The spate of exploitations, intellectual property theft and other unprecedented challenges which Micro, Small and Medium Enterprises (MSMEs) face in the country of late is becoming unbecoming. Some startups and entrepreneurs do not find it easy to weather the storms in business even after breaking even. All these quivers in business and more lead to either lawsuit or out-of-court combats which do more harm to business owners in the long run.
In this interview, Ifeoma Ben, a Legal Practitioner and Principal Partner, Eminence Solicitors and Founder, Legal Business Network and Justice Vault Foundation, elucidates on how to build a legally-compliant business and how ignorance of the legal aspect of business could damage businesses and why legal practitioners should be involved in any business ab ignition.
What does Legal Business Network do for businesses?
Legal Business Network is an entity set up to address the legal problems entrepreneurs face in their businesses. It aims at enlightening and educating entrepreneurs on the legal aspect of business, helping them build legally protected businesses. The mission of the Legal Business Network is to help entrepreneurs achieve their goals by providing high-quality legal guidance and service tailored to Entrepreneurs of all financial abilities. We provide value-added legal guidance with an in-depth understanding of the Client’s business, focused on results in order to enhance value to businesses.
From time to time, we organize Legal Business Meet-Ups for Startups and Entrepreneurs in different industries, enlightening them on the suitable corporate structure for their business, taxation, intellectual property protection and other legal aspects of their business, helping them avoid legal mistakes and build legally protected businesses.
Legal Business Network also organises conferences and trainings for Lawyers on topical issues and helps to equip Lawyers with business skills and educate them on how to leverage technology to build a 21st Century Law Business. The Legal Business Conference 2020 which was organised by the Legal Business Network was a great opportunity for experts in law and technology to discuss how to leverage technology to build a more profitable law practice.
How can legal practitioners help mitigate the pains of small business owners/entrepreneurs especially within the first 3 years?
Legal Practitioners can help businesses grow by offering legal advisory services to Entrepreneurs, legal documentations, company secretarial services and helping them stay legally compliant in business.
A lot of Startups complain about not having enough resources to pay legal fees. In my years of legal practice, I’ve discovered that a lot of Entrepreneurs make the mistake of putting off all legal issues until they are threatened with a lawsuit. They tend to engage Professionals only after a problem has arisen. There is a saying that “prevention is better than cure”. This is quite true. It costs you less to prevent a legal issue from arising than solving it when the issue has arisen.
I have been working with a lot of Entrepreneurs and Start-ups and have seen a lot of legal mistakes made by Entrepreneurs and Start-up companies. You can have the best Start-up ideas and Founding Teams but legal mistakes can destroy all that. It’s advisable for Startups to get a business lawyer or law firm on Retainer who will ensure that all their legal needs are taken care of. That will make them avoid unnecessary liabilities in business and help grow their business.
A legal Maxim said thus: Ignorantia juris non excusat”.
So many startups fail before they breakeven, not really because of a dearth of management or administrative acumen, or financial issues but for lack of knowledge on business law, what do some micro and small businesses need to know? That’s (building legally protected business).
First, Entrepreneurs and Startups must understand the importance of law in business. This is why we organize Legal Business Meet-Ups for Startups and Entrepreneurs to enlighten them on the legal aspects of business.
A business which has no solid foundation will fail. Entrepreneurs toil day and night to build businesses. However, very few Entrepreneurs and Startups think of ways of making their business legally-compliant. When you want to build a house, there is a need to lay a solid foundation. In my book: I discussed a lot of legal mistakes which Entrepreneurs make, which contribute to ruining their businesses. I will share a few points here.
• Failure to choose a suitable corporate structure (legal entity) for business
Choosing the right structure for business is one of the important factors to consider when starting a business. A lot of Start-ups are confused as to the appropriate Corporate Structure to use for their business. The decision on how to form your business will influence several aspects of the business which includes how profits and losses are shared, how the business pays taxes and who runs the business. You need to have a legal expert by your side when you are starting a business so as to ensure that you are taking the right step in your business. Based on your needs, a lawyer can help steer you in the right direction in selecting the legal structure for business.
• Engaging in Gentleman’s Agreement
In business transactions, Entrepreneurs often enter into negotiations and sometimes do not have clear-cut agreements. In some cases, we find out that there was no valid contract only when the matter goes to court. A Gentleman’s Agreement otherwise known as handshake deal simply means an oral commitment to a transaction. A gentlemen’s agreement relies upon the honour of the parties for its fulfilment. Having a gentleman’s agreement could put a business at risk for losing money. Every contract should be properly defined and signed by all the parties to the contract. Relationships with Vendors, Partners, Customers and Employees should be defined and reduced into writing. Written contracts protect your interests more effectively than verbal agreements. In a written contract, the rights and obligations of the parties are clearly spelt out. While it is good to develop long-standing relationships with clients, it is important to protect yourself and your business in the process. Engage your Lawyer to put a “gentleman’s agreement” into writing.
Some Entrepreneurs also make the mistake of “copying and pasting” when it comes to agreements. This can be very dangerous to your business. Contracts play a major part in businesses. A good lawyer can help you draft contracts to steer you away from potential legal troubles.
• Not having a Legal Advisor for the business
Every business needs a legal advisor. Businesses should build a relationship with a good Lawyer early enough in the lifecycle of the business. Your Legal Advisor will get to know the intricacies of your business and give legal advice when necessary. Do not make the mistake of engaging a Lawyer only when you are threatened with a lawsuit. It costs less to prevent a legal issue from arising than solving it when the issue has arisen. Be wise. Seek legal counsel and protect your business from liabilities.
Tell us what those in the entertainment industry need to know to be on a safe side to avoid intellectual property theft and other forms of exploitation?
The Entertainment Industry is growing very rapidly. The industry is governed by laws which protect the players in the industry. Music-related careers are affected by legal issues from time to time, ranging from artist contracts, recording and music publishing agreements to copyright issues, royalties, licensing, et cetera. While Artistes and Producers in the Entertainment Industry are interested in movie and music production, it is also very important for them to understand the basic legal aspects of the industry in order to stay profitable and avoid problems in their career. Intellectual Property simply means creations of the mind like inventions; literary and artistic works; designs; symbols, names and images used in commerce. The law recognises and protects these products of the human intellect from unauthorized use by others. Intellectual Property is a money-making machine. IP monetization strategies include Assignment, Licensing and Franchising; IP backed finance such as collateralisation, securitization, sale-leaseback and tokenization. Financial benefits from IP include using IP as collateral for bank loans, the increased value of business assets when selling the business to a new owner, revenue from royalties paid by Licensees and Franchisees of IP, paying debts using IP instead of money, investing IP assets in new projects instead of cash.
Creatives should take steps to register their intellectual property in order to avoid unauthorised use by third parties.
So why are legal luminaries indispensable for any business venture?
Lawyers are very important in business ventures because there are many laws relating to business which must be complied with. Each industry has its own laws and regulations and business owners might not be aware of all these laws. Lawyers help to ensure that your business interests and legal rights are adequately protected. Hiring a lawyer will take away the burden of dealing with laws relating to contract, employment, intellectual property, licensing and permits, et cetera. Lawyers play a very vital role in business.
Which other things are you passionate doing with your traits?
I am very passionate about solving problems and adding value to society using my legal skills. I have identified the problems business owners face and as a results-driven professional who has worked well in breaking down the barriers between the functions and the business and delivering momentum with greater efficiency and effectiveness, I’m out to help businesses thrive and stay legally compliant.
As a active member of the Nigerian Bar Association, Lagos Branch, I have contributed and still contributes to the growth of the Association in diverse ways and have worked on projects that impact positively on society. I was the Assistant Secretary of the Human Rights Committee of the Nigerian Bar Association Lagos Branch (2017-2019) and worked assiduously in achieving the objectives of the Committee in decongesting the Prisons. I offer pro bono services to Prison inmates and has assisted in setting many Prisoners free, especially those who were unjustly incarcerated. My passion for humanitarian services moved me to establish a Not-for-profit Organisation – Justice Vault Foundation, which aims at offering free legal services to the less privileged in society.