TOP 4 KEY LEGAL REQUIREMENTS TO LOOK OUT FOR WHEN REGISTERING A STARTUP
A startup is simply defined as a company at its initial stages in its business. When a startup is newly formed it often requires financing either through capital contribution from the company’s owners/ promoters or through investor financing, loan facilities and venture capitalists.
The formation of a startup company is pegged on two considerations namely; registration and incorporation.
Registration
A startup company must be registered under the Companies Act 2015. The conditions for registration/ formation of a startup company are: –
- The startup company must be formed by one or more persons
- The person(s) must subscribe their names to a memorandum of association
- An application for registration must be lodged with the Registrar of Companies and it shall state: –
- the proposed name of the company;
- the proposed location of the registered office of the company;
- whether the liability of the members of the company is to be limited, and if so whether it is to be limited by shares or by guarantee; and
- whether the company is to be a private or a public company.
- Articles of Association shall also be lodged with the Registrar.
The following documents are required for purposes of registration:
- The statement of capital and initial shareholding
- Statement of guarantee
- Statement of proposed officers.
Incorporation
Upon incorporation, the startup becomes a legal person, with rights and obligations of its own, with separate personality from its owners. The effect of incorporation is that the startup exists as a legal person, meaning that it has the right to sue or be sued, can enter into contract, has perpetual succession and it has a separate legal personality from that of its shareholders.
How can we assist?
The success of a startup is pegged on how well it protects itself from loss and harm arising from contractual relationships. Such loss and harm is prevented or reduced by having understanding how the startup ought to operate. At Netsheria International, we offer a wide scope of legal documents that can be tailored to meet the requirements for a startup. For more information, kindly visit our website at www.netsheria.com
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