LEGAL & TAX: FIVE (5) COMMON MISTAKES MADE BY STARTUPS

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Starting a new business is an exciting and challenging endeavor, but it can also be risky. Legal and tax mistakes are common among startups and can lead to significant financial losses and legal trouble. In this article, we will discuss five common legal and tax mistakes made by startups and how to avoid them.

1. NOT INCORPORATING: One common mistake made by startups is failing to incorporate their business, which can lead to personal liability for the company’s debts and legal issues.

2. NOT PROTECTING INTELLECTUAL PROPERTY: Startups often overlook the importance of protecting their intellectual property, such as trademarks and patents, which can lead to legal disputes and financial losses.

3. NOT KEEPING ACCURATE FINANCIAL RECORDS: Many startups fail to keep accurate financial records, which can lead to legal issues and difficulty in obtaining funding.

4. NO UNDERSTANDING TAX LAWS AND DUE DATES: Startups often make the mistake of not understanding the tax laws and regulations that apply to their business, which can lead to penalties and fines.

5. NOT HAVING A CLEAR EQUITY SPLIT AMONG FOUNDERS: Startups often make the mistake of not having a clear equity split among the founders, which can lead to disagreements and legal issues. It is important to have a clear agreement in place from the beginning.

To avoid or remedy these pitfalls, contact us today

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

REQUIREMENTS FOR THE REGISTRATION OF TRADEMARKS IN NIGERIA

Trademarks Registration in Nigeria

According to Investopedia, the term trademark refers to a recognizable insignia, phrase, word, or symbol that denotes a specific product and legally differentiates it from all other products of its kind. A trademark exclusively identifies a product as belonging to a specific company and recognizes the company’s ownership of the brand.

REQUIREMENTS FOR THE GRANT OF TRADEMARKS IN NIGERIA

TRADEMARK SEARCH: This is to confirm the registrability of the mark if it doesn’t infringe on any existing mark or is similar to any already registered mark.

APPLICANT INFORMATION

  • Owner of Mark (Company or Individual)
  • Address of Mark Owner
  • Phone Number
  • E-Mail Address

TRADEMARK INFORMATION

  • Trademark (Name, Sound or Device)
  • Class of Specification of Goods/Services
  • Specification of Goods/Services Description
  • Attach Power of Attorney

Upon Approval/Acceptance, a Trademark Acceptance Letter is issued.

  • TRADEMARK CERTIFICATE: Kindly note that Acceptance Letter should not be misconstrued as a certificate. Not until the mark has been published in the Trademark Journal and not opposed within two months can an application be made to the Registrar for a Trademark certificate.  

Regville Associates offers end-to-end legal, tax and secretarial service for companies. We are an Accredited Agent of the Ministry of Trade and Investment, Department of Commercial Law, where Intellectual Property such as Trademarks, Patents and Designs are registered. We will be happy to hear from you regarding your Intellectual Property protection.

Tolulope Oguntade 
Regville Associates 
info@regville.com 
08065111667

What are Trade Secrets, and How Can they be Protected in Nigeria?

Trade Secrets – Intellectual Property

Introduction

For decades, most companies and corporations worldwide have done virtually everything possible to conceal their trade secrets from the public. Similarly, protecting trade secrets is important for any company that wants to stay prosperous and function perfectly for a long time.

For information to be declared a trade secret under the law of certain countries, a company must take reasonable steps to keep it hidden from the general public, have economic value on its own, and contain relevant information.  Trade secrets are a part of a company’s intellectual property.

What are Trade Secrets?

Trade secrets are the process of production or practice that looks valuable to a company and is not to be generally known or revealed to the public. Trade secrets are valuable to every company because they serve as a competitive strategy or advantage that the company has over its competitors.

The Scope of Trade Secrets

The development of trade secrets began with keeping confidential information away from society. This concept is said to be traced back to the middle of the 19th century, which served as a period when capitalism was on the rise. However, trade secrets became inoperative when it was realized that the concept would be a relevant part of the law.

However, it should be noted that the case of Prince Albert v Strange played a crucial part in developing the area of law in as much as trade secrets are concerned. According to the facts of the case, the Queen and Prince Albert made artwork (which are specifically etchings) for the sole purpose of their amusement and their private entertainment, but they sometimes had prints to give to friends. As a result, the defendant had made unauthorized copies intending to put them on public display. Accordingly, an injunction was granted to restrain him from doing so.

Suppose the authority of the relevant law had helped to restrain third parties from taking credit for other people’s research, hard work, and valuable information. In that case, trade secrets don’t necessarily have to be innovations or inventions. Still, they should serve as valuable information regarding processes, finance, and technical know-how, which should not be known or made available to the general public.

The rationale for the Protection of Trade Secrets

One of the frequently asked questions which need to be answered in the world of intellectual property rights is- why should trade secrets be protected when it is already a secret? The best answer to this challenging but demanding question is that when a trade secret of a business is said to be protected, that protection preserves the ingenuity of such a secret since it has a real economic value in the eyes of the company protecting it. According to the World Intellectual Property Organization (WIPO), protecting trade secrets will assist most businesses in the following:

1. A strategic motive to prevent competitors from utilizing similar ideas or innovations without bearing the expense or risk associated with developing the innovations.

2. Maintaining and promoting specific standards of commercial ethics and fair dealing.

3. Provides the best idea for businesses to innovate by protecting the substantial time and capital invested in developing innovations that are competitively advantageous in the sphere of technology or commerce, especially those that are kept secret or do not merit the cost of patenting.

You should also know that since trade secrets serve as intangible property, they can be utilized as collateral in the event of debt financing.

How are Trade Secrets Protected in Nigeria?

Trade secrets also serve as confidential information in some jurisdictions and become public knowledge when lost. The protection also goes forever as a result of this.  In Nigeria, the law concerning trade secrets could be more systematic. Although there are several technology-driven start-ups in Nigeria, the regulation of intellectual property is a limitation to the likes of Patents, Copyright, Designs, and Trademark.

Suppose there is an absence of any definite law that seeks to protect and regulate trade secrets in Nigeria. In that case, the architect of such a trade secret has to endeavor to protect such information from being disclosed to a third party.

Frequently Asked Questions

How are Trade Secrets Protected in Nigeria?

The concept of trade secrets in Nigeria was derived from common law. As a result, persons and private and even public companies have relied upon contract laws and other legal principles to prove a claim for the misappropriation of trade secrets.

What Qualifies as Trade Secrets?

A trade secret will be qualified as one if it is subject to reasonable efforts to keep it secret, has actual or potential independent economic worth due to not being commonly known, and has value to others who cannot access the information legally.

What is the Trade Secret of Coca-Cola?

According to a source from the web, the secret recipe for Coca-Cola is called pepsin, which is a digestive enzyme extracted from the stomach of pigs. However, Coca-Cola was initially referred to as Pepsin Cola in 1896 and then Pepsi-Cola in 1898.

However, the name Coca-Cola was created by Pemberton, a medicine inventor and morphine addict. This drink was made from a secret mixture of stimulant cocoa leaf and African kola nuts containing caffeine.

What is the Difference Between Trademarks and Trade Secrets?

Firstly, what needs to be known is that trademarks protect products, brand names, and services. In addition, the product’s logo is also protected by the package design. On the other hand, Trade secrets are certain kind of intellectual property that includes things like patent, copyright, and trademarks.

Why is Trade Secret Better Than Copyright?

The protection of trade secrets is not limited to twenty years, like patents or copyrights (100 years). Restricting access to information or limiting the number of people with knowledge of it is most of the ways to protect trade secrets.

Conclusion

Trade secrets are an essential component of intellectual property portfolios, enabling organizations to safeguard their exclusive know-how, secret formulas, and other basic knowledge that are not public information, whose secrecy provides an economic benefit to their holder, and there is also active protection.

For further inquiries about intellectual property protection. Feel Free to contact us

Tolulope Oguntade 
Regville Associates                                                                                                       info@regville.com                                                                                                                 08065111667