You have identified a niche market, done your market research, created a business plan, incorporated a limited liability company or registered a business name, and you are all set to transform your idea to reality. But before you open for business, it is important that you consider all of the legal requirements for running a successful venture.
This week we discuss some of the core requirements a new business owner should put in perspective-
Taxes
Companies or Business Names are required to register as Corporate Tax Payers upon commencement of business. For new business owner the Taxpayers Identification Number (TIN) is free and is now generated automatically after registration with Corporate Affairs Commission.
Companies in Nigeria are required to file Value Added Tax and Withholding Tax returns not later than 21st of every month. It is also important to note that the Companies Income Tax ought to be filed after the end of the Accounting Year or 18 months after the commencement of business or whichever comes first.
Licenses and Permits
Depending on the nature and location of your business, a number of licensing and permitting requirements may apply. For example, if you are in the advertising space, you will need to register with Advertising Practitioners Council Of Nigeria (APCON). In addition, you may be required to obtain a business license from the State or Local Government where the business is located. Before you open for business it is important that that you have complete information about the requirements relating to your business sector.
3rd Party Relationships
As your business grows, you will likely need supplies or services from others and you should carefully consider any vendor agreement that your business enters into. Make sure that it accurately reflects the business terms that you agreed upon and that it doesn’t unfairly burden your business or require that your business take on a disproportionate share of liability.
In your agreements ensure that you properly name your business as the contracting entity, rather than yourself, so that you don’t inadvertently incur personal liability.
Employees
When the time comes to hire employees, it is important that the business aligns with all relevant statutes governing employee relations in Nigeria. Some key statutes include: the Labour Act; the Employees Compensation Act; the Pensions Act etc When a hire is made, The law requires employers to provide an employment contract setting out the terms and conditions of employment.
In addition, employers may perform background and medical/drug checks when deciding hire a potential employee. Such checks may be performed by a third party, and must be undertaken at the employer’s expense.
TAKEAWAY
Running a business in Nigeria can be a daunting prospect considering the sheer number of issues to be considered and different governing bodies involved. However, tackling these issues with the help of professionals would result in a solid foundation for future growth and success.