What Is A Registered Business?
The best way to describe a registered business is to tell you a short story.
Fred is an entrepreneur who makes very beautiful shoes for men and women with the best quality leather. This has been his line of work for seven years now and thousands of people love his shoes.
In fact, his shoes have become so popular that people commonly refer to it as ‘Fred shoes’. People actually go to the market and ask for ‘Fred shoes’. Most of his customers are so loyal that they will not wear any other brand of shoes (local or foreign) except for Fred’s shoes.
Just last year, one smart entrepreneur (let’s call him John) caught a bright idea and decided to register a company and named it “Fred Shoes Company”.
It cost him time, effort and money but John went through the hassle to register his new company. Guess what? His new company makes shoes too. These shoes are also of high quality but they’re not as good as the popular Fred shoes.
But the interesting thing is, John’s company’s shoes are labeled ‘Fred Shoes’.
As you may have guessed, Fred finds out that John’s company is selling its shoes with a ‘Fred Shoes’ label. What can he do?
If he does nothing, these new shoes that carry his name will confuse his customers and he could lose sales. So he decides to sue John’s company “Fred Shoes Company”.
Who do you think will triumph when this matter goes to court?
The facts of this case are quite simple:
One person (John) owns and runs a business that is legally registered and recognized by law. The other person (Fred), although running a very successful but unregistered business, has become a victim of his own mistake. He owns and has been operating a business that doesn’t legally exist.
This is a sad example of the kind of unfortunate things that could happen when a business is not properly set up and registered.
It is often tempting to postpone or think that business registration can wait or is not really important.
The truth is, you may be building something that could become very big and popular in the future. However, if you don’t do something as basic as registering your business, all your hard work could easily be wasted, or worse, taken over by somebody else.
In summary, this story teaches us (with a hard lesson) exactly what a registered business is. It is one that legally exists and is recognized by law. It is one that enjoys certain rights, benefits and privileges that an unregistered business cannot enjoy.