When it comes to questions and inquiries, I have hardly come across any profession that has it more than the profession of Wigs and Gowns. The law governs every aspect of human existence particularly businesses in this context. Business is the commonest way to earn a living and as the global demography expands, businesses spring up. These businesses are usually start-ups and Small and Medium-Scale Enterprises (SMEs).
For start-ups and SMEs, a few notorious questions have been identified:
“Do I need a lawyer when starting up my business?”
“Do I need a lawyer for my business?”
“Do I need a lawyer for my business to thrive?”
To these questions, this article provides answers in a simple way that satisfies your curiosity.
YOUR BUSINESS AND “THE LAW”
The need for a lawyer for your business arises from the fact that the laws applicable to businesses are countless; you cannot exhaust naming them for Nigeria alone! For further emphasis, each industry to which a business belongs has particular body of laws, rules and regulations. A young entrepreneur or a small business owner may be oblivious of virtually all the laws as they are innumerable. Beyond this, some laws even overlap.
Furthermore, as if the challenge of plurality of laws (so many applicable laws) is not enough, you would realise that these laws are dynamic. They keep changing and are continuously evolving in small and subtle ways that can cause one to suddenly be out of compliance with the laws, even though your business has not changed. Keeping track of all the changes and reforms in the law can be a very onerous and daunting task.
The actual laws applicable to your business would differ according to your geographical location as well as the nature of your business. Some of the laws include:
- Business formation and restructuring laws;
- Consumer protection laws;
- Contract laws;
- Laws governing Licenses and Permits, E.T.C
Strictly speaking, not all the laws are relevant to your business. Many laws are antiquated and some are not being enforced though they are still “laws”. This happens with very old laws that are somehow never rolled back and technically continue to be active. A lawyer is needed to keep track with these laws and their dynamics.
The reason for hiring a lawyer or involving a lawyer in your business is that a lawyer will help to provide you with vital assistance in almost every aspect of your business on areas ranging from incorporation to copyright and trademark advice, litigation, contract agreements, and general liability, et al.
Business ventures involve quite a few legal manoeuvres and know-how. Entrepreneurs must wear several hats in order to achieve some level of success and so it is advisable to leave the more complicated matters to the experts. These experts are called LAWYERS.
Lawyers conduct research, write legal documents, argue a client’s case before a court or negotiate settlement terms. A business lawyer is commercially aware. The focus of their legal practice is on issues that affect businesses. These issues range from taxation to various species and manifestations of business transactions and intellectual property.
By the ethics of the legal profession, lawyers are obligated to only do what is best for their clients. Rule 14 (1) of the Rules of Professional Conduct for Legal Practitioners, 2007 clearly states that:
“It is the duty of a lawyer to devote his attention, energy and Expertise to the service of his client and, subject to any rule of law, to act in a manner consistent with the best interest of the client.”
WHY FEAR EMPLOYING THE SERVICE OF A LAWYER?
The reason why most people do not engage the services of a lawyer in their business is mostly due to a single perception – Lawyers charging for their services at exorbitant rates. Truly, most small businesses or young entrepreneurs are not well funded or financially buoyant to afford the services of lawyers. Be that as it may, an entrepreneur or business owner needs a lawyer to have a successful and hitch-free business.
However, in a recent twitter conversation, Temitayo Ogunmokun, an associate at Elvira Salleras Law Practice remarked appropriately as follows:
“Avoiding legal advice on the basis of cost when starting out may turn to be a classic case of being Kobo wise, Naira foolish. You run the risk of running into troubles that you could have effectively circumvented with prior sound legal advice.
Consider money spent on legal advice as part of your capital investment. As a start-up seeking to break into the market, you don’t need to engage a Tier 1 law firm before you can get the basic legal help you require. Chances are that you may not be able to afford one anyway.
So look inwards. Talk to your network and friends. Get lawyers as friends and ask questions constantly. But ensure to reasonably and fairly remunerate them when appropriate. You will be better off for it and as your business scales, you will be able to retain maximum legal assistance.”1
INSTANCES WHERE LAWYERS CAN HELP
This heading focuses on certain areas with respect to which an entrepreneur should employ the services of a lawyer. The under-listed are very important areas, and are not limited to those, where you need a lawyer and detailed reasons for you to get one.
Deciding on a Business Structure:
It is important to understand that a business in the early stage ought to be well structured. It is possible for the business owner to first understand some basics before stepping out to structure his business. What then are Business Structures?Business structures are what lawyers call, the legal status of a business. They differ from jurisdiction to jurisdiction. This is more reason consulting a lawyer in your jurisdiction to know which structure your business should take is crucial. In Nigeria for instance, a banking business cannot be registered as a mere Business Name. It must be a public company limited by shares.
Suffice it to say that the responsibility of your lawyer is to know what business you are into and advice you on the law applicable to your business area. Thereafter, the lawyer ideally offers professional advice on what the most suitable business structure for your business is.
Protection of Intellectual Property
A lawyer is also responsible for offering advisory services pertaining to Intellectual Property Rights (IPRs). Intellectual Property covers a wide range of business and commercial issues including distinct trade ideas, prints, logos and insignias, designs, product outlook et cetera.
It is in the professional place of a lawyer to offer advice on the need to acquire exclusive rights over a trademark, patent, copyright, design and others concepts by registration. The Intellectual Property lawyer leaves no stone unturned in this light. Failure to protect IPR certainly equates the loss of such rights. What intellectual loss!
Before proceeding with in creating commercial reputation and goodwill for a business, it must be realised that a huge fortune could be lost to litigation and other tough legal battles if a business is found infringing on another business’ IP rights. A lawyer is therefore the go-to professional to save the fragile head of a business from such serious troubles.
Signing deals, contracts, or leases as well as negotiating for fees.
Commercial transactions are the engine rooms of a business. These transactions involve a lot of terms, agreements and compromises. On countless occasions, the need would arise for drafts of agreements and different memoranda.
“How does a lawyer come in? How now? Is it not just to sign a mere agreement?
But wait! It goes beyond what you think! Some agreements are constructed with clauses that result to business and legal crises in the near future. Interestingly, these clauses may be hidden behind the veil of good grammar and beautiful compositions that make their harmful effects not clear to the naked eye of the layman business owner. A competent lawyer certainly rises to the occasion in this regard.
A competent lawyer is required to use his legal eye and spectacles in drafting and vetting such agreements and documents. A competent lawyer is equally instrumental during commercial and legal negotiations. So many matters would never have gotten to Court with the employment of a competent lawyer who is skilled in weaving a business away from the dangerous claws of litigation.
Litigation is an instrument of final resort. Competent lawyers are around you. Get a competent one for your business.
Merger and Acquisition:
Here is one of the most important aspects of business that you cannot afford to toy with. Mergers and Acquisitions are delicate business restructuring options. In case you do not know what mergers and acquisitions mean, sit tight.
“Merger” as the word implied connotes the coming together of two established business entity to form a new entity. As a graphic example, the most recent in Nigeria is the Access and Diamond Bank merger. “Acquisition” on the other hand simply underscores a situation involving a company acquiring both the assets and liabilities of another business entity(s).
Perfecting business (corporate) restructuring requires deep legal expertise; it is not an area to dabble into recklessly. There are several laws guiding them. There are clear-cut steps and procedures that must be followed to consummate each restructuring option.
Indeed, the business affairs and whatever it gradually becomes is a confidential matter. However, in essence, this confidential nature of the business does not remove it from the purview of government scrutiny and regulation. Every government has a duty to conduct proper checks on every entity constituting the economy within its jurisdiction.
There are certain things businesses must do as a legal necessity. There are a number of documents to prepare and file, some notices, certain procedures to follow, certain obligations to fulfil and other critical issues. Importantly, any deviation from these rules of procedures is capable of running such business into crisis or liquidation!
Lawyers don’t just ensure your business grows, but also ensure that their clients’ business transactions are in compliance with the law. Lawyers are experts in company and business law, they understand the minute differences between legal entities and how to best utilise them for different purposes. Because business is vast and complex, a business needs to have lawyers to interpret and advise on proper action to ensure compliance. There are more than a thousand help a lawyer can render to your business but you won’t know if you don’t consult one.
With the plurality of laws, the constant change in applicable rules and regulation as well as periodic change of government and policies, it is absolutely essential for every business to employ the services of a lawyer. A lawyer would protect and defend the best interests of the business against the hassles and challenges incidental to running a business.
Would you cheaply suffer the wrath of the law? This is not an unpaid advert, it is an unsolicited advice! Do take it freely!
Pictrue of Lawyers in suit (From the Movie Series: Suits)
Partner and Head of Finance
Law Axis 360°
Jumoke Jeje is a self-motivated legal practitioner with a keen interest in Sports and entertainment law, intellectual property as well as tax law. She is a resourceful and dedicated team player. During her leisure time, she enjoys watching football and writing.