Legal Guidelines for Small Businesses
Regardless of the nature of your business, whether you operate in services sector, Information Technology, retail or manufacturing, legal backing is important.
According to experts, there are certain milestones that you may want to achieve that will require certification from some government agencies or evidence of adherence to business standards and regulations.
Moreover, certain issues may arise that will also require the services of an experienced lawyer.
Experts observe that lack of experience by some entrepreneurs and failure to engage the services of an experienced attorney who will give them guidance at every stage, have been identified as the reasons why many businesses collapse shortly after starting.
The success of your business, according to experts, lies in the legal advice you get from your lawyer especially in the area of dispute resolution.
Experts say corporate lawyers’ role in business management are not limited to protecting the business against lawsuit, they also give advice on applicable laws and ensure compliance with them.
They also assist with negotiating business acquisitions and other transactions.
They say most entrepreneurs underestimate the role of a legal representative thinking it is unnecessary. But regardless of the amount lawyers charge for their services, the reality, according to them, is that a lot of time, energy and money are saved when they are involved in business decisions and transactions.
Experts have identified the key roles played by solicitors for every kind of business.
A legal practitioner, Mr. Kola Adejumo, says before a new business can be recognized as a legal entity, it has to be registered.
Doing this, he says will ensure its sustainability, growth, credibility and will provide numerous profitable opportunities.
According to him, a business owner requires the assistance of a lawyer at the beginning of the business to establish and build a solid organizational structure for the company.
To achieve this, he says, “The business will be registered with the Corporate Affairs Commission. With the help of a lawyer, the business owner can also get advice on government’s compliance policies; and can assist in obtaining the right permits and licenses.”
In the choice of a business name, the lawyer can give advice. He says, “The name of the business is very important because it must not be the same with any other existing business. And in obtaining a patent, which is always complex and time-consuming, a patent lawyer can help evaluate the product.”
Partnership in business has advantages over other types, because it will be easy for both parties to pool funds together and exchange ideas.
Besides, experts say a combination of knowledge, skills and creative ideas from the partners will propel the business into the right direction.
Despite this benefit, dispute may arise in profit sharing, as such a concrete agreement of dividends can be drawn by a lawyer.
According to Adejumo, a partnership must be entered into with both parties being aware of risks associated with it.
Therefore, he says business managers need to conduct due intelligence on previous business dealings of the partner, cases of litigation or criminal record. Afterwards, a partnership agreement should be drawn up by a business attorney to protect the assets against any loss.
According to her, the agreement is a legal contract that states the rights and obligations of each partner, the sharing formula of profits and losses and other issues that will protect their interests.
Drawing up a contract
Experts say a contract is a legally binding document between two or more people which comprises three elements: an offer, an acceptance and a consideration.
Adejumo says a contract is drafted to protect the clients especially in business-to-business partnerships.
He says the statement in a written contract comprises terms and conditions of the business, using words without ambiguity.
According to him, a contract is made up of many clauses, and will require an attorney to analyse, interpret and break down the words in the contract into simple and understandable language for the business owner to comprehend.
Settling tax issues
Payment of multiple taxes has been affecting sustainability of businesses in recent times.
In preventing huge expenditure on accumulated tax, experts advise that business manages should consult with tax professionals in this area.
Experts say adequate knowledge of when, where and how to pay tax will reduce the impact of non-compliance for all stakeholders.
A survey by an online marketing research firm, Decision Analyst, on small businesses shows that a number of them have most of their legal issues centered on debt collection.
It states that 20 per cent of the respondents say they need contracts and documents checked to protect their company; and nearly 10 per cent say they have to deal with contractor or supplier disputes, Internet security breaches, product liability issues, employee theft, tax audits, employee confidentiality issues, and threats of customer lawsuits.
However, all these can only be handled by a qualified and experienced attorney.
Regarding the qualities of the lawyer, Adejumo says, “You should ensure that your lawyer is registered with the Nigerian Bar Association because these days, there are a lot of people out there professing to be qualified when they are not. Therefore, ensure that your legal issues are handled by a qualified person. A good lawyer should have a good understanding of the law and have experience in the business he wants to represent.”