4 Major Reasons Why You Need A Lawyer For Your Business
It is best for a lawyer to examine the organizational structure of your company rather than a judge! Top law firms in Nigeria, employ all kinds of lawyers to advise their clients on legal obligations, rights, responsibilities and commercial laws. This also includes the formation of corporate structures, associations, joint ventures, sole proprietorships, and partnerships.
Additional, they ensure that the provisions of an agreement are clear, unambiguous and won’t cause problems for their clients. Lawyers have become one of the most sought-after professionals for many business owners due to the high risk involved when legal matters arise. This is why we will discuss 4 major reasons why a business needs a lawyer.
1. Company Formation, Governance and Operation
A company formation is a legal entity created under the laws of its country of incorporation. Nations make laws regarding the creation, organization and dissolution of corporations. In the case of Nigeria, the Companies and Allied Matters Act, 2020 (popularly known as “CAMA 2020”) is the relevant law governing corporate matters and it was signed into law on August 7, 2020, to replace the 1990 Act.
CAMA 2020 governs all residents and foreigners intending to do or doing business in Nigeria. This is to improve the ease of doing business in Nigeria. CAMA 2020 treats a company as a legal “person” and is distinct from its stakeholders. As a result, a business may file a lawsuit or may be sued.
The legal independence of an organization shields shareholders from being personally responsible for corporate debts. A lawyer can help a client form, organize or dissolve a business entity. To form a corporation, lawyers draft “articles of incorporation” which specify the management of the internal affairs. Also, they can draft a “Memorandum of understanding” (MOU). This helps their clients decide on a suitable business structure for their operations and determine the relationships with the shareholders.
2. Intellectual Property (IP) and Acquisitions
Intellectual property can contain many sorts of assets, including trademarks, patents, and copyrights. A company that decides to acquire intellectual property may require the legal counsel of a lawyer or a law firm. This counsel could be on the intellectual assets, contract of agreement, or relevant documents that prove ownership of the property.
Typically, to evaluate a proposed asset, a team of lawyers or a law firm reviews the assets. This is to ensure that all properties and acquisitions are legally protected from external use without the consent of the owner. Acquiring intellectual property requires heavy investments in brainpower and time of skilled labour. This is why businesses need a lawyer to protect their IPs.
3. Investment Capital
A lawyer may advise a business on private and public financings and day-to-day expenses. This means that lawyers can help new or old businesses seek and manage funds. Also, they can assist business owners organizes their finance and maintaining the legal structure of their finance.
Aside from these responsibilities, the lawyer may help build and expand businesses through their legal counsel Which could come in different forms. These may include technology licensing, merging, acquisitions, and negotiating financial terms with lenders and investors in case of corporate partnerships or other legal entities.
4. Company’s securities
A company’s securities are referred to as financial instruments, typically any financial asset that can be traded. The nature of what can and can’t be called security generally depends on the jurisdiction of the trading assets. Company Securities include shares and stocks of a company and all rights to purchase or otherwise acquire it. Companies may require the legal counsel of a lawyer on certain protocols regarding the disclosure of data to shareholders or investors.
To ensure the company operates within the legal framework, lawyers may prepare reports for initial public offerings, yearly and quarterly disclosures and special disclosures whenever required. A company’s first major sale of equity securities to the general public is referred to as an “Initial Public Offering (IPO)”.
Bottom line
When a company hire a lawyer, he/she represents the company as an entity, not its shareholders or employees. This is because a corporation is treated a lot like a person, as a singular entity under the law. Also, a lawyer who helps a client form a corporation may counsel the client on the management of the business. This may include reviewing a lease for office space or equipment, drafting of valid contracts, nondisclosure and non-compete agreements.
Furthermore, lawyers might research the various aspects of employment law, and environmental law, or consult with another lawyer who specializes in that field to resolve some legal matters. Business executives also seek advice from lawyers on the rights and responsibilities of corporate directors and officers.
Any entrepreneur starting a business venture could benefit a lot from a lawyer. It is advisable to have a lawyer on board or hire a law firm to craft the documents of your business. The lawyer or law firm can also review your contracts, and help you make other strategic decisions.
It is not easy for smaller businesses or businesses with financial constraints to hire a lawyer or a law firm. But hiring a lawyer is necessary when forming a business venture. Also, they can help to restructure or close a business and mitigate risks when problems arise.
