Dear Friend,
Do have an idea what post-incorporation transaction is, why it is important and why you should care as a business owner?
Here is a story of Herbert for a better understanding…..
Herbert was a young graduate gainfully employed with one of the top commercial banks in Nigeria and in the face of having multiple streams of income, Herbert decided to go into real estate marketing as a part time business, which he later registered as a business name, since it was a side hustle and he was starting small.
3 years down the line, the real estate business paid off more than Herbert’s full time work with the bank, so he resigned and decided to concentrate more on the real estate business
That was not the only upgrade Herbert did, he also upgraded his business to a company and went into partnership with an estate developer and soon Herbert was seemingly selling “his own land”
However, in business, things don’t always go smoothly, the real estate developer Herbert partnered with, started having issues with the authenticity of the land Herbert was selling and that was how Herbert got entangled in a mass debt recovery drama
Investors who didn’t get allocation were asking for a refund and since everywhere was tensed up, the developer’s office stampeded here and there, police issues today, Economy & Financial Crime Commission (EFCC) tomorrow, Herbert decided to lie low for a while “till things calm down”
Few months down the line, Herbert discovered that he could not make any withdrawals from his bank accounts (both personal & company) and when he went to make enquiries he was told that all his accounts were garnished.
On further finding, Herbert discovered that 10 of the investors had filed a law suit against him and his company, got judgement and were already executing.
Wait! How?! When?! That is not possible! Herbert exclaimed!
“No one told me, I was never served nor notified” Herbert went on…
And when he sought clarification from a lawyer, after a few digging, it was discovered that all court processes were served at Herbert’s registered address by substituted means.
The next thing Herbert said was……
“No I am not using that place again, in fact it was my former house address and I only used it then to register my business, because I didn’t have an office space as at the time of registering my business, besides my real estate business is mostly done online”
Then, Herbert’s lawyer asked if he had carried out a post-incorporation transaction known as notification of change of registered place of business.
Herbert said no and wondered what that had got to do with judgement and execution
Here are 2 major mistakes Herbert made that got him into a circle of debt issues…………
- He ran his business without proper legal support or guidance (I always say, there are 2 ways to hire a lawyer –through direct engagement or indirect i.e. training programs/courses),
- Herbert left his former place of business without notifying the Corporate Affairs Commission (CAC), the government agency in Nigeria he registered his business with, so it was presumed that he was still carrying out business there and all court processes served on Herbert at his former address were valid and acceptable in law.
Are you like Herbert, who is running a business without any legal backup, guidance believing that all will always be smooth?!
- Do you take your post incorporation transaction with the CAC and other government agencies seriously?
- Do you even know how many post incorporation transactions a registered business or company is expected to carry out and with which of the government agencies?!
- Do you know when to carry them out and the consequences of not complying?
- Would you like to learn how to prevent Herbert’s type of situation in your business?
Then the BDB Program is the right fit for you
BDB stands for Build a Debt-Free Business – The program is a 6 week legal training and business structure coaching for SMEs on how to avoid, recover and manage debts in business
Do not be like Herbert who tried to play smart by hiding from his investors to later seek for medicine (remedy) after death.
There are a lot of things you are doing now in your business that will land you in serious debt issues if you do not rectify them asap.
This is worth thinking about.
Yours legal,
Precious Toju, Esq.
(Debt Recovery & Credit Risk Coach)
Visit www.asklawyerprecious.com to read more insightful blog post
