LAW AND BUSINESS TIPS: SOME LEGAL TIPS FOR YOUR BUSINESS

-

LAW AND BUSINESS TIPS

SOME LEGAL TIPS FOR YOUR BUSINESS

There are many legal issues which may make small businesses thrive. Here are a couple of tips to ensure your business entity works as easily as could reasonably be expected:

Form a Separate Entity

Determining the proper entity structure for your business matters a lot. A business entity may be formed as a company limited by share, a company limited by guaranty, an unlimited company, sole proprietorship or partnership. Your choice of entity influences operation, borrowing, and taxation. It is advisable to create a business entity which has a distinct legal personality from that of the owner. This is to protect the owner’s personal assets. Otherwise, the owner may be personally responsible for the debts and obligations the business may incur.

Maintain Proper Records

A business entity is required to create and maintain proper records which may include passed resolutions which document business decisions, documents relating to payroll, Agreement/Contract and document relating to taxes etc. A business owner must ensure that business records are in place. Proper record keeping is good for ease reference.

Document All Moves

A business entity should have its moves documented in the form of an Agreement, Memorandum of Understanding and the likes. Every relationship or undertaking entered into by the business entity must be documented. One of the benefits of this is that a well-prepared agreement can limit disputes and promote harmony among the parties.

Document Your Relationships with Your Employees and Independent Contractors

It is important to ensure that the relationships between the business entity and its employees and independent contractors are well defined and documented. It is also important to comply with all laws relating to employment.

Employee and independent contractor agreements must seek to protect business trade secrets and other confidential information.

A handbook is a vital document for regulating employment matters relating to the entity. It informs employees of the business’ policies and expectations. It can also protect the business against potential lawsuits and other complaints.

Protect Your Business’ Intellectual Property

This is very important to do. We have pointed this out in our last edition of this series (Law and Business Tips).

Always Adopt Confidentiality and Non-Disclosure Agreements (NDAs)

This is necessary when a business entity intends to explore the possibility of working with other business entities or individuals. The adoption of NDAs protects confidential information which might have been disclosed in the course of negotiation.

Take Steps to Avoid Litigation

It is very important for a business entity especially startups to ensure that litigation is avoided. Litigation should always be the last option. This is because litigation involves a lot of sacrifices ranging from finance, time, relationship etc. It is very expensive and distracting!

It is important to note that we are not saying that a business entity should put itself in a position of weakness or loss by avoiding litigation. Our advice is simply that a business should ensure proper planning, documentation and execution of its affairs; proper documentation of all transactions with third parties and avoid signing of bad contracts or contracts which you do not fully understand.

Get Legal Advice

This is the only sure way to avoid litigation. However, it is pertinent to state that while seeking for legal advice a business entity should avoid cheap or free legal advice. Cheap legal advice may at the end be very costly because cheap transactions usually produce poor result.

I have seen small business owners trying to prepare legal and contractual documents themselves in an effort to save money. Oftentimes, it is significantly more expensive for a legal practitioner to clear the mess created by such documents.

A diligent legal counsel can help a small business spot and avoid legal issues before they become destructive to the business. Get legal advice before taking important business steps.

 

Jimoh Mokanreola Bamigbola

M.J.B. BAMIGBOLA & CO.

mjbbamigbolaandco@gmail.com

Comments

Post a Comment

Popular posts from this blog

LAW AND BUSINESS TIPS: REGULATORY COMPLIANCE FOR YOUR BUSINESS

-
LAW AND BUSINESS TIPS REGULATORY COMPLIANCE FOR YOUR BUSINESS One of the fundamental mistakes being made by many startups is what I have tagged "let just do it after all na 9ja we dey syndrome/attitude." By this attitude, many startups do believe that they do not need to comply with the core rules needed to be complied with before floating a business, because they believe we are in Nigeria where laws are not really being enforced (let just assume without conceding that it is so that laws are not really being enforced in Nigeria). This is a fundamental error and it goes to the root of the business. In fact, it is a self-deceit which may ultimately lead to self-defeat. It is a mistake that will definitely tell on the business as time goes on. For instance, many business entities have folded up today due to non-compliance with relevant rules. Another factor to consider is the high possibility of unconsciously making bad deals as a result of lack of access to legal advice. Also,...
Read more

RECALL: A CONSTITUTIONAL RIGHT OF THE ELECTORATES

-
Recall is a constitutional process through which a public office holder could be removed from office by a popular vote. Aside that recall is a constitutional process, it is also a constitutional right of the electorates. Sections 69 and 110 of the 1999 Constitution of Federal Republic of Nigeria (as amended) provide for the procedures for recalling members of the National Assembly and State Houses of Assembly respectively. The provisions of the two sections are identical, and below is the summary of the recall procedures as provided by the two sections. 1.     The registered voters in the constituency where the lawmaker represents must come up with a petition alleging loss of confidence in the lawmaker. What amounts to loss of confidence is not defined in the Constitution, thus, the lawmaker needs not to have done any wrong or be culpable of any misconduct before the electorates may lose confidence in him. 2.     The petition must be signed by more ...
Read more