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Starting a business but concerned about capital? All you need is the right strategy and great support.

Gbemi Olateru-Olagbegi, Founder of Gbemisoke Shoes & Co-Founder of TNC Africa and Vanessa Nwuka, Founder of VeeStore shared practical steps to getting started with limited capital.

Gbemi Olateru-Olagbegi

As you go along, you will figure out what works for you. You’re going to make mistakes and you will learn from those mistakes. Look around you, use the people around you. Is there a friend that studied marketing or advertising or works at an agency? Reach out to them for help. You don’t know everything and you can’t do everything yourself

Vanessa Nwuka

Before you take a loan, you have to have your books ready from day one. Your accounting has to be good so they know that you’re serious and they can lend you the amount of money you’re asking for. Be disciplined. If you cannot repay at the date you agreed, you have to communicate with your lenders early enough. It is really important because trust is key.

Getting Started with Limited Capital

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The first conversation in our Business Guide Series brought to you by Brass Business Club.

Damilola Odufuwa, Co-Founder and CEO of Backdrop and Ore Runsewe, Founder of Arami Essentials, spoke to us about their journeys getting started in business.

Damilola Odufuwa

One of the things our team did that I really loved early on was reaching out to the first users to get their feedback on the app and one of those users helped us create our backdrop near you feature… I would always suggest to anyone building an app to speak to your first set of early users.

Ore Runsewe

If I had to give anybody advice, if you have a 9-5 and you have a business on the side, try and do it for as long as you can. There comes a time where it’s not possible anymore and you have to respect that but where it’s still possible, I think still do it.

Starting Your Own Business

Imagine an ecosystem where there is no governing business operation standard. Chaotic right?

To avoid this happening or at the very least, reducing its occurrence, there are compliance checks every business must subject themselves to. These checks may vary between different countries, but for the purpose of this article, we will be focusing on business compliance in Nigeria.

When we talk about business compliance, it goes beyond the documents and statutory checks  needed for business approval. It is also about how employees should be treated and compensated, how decisions are made in an organisation, how customers and business data are handled etc. Business compliance is an essential position every company should strive to attain. 


## Definition

Business compliance is the process of making sure your company and employees follow all laws, regulations, standards, and ethical practices that apply to your organisation and industry.

It is also a requirement of all organisations that want their business activities to be approved by their government and investors. With effective management of these processes, businesses can reduce excessive costs, improve margins and increase profitability over time.

The purpose of compliance is to ensure that an organisation’s policy, procedures and actions are in accordance with the law and in compliance with regulatory requirements.

## Why is business compliance important?

The importance of business compliance are highlighted below:

- To protect your business from fines, lawsuits and reputation damage that may have otherwise been caused through violation of rules.

- To stay legally compliant with the governing laws of the land your business operates in.

- Protects your business from risk and liability by preventing events that can negatively affect your business operations.

- Enables swift decision making in matters that regards to ethics, values, code of conduct and policies.

## Why does compliance matter?

 **To build a good reputation** 
 
 By staying compliant as a business, you aren't only showing the governing authorities that you are fit and veritable to run the business, but also assuring your customers that they can do business with you. It has been said that the success of your business depends highly on it’s public image. If your business is constantly facing legal issues, people will lose trust in the business, which will then lead to low revenue and profits.

 **To avoid civil and criminal sanctions**
 
 This is the most beneficial importance of compliance. No business wants to be on the receiving end of criminal sanctions for not adhering to the law. To avoid this, businesses are advised to have a compliance department to monitor all compliance-related matters.

 **Higher productivity in the company**
 
 Compliance helps you avoid waste, fraud, abuse, discrimination, and other practices that disrupt operations and put your company at risk. It also creates strong business models and an environment where employees feel safe and secure to work in. Also, better decisions are made from management, down to the employees.
 
 ## Categories of Compliance

Compliance can be divided into two different types:

 **Internal Compliance**- This refers to the measures a company takes within its own business to set a standard and maintain a certain level of quality. Simply put, internal compliance means compliance within a company.

Internal requirements for compliance-

- Physical entrance policies
- Virtual Access
- Password protection
- Security update
- Emergency response
- Risk Analysis
- Audits and reviews

 **External Compliance**- This refers to the measures a company takes to remain compliant with state and federal laws. Simply put, external compliance means compliance outside your company.

External requirements for compliance-

- Annual statements or reports
- Taxation
- Pension and other statutory employer contributions
- Labour standard Acts
- Business Licenses/Permits
- Employer Identification Number, or EIN


Below are the various business compliance according to Companies and Allied Matters Act 2020 (CAMA 2020)

- Incorporation of Companies & Annual Returns
- [Taxation](https://www.trybrass.com/guides/running-a-business/guide-to-business-tax)
- Employee Compensation Scheme
- Industrial training fund
- Nigerian Immigration Service (NIS)- where applicable
- Financial Reporting Council (FRC)
- [Special Control Unit Against Money Laundering (SCUML)](https://www.trybrass.com/guides/nigerian-business/what-is-a-scuml-certificate)


## How to ensure compliance
**Involve Legal Practitioners**

To avoid unintentionally breaking laws, it is advisable that you involve legal practitioners or even consultants to periodically check through and ensure that your business remains compliant. This is particularly important for small and growing businesses.

**Stay up to date with changing laws and regulation**

The compliance laws are always changing. As a business, it is important that you stay on top of this to monitor and identify that which your business needs to work on, without delay.

**Ensure employees follow procedure**

These policies should be well communicated to the workforce by the management. There is no point having a company policy if it won’t be followed by employees. Leadership should put structure in place to ensure that the employees stay compliant to these policies.

## Conclusion

Companies face the risk of being sanctioned by the governing authorities if they fail to comply with these various requirements. These sanctions could be huge fines which may negatively  impact the cashflow or revenue of the company or could also affect the brand identity of the business. It is important that companies that operate in Nigeria stay compliant to the governing authorities requirements. 

We advise that beyond following the steps in this article, you should speak with your legal partner to ensure that there are no loose ends.

At the end of this article, you will know what business compliance is, its importance and why it matters to you as a business owner.

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What is Compliance and why does it matter to Nigerian Businesses

There are many considerations to make before entering into a business partnership. These considerations include legal advice, tax implications, and personal and business experience. By the end of this article, you'll have known what a business partnership is, the types and benefits of a business partnership and things to consider before entering into a business partnership.

### Definition

[Entrepreneur.com](http://entrepreneur.com/) defines a business partnership as a legal form of business operation between two or more individuals who share management and profit. Another definition of a partnership is a type of business where persons agree to carry on a business in common with a view of sharing profit. The agreement for partnership does not have to be in writing before it can exist. However, documenting agreements is more beneficial in business relationships.

### Types of Business Partnerships

 **General Partnership:** A General partnership is the easiest kind of partnership to establish as there are no formal registration requirements or compliance hurdles involved. The partners agree on the terms of the partnership, and there is no limitation to each partner’s liability under a general partnership. Where parties do not agree otherwise, the partnership will be dissolved upon the death or bankruptcy of a partner. It is also important to note that under the Nigerian law, there is no formal requirement to set up a partnership business.

 **Limited Partnership:** These partnerships are formal business entities authorised by the state. They have at least one general partner fully responsible for the operation of the business and one or more limited partners who contribute capital but do not actively manage the business. Limited partners share the company's profits but can only lose as much as they have invested in the business. Limited partners invest in the business for financial returns and are not responsible for its debts and liabilities beyond the capital contribution made into the business.

 **Limited Liability Partnership (LLP)**: An LLP is a body corporate formed and incorporated as a legal entity separate from the partners. The aim of an LLP is to reduce legal liability on the partners by identifying the LLP as a legal personality. 

Read more on types of business partnerships in Nigeria [here](https://www.mondaq.com/nigeria/corporate-and-company-law/1142692/registration-of-limited-partnerships-in-nigeria-under-cama-2020).

### 5 Things to Consider Before Entering Into A Business Partnership.

Entering into a business partnership can be one of the most rewarding, satisfying and exciting experiences you could ever have. There are so many benefits, some include- more capital to grow the business, sharing of workload/responsibilities, better decision making processes, access to skills and experience.  However, before entering into a business partnership, it is essential to think about the risks and responsibilities carefully. Here are some things to consider before entering into a business partnership

 **Value alignment is vital:** It is common for people to compare a business partnership with marriage. This is because business partners should be compatible. They should be an agreement on the non-negotiables of the partnership and a commitment to communication between both businesses.

**Determine the roles and responsibilities of each partner:** The expectations from both partners should be made clear at the beginning. It is best to outline what each partner will contribute in terms of time, money and responsibilities. Doing this can help avoid problems that may arise in the future.

 **Decide on the type of partnership to be used:** You will need to decide on your partnership's legal business structure, i.e. what kind of partnership to be used. Refer above to learn about the various types of partnerships and which will work best for your business.

 **Decide how partnership dissolution will be handled:** Make a plan for how the partnership should be dissolved if it has run its cause or is simply no longer mutually beneficial. This is totally fine as even the best business partnerships come to an end. In the plan, decide how compensation and the finance-related issues will be resolved in that instance.

 **Consult with a legal practitioner**: A solid business partnership is backed by a written agreement. It is not enough to verbally agree. Partners should be able to resolve any issues that arise by referring to the written agreement. An attorney can help you work out an agreement that both parties understand and agree to. It may feel tedious at first, but taking this extra step is the best way to protect the interests of both partners and do what's best for the business.

### Conclusion

Although your business stands a lot to gain from a business partnership, it could also be a decision that could negatively impact your business if not well thought out. We advise you to consult a legal practitioner before entering into a business partnership.

At the end of this article, you'll have known what a business partnership is, the types and benefits of a business partnership and things to consider before entering into a business partnership.

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Five things to consider before entering into a business partnership

Most consumers know VAT as that extra payment they have to make for a item or service purchased, for business owners however, it is more of a legal concern. This article will shed more light into what a VAT is and what you should know about it as a business owner.

### Definition

Value Added Tax (VAT) is a tax levied on an item (subsequent use of an item in this article will mean “a vatable item”). It is based on consumption rather than income meaning that a VAT is charged equally on every purchase of an item. VAT percent rate varies between countries. 

For Nigeria, a 7.5% rate is charged on all goods and services provided within Nigeria to a person in Nigeria or provided outside Nigeria (imported goods or services) to a person or business registered in Nigeria. This law was implemented on 1 February, 2020 under the new finance act.

As a business owner registered in Nigeria, it is important to charge VAT in order to stay compliant with the law.

### Who needs to register for VAT?

A taxable person shall upon commencement of business register with the FIRS and failure to register within the period specified is liable to pay a penalty of 50,000 for the first month, and 25,000 for each subsequent month. This was stated in Section 8 of the Value Added Tax Act which was amended by the Finance Act 2020. Certain goods and services are exempted and they are-

- Baby products.
- Medical services
- All exports
- Books and educational materials
- Basic food item
- Fertiliser and farming machinery
- Charitable fund raising
- Selling or letting commercial properties
- Insurance and finance services
- Postage stamps
- All medical and pharmaceutical products etc

### How to register for VAT in Nigeria

Go to the [FIRS website](https://firs.gov.ng) and select an office that is close-by your location. Take these documents along with you to ensure a smooth registration process:

If your business is only a registered business name-

- Business name registration certificate
- Utility bill
- Filled and officially stamped VAT form
- Application letter on business letter-headed paper

If your business is a limited liability company-

- Memorandum and articles of association
- Certificate of incorporation CAC2, CAC7
- Utility bill
- Duly filled and officially stamped VAT form
- Application letter on company letter-headed paper

### VAT Collection & Remittance

The law in Nigeria requires that VAT returns are filed on a monthly basis on [Form 002](https://www.firs.gov.ng/wp-content/uploads/2020/10/VAT-FORM-2.0.pdf). This is due on the 21st of the month following the reporting period. Any VAT due should also be paid by this date. This should be done through a payment or transfer from an approved bank. Returns may be filed online as well as by paper.

A return must be accompanied with a listing of all VATable supplies received and provided.

Failure to file a return may incur a fine of NGN 5,000 per month. Failure to remit any VAT due will incur a fine equal to 5% of the liability, plus interest.

### Penalty for Non-deduction of VAT

Non-deduction/failure to collect tax by a taxable person attracts a penalty of 150% of the uncollected tax plus 5% interest above the CBN's rediscount rate.

### How do I file VAT return in Nigeria?

**Step 1**: Go over your accounts. Before filing your VAT returns, you need to go over your business' financial records for the duration you will remit tax.

**Step 2:** [Login to TaxPro Max](https://taxpromax.firs.gov.ng/)

**Step 3**: Select Taxes Due

**Step 4:** Select a payment method and pay

### Conclusion

It is absolutely free to register for VAT and you do not need to employ the services of a third party to help you register. Staying VAT compliant is in the best interest of your business. 

For more information, read [this](https://firs.gov.ng/value-added-tax-vat-faq/)

**NB**- As at the 1st of April, 2022, Google and Facebook also began charging 7.5% VAT on all taxable goods and services due to new regulation from Nigeria. More information [here.](https://www.thenicheng.com/google-joins-facebook-charges-7-5-vat-on-nigerian-adverts/)

Learn how to register for VAT in Nigeria 

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What is VAT and how does it affect my Nigerian business? 

Juggling parenting and being a business owner can be intimidating as raising children can also be classified as a full-time job. However, it can be gratifying when balanced well.

Being able to stay on top of both positions requires you to master some simple life hacks, so you don't get consumed by the sheer amount of work needed to be done. To help with this balance, we have provided practical tips to help you navigate your time and workspace.

### **Rely on your support system**

You can't do it alone, and that's fine. You'll need help from people. The first step to becoming a successful parent entrepreneur is to acknowledge that you will need lots of support, from having family members step in when you are unavailable, to having help with sorting the basic chores at home and having good employees who are proactive.

### **Schedule Your Time**

To manage your time correctly, we advise that you schedule everything. This advice goes to entrepreneurs, 9–5'ers and stay at home parents. Tasks written down have a higher possibility of being completed than those that aren't. Make a to-do list that will help with not just your productivity but allows you free up time to spend with your family. Try as much as possible to stick to the schedule you created and finish up your daily or weekly tasks, so you don't carry over any extra tasks.

### **Delegate**

While it may seem difficult to let others handle your business, it can help you create more time for yourself and your children. When you hire competent staff, all you need to do is delegate duties. That way, you are not required to do all the work. This also improves the quality of life. Get your children involved in the whole process as well. When they are old enough to start having responsibilities, hand some over to them. From helping with laundry to picking up their toys after playtime, this allows you to focus on other complex tasks and creates room for bonding.

### **Self-Care**

When you delegate effectively, you have time to incorporate self-care into your routine, from taking a quick power nap to spending time at your spa. Everyone deserves some "me" time. It motivates you to finish tasks. At least 10 minutes a day of self-care can make a huge difference in your productivity levels. You can read more about the importance of parental self-care in this [guide](https://www.waterford.org/education/self-care-for-parents/).

### **Be more organised**

Know when to wear the parent cap and the entrepreneur cap. Try to keep work away from your resting place. For example, please don't bring your laptop into your room, don't take your work laptop with you on family trips, focus on doing quality work during your scheduled work hours, so you don't have to bother about it while at home etc.

### **Take your business online**

It's 2022. You don't physically have to be at your office/store to oversee the operations. With platforms like [Slack](https://slack.com/), [Notion](http://www.notion.so/), [Airtable,](https://www.airtable.com/) and [Google Workspace,](https://workspace.google.com/) communication between you and your employees is achievable. You can also choose to work from home to take time off when needed.

### **Conclusion**

Being an entrepreneur and a parent has many benefits. The tips we provided can help you balance the two without feeling guilt for prioritising one over the other. Remember, you can be both a successful parent and a successful entrepreneur.

All over the world, we have parents becoming entrepreneurs, entrepreneurs becoming parents and the term "parentpreneur" gaining popularity.

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Six tips To Be A Successful Parent Entrepreneur

Special Control Unit Against Money Laundering (SCUML) is a governmental agency that was established in line with the Money Laundering (Prohibition) Act 2004 now Money Laundering(Prohibition) Act 2011 . This agency is charged with the responsibility of solely monitoring, supervising, and regulating the activities of Designated Non-Financial Institutions (DNFIs).

The SCUML certificate is issued by the EFCC and serves as proof that the organisation’s bank account is not used for money laundering activities and certifies the organisation as legitimate. Any organisation who falls under the DNFI but has not registered with SCUML may not be allowed to have a bank account with any financial institution.

### Who are under DNFIs?


Section 25 of the ML (P)  Act defines DNFIs as dealers in;

1. Jewellery
2. Cars and luxurious goods dealers
3. Precious stones and metals dealers
4. Real Estate agents
5. Estate Developers
6. Estate Surveyors and Valuers
7. Estate Agents
8. Chartered Accountants
9. Audit Firms
10. Tax Consultants
11. Clearing and Settlement Companies
12. Hotels
13. Casinos
14. Supermarkets
15. Dealers in mechanised farming equipment and machineries
16. Practitioners of Mechanised Farming
17. Non Governmental Organisations (NGOs)

### How do I register?


Registration can be done on the [SCUML website](https://scuml.org/registration2/) at no cost.

### What do I need to register?


**Business Name**

- Certificate of Incorporation,
- BN FORM 01, (Proprietor’s Particulars)
- Evidence of tax registration (TIN letter) and
- Professional certificate where applicable.
- BVN, Bank Name, and Account Number

**Companies**

- Certificate of Incorporation
- Memorandum and Articles of Association
- Form CAC 1.1 (CAC 2 and CAC 7 FOR OLD REGISTRATION)
- Evidence of tax registration (Tax Identification Number (TIN)
- BVN, Bank Name, and Account Number

**Trust/NGO**

- Certificate of Incorporation/Registration
- Incorporation of Trustees or CAC7 and CAC 2
- Identification of Trustees with a valid means of identification
- Constitution/Memorandum & Articles of Association
- Tax Identification Number (TIN) or Tax Exemption
- Particulars of Settlors
- Particulars of Protector (if any)
- Copy of Cooperation Agreement (For international NGOs)
- Trust Deed Agreement
- BVN, Bank Name, and Account Number

**Religious Organisation**

- Certificate of Incorporation/Registration
- Incorporation of Trustees
- Identification of Trustees with a valid means of identification
- Constitution

**Association /Clubs/Societies**

- Certificate of Incorporation/Registration
- Copy of Constitution/Bye-Laws etc
- Particulars of the trustees
- Reliable means of Identification of at least two of the trustees
- Tax Identification Number (TIN) or Tax Exemption
- BVN, Bank Name, and Account Number

### What happens next?

Once your application is successful, your organisation will receive its own unique SCUML registration number and a SCUML registration certificate.

For more information, please visit the official SCUML [website](https://www.scuml.org/).

A SCUML certificate is the Special Control Unit against Money Laundering issued to organisations that certifies them as legitimate. 

A new community for enterprising Africans everywhere

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Our business guide series with expert guests, stories and best practices on doing business in Africa.

Getting Started with Limited Capital

Gbemi Olateru-Olagbegi Co-Founder, TNC Africa

Vanessa Nwuka Founder, VeeStore

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Gbemi Olateru-Olagbegi

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