Get it Right from the Start
Indeed, no man ever goes to a fight without counting the costs. In the same vein, success in any business venture demands that a smart and future-minded business owner adopts a holistic approach in making sure that the business that is to be embarked on gets it right from the start, and in particular, as it relates to regulatory compliance and other pertinent legal issues.
Decide the Nature of the Business Entity to be formed
The first legal point one must consider is the nature of the business entity that is to be started. Questions, such as the following, can help the potential owner to decide on the kind of business entity to settle for: will I benefit more from the registration as a business name in a sole proprietorship or partnership? Should the business entity not protect its intellectual property, i.e. trade mark, patent, copyright or a partnership with the appropriate regulatory authority? Will the business owner be better off incorporating a private limited company (Ltd) as opposed to a public limited company (Plc)?
Answering the questions formulated can greatly be assisted by weighing the benefits for each business entity. For instance, registering a ‘Ltd’ company comes with benefits such as greater potential to raise capital; corporate taxation; capacity to sue and be sued in the name of the company (separate legal entity different from the owners/shareholders); but where less formality and less expenses as well as flexible management is to be considered, the would-be business owner may choose to register the business name and or register a limited partnership as is the case in Lagos.
Obtain Regulatory Approval/License
Depending on the nature of business you decide on, the prudent business man must seek proper legal guidance on getting appropriate regulatory approvals/licences/permits that are germane to the successful running of such business entity. For instance, will such an entity not be required to register with any of the following regulatory agencies: Corporate and Affairs Commission, the Nigerian Immigration Services and the Nigerian Investment Promotion Commission (when considering employing expatriates and partnering with foreign companies or contemplating foreign investment); Federal Inland Revenue Service, Securities and Exchange Commission, Standard Organization of Nigeria, National Agency for Food and Drug Administration and Control, National Office for Technology Acquisition and Promotion Act (when there is a contract or agreement entered into in Nigeria with any person outside Nigeria involving the transfer of foreign technology to Nigeria partners to be registered), amidst others.
The potential business owner should, by all reasonable means, avoid a situation where he becomes penny wise but pound foolish; recourse should be made to legal guidance, as at when necessary, in meeting with all legal obligations, in all undertakings relating to the business venture.