Hello , Do you have the intention of Co-founding a business with someone?

If Yes, then I will show you this email, I will show you some Hacks that can help you maintain neutrality when Co-founding a business with other people.

first thing is, Mutually agree on a new company name and do a fresh company registration for your new startup, regardless of whether one or all of you have an already existing registered company.

one person saying that he has an already existing company that should absorb your new relationship doesn't make any legal sense.

This is because aside from the fact that your new startup will automatically be inheriting the existing company's tax and other regulatory agencies' liability, the owner of the existing company will always feel like he is still the owner of the company.

And this will automatically result in a conflict of interest.

So, the #Legalsense thing to do is to actually float a fresh Ltd Liability Company.

Even if they insist that you will be saving money by going with the old company, refuse.

Because the truth is that you will probably end up spending much more than you would have spent when you do all the post-incorporation changes with the CAC and other regulatory agencies as the case may be.

As a matter of fact, It will be foolhardy on your part as Co-founders to use an existing company for your new startup and not insist on filing some changes to the company with the CAC.

And here are some other issues...

You will need to remove some old directors as they may not be a part of the new idea you are trying to push.

If you are doing this, you will need to speak to a lawyer to avoid being sued for the "wrongful removal of a director".

can you see the legal landmine there?

Also, If you insist on using an existing company for your new startup as co-founders, you will need to make changes to the company's shareholding structure.

Depending on the situation you find, the existing company's share capital may be increased to help you issue new shares to the new shareholders.

It could also be that the company's share capital may be restructured in such a way that the existing directors will need to relinquish some percentage of their shareholdings to be issued to the new directors.

This is also another place where serious problems may arise.

Another thing is that you may have to make changes to the object clauses of the existing company to reflect the object clauses for your new startup.

Now, before any of these post-incorporation changes can be made to the company you wish to use the CAC annual returns of the company must be paid up to date depending on what year the company was registered.

Guess what?

You could do all of the above and they will still do not guarantee neutrality in business.

, now tell me...

Why would you want to put yourself through all that stress when you can just actually register a fresh company and focus on building your business?

Think about it.

To your #LegalSense

#BarinaadaLegal

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