Is your Business Well-Structured? Why Legal identity and Business Structure can influence Growth, Enhance Success, and Promote Longevity.
Dear Entrepreneur and Business Owner,
Is your business well- structured?
By business structure, I’m talking about the legal categorization of your entrepreneurial activity.
Are you a sole proprietorship, partnership, limited liability?
Is your business scope vast and you operating as a Public Limited Liability company?
Or your activities are not designed for profit.
Thus, you serve the community as a Non-Governmental Organization working for societal good.
Or you fit into one of the many categories of business structures available out there.
No matter how small, having a legal identity and business structure is important.
Working in the shadows
Without a doubt, a large percentage of the Nigerian population engages in one economic activity or the other.
While a sizeable number operates in the Agricultural sector, albeit at the subsistence level, others participate in other sectors.
Many fall under the classification of Small and Medium Scale Enterprises but do their thing without any desire to register with the authorities.
These citizens see no need in establishing a business structure.
This complacent attitude is not limited to those without formal education.
A host of entrepreneurs with formal education do their thing without giving business registration or structure a thought.
They set up shop and throw their hats into the ring, conducting business in the shadows of the law.
There is no doubt that a lot of businesses outside the formal sector of the economy thrive.
But while a business can be successful without formal registration, the benefits of doing so cannot be underestimated.
Your business structure will impact operations and can influence how well the enterprise performs in the long term.
Having a registered business can impact your ability to scale up. Investors may not support a venture that is not structured.
The same applies to financial institutions that offer loans or organizations that give grants.
In the same vein, your business structure can limit or determine what kind of business activity you perform.
It will also establish your level of personal liability when things go the other way.
It may even influence whether your business will continue to thrive when you are no longer in the driving seat.
But note that the business structure is different from the licenses that a business may need to obtain to offer its services in the first instance.
For instance, a hospital will need a professional license from the government.
Whereas the hospital may also be set-up by one person, it may also be the investment of several persons.
The Corporate Affairs Commission
In Nigeria, the Corporate Affairs Commission is the agency of government saddled with the responsibilities of registering businesses.
Categories of Business Structures
There are several categories of business structures.
The categories include:
- Sole Proprietorship
- Limited Liability Company
- Public Liability Company
In another post, we will look in detail at the categories and examine the features and specific merits of each one.
But in the meantime, suffice to say, registering with the appropriate regulatory agency is the first step in establishing a good structure for your business.
Am I too small to have a formal business structure?
So, are you a freelancer, make-up artist, a farmer, restaurant operator?
Are you a housewife doing business from home?
Are you a student, a technician, an artisan, or a trader?
Whatever sector you operate in, it is vital to have a legal identity and a business structure.
Because you never can tell how successful your brand will be in the years ahead. Amazon, the largest e-commerce platform in the world, started from a garage. It made its founder, Jeff Bezos, one of the richest men in the world.
In the same vein, Apple started in a garage, but it is one of the biggest corporations in the world today. Apple is a game-changer in the field of technology.
Here at home, there are countless examples of businesses that started from the bottom and grew to become national brands. Tantalizers, a leader in the food sector, come to mind.
Having a legal identity and business structure provides a solid foundation for growth.
Without the right structure, you may find it tough to scale your business to its highest potential.
Consider it a priority if you are yet to register your business.
Step out of the shadows.
Do not entrench forever on the sidelines.
What are your thoughts about business structure? Join the conversation. Please share your comments below.
List your business on Ezone Direct
Are you one of those business owners waiting for customers to find you or come knocking on your door?
Are you banking on a sudden, instantaneous breakthrough, a string of good luck to push your business to the next level?
Or are you working hard to promote your products and services to consumers?
Remember, business is competitive. And others are as good as you are or better. Hence, it is those who promote their products and services stand a better chance of swaying the customer.
List your business on Ezone, because you will attract new customers and increase your bottom-line.
And it is free to list on the site.
Call us today.