Over the years, I’ve spoken to hundreds of budding entrepreneurs with energy, optimism, and great ideas to turn their vision into a successful business. But they don’t always have a roadmap for handling the legal aspects of launching a business.
Here’s a quick rundown of five important steps to follow for your new business.
1. Make sure you can legally use your business name.
After you’ve brainstormed and come up with an awesome name for your new business, you’ll need to make sure it’s legally available for you to use. Use www.thenameapp.com to do a quick search of names available across platforms. Using a business name that is already taken could leave you open to lawsuits and can also confuse your customers when they search for you online. Trademarking your business name is always a good idea to avoid future infringement.
2. Register your business.
After confirming your business name, you need to create a legal business entity in your state. For Nigeria, a quick search on the Corporate Affairs Commission website will tell if your chosen name is available. It’s best you register with a barrister known for company registration to save time and the stress of dealing with Nigerian bureaucracy.
3. Get any necessary licenses and permits.
Depending on your specific business type and industry, you may need to get business licenses or permits from your state or federal office. For example, a restaurant or private hospital will need more permits than a graphic designer. These licenses can include: a general business operation license, sales tax license, health department permits, and occupational or professional licenses.
4. Get a Tax ID Number.
A Tax Identification Number (TIN) is simply a number that lets the FIRS track your company’s transactions. Your business is not completely legal in the eyes of the government until you start paying tax. It is best you pay your taxes regularly to avoid your business being shut down by the tax man.
5. Open a business bank account.
Once your business is registered (either as a business name or limited liability company) and you have your Tax ID number, you can open a business bank account. This will allow you to accept cheques made out to your business name. In addition, a business bank account keeps your personal and business finances separate – a must for businesses that intend to succeed.
These may all seem like basics to a savvy entrepreneur, however, you’ll find that several businesses in this terrain still don’t have these simple things in place. Several businesses are defaulting on one or two of these, its best to get all this sorted before it becomes a bigger issue.