The legal front of any business is necessary in order to cover all bases.
By Funkola Odeleye
The entertainment and hospitality industry in Nigeria is very vibrant and there are new entrants every day; from musicians to restaurants, wedding planners to hotels, tour companies to concierge services, galleries to event promoters, the list is endless.
You will agree that running a business in any industry is hard work, but I dare say that it is even harder in the entertainment and hospitality industry where the thrust is to help people make the most of their leisure time as well as manage their personal and social lives.
As a player in this industry, here are a few things you should put in place on the legal front to ensure that your bases are covered.
- Get the formation right: To put a legal structure around your business, it is strongly advised that you register it as a limited liability company and not a business name. A limited liability company, as the name implies, limits your liability; as such, the owners are not personally liable for debts and liabilities of the company as they are seen as different persons from their company i.e. the company becomes a separate legal entity from the owners once it is registered as a limited liability company.
A registered business name does not afford you that protection as you and the business are seen as one and the same person under the law.
In an industry where personal services are provided, the better option will be to limit your liability.
- Protect your brand: You have most likely put in a lot of work in choosing a name, designing a logo and coming up with a slogan; these various elements are your trademark and you should go a step further to protect them.
As the saying goes, “there is no monopoly of ideas”; this means that someone will come into the same space and offer the same services you offer. Unfortunately, some others may outrightly rip your idea, use your brand colors and even use a name similar to yours. If you do not register a trademark to protect your brand, it will be difficult to stop others from infringing on your brand. Registering your trademark is an official declaration of ownership and this gives you a right to the exclusive use of the trademark in respect of goods and services that the registration covers. It also grants you remedies against infringers such as damages.
- Get insurance: Insurance seems unpopular and most times it is considered an unnecessary expense but it always saves the day. Imagine that the headline act of your concert can’t make it and you have to cancel the event and refund tickets sold, or that people are injured at your nightclub. With insurance, you can reduce your losses or be reimbursed for expenses occasioned from mishaps. Examples of insurance that pertain to the entertainment and hospitality industry are event cancellation insurance, bodily injury insurance, property damage insurance and you can even take out a fidelity bond to protect your business from losses that occur as a result of fraudulent acts of your employees.
- Agreements and Partnerships: In this industry, there is a reliance on suppliers, 3rd party vendors, contractors, freelancers and the like, such as caterers, photographers, car hire services, delivery companies, event venues, platforms for event ticket sales, to name a few; there is also the tendency to deal informally with these parties. It is important that you put agreements in place to document these relationships and the obligations of each party. These agreements should also be detailed enough to spell out payment terms, commissions (if any), how long the relationship will last for and what happens in case there is a dispute. There are various agreements to serve different purposes such as Promoters Agreements, Sponsorship Agreements, Freelance Contracts, Ticketing Service Agreements, Haulage Contracts and various kinds of Service Level Agreements.
The above is not an exhaustive list of all you need to do on the legal front but it is a great start. Be sure to consult your legal adviser.
Editor’s Note: This article was originally published in The Spark Magazine. Find the magazine here to read other articles.
Funkola Odeleye wears many hats as a parallel entrepreneur. She is a Director and heads Legal and Global Partnership at TMO Lifestyle Services – a concierge services and luxury lifestyle management company based in Lagos, Nigeria and Dubai, UAE. She is also a Co-founder and Director of Legal & Operations at DIYlaw and the Corporate-Commercial and Intellectual Property lead at The Longe Practice LP, an entrepreneur focused law practice. Funkola has a Masters in Finance and Financial Law from the School of Oriental & African Studies, University of London in addition to her LLB from the Lagos State University and BL from the Nigerian Law School. She keeps a food blog and loves to cook.