When a friend of mine —Amina decided to start her bakery business in Abuja, she had everything planned out — the recipes, the branding, even the shop’s decor. What she hadn’t fully considered, however, were the legal steps necessary to secure her dream. Like many entrepreneurs, she was so excited to get started that she overlooked one critical part of the journey: protecting her business legally.
Starting a business is thrilling, no doubt. The vision, the passion, the late nights — it all feels worth it. But amidst the excitement, many new business owners skip a vital step: setting up a strong legal foundation. This oversight is not just common; it is costly. Neglecting the legal side can derail even the best business ideas.
The first mistake most entrepreneurs make is thinking that merely picking a catchy business name or launching a website is enough. It is not. Choosing the right structure — whether as a sole proprietor, an Limited Liability Company (LLC), a corporation, or an incorporated trustee — shapes your taxes, liability, and long-term growth prospects. For instance, had Amina registered her bakery as an LLC, she would have protected her personal savings from any lawsuits or debts her business might face.
Registration with the Corporate Affairs Commission (CAC) is another step too often delayed.
Operating without formal registration leaves a business vulnerable. Beyond that, banks, investors, and even customers often treat unregistered businesses with suspicion. Legal recognition builds credibility — and Amina learned this the hard way when a major catering contract slipped through her hands simply because her business was not yet registered.
Another quiet risk is operating without a business agreement. When friends start businesses together, trust feels natural. Yet, as countless stories show — including Jane and Tom’s painful breakup of their tech startup — without a clear agreement, simple disagreements can escalate into drawn-out, expensive battles.
A TIN (Tax Identification Number) might seem like just paperwork, but it is far from it. Without one, a business is invisible to tax authorities until fines, penalties, or even closure are threatened. Amina realized this when she tried to apply for a government grant, only to be disqualified because she lacked a TIN.
For those hiring employees, compliance with labour laws is non-negotiable. Employment contracts, fair dismissal procedures, and working conditions are regulated for a reason. Violations can lead to lawsuits, compensation payouts, and reputational harm.
Today’s entrepreneurs must also protect their ideas. Intellectual property — logos, inventions, designs — can be stolen if left unprotected. Registering trademarks, copyrights, and patents shields a business’s unique identity. A Nigerian startup’s court victory against a software copycat proved how early IP registration can save years of innovation from theft.
Finally, insurance often feels like an unnecessary cost — until disaster strikes. Whether it’s public liability insurance, property insurance, or workers’ compensation, the right coverage can mean the difference between surviving an accident and shutting down entirely.
The reality is simple: the legal side of business is not a luxury; it is the foundation. Entrepreneurs like Amina eventually learn that success is not just about the dream; it’s about securing that dream against predictable — and preventable — risks.
Building your business the right way from the start protects everything you work so hard to create. And truly, it’s better to be safe than sorry.
Abdul-warith Opeyemi Oladimeji (LLB, MSc, MBA, NPLM, ACIPM) is the Lead Consultant of DMJ-Global Consulting Limited, and the Team Lead of Future Builders Initiative (FBI). He is an academic researcher, legal analyst, and nonprofit leader specializing in management, resource mobilization and corporate governance. He helps entrepreneurs and organizations build strong foundations for sustainable growth. He can be reached through dmjglobalconsult@gmail.com
