As an entrepreneur or a business owner, it is important to note the following as business transaction is concerned:

  1. When entering into a contract, the business owner should enter such a contract in the name of his/her business. This is to forestall situations in which the business owner becomes liable for the acts of the company. However, when a business is yet to be registered, the owner should not enter into a contract in such a name as such a contract becomes unenforceable. Only a registered business has the capacity to enter and enforce a contract.
  2. Also, in cases where the other party in a contract is a corporate entity, it is essential that you verify the registration status of such company, as it is commonplace to see persons that carry out business transactions with unregistered names, enter an agreement in such names. If it happens that you enter into a contract with an unregistered organization, enforcing such a contract on the organization will usually pose some challenges and difficulties.

iii.        There are generally two forms of contract: Oral Contract and Written Contract. It should be noted that the two are enforceable in law. Nevertheless, it is advisable that you reduce your agreement into writing either by yourself (even though not always expedient and wise) or through a lawyer. A written agreement is easily proved in court in the event of disagreement or dispute between parties. In your business engagements, it is important you avoid handshake agreements or gentleman agreements.

  1. In any transaction that involves an exchange of money, I will further advise that the handing over to the other party should be in a form that is traceable and evidential – either through the issuance of a cheque, bank deposit, or electronic transfer. In a situation where the money is paid in cash, the receiver should be required to acknowledge the receipt in writing. It is advised that cash payment without proof should be completely avoided. Aside from issues of denial of receipt of such money, there are many issues that can come up that would warrant proof. There is a case we handled recently, where a man collected some money but died before the execution of the business transaction. The family of the deceased was not willing to release the money to the partners as no evidence to prove it.
  1. Also note that it is unwise to sign an agreement that you have not read through and understood or given to your lawyer to study and advise you appropriately. Very recently, social media was flooded with the news about an artist who did not read her contract (or did not read well) before she signed. It happened that she already mortgaged her name and identity. Many have fallen into this trap, many others are still falling, and more will still fall into the same trap.

vii.       Exposing your names, ideas, and any of your intellectual property without registration and/or protection usually leads to sour regrets. Imagine you have started building customers and clientele around your name or logo for about 3 years. Then you decide to register the same but discover an existing or similar one to it.

viii.      Protection of your Intellectual Property (IP) through copyright, trademark, design, and patent, whichever is appropriate, is very crucial. These protections are available to protect your Intellectual Property against infringement. Many entrepreneurs in their desperate search for partners or investors tend to expose all their ideas, works, and products. Unfortunately, some would-be investors reject their offer and turn around stealing ideas, work, or products. Irrespective of how cheated the owner of the IP might feel, if not registered it would be very unlikely to succeed if he/she sues for infringement.

x. Irrespective of your kind of business, whether Micro, Small or Medium, there is a need for you to retain a lawyer for yourself. What a lawyer’s advice will save you will be nothing compared to what you could lose if you make the wrongful step on the side of the lawx

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