1. A business name can either be sole proprietorship or partnership while A company limited by shares can have a director (s) and Shareholder (s)
2. A business name has no separate legal personality from the owner and can sue or be sued in the name of the owner(s) of such a business whereas A company limited by shares is a separate legal entity from its shareholders and directors, it can sue and be sued only in it’s corporate name.
3. A business name doesn’t pay tax to the Federal Inland Revenue Service (FIRS) rather, the proprietor pays tax under the Personal income tax act to the State board of internal revenue wheras a company limited by shares is a taxable legal entity and pays its taxes to the FIRS in it’s corporate name under the Companies Income Tax act.
4. A business name is limited in capacity to bid for BIG contracts from government agencies or other companies as it doesn’t have more than the certificate of incorporation and application for business name doc while on the other hand, A company limited by shares has a certificate of incorporation and other documents like Memorandum an articles of association upon registration which are important documents to get big contracts.
5. A business name doesn’t have shares and is mostly funded from the personal funds of the owner whereas a company limited by shares can obtain loan in the name of the company and can also raise funds by issuing its shares to private investors.
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