Startup 101: First Of All, Introduction

This article first appeared on TechCabal

I have been mandated/coerced/persuaded/psyched/engaged/instructed (call it what you will) by the good people of TechCabal to do a legal series on the needs of the Nigerian startup/entrepreneur, and this article kick-starts our journey into Startup 101 – A Legal Perspective.

I am hoping this journey into the basic legal needs of every startup will not only inform and enlighten but would also be practicable and adaptable in your startup journey.

I promise to try to speak only English as we set out on this journey and keep the legal jargon to the barest minimum. After all, the startup grind is difficult as it is without having to make it worse with legalese prose.

So a brief teaser on what to expect in this series:

1. Setting Up Basics: I have met a few people who think the only legal entity that exists in Nigeria is a “company,” and I know some reading this article are also of the same perception. Actually, that is not the case. I am pleased to announce to you that in Nigeria, there are various options available to people who seek to set up businesses. Such entities include the Sole Proprietorship, Partnership, Limited Partnership, Limited Liability Partnership, the Private Limited Company,  Public Limited Company etc., with each structure relevant to various business needs. While not all these entities are suitable for a startup or an entrepreneur, we would touch on the various structures relevant to an entrepreneur.
2. Setting Up Basics II: A single article would likely not do justice to the issue of setting up a business. So in Part II of Setting Up Basics, we will touch on the pros and cons of each entity we considered in Part I. Basically, why you should opt for one structure over the other, which of course would depend on your peculiar needs and the stage you are in your startup/entrepreneurship grind.
3. Founders Relationship: Having touched on the boring but extremely essential stuff, it gets a little more interesting as we proceed in the series. Here we will discuss the legal structure that needs to be in place among founders when they come together to do business. Is a handshake enough? Would a paper napkin acknowledgment of roles suffice? What are the essential terms that need to be in place among founders? If you like your glass half-full, the question would be, “how do we keep the marriage peaceful and mitigate the likelihood of a divorce?” and if you like your glass half-empty, the question would be, “how do we make plans to make the divorce as painless as possible “in case” it arises?”
4. Vesting: What exactly is vesting? How does it work? What is a cliff period? Why vest? Well, if you stay the course with us, these questions and more as they relate to vesting would be addressed.
5. Intellectual Property: How can I protect my ideas? What are the patent laws in Nigeria? Are designs protected in Nigeria? Is copyright relevant to startups and entrepreneurs, or just people in the arts? Why and when do I need to trademark? What is a service mark?
6. A Few Useful Documents to Note: Certain documents are sine qua non essential to the startup grind. I would list some of these documents, explaining their usefulness and why you need to have them in place.