Legal Insights for business
Welcome to another episode of our Legal Business Series!
Last time out, we discussed the importance of having your Incorporation documents drafted by a legal practitioner. If you missed it, please follow the hashtag #LegalBusiness to catch up.
Remember Joseph? Becky’s former associate who stole away one of her clients (Alhaji Bako) and started his own digital marketing outfit? He registered a company and named it Bionic Don Limited.
Continue reading “Trademark- All you need to know…”
Welcome back!
A short while after Joseph left, Becky put in a bid to a fairly large consumer product company called Maximus Inc. for a print and outdoor marketing campaign to launch their new product. Along with the bid, she was required to submit a copy of her company’s Certificate of Incorporation and Memorandum and Articles of Association (MEMART).
The bidding process was quite tough with a lot of lobbying but Becky’s company (BeWise Digital Limited) eventually won the bid and was chosen to execute the contract. Becky put in a lot of time and resources to make sure the quality of her work was of international standard.
Welcome back! The Chronicles of Becky continue… *wink*
Recall that in our last episode Becky had to register BeckyWise Digital Limited in order to bring on a new investor and expand her operations. She was now able to get a new office location, upgrade her office equipment and employ additional staff… business was good.
As her client base grew, Becky was able to groom two of her more competent employees into associates whom she could delegate to work independently on different client accounts with minimal supervision. One of these associates was called Joseph.
Becky’s Story Continues…
Business started a bit slow for Becky but eventually things began to pick up and she started getting clients from all over the city. 6 months after startup, she had to hire two additional staff to help cope with the workload. Revenues were growing and business was good.
By the end of the first year, Becky’s business needs and capital requirements had grown significantly. She needed more staff, a new office in a better location with more space, office equipment for her new staff, two pool cars for her team to use when going out on client engagements, etc. Because her business was doing well, she was able to get a potential investor willing to bring in new equity to help with her expansion drive.
Day 2
Case study
In the previous post, you were introduced to Becky, the high flying digital marketing professional, who lost her job and decided to start up her own Digital Marketing Agency.
The structure she decided to adopt for her business was Sole Proprietorship. She figured this was the best option for her because she was starting out on her own and the cost and requirement were minimal.
This is how BeConnect Agency came to life.
Case Analysis
There are a number of different #LegalStructures that differ in several important aspects. Your choice will depend on the purpose/reason for operating that business. To we will be looking at the Business Name (Sole Proprietorship) structure.
Who can register a business name?
As long as you are an adult, of sound mind, and have not filed for bankruptcy, you can solely register a business name. A minor can be also be added as a proprietor provided two other adults are also listed as proprietors and a Legal Practitioner, Magistrate or Justice of the Peace attests on behalf of the minor.
What do I need?
You will need two (2) passport photographs, means of identification (International Passport or Driver’s License), Certificate of Proficiency (where needed) and payment of filing fees.
What kind of businesses fits the Business Name structure?
Generally, most businesses can be registered under the Business Name structure. Examples include digital marketing services, make over services, consulting businesses, furniture makers, interior decorators, Sports promoters, estate agents, catering services and so on.
Pros
• It is the cheapest to set up
• One person can register a business name
• Tax liabilities and annual returns are lower than for other structures
Cons
• You bear all the risk, debt and liability
• When you die, your business dies with you
• Since you don’t have share capital it would be difficult to raise funds
• You cannot register a trademark to protect your products or intellectual property
Please make sure you seek advice before registering a business name because once it has been registered you cannot upgrade it to a limited liability company except you first file for cancellation of the existing business name.
We would catch up with Becky’s story in the next post. Thanks for your engagement so far. Any questions?
Case study.
Becky, the vibrant and highly skilled Head of Digital Marketing for an upscale advertising firm, had long dreamt of going to the Maldives on vacation. She planned to go on the trip in June 2016 and had already saved about N700,000.00 to cover travelling expenses.
Her dream went up in smoke when her contract of employment was suddenly terminated in January 2016. The usual reasons were given: economic crunch, dropping revenues, etc., etc.
Her priorities instantly changed. She decided to take her destiny into her own hands. She pooled her severance package with the vacation cash she had stashed away and decided to start a business. She was confident she had the skills and intelligence to succeed.
This was her time to take charge… her time to shine!
Case analysis
If you find yourself in this kind of situation, or you just feel it’s time to start up your own business then fret not! I will take you through steps you need to take to build a #LegalBusiness.
Firstly, you need to decide what kind of business you want to go into and get clarity on your strategy. If undecided, you might need to seek the help of a coach.
When you are clear on what business you want to operate, the next thing is to choose the #legalstructure your business will operate under.
Now this is the most important decision you will make for your business as it will determine;
• The type of documents you are to file
• The amount you pay as tax
• The extent of your liability
• Your ability to raise money for your business and so on.
Tomorrow, we shall be looking at the various #legalstructures available and analyzing which one of them suits your business.
Are you in this situation? Have you given any thoughts to the legal considerations of starting your business? Please share your insights.
Thank you!.
Hiya! Welcome to my blog😁.My name is Ronke Omorodion. I am a Legal Practitioner (not charge and bail lawyer o! Lol) I would describe myself as a legal consultant with a passion for helping entrepreneurs build structured businesses that are legally sound.
Now I know you might think once you register your business name or company you are done. News flash! That is so wrong. Depending on the kind of business you operate, there are other legal factors you need consider to make sure you do not put yourself or your business at risk, lose money or crash your enterprise.
I will be dishing out my signature #LegalBusiness series which will be targeted at exposing to you the various steps you can take to give your business a sound legal footing and structure.
Don’t worry I promise to make my snippets brief and straight to the point. There will also be lots of #storytelling *wink wink*. Please let me know if you have any questions by dropping a comment below.
I look forward to interacting with you all! Bye for now
Ronke Omo's Blog