After a product, service or business idea is discovered and designed, protective hedge(s) must be built around it. There are numerous legal requirements that an idea or a business organisation needs to be legally shielded. Meeting legal requirements gives your business clout, power, rights, identity, official recognition (internationally and/or nationally), trustworthiness, standardization, protection etc.
Legal requirements are demanded by government regulatory bodies firstly, for the business; to make it a legal entity, secondly, to make it a corporate citizen and thirdly, for the products / services; to give it benchmark, control and standardization. Whether your products / services are regular, innovated, invented, licensed or otherwise, there are requirements to be met to give it protection and recognition. Below are the various legal requirements you must consider meeting before operating at full scale for the safety and general good of your business:
1. Business Name Registration: the Corporate Affairs Commission (CAC) is the body charged with the task of registering micro and small businesses as ventures or enterprise. It is the business name that is registered and your name(s) or any other name(s), word(s) or formed word(s) that is not yet registered with CAC can be used to form (part(s) of the name. A business name number (BN) is usually assigned to that business name. Today such name can be verified on the website of the commission to authenticate if it is a registered business or not. However, a registered business is not limited in its liabilities.
The owner bears the legal and financial burdens of such enterprise. The owner pays personal income tax. In other words it is the owner that pays tax and not the business. Also if the business is sued, it is the owner who is sued. However, a registered business name gives the business power to carry out contracts with government, corporate bodies and individuals in a legally.
2. Incorporation: the Corporate Affairs Commission (CAC) is the body in charge of incorporating a business in Nigeria. An incorporated business is a corporate entity and a corporate citizen which can be owned by 2 to 50 people who own various share values in it. The shares are known as private shares (or equity). It is a far more advantageous form of business since it can sue and be sued. The owner(s) are neither the ones sued nor do the losses or liabilities of the company extend beyond their shares in the company. The only loss the owners / private shareholders incur in the case of crisis or problems is their shares in the business which is their major stakes in it. There are certain businesses that registered business ventures cannot do but which an incorporated business can do, an example is export business.
3. Trademark: the Ministry of Trade and Industry is the body saddled with the task of trade marking or registering business logo or product / service name as a trademark in Nigeria. This is usually an exclusive right to use the name you gave to your product / service. It is also an exclusive right granted you to use the logo you designed for your company, product or service. No other person, business or organisation can use such name or logo to trade without your permission. You or your company is legally empowered to sue anyone who uses your trademarked name or logo without permission or license. It is only a registered organisation, business or company that can obtain trademarks. Therefore, you must either register or incorporate your business first.
4. Patent Right: if you invent the product you are building the business on or around, it is advisable to patent it at the Patent Office. This aspect is not very well-known and used in this country presently. However, Nigeria has a functioning patent office or registry that is presently giving patent rights to inventors and innovators as at today. Not many entrepreneurs and creative individuals are aware that their inventions can be patented so that no other person or firm can produce or reproduce what they invented without license or permission from them. This gives them an exclusive right to be the ones producing such products for as long as 20 years from date of filing for the patent. Patent right covers both novel (new) inventions and improvement on old inventions. However abstract ideas cannot be patented.
5. Copy Right: a copyright is the exclusive right you have over a works such as books, music, movie/film, online photos etc you have created. Copy right is the right to use your property which can be intellectual or otherwise. Any one that must use such property must obtain permission or license from you. The permission or license can be granted if the user satisfies your requirements which may include payment of an agreed amount as royalty. whether it is book (e-books included) you have written or writing, songs, music, movie, videos or film you are producing etc. or other intellectual properties such as games, pictures, paintings, artworks, innovative designs, software, apps, or even business plan etc, you need to copyright it.
The National Copy Right Commission is the government regulatory body that is charged with this. Before embarking on mass production or producing in commercial quantities, it is wise to obtain a copy right because once it gets to public domain intellectual properties are easier to be stolen or pirated than most other product. In most cases this right obtains when the work is already stored, published, transmitted or fixed in or through a medium such as in an electronic system or in a publication. Consult intellectual property lawyers for clearer insights.
6. Royalty Right: royalty is usually certain agreed payment made to you for the use of your trade mark, patents or copyright. Royal can be perpetual or based on ine-time use. The right to collect such payment is called royalty right. Royalty rights can be for music, books, movies, films, videos, arts, TV/radio shows/contents, software etc. Remember also that the payment you make to government agency to in order to be permitted to do certain business can be called royalty.
7. Franchise: a franchise is the right to trade with or do business under the name, brand and / or the logo of another organisation. Certain companies called franchisors permits other companies or individuals called franchisees to trade or carry out businesses under their name and logo.
8. License: a license is simply a right or permission granted by the owner of an asset or property to use the property. When permission is given to you or by you for the use of a trademark, copyright, franchise or patent that is license. License is also an official permission to practice certain profession or carry out certain business.
9. Product Standardization: the Standard Organization of Nigeria (SON) is the body that regulates product manufactured within or imported into Nigeria. The body ensures that every product manufactured or brought into this country from other countries meet the stipulated standards. They ensure that manufacturers and importers do not put substandard products in the public domain or in the market. If you are going into manufacturing you should ensure you study their requirements and meet them before going into business or at least you begin studying them while you are starting the business so you can eventually meet the standards as you grow. Once your business reaches certain level this body may come after you to inspect your products and factory. Failure to meet standards may result in dire consequences.
10. Food and Drug Standardization and Approval: while other products are very important for safety and well-being of consumers, foods and drugs are much more important. These are the most urgent and most important needs and if not ethically merchandised can lead to colossal damage to lives. Hence a special regulatory body called National Agency for Food and Drug Administration and Control (NAFDAC) was set up to regulate the production and supply of foods and drugs into the market. NAFDAC is perhaps the most widely known regulatory body today in Nigeria. Once you begin to think about processing, producing and packaging food to sell you must also put NAFDAC’s requirements and approval in the picture.
11. ISBN and ISSN: these stand for International Standard Book Number and International Serial Number, respectively. Both are issued by the National Library Commission to publishing companies that apply for them. ISBN is issued on a book, while ISSN is issued on books that are in series or periodicals such as newsletters, newspapers, magazines etc (both print and electronic editions). If you are publishing a book, series or periodicals you should have a fair knowledge of this. If you are going into self-publishing you must liaise with a registered publishing company or publishing business to be able to obtain both ISBN and ISSN as the commission will not issue them to individuals.
Though there are many such materials without ISBN or ISSN, these numbers give you legal protection and recognition. For example a book with ISBN and a magazine with ISSN will be usually required to have copies at the public library since they are listed in the National Library Catalog. However, if you leave the publishing entirely to a publishing house/company they will know what to do since this is an integral part of their works.
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