Common legal mistakes small businesses make and how to avoid them – Expert
The Chief Executive Officer of Lawboxng, Olusola Adegoke, has highlighted some common legal mistakes people make when starting a small and medium-scale business in the country.
Some of these mistakes include involving one’s family unnecessarily in business, and failure to seek legal advice, amongst others.
Adegoke stated this recently while speaking to Nairametrics during our Business Half Hour programme.
The common mistakes: Commenting on the major mistakes people make when tying the legal end of a contract, she explained that some people often assume that the other person understands their vision or knows where they are heading.
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She added that people also make the mistake of involving family and friends in businesses which can get very emotional when things are not going on well, thus causing issues in the family.
“So I always advise finding a partner that you’re not having blood ties with, then you go into business and you do your research on who they are, what they do, the kind of experience they have, financial standing and all,” she added.
Adegoke added that signing contracts without seeking legal advice considering that certain clauses could be implicated in business is also a be a big deal. She said:
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“There’s a particular clause that people take for granted and that is the exit clause. you realize that when one partner wants to walk away, another person disagrees with some of his terms and it becomes an issue.
“If the business has no exit clause, you see them going to court, So clauses are very important in business to address questions of; when one party is leaving, what happens? what’s in your exit plan? are you giving out a percentage of the business to this person? Is this person leaving with you know a particular compensation?”
Advice/recommendations: Adegoke said that in addition to an exit clause, business partners should also indicate a Force Majeure clause in case of unforeseen circumstances or anything that could hinder the party from fulfilling the terms of the obligations of the contract.
She advised against attending meetings alone, noting that it is also a big mistake that every business-minded person should avoid.
“Try not to attend meetings alone. If you cannot afford to go with a lawyer, Please go with an intelligent person or somebody in your circle. when you go to meetings alone, there’s always that likelihood that you could be manipulated into thinking that something works right, but when you have somebody with you, the other person is seeing things differently because this person is neutral, so I always tell people to go to meetings in the company of your lawyer or go with just like a neutral person,” She said.
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Curated from: https://nairametrics.com/2022/12/14/common-legal-mistakes-small-businesses-make-and-how-to-avoid-them/
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