02/03/2023
HOW TO PROPERLY ENTER INTO CONTRACT WITH A BUSINESS NAME❗
Away from election matters. Let me teach on everyday legal issues in business
A lot of times small business owners prefer to register their business at the early stage as a Business Name for various reasons majorly because it is cheaper
Nothing wrong with doing business as a Business Name but I would like to point out one major fact that a lot of non lawyers do not know
Although your business name maybe registered with Corporate Affairs Commission, under the law it is not regarded as a juristic person
What I mean by not a juristic person is that it cannot be sued in it's registered business or brand name.
A business name does not have an independent legal person unlike a limited liability company.
Let me use myself as an example. My legal name is Chinenye Ibeneme. I happen to run a fashion outfit that goes by the brand name Aura quartz clothing which I registered as a Business Name with CAC.
So let's say that a school has approached me to make and supply school uniforms for it's students. For record purposes, they would also want me to sign a contract for that effect before money is paid and production starts.
So let me give 2 examples of how the introduction section of the contracts may be written
Example 1
This Agreement is made this 2nd day of March 2023 between
Hollancinades International Model School hereafter known as the buyer..........
And
Aura quartz clothing hereafter referred to as the Supplier..........
❌❌❌❌❌❌❌❌❌❌❌❌❌❌❌❌❌🚫
This first example is totally wrong
Example 2
This Agreement is made this 2nd day of March 2023 between
Hollancinades International Model School hereafter known as the buyer..........
And
Chinenye Ibeneme (Trading under the name and style of Aura quartz clothing) hereafter referred to as the Supplier..........
❗⭕✔️✅✅✅✅✅✅✅📌📌📌📌📌
Example 2 is a better introduction and description of the parties. Like I earlier stated a business name is not a juristic person capable of suing and being sued under the law
If a dispute arises and the buyer decides to go to court and sues Aura quartz clothing, the suit may be thrown out if I raise a preliminary objection on the ground that the fashion outfit is not capable of being sued
So the way to go about it if you find yourself in such a situation is to
1. Ask for a copy of the incorporation documents of the business you are about signing a contract with
2. If the business was registered as a Business Name. Find out the name of the sole proprietor ( it is usually written on the incorporation documents on Form CAc/BN/1. On the column for particulars of partners
3. Write the name of the business owner then you can add in bracket it's known brand name that it is trading under
With this you would have fulfilled the legal requirements and protected yourself Incase of incasity like we say in local Nigerian street lingo
Above all, always cross check with your lawyer before you sign your signature on an contract.
Chinenye Ibeneme
