Starting a business often feels like planting a seed. There’s excitement, hope, and the eager vision of watching it grow into something remarkable. But ask any seasoned entrepreneur, and they’ll tell you: hope is not a strategy. Without the right structure, even the most promising startup can falter before it flowers.
I once met Tunde, a brilliant software developer in Lagos, who launched his tech company straight out of university. His app took off faster than he expected. Investors started knocking. Clients were multiplying. But underneath the success, cracks were forming. He had registered the business as a simple sole proprietorship, had no shareholder agreements, no formal contracts, and no intellectual property protections.
When a co-founder left abruptly—and took part of the app’s code with him—Tunde realized he had made a critical error. Growth had exposed the weakness of his foundation.
Lesson 1: Choose the Right Legal Structure Early
The first building block for any startup is its legal structure. Corporate law teaches us that structure defines everything—your liability, your access to funding, and your longevity.
A Limited Liability Company (LLC) is often the best starting point for startups. It protects personal assets, allows flexible management, and looks credible to investors. If you’re thinking bigger—dreaming of raising millions in venture capital or going public someday—then a full Corporation structure might suit you better.
Lesson 2: Formalize Relationships with Co-Founders
Many startups begin as friendships. Two people meet over coffee, sketch an idea on a napkin, and the journey begins. But corporate law warns us: handshake agreements are dangerous.
Clear, written agreements—defining ownership shares, roles, decision-making authority, and exit terms—are vital. It’s not about distrust; it’s about clarity. When things go wrong (and they often do), a solid agreement can save the business—and the friendship.
Lesson 3: Protect Your Intellectual Property
Your brand, your code, your designs—these are your crown jewels. Early on, startups must register trademarks, copyright their original works, and, if necessary, file patents.
Without this protection, someone else could legally steal your work, and you’d have little recourse.
It’s like fencing your farmland before planting the crops. Without a fence, anyone could walk in and take what they like.
Lesson 4: Set Up Proper Corporate Governance
It may sound boring, but governance is the secret backbone of growth. Simple practices—like keeping board meeting minutes, documenting major decisions, and filing annual reports—can make the difference between a business that survives its first crisis and one that crumbles.
When investors come calling, they don’t just look at your product. They look at your structure. Sloppy governance is a red flag.
Lesson 5: Plan for the Future, Today
Finally, don’t just think about today’s version of your business. Think five years ahead.
If your dream is to expand across Africa, to franchise, or to be acquired by a global giant, the foundation you lay now must support that future. Corporate law forces founders to think about scalability—because what works for a two-person team will not work for a two-hundred-person company.
In the end, startups that grow—and stay successful—aren’t just those with a great idea. They’re the ones built on strong legal and structural foundations.
Tunde eventually restructured his company, brought in legal counsel, and rebuilt stronger. Today, his startup is thriving—and he’s a fierce advocate for getting the structure right from day one.
If you’re dreaming of building something great, don’t wait for problems to force you into action. Set your foundation right, and watch your startup grow boldly into the future.
Abdul-warith Opeyemi Oladimeji (LLB, MSc, MBA, NPLM, ACIPM) is the Lead Consultant of DMJ-Global Consulting Limited, and the Team Lead of Future Builders Initiative (FBI). He is an academic researcher, legal analyst, and nonprofit leader specializing in management, resource mobilization and corporate governance. He helps entrepreneurs and organizations build strong foundations for sustainable growth.
