So after a long legal audit session with a potential client a few days ago I was reminded that it was important to clarify some misconceptions about setting up a company...

, In the spirit of that conversation, here are some important facts to have in mind about a company.

1. First of all, understand that a company is a creation of law.

It is a legal entity recognized by the law as an artificial person with all the powers of a natural person.

this means that it can sue, be sued, enter into binding transactions, and much other cool stuff.

when you understand the implication of this, then you will know truly that this artificial person needs a serious legal backup.

2. Contrary to what you may or may not already know, You do not need a physical office to establish a company.

Stop procrastinating and waiting for when you would have a physical office address before setting up your company.

you don't need that to start off.

Your company as an artificial person can reside in your home.

So yes you can use your residential address as your registered company address and that would be enough to get started ad keep going.

3. You do not need so many people to float a company.

Early this year, someone came to us for company registrations, he wanted to have 50 persons as shareholders because he learned that a private company can have as many as 50 persons on board.

While that is actually true, it is an absolute absurdity to have that number of persons as shareholders for a start-up company or even any serious company at that.

I personally don't think as a fresh company, you should have more than 5 members or shareholders at the early stage.

this will help keep things tidy ad manageable.

Besides, Investors who would otherwise have funded you will be wondering why you still need funding when you can raise the funds from your numerous shareholders.

4. A company is not actually the physical building nor is it the people running it.

A company is a legal fiction.

That is why the company may continue to exist even though all the founders are dead and the building has collapsed.

Likewise, The company may die or cease to exist even though the building and its founders are still very much alive.

5. You do not need to have physical branches of your business scattered all over the country just to prove a point to your competitors.

There is a reason you are called a start-up You are actually just starting out.

Run at your own pace Understand that you are not in competition with anybody.

6. Finally...

don't shoot yourself in the leg by trying to become the CEO, the lawyer and everything else in your business.

This kills growth as the time you would have used to figure that out would be unduly used to fight unnecessary fire.

#smartbusinessowner...

Get people to help your business.

As a legal entity that doesn't have the ability to think and make decisions on its own, it's dangerous to leave everything to chance.

More importantly, get your company a legal bodyguard...

Your business will thank you for it.

To your #LegalSense

-BarinaadaLegal.