It is important for us to understand our role in preserving the “destiny” of generations to come. This message is therefore addressed to youths at large; parents, future parents, those preparing for marriage, and those who desire to gain more understanding on their role in bringing about the agenda of God for generations to come.
There are many misconceptions about marriage and the place of the child. However, a deep search of the scripture reveals the right position –
The Psalmist helps us to understand in Psalm 127:4 that:
“Like arrows in the hand of a warrior, so are children of one’s youth”
That means parents are to aim (guide, give direction, instruct) their children towards specific goals in life.
Put in another way; that the job of the parent is not about the “present” alone, but the “future” of the child.
But these goals will not just come to pass like that, and no parent will direct a child where he or she does not even know! So, what does this teach us? That we owe our children a duty – one of seeking the face of God just as Rebekah did (Gen. 25:22) so as to know, understand and initiate the proper roadmap for them.
The act of seeking God’s face to get instructions for our seeds is a good practice, one that is deeply rooted in scriptures, but is overlooked in our days.
Interestingly too, in the first place that God made mention of those to come from our bosom, He called them “seeds”, (Gen. 3:15). I believe that His choice of word was a careful one, and this, we can also understand through our reading of other instances where He addressed the men of old as touching His promise for their “seeds”.
In elementary science, we learn how one pollen grain can cause fertilization in flowers on a field, the same way, our seeds (children) are like pollens meant to be released by us to cause positive changes on the field of life!
How are these seeds (children) empowered? The scriptures records that “by faith”, Abraham (the receiver of a promise from God) believed God for His promise (Gen. 15:5-6, Heb 11:9), and passed the gospel of that promise to his seeds who in turn passed it from generation to generation confessing it, not having received the promise, but having seen them afar off and were assured of them, embraced them… until the ultimate fulfilment (Hebrews 11:13).
Search deeply into scriptures, there is something about the promises of OUR GOD which makes His words to us not just for us but for generations to come and our seeds unborn. The reason many promises are lost is because we (as the receiver) sometimes misconceive God’s promises expecting Him to act in our time, and off course, when we leave the earth, those who we hand over to (our seeds) keep living life without even knowing what to live for!
In order words, our seeds are empowered when we, as parents and “parents to be” begin to trust God for His promises to us and our children. This promise will ultimately guide the choice of our course, profession, and reasons for living.
In preparing these seeds (children) to take their rightful place in destiny, we (as carriers of those blessings) must understand our role as a prophet to them; we might not have been called to the ministry of the prophets, but we have all received the grace for the prophetic unction over our lives and families.
Note the words of Isaac in Genesis 27:4 as he called his son, Esau to prepare him a meal. He said “…make me savoury meal… that my soul may bless you before I die”. The words of Jacob is more convincing as he told his children “Gather yourselves and let me tell you things that will happen in the years to come” (Genesis 49). Even Paul refers to them as men who “Have seen the promise from afar” (Hebrews 11:13).
No doubt, that is the prophetic grace bestowed upon every parent, and “would-be parents”.
From the words of a wise woman in 2 Samuel 14:14:
“…….For we will surely die, and become like water spilled on the ground which cannot be gathered again, but God does not take away life, but rather has devised a means so that His banished ones (those who have received the promise) are not expelled from Him”.
My brothers and sisters, life is a relay race in which we must run by keeping to the rules, and abiding in the faith that we may pass on the baton (a better legacy) to the seeds coming after us.
If we live well in our time and show our seeds the right path to follow, they will have no excuse to fail in their own time.
However, if we live a reckless and a careless life, we will still have to eventually pass the baton and that which we pass may turn out to be what generations may suffer for, simply because of our own errors.
I pray that when it is our turn to pass on the baton of life, we will have a well groomed runner (our seed) to pass it to.
Please affirm these words of prayer as you commit yourself to the Lord:
“Dear Lord, you have taught me from my youth,
And to this day, I declare your wondrous works.
Now also, when I am old and gray headed,
Do not forsake me, until I declare your strength to this generation,
And your power to everyone who is to come… So help me God.” (Psalm 71: 17-18).
You shall fulfil your purpose for living in Jesus name (AMEN).
Helping Women Entrepreneurs Thrive in an Emerging Economy
‘’ Thy mother is like a vine in thy blood, planted by the waters: she was fruitful and full of branches by reason of many waters’’ Ezekiel 19:10King James Version (KJV)
There is an increasing number of female entrepreneurs, especially in Sub-Saharan Africa, making huge contributions to the rise of entrepreneurial activities in their countries. These women drive the development of their economy. According to Global Entrepreneurship Monitoring Annual Report, women actually outnumber men in the entrepreneur space in countries like Nigeria, Ghana and Zambia, and the report below from no ceilings show evidences that there are more female entrepreneurs in Nigeria than anywhere else in the world.
Despite this fascinating statistics, many Nigerian female entrepreneurs still face obstacles that limit their ability to build a thriving business. While some of these constraints apply to all business owners, irrespective of their gender, others have been identified to be related primarily to women.
There are more female entrepreneurs in Nigeria than anywhere else in the world
Some of these constraints can easily be attributed to gender stereotypes pertaining to cultural and social beliefs and behaviors, and are described below.
There are many other challenges faced by female entrepreneurs in Nigeria which I have not captured in this piece. However, it is clear that the role of women in driving the Nigerian economy is huge and all stakeholders must continuously put measures in place to encourage women in business.
One of such measures is to organise networking opportunities for women to discuss the issues that they face and provide support on how to overcome those barriers.
An impending women focused gathering is the women MSME conference which holds on the 14th of October, 2017 at Covenant Chapel Lekki. This conference aims to remove some of these constraints and feed the female entrepreneurial mind with streams of ideas, concepts and insights that allow her thrive in business – in spite of the glaring constraints. It is an initiative of Covenant Capital; a business advisory arm of Covenant Christian Centre with mandate to reduce poverty in Nigeria by empowering individuals and businesses with the tools to create wealth through – business advisory services, micro-credit schemes, trainings and seminars. To register for the event, please got to www.insightsforliving.org/
Today, if you ask an entrepreneur one thing that is required in starting and growing a business, the popular response will be capital. There is no doubt that capital is fundamental to the success of any business, however the business climate is evolving from transactions to relationships. Thus, generating and increasing trust is essential in sustaining growth.
Trust is a hidden capital most businesses do not pay attention to, whereas it is valuable in growing the bottom line and will see you through the difficult times in your business. On the other hand, a lack of trust in you and your business can kill your business in its infancy.
No one can tell you exactly where trust originates or how it develops. The trust process is incomprehensible. You can’t fake it. You can’t go through the motions or pay it lip service. Trust in a business speaks volumes on how a company services and communicates with its customers. In business interactions, customers can intuitively feel when you can or cannot be trusted.
When considering if a company should be called trustworthy, customers are looking for the following:
1. First Impression
First impression matters. A customer has expectations that a company’s product will satisfy their need to purchase it. Therefore, their first approach is to test the waters if indeed your product or service will provide such satisfaction. If it does not, they will walk away. Therefore, do not promise what your product or service cannot do. If you are selling a product with lower quality than the original, do not pass it off as the original. Do not sell a low quality product at the same price as an original one. Do not include hidden charges and fees. Your customers will always find out and you would have effectively ruined any return purchase or recommendation. In essence, ensure product or service integrity.
The more significant a purchase is to a buyer, the more consciously he seeks a trustworthy seller or provider.
One of the things that can quickly destroy trust in your business is lack of competency in the service you are rendering. Do you do what you say? If customers cannot trust what you say or the service you render, they will not patronize you. A dry-cleaning service that does not launder or iron clothes properly will not grow. Also, a laptop repair shop will only get anger and frustration from its customers if the laptops he repairs keep breaking down. Therefore, if you must be in business, ensure that you know how to provide the service you are selling or at least hire someone who does.
3. Work Experience
We know why there is a term in the labour market called ‘Number of Years of Work Experience’. This is because it cannot be over-emphasized. Customers would always relive their past experience with your business for future transaction, the same way a recruiter would scrutinize a candidate’s work experience. Their experience when leaving your business premises must leave no doubt in their mind that your business is where they should go to in the future. If your customers cannot think that about your business, you need to start requesting for feedback to understand their reasons. You also need to start building trust in your business because this means that they cannot trust your business to deliver value in the future based on past experience.
4. Customer Value
To value your customer is to deliver on your promise and acknowledge where you have fallen short.
If you promised the moon, deliver it along with a handful of stars. You want to shine in your customer’s eyes. Every time you follow through on a commitment, small or large, you build trust. And if you go above and beyond, you make an even stronger impression. So, if you say you are going to email prices to your customer today, it should be sitting in their inbox before their close of business (not yours).
In addition, do not to hide or cover up your errors. Address the issue directly, apologize and explain how you will handle it and if possible, share what steps are being taken to prevent the errors from occurring in the future.
5. External Relationship
Staying up to date and compliant with all federal, state and local rules required to keep your business in good standing is essential. Failure to meet the necessary requirements like taxes, pension, insurance etc. can cost you loss of good will. Customers, lenders, potential business partners and investors will check your company’s credit reports. What is your attitude to your financial obligations? Positive credit affords businesses better relationships with partners, vendors, trade sources and the community at large. Do not renege on agreement with vendors or partners.
The first step in your approach to trust-based marketing will be forcing yourself away from rational, logical thought about why your customers would or should trust you. Instead, if you know how they really process you and your business and what forms the basis of their trust you’ll find yourself holding a new key to growing your business.
CTA – One of the things that can quickly destroy trust in your business is lack of competency in the service you are rendering.
If you have consulted a software developer to help you develop software, you may also have to enter into an agreement with the developer so that specifications are understood and duties are clearly stated.
Sometimes, off-the-shelf (ready-made) software may not be suitable for your company and you want a bespoke software that is developed just for you from the scratch. You will therefore have to engage your lawyer to prepare a comprehensive Software Agreement (“the Agreement”).
In addition to the standard clauses, below are some clauses that should be considered in the Agreement to protect your investment:
1. Change is the most constant thing in the field of Information Technology. You may not be able to predict the relevance/applicability of your software in the nearest future, but you can ensure immediate intervention by your software developer. The way to go about this is to instruct your lawyer to add a clause for periodic review of the software. Although, some developers will charge you a little more for the service, but you will get value for money and you will be well placed for future eventualities.
2. Ensure that there is a clause for training and retraining of your team. You may also request for a user manual, maintenance guide, installation instruction, etc.
3. You may not be able to guarantee the availability of your software developer to attend to your queries. Sometimes too, events may happen that make it impracticable for the software developer to continue to operate or maintain the software. If it is intended that you will have the copyright in the software to be developed, one of the ways to ensure that the developer does not hold you to ransom is to insert a clause which mandates the developer to hand over the source code to you (including the updated source code any time there is an update). If the developer has an issue with this, you may request for a clause which mandates the developer to release the source code to a third party (usually known as an “escrow agent”) who would have custody and can only release it to you in circumstances where the software developer has defaulted or where other conditions have happened by which it is important for you to have access to the code. The practice of escrow agent is not common in Nigeria, but that is not to say that arrangement cannot be made for it particularly in multi-million naira software contracts.
4. One of the ways to have a healthy relationship with your software developer is to have problem solving clauses. I discussed this in my article 6 Important Points to Note in Software Agreements (Part 2: For software companies). One of the circumstances in which you can have such clause is in case of late delivery which was not caused by you or some unforeseen events; in which case you may have a clause that makes you entitled to a stated amount per day for the period of the delay. Although, you must also have a clause that allows you to terminate the Agreement if delay continues for an inexcusable length of time.
5. Your software developer is ordinarily the owner of copyright in the software, but that will not be the case if your agreement state that intellectual right in the software is yours. Therefore, if it is important that you have ownership of the software, then, make sure your Software Agreement states this in clear terms. An example is as follows:
“The Software Developer agrees that …………[your company name] will be the exclusive owner of the rights, interest and title in the software and its components”.
6. What if the software claimed to have been designed for you is actually the product of another person and you had thought it was designed from the scratch by your software developer? The easy safeguard will be for you to get your software developer’s undertaking in the introductory part of the Software Agreement that the software to be developed for you will be original and not a violation of an existing intellectual property of another person.
An example is as follows:
“The Software Developer undertakes that the software and its components will be original and not a violation of an existing intellectual property”
You don’t have to stop at the undertaking, you may also add that you have a right to refund and compensation if a third party claim of software ownership arises.
7. You might ask, “what if the software company offers me an already prepared agreement to sign?” simply get a competent lawyer to review it and advise you.
Other than the above suggested clauses, there are standard clauses which your Agreement should have. In essence, the points listed in this article are not exhaustive and the peculiarity of each client’s specification may differ, it is therefore important that you seek advice from an experienced legal practitioner.
By Audu Monday and Sunday Okpeh
Covenant Capital’s Annual Tax Seminar held on 29 July 2017 was an insightful session. We had seasoned tax professionals share their knowledge on the tax environment in Nigeria. One of the speakers, Mr Wale Ajayi, a Partner at one of the ‘Big 4’ Accounting Firms in Nigeria took us through the Nigeria tax regime for SMEs. We have summarized below the insights he shared at the Seminar.
1. What are taxes?
Taxes are the compulsory levies imposed by the government on people, entities, properties and transactions. According to Frederick the Great (18th Century), “no government can exist without taxation. This money must necessarily be levied on the people; and the grand art consists of levying so as not to oppress.”
A tax is not a quid pro quo payment by the people to the government. English speakers often use the term to mean “a favor for a favor”. The government is obliged to provide public goods, however, it is not meant to be a direct response to payment of taxes.
2. Overview of Nigerian taxes
Even though taxes are payable by individuals and corporate bodies, such taxes are not levied or imposed on such individuals and corporate bodies. Rather, taxes are levied on the incomes and transactions of these individuals and corporate bodies.
Taxes may be direct or indirect and may be imposed on individuals’ incomes, corporate entities’ incomes, assets and transactions.
3. Tax administration in Nigeria
The administration of taxation in Nigeria is vested in various tax authorities depending on the type of tax under consideration.
Broadly, there are three categories of tax authorities; the Federal Inland Revenue Service (FIRS), the States Internal Revenue Service and the Local Government Revenue Committee. The enabling law in respect of each type of tax will normally contain a provision as to the body charged with the administration of the tax.
4. Overview of SMEs
Small and medium enterprises (SMEs) form the core of majority of the world’s economies. The National Policy on Micro, Small and Medium Enterprises defines Small and Medium Enterprise (SME) as “An entity with between 10 – 200 employees and with an asset value (excluding land and buildings) of ₦5million – ₦500million”. They represent 50% of the GDP and employ about 84% of the labor force in Nigeria.
The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) was established in 2003 to facilitate the promotion and development of a structured and efficient Micro, Small and Medium Enterprises (MSMEs) sector that will enhance sustainable economic development in Nigeria.
5. SMEs Tax Incentives
There are a lot of incentives available to SMEs in Nigeria. Some of them are:
(a) Small business incentive
Companies within the SME bracket are charged to company’s income tax at the rate of 20% instead of the conventional 30% for their first 5 years, which can be renewed for an additional 2 years subject to certain conditions.
(b) Free Trade Zone/Export processing zone Incentives
Section 23(1s) of CITA also exempts a company that is established in an EPZ or free trade zone from payment of taxes. In addition, Section 35(i) – (v) provides that, the profit or gain of a 100% export oriented undertaking established within or outside an export free zone shall be exempt from tax for the first three consecutive assessment years subject to certain conditions.
(c) Agricultural business incentive
Companies carrying on agriculture trade or business will not be subjected to minimum tax. There is also exemption for interest on loans granted by a bank to companies engaged in agricultural trade or business, fabrication of any local plant and machinery and providing working capital for any cottage industry established by the company.
(d) Pioneer Status incentive
A company granted pioneer status will not pay income tax for the period stated in the pioneer certificate. The company will however, pay VAT and also render WHT returns. The pioneer company would however file normal income tax returns which would state ‘NIL’ tax liabilities. The Nigerian Investment Promotion Council (NIPC) is statutorily empowered to grant and issue Pioneer status under parameters laid down by the FG. The NIPC grants pioneer status ranging from 3 to 7 years and is conferred on a product(s) and not a company. Tax holiday begins on the date certified as production day.
(e) Gas Utilization Incentives
A company engaged in gas utilization (downstream operations) shall be granted an initial tax free period of three years, and which may be subject to the satisfactory performance of the business, be renewed for an additional period of two years.
6. Strategies for Managing Taxes
Taxes can be managed by an SME using three approaches. These are:
(a) Business process
● Proper Record Keeping – It is required by law to maintain good records. This among other things will discourage the tax authorities from raising best of judgment assessment which most times will be more than what a taxpayer would have paid if records were properly kept.
● Treat FIRS Correspondence/Tax documents as priority – This must be taken seriously and attended to promptly and professionally.
● Business Financing Method – Financing businesses with loan/debt is cheaper than using equity. Interest on loan is tax deductible. This option should be taken advantage of. Care should be taken however that loans are promptly repaid as and when due.
(b) Accounting and Tax Strategy
● Invest in basic tax knowledge. If you want to run a successful SME, then a little knowledge in tax should be considered.
● Engage tax expert. The use of auditors/tax adviser is not an option when preparing and filing returns. This will save the business a whole lot of money
● Take advantage of tax planning opportunities and incentives. Some examples of these incentives has been discussed above.
(c) Voluntary Tax Compliance
● The cheapest form of tax compliance is voluntary/self-compliance. The FIRS operates a self-assessment regime where a taxpayer can assess himself to tax and file returns on that basis.
● Use of tax amnesty. For example, the recent Voluntary Assets and Income Declaration Scheme (VAIDS) initiative by the Federal Government.
We should always remember that nothing is certain except for death and taxes. Taxes are here to stay, they won’t go away. It is not a punishment but our responsibility as citizens. So let’s brace up.
Tax is one certain obligation for every company doing business in Nigeria. Tax may be a burden but we have what I call “rest stops” on the journey to paying taxes or using the general term “tax incentives”.
In my article, I have described some of the tax incentives available to incorporated companies in different industries in Nigeria. This article relates to tax incentives for incorporated companies. In a subsequent article, we will examine the incentives for unincorporated entities.
The agricultural industry currently has the following tax incentives:
• An agricultural company with turnover of less than ₦1 million will pay CIT at 20% (instead of 30%) for the first five years in which its turnover is less than this amount
• Exemption from minimum tax
• Non-restriction of the capital allowance claimable on property, plant and equipment purchased
• 10% Investment Allowance on plant and machinery
A lot of manufacturing activities are under the pioneer industries and products. However, there are still other tax incentives available to companies in the manufacturing sector.
• A manufacturing company with turnover of less than ₦1 million will pay CIT at 20% (instead of 30%) for the first five years in which its turnover is less than this amount
• Rural Investment Allowance of between 15% and 100% of the cost incurred in providing facilities/infrastructure in rural areas
• 15% Investment Tax Credit on replacement of obsolete plant and machinery
• 10% Investment Allowance on plant and machinery
• Accelerated capital allowance of 95% in the first year in respect of replacement of industrial plant and machinery.
• Gas Utilisation (Downstream Operations)
Enhanced investment allowance of 35% on assets acquired, or a 3-year tax holiday which is renewable for an additional period of 2 years, subject to satisfactory performance
An annual allowance of 90% plus an additional investment allowance of 15% after the tax-free period. Where a gas company opts for the enhanced allowance, it will not be entitled to the 15% investment allowance
Tax free dividends during the tax holiday, subject to certain conditions
Plant, machinery and equipment purchased for gas utilisation are exempt from value added tax (VAT)
Profit from gas utilisation operations is subject to tax under the CIT Act
Pre-production costs and investment required to separate crude oil and gas from the reservoir are tax deductible expenses
• Gas Utilisation (Upstream Operations)
Capital investment on facilities and equipment required to deliver associated gas in usable form is treated as part of the capital investment for oil development
Investment required to separate crude oil and gas from the reservoir into usable products is also considered as part of oil field development
Gas transferred from a Natural Gas Liquid facility to the gas-to-liquids facilities is subject to 0% Petroleum Profits Tax and 0% royalty.
• A company engaged in wholly export trade with turnover of less than ₦1 million will pay CIT at 20% (instead of 30%) for the first five years in which its turnover is less than this amount
• Export Expansion Grant
• The profits of a company whose supplies are exclusively inputs to the manufacturing of products for export are exempt from CIT
• The profits of a company established within an export processing zone is exempt from CIT
• Tax-free dividends from investment in wholly-export-oriented business
• A mining company with turnover of less than ₦1 million will pay CIT at 20% (instead of 30%) for the first five years in which its turnover is less than this amount
• A new company engaged in the mining of solid minerals will enjoy a tax holiday of three years
• Plant, machinery, equipment and accessories imported exclusively for mining operations in Nigeria are exempted from customs and import duties
6. Services Industry
• 25% of incomes in convertible currencies derived from tourists by a hotel shall be exempt from tax, subject to certain conditions
• Interest payable on any loan granted by a bank for the purpose of manufacturing goods for export, shall be exempted from tax
• Tax exemption of the interest earned from agricultural loans subject to certain conditions
• Companies engaged in research and development activities for commercialization are entitled to 20% investment tax credit
7. General Tax Incentive
• Companies with approved business in the free trade zones/export processing zones are exempt from tax
• Exemption from minimum tax for new companies
• Income from investment in bonds and treasury bills is exempt from tax
• Interest earned on foreign currency domiciliary account in Nigeria is exempt from tax
• Investment (dividend, rent, interest and royalty) income derived by the beneficiary from outside Nigeria and brought into Nigeria through government-approved channels are tax-exempt
Companies in different industries are encouraged to take advantage of these tax incentives. It is important that you engage with a tax professional to confirm your eligibility and the application process (if any) for enjoying these incentives.
It has been said that “no business can succeed in any great degree without being organised”- this is the truth that many failed Businesses have not mastered.
Unfortunately too, it is not all registered companies that have had the opportunity of being advised on the things that every company must take note of after becoming registered.
Many of my business students have been sparked to start their company as soon as they understood the details needed to start one, but not all of them waited to find out the details that are needed to give their company that solid foundation that will give them an organised outlook.
The tips that I will give to you in this article may be totally new, while some will come to you as a reminder, if you will put everything in place to comply with them, they will strengthen your hands to become a master Potter modelling the business ideas that you want and growing it into a reality.
Comments are welcome, and questions may be directed to my email address email@example.com. Enjoy!
TIP NO 1:
As soon as you register your company, purchase a standard notebook to record the details of the members of your new company.
Put in the layman sense, your members are otherwise known as the co-owners of the company.
You can title the notebook as “Register of Members of ……. (Insert your company’s name)”.
The records of each member should include their names, address, extent of ownership in the company, date on which each person became a member, date on which the person ceased to be a member (i.e. where the person has ceased to be a member).
There are other technical details that you must bear in mind. For instance, the kind of entry that will be in your Register of Member for a Company Limited by Shares may be affected by whether or not each member has paid for the unit of shares owned by him/her. In the event too that you have converted your shares into stock with proper notice to the Cooperate Affairs Commission, your Register is supposed to show the details of the stock and not shares.
You must take inventory of the members that started the company within 28 days of registering your company, and you must take inventory of all subsequent members within 28 days of the conclusion of agreement for them to become members. Where a person ceases to be a member, you must take record of that fact within 28 days too.
You may decide to keep your Members’ Register at your registered office, or in another office of your company (if that is the place where you make up the content of the Register), otherwise, you can keep it with your Legal Adviser/ Solicitor particularly if he/she is responsible for using his/her professional competence to manage the Register on behalf of your company.
If you prefer to keep the Register at an office other than your registered office, or with your Legal Adviser/Solicitor, make sure that either your company secretary or your Solicitor notifies the Corporate Affairs Commission of the place where the Register is kept within 28 days of the company’s decision.
TIP NO 2:
Where your company has more than 50 members (maybe because there are members that are joint holders of your company’s shares or for some other reasons), you may either choose to keep an Index of the members of your company in your Register of Members, or buy a separate Standard Notebook to take inventory of the Index of members.
The index of your company will contain the alphabetic list of the names of the members of your company and must, at all times, be kept at the same place with the Register of Members.
Where you make any alteration in your company’s Register of Members which makes it necessary that a consequential alteration be made in your Index of Members, you must make the consequential alteration within 14 days after the date on which the alteration is made in the register of members.
TIP NO 3:
Your company must hold its first annual general meeting within 18 months of its registration, and within every 15 months thereafter.
An “Annual General Meeting” is the yearly general meeting of the members of a company to deliberate on the businesses of the company. By implication, the following people are entitled to receive notice of your company’s general meeting:
• Every member
• Every person upon whom the ownership of a share devolves by reason of law
• Every director of your company
• Every auditor for the time being of your company
• Your company Secretary
At the Annual General Meeting, your company may present the financial statements for the year ending, present directors and auditors’ report, elect new directors in place of those retiring, appoint members of Audit Committee, declare dividends, and fix remuneration for company’s auditor etc.
Every member is entitled to a 21 days’ notice prior to the day of meeting. A shorter notice may be valid if only all the members entitled to attend and vote at the meeting agreed for a shorter date.
You may opt to engage your solicitor to prepare the notice of meeting to be sent to the members of your company or otherwise get your company secretary to prepare it.
As a guide, here are the details that your Notice of Meeting must specify:
• the venue of meeting
• the date and time of meeting, and
• the nature of issues to be dealt with at the meeting
There are other technical details that may have to be stated in the Notice of Meeting; for instance, where your meeting is meant to consider a special resolution, the terms of the resolution must be stated in the Notice of Meeting.
In a similar vein, you are not allowed to discuss any issue which you have not stated in your letter of notice of general meeting, and failure to give notice of your company’s general meeting will invalidate the meeting unless the failure was an accidental omission on the part of the person(s) giving the notice.
It is therefore necessary that you seek proper legal advice while planning to hold the annual general meeting of your company. You may contact me for further information or explanation, and you may likewise contact your Solicitor for additional assistance or information.
TIP NO 4:
Your company must keep minutes of its meetings. To do this effectively, I will suggest that you dedicate special notebooks for that purpose so that your minutes can be sequential and orderly.
The meetings which the Corporate Affairs Commission envisages that your company should take record of are:
• Proceedings of all General Meetings
• Proceedings of Meetings of Directors
• Proceedings of Meetings of Managers (where there are Managers)
TIP NO 5:
Your company must have at least two (2) directors.
Anytime the number of directors fall below two, your company must appoint new directors within one month, otherwise, it will be illegal to continue doing business after one month of refusal to appoint a director.
The power to appoint the directors reside in the members of your company and it may be exercised at the Annual General Meeting of the company.
TIP NO 6:
The first meeting of your board of directors must be held not later than 6 months after you register your company. All other meetings may be held at any time whatsoever.
Any issue that is to be resolved at the Board of Directors’ meeting must be decided by a majority vote, and if there is an equality of votes, the chairman may have a second vote.
TIP NO 7:
You must buy a standard notebook to take record of your company’s directors and secretaries.
The notebook may be headed “Register of the Directors and Secretaries of ………………………………………. (Insert the name of your company)”
The notebook is to be kept at your company’s registered office, and will take note of the following:
• Full names of Director/ Secretary
• Any former name (s) or surname
• Residential address
• Business Occupation
• Details of any other directorships held by him/her
• Date of Birth
• Where your Company’s secretarial duties are outsourced to a Law Firm or Corporation, the details of the registered name and registered address or head office must be noted.
Your company is expected to file its first update with the corporate affairs commission within 14 days from the day it is registered with the corporate affairs commission, and 14 days after every subsequent change.
The Register of the Directors and Secretaries of your company is supposed to be accessible to the public.
TIP NO 8:
Where your company changes its registered address, you must notify the Corporate Affairs Commission within fourteen days of such change.
Your Company Secretary may purchase and file the appropriate form for that purpose, or otherwise, engage a competent Solicitor to assist with the process.
TIP NO 9:
One of the things that you need to do after registration is to impress your company’s name and “Registered Company Number” (i.e. “RC No”) on every form of your company’s correspondence.
Unfortunately, this aspect of company obligation is usually overlooked by business owners and investors, and where the name of the company is stated, the “RC No” is often left out.
In more specific terms, you must paint or affix (and keep painted and affixed) your company’s name and “RC No” in a very clear manner on the outside of your office, on every of your company’s business letters, notices, advertisements, all official publications of the company, its bills of exchange, promissory notes, endorsements, cheques, bills or parcels, invoices, receipts, letters of credit, orders for money or goods purported to be signed by or on behalf of the company, and on the company’s metallic seal.
TIP NO 10:
Your company must prepare and submit to the Corporate Affairs Commission an annual report on matters specified in the Companies and Allied Matters Act which are applicable to your company.
The annual report is otherwise known as ANNUAL RETURNS, and if you are operating a limited company, It will usually contain your company’s registered address, address of place where the register of members is kept, summary of share capital and debenture, particulars of indebtedness of your company (if any), list of past and present members of your company, balance sheet, auditor’s report, and profit and loss account etc.
Keeping your annual returns up to date with the Corporate Affairs Commission is about the most important obligation that you must keep up with as soon as you register your company, and considering the technical nature of the task, it is important that your company secretary should be given the necessary training to handle the task, or otherwise, same should be outsourced to a Professional to handle.
TIP NO 11:
Register your company for Tax Identification Number and Value Added Tax at the Federal Inland Revenue Services (FIRS).
To apply for TIN and VAT, you may have to design your company letterhead, rubber stamp/metallic seal, and company logo.
You can reach me for further enlightenment on tax compliance in Nigeria.
Here, let me get back to the title of this article “11 simple tips to grow your new company”.
That title came to mind because I have seen many Businesses crumble not because they were bereaved of ideas, or money, but because they did not have somebody to put them through on their legal obligations, and as soon as they started getting penalised, they had to forfeit operating the company as it was too late to comply.
You have an opportunity to get the basic things right if you master the content of this article.
HOW TO ENJOY PIONEER STATUS INCENTIVE IN NIGERIA
Pioneer status is a fiscal incentive provided under the Industrial Development (Income Tax Relief) Act, Cap I7, Laws of the Federation of Nigeria, 2004 (IDA). Under the incentive, companies operating in designated pioneer industries or producing pioneer products, which apply for and are granted pioneer status, are entitled to income tax holiday for up to three (3) – five (5) years in the first instance, renewable for an additional maximum period of two (2) years. In addition to income tax holiday, pioneer companies enjoy other benefits such as the exemption of dividends paid out of pioneer profits from withholding tax.
The review of the pioneer status incentive (PSI); an incentive administered by Nigerian Investment Promotion Council (NIPC), led to the suspension of the PSI scheme since September 2015. However, on 7 August 2017, the Minister for Industry, Trade and Investment, Mr. Okechukwu Enelamah, lifted the suspension on the PSI scheme and also announced the approval of addition of 27 new industries and products to the list of pioneer industries. Similarly, the new PSI guidelines and process chart (“the guidelines”) which the NIPC had earlier released on its website was approved.
This article explains the details of the new guidelines and how companies can take advantage of this incentive.
• Approval of additional 27 industries
The approved list of 27 industries focuses on emerging industries in Nigeria such as e-commerce companies, software development, video and television production, real estate investment vehicles and manufacturing of machinery, among others. The Minister also stated that mineral oil prospecting and cement are no longer part of the list of pioneer industries.
Click here to download a copy of the new 27 industries. The full list can be accessed on NIPC’s website
• Required documents for PSI applications
The guidelines require PSI applicants to submit a copy of the following documents in addition to that required under the former guidelines:
– Applicant’s pension compliance certificate
– Nigerian Social Trust Insurance Fund (NSITF) registration certificate
– Industrial Training Fund (ITF) compliance certificate
– Regulatory license(s) to operate in the sector or business activity (where applicable)
– Approval letter received for any incentives/waivers/concessions/grants from other government agencies (where applicable)
– Applicant’s sustainability policy
• Applicable fees
We have outlined in the table below the change in the applicable fees under the old and new guidelines.
Under the old guidelines, the 2% projected tax savings was paid before the issuance of the pioneer certificate and was not refundable regardless of whether the company makes a profit or loss during the pioneer period. However, under the new guidelines, applicants pay 1% of the actual pioneer profits at the end of a year in which the company makes a profit. Therefore, applicants are better off under the new regime in this instance.
On the other hand, under the new regime, applicants will now pay an additional ₦3million to enjoy PSI in their initial application.
• Timeline for PSI application process
The process flowchart introduced by the Minister proposes definite timeline for application and processing of PSI. Based on the process flowchart, the time required to apply and obtain an approval in principle is 18 weeks while to apply for a production day certificate (which comes after an approval in principle) and obtain the PSI certificate is 7 weeks.
In total, an applicant should expect to receive the PSI certificate in 25 weeks (about 6 months) from the date of application. In addition, the time required to obtain a PSI extension certificate is 15 weeks.
• Annual Performance Report and Impact Assessment
According to the guidelines, beneficiaries of PSI are now required to submit a performance report annually to NIPC not later than 30 June of the following calendar year. The report is expected to contain the company’s financial statements, evidence of payment of the annual service charge and other information as provided in the guidelines.
Failure to submit the annual performance report for any year, after two reminders, will result in the PSI certificate being cancelled, removal of the company’s name from the list of beneficiaries and notification to FIRS to collect the tax for the period the report was not filed and the remaining pioneer period initially granted.
A periodic impact assessment would also be carried out by NIPC during the period that a company enjoys the PSI incentive. The purpose of the impact assessment is to measure the effectiveness of the incentive and to evaluate the utilization of the saving accruing from the incentives.
Going forward, the Federal Executive Council has agreed that the pioneer list would be reviewed every two years in order to ensure that the Federal Government (FG) is responsive to changing economic environment. Based on FG’s commitment to the promotion of transparency and efficiency in the PSI process, we hope that the new PSI application and approval process would follow the provisions of the Guidelines to prevent abuse of the incentive.
Quoted as we understand it, section 573 of the Companies and Allied Matters Act says that:
You do not have to register your business name if:
(a) As a firm, your firm’s name is the combination of the surname of all partners, or the surnames and their other names.
(b) Your individual business is operated in your real names
(c) Your Company (i.e. LTD, PLC, GTE, and ULTD) decides to operate a business name that does not consist of any addition to its corporate name
The following instances are additionally allowed:
(a) Situation where the word added is merely to show that the business operates in succession to a former owner. This is common in family businesses.
(b) Situations where the partners have the same surname and “s” is added at the end of the last surname. For instance Akinyele & Akinyele’s Firm
(c) The business is carried on by a receiver or manager appointed by any court.
In summary, you do not have to register your business name if you are using your actual names- your surname with or without your other true names or initials of those names to run your business.
Furthermore, if there is an addition that merely indicates that the business is carried on in succession to a former owner of the business; or where two or more partner have the same surname and decided to add an “s” at the end of that surname; or where the business is carried on by a receiver or manager appointed by any court, registration will not be necessary.
It is understandable that you can do business in your natural names because you are a legal person by reason of your natural names (particularly if you are 18 years or above). So, I as EYITAYO OGUNYEMI could decide to have a legal retainership with your company in my natural names. If I however operate as “Law Accent”, I need to register it because it is not my natural name.
It is not surprising that a person that does business in a name other than a natural name must register because there is a need for the public to put a face to anybody behind transactions done in unnatural names.
Here are however some reasons that may necessitate that you register your business name either ways:
Banks usually request for certificate of business registration before opening a corporate account for corporate clients. By implication, you may not be able to open a corporate account.
Foreign investors prefer to deal with entities that are registered with government agencies, and that begins with the Corporate Affairs Commission.
It is almost impracticable to have your name alone (without any addition) for a business name. For example “Eyitayo Ogunyemi”- looks quite absurd without any addition like “Law Office of Eyitayo Ogunyemi” “Eyitayo Ogunyemi & Co” etc. It is however assumed under this heading that the law will be reviewed to capture this situation because the law ought not to be construed in such a way as to demand the impossible.
You may therefore conclude on registering your business name notwithstanding the leverage allowed by the law as this puts your business in a prime position for opportunities.
UbongNkanta | Feedback Works
information about reactions to a product, a person’s performance of a task, etc. which is used as a basis for improvement.
The continuous change in customers’ needs and expectations is a clarion call on businesses – established, growing and startups to engage their customers satisfactorily. Businesses spend time to develop, review and evaluate their business strategy periodically, however, very little (if anything) is done to seek and review the feedback on the customers’ experience with their products and services. A best-in-class business strategy is incomplete without a clearly defined customer feedback plan.
A research conducted by Esteban Kolsky shows that 70% of companies that deliver best-in-class customer experience use customer feedback, versus industry average of 50%, and 29% for laggards.
Every business expectedly, is set up to operate optimally and be the ‘top mind’ brand for their customer at all times. However, as services are being rendered round the clock, customers’ feedback on their perception of the experience are not also gathered on the go. So many organizations do not have structured, clearly defined and effective customer feedback channels, thus they only get to know of their customers’ experience with their services when the customer has already gone public – the power of social media! Today, we all have access to media platforms through which we provide unsolicited feedback on a/an good, bad, ugly experience with brands at any time. This liberty for experience expression is also a very good, bad and ugly form of brand exposure, depending on the usage and for what purposes.
So many organizations are spending millions in protecting their brand from poor reputation resulting from bad publicity and some are trying to salvage theirs from one that has gone awry. This is the power of the Voice of Customer (VOC) at work. So many businesses make little or no effort in putting in place a structured, easy and convenient process to gather and listen to real-time feedback from their customers. Today’s customers do not wait or give you a second chance to improve on a poor service (if at all you know about it); they are at liberty to talk about their experiences in the public (virtual) space even while being served. This is a big dilemma for established businesses that move like cruise ships.
”Only 1 out of 26 unhappy customers complain. The rest churn. A lesson here is that companies should not view absence of feedback as a sign of satisfaction. The true enemy is indifference”. – Kolsky
In Customer Feedback management, the customer is in charge! So handling it must be from the customers’ perspective and not on perceived assumptions. Organizations, irrespective of market size must strategically develop and implement a seamless, effective, easy and accessible feedback process. It must be a deliberate act and the customers clearly informed. The feedback channels should serve all cadre of customers and must be available and managed at all times.
Most importantly, the organization should have an empowered team to listen to, engage personally and act real-time on the voices of their customers. Effective customer feedback process is a veritable tool for continuous improvement and a sure pathway for business growth.
Forrester found that 80% of companies say they deliver superior customer service. However, only 8% of people think these same companies deliver customer service worthy of a superior rating.
What kind of customer experience are you providing? Have you asked your customers? Have you asked your employees? Engaged customer-facing employees have a better idea of the customer experience than non-customer facing employees. Disengaged employees don’t care.
How do your customers define an acceptable, unacceptable, and outstanding customer experience? Ask them. That is the only way you will ever know.
Talk to your customers to let them know you care about what they think. They will be amazed that you care about them as individuals.
Recognize employees who provide an outstanding customer experience so other employees will know what you value – beyond revenue.
Today, so many organizations have improved on their product offerings and service models; increased their customer base, market share and profitability from customer feedback. This in turn enhances their customers’ experience, which today is the competitive battleground and marketplace differentiator.