprietor businesses. See the differences between a sole proprietor business and limited companies.
- Easy to raise funds – limited companies find it easier to raise funds from getting bank loans, venture capitalists and angel investors when compared to forms of businesses like sole proprietorship and partnerships. NB: You can pitch your business without any legal entity in place but you can’t raise capital without having a legal entity.
- It’s easy to attract employees – one of the most important thing for startups that are still at the beginning stage is to have committed employees. You need to employ people who share the vision of the startup. In this case, you can give partial equity to your employees instead of putting them on salary. They’ll become more committed because they become part of the startup.
Do you want to register a startup in Cameroon?
If you want to register a startup in Cameroon, make sure you check out the minimum requirements. I think this post on when to start paying taxes will be helpful to you. It’s also important for you to know some of the taxes you will be liable to pay as well as some local taxes in Cameroon.
Are you ready to register a startup in Cameroon? Get in touch with us at OpenHub Digital. We have helped many startups to start, run and grow their business in Cameroon!