The Lagos State Employment Trust Fund (LSETF), an organisation established to create job opportunities and tackle unemployment in Nigeria, says proper legal structure implementation is required to sustain the economic growth of Micro, Small, and Medium-sized enterprises (MSMEs) in Nigeria.
This was outlined during a physical legal clinic event held in Lagos on Tuesday themed ‘The purpose of business entity for small business owners’.
According to LSETF, the economic growth of small businesses in Nigeria is determined by the depth of understanding and implementation of certain legal structures required to sustain a business.
The legal business structures are sole-proprietorship, partnership, corporation, limited liability companies, and cooperative businesses.
However, business entities need to understand that identifying an organisation as a company or enterprise, registering a business with The Corporate Affairs Commission (CAC) of Nigeria, having stable financial capital and funding coupled with financial literacy, and consistent networking with like-minded business owners are key to sustaining a business.
Oyeyemi Aderibigbe, senior associate at Templars facilitated the event by highlighting major challenges MSMEs, especially market women face while setting up a proper business in Nigeria and proffered solutions to them.
“An entrepreneur is expected to be intentional about how to get more knowledge of their business before investing in it. They should determine whether it should be a company or just a personal brand and also know the product offering before registering it as a company or enterprise,” she said.
She added that one of the advantages of registering a company, a limited organisation with employees, or an enterprise for buying and selling or rendering services, is getting a better legal structure to sustain the business and avoid fraudulent acts.
The Corporate Affairs Commission (CAC) of Nigeria is a government body responsible for regulating and managing Nigerian companies.
Michael Nwabufo, ambassador for the Corporate Affairs Commission, recently revealed that business registration can now be completed within 24 hours through the new special registration portal.
To facilitate the deadline for business registrations on July 7, the CAC introduced a Special Registration Portal (SRP), a new system enabling businesses to complete their registration directly through their mobile banking apps.
Aderibigbe noted that the major mistakes business owners make are to involve people based on emotions rather than those who are knowledgeable about it, financially literate, possess good character with no crime record, and can make good decisions.
“Entrepreneurs need to be aware of certain licenses to practice in Nigeria or other countries, necessary taxes to be paid while practicing, and professional organisations that can give loans or grants when necessary,” she concluded.
