10 laws Affecting Businesses in Nigeria: A Must Read for Every Entrepreneur
There is a whole lot of preparation that goes into developing a business idea, launching a business and even making sales. Entrepreneurs in various countries all over the world operate under various laws. While we talk about making sales in business, we must also take into consideration laws and regulations that guide businesses. Just like we have laws that guide people, business also has its laws, knowing and abiding by these laws will help you to be tactical and avoid government troubles in your business.
The government of any country contributes solely to the success and growth of any business enterprise. If you want to run a successful, you must not neglect the role of the government to the background, because they have laws already put in place to guide the running of your business or prospective business. In this article, you will learn about some government laws that affect businesses in Nigeria which every entrepreneur must know.
- Tax: Government hold taxes in high esteem, as a matter of fact, they do not joke with taxes. Every business owner must put in mind that he has to pay tax, it is mandatory. Once you have a store and you sell goods, you must pay taxes. However, with the high rate of online sales, there is little income for government in regards to tax, and this is because a lot of people now sell online , making it unapproachable for tax collectors to reach them . Nonetheless, there are still indirect ways of paying tax; tax on production tools. For instance, if you are involved in dress making and sell online, remember that you use fabric, thread and a lot of other things in making the dresses you sell, there is always a percentage of tax rate distributed by the fabric or thread seller on each product he sells to you. This is called indirect tax. Government relies so much on tax because the development you see, construction and other things are products of tax payers’ money. Thus there is always a price for violators of taxes to pay.
- License: you need to own a business license to legally start up a business. This is to the end that your business could attain recognition by the government. To get a license, you could visit the Nigerian licensing website to place your application.
- Fair labor standard acts: this act regulates minimum wage, employment laws and record keeping requirements.
- Copyright: copyright is a legal right that grants exclusive rights to the creator of an original work. The exclusive rights are however not absolute, they are subject to limitations. The Copyright Act is in charge of copyright legislation in Nigeria, while the Nigerian Copyright Commission (NCC) is in charge of the enforcement and protection of copyright in Nigeria. “The ownership of copyright is vested in the creator of a copyright work, usually referred to as the “author” of the work. He/she owns the copyright in the work in the first instance. However, the author is at liberty to transfer his rights to a third party. In such a case, the person who has obtained the right by transfer or other legal means becomes the owner of copyright.” If your business revolves around music, literature, art and so on, copyright protection is for you in that it helps to secure your product against infringement and piracy. Without a copyright, you cannot protest against an infringement, which is why government emphasizes copyright act.
Read Also: Passive Income Simplified
5. Trade regulations: there are some regulations set up by the government to guide the descent marketing of goods in the country. Although some of them appear to be in favor of business owners while some are not. The essence of trade laws is to promote unrestrained competition among business without violence. Laws like health inspection carried out at hospitals and restaurants is one of government strategy to see that business owners can be trusted to give consumers the best consumer experience by eating in a healthy environment and receiving care in a healthy vicinity. This is why it is important for entrepreneurs to see to it that they create the best consumer experience for their customers, especially when you are venturing into businesses that deal with health.
6. Interest rates: government policies also influence interest rates on credits and loans. In Nigeria, the monetary policy committee determines the interest rate. An increase in interest rate equals an increase in the cost of doing business. This could cause two things: the cause of running a business and getting loan becomes higher due to increased interest rate, and on the path of customers, there is reduced expenditure which will lead to decreased sales for business owners. This interest rates does not affect loans from the government alone, it also affects bank credits and loans.
7. Trademark: trademark is any word, phrase or design that is peculiar to your business. It helps stand your product out among others. Once you are registered, you could take legal action against anyone who uses your mark without permission. The issue however with trademark is that you have to go through some process before acquiring it . You have to be sure your adopted trademark is not yet in use by another business or you’ll have to change yours if already in use, then proceed to application and other necessary things. Having a trade mark helps your business to be recognized by the government.
8. Rates on the loans: government give out loans to business owners and it also controls who receives the loans. Government loans are primarily meant for small business owners because government sees them as “helpful” so in a bid to help them boost their business, they get loans . Government however determines who gets loans among all the applicants and also determine the interest rates on the loans.
9. Truthful advertisement: government places so much value on truthfulness. In advertising your product, be as truthful as you can be, because if you’re discovered to be fake, you might be penalized by the government for deceiving its citizens about your product.
10. The cost of running business: the cost of running a business in Nigeria is high, even the cost of establishing. This is why a lot of people with idea find sometimes it difficult to pursue their idea because of cost. This is not only peculiar to small businesses, even big establishments are affected by government policies of high import and export dues.
It is important to pay attention to the above laws and have them registered at the back of your mind so that you don’t violate them.
Hope you enjoy this article?
Share your thoughts in the comment session.
Contact us today for your business consultancy and business advisory services. We can help you fine tune your idea, structure your business, market your business, train your staff, consult on your retirement plan, coach you for financial success. We also write business plan and help with fund raising strategies and Grant applications. We can help you start, grow and expand your business.
Call or WhatsApp us now on 081 0563 6015, 080 7635 9735, 08113205312 or send email to email@example.com and we will solve any of your business problem.
- Katumu Adasi: How to survive in Nigeria without a job - February 11, 2021
- Top 5 business and services with the highest demands in Nigeria - January 4, 2021
- How to Become a Millionaire doing Rice Farming in Nigeria - January 4, 2021