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Advice For Small Business Owners: How to Avoid Closure

Unfortunately, there are a lot of small businesses out there which are currently struggling more than ever. It has been a busy year for business and now there are plenty of new companies cropping up each day. The competition is getting fiercer and is it becoming more difficult to stay afloat.

Most small businesses fail due to financial issues. Today, we will be discussing what small business owners can do to avoid closure whilst increasing that all-important profitability.

Assess Your Finances

To determine the success of your business and whether you can afford to keep operations running, it is important that you regularly assess your finances. Start by tracking how much money goes out of the business compared to what is going in. Ask yourself – is the cash flow steady enough?

If it is not, then you will need to start looking into areas where you can cut costs. Investigate all areas of operations and you will be sure to find areas that can afford a cut back. If you need to find ways to cut costs in your small business, then you can also turn to the internet for help. It is packed full of helpful blogs and articles which can steer you in the right direction.

Pay Off Your Debts

Any debt that your business owns will need to be paid. You can try ignoring them, but they won’t go away, and they will only make your financial situation a lot worse. When it comes to paying off your debts you should prioritise them. Some will be more important to pay off than others. Taxes are one of the most critical debts for small businesses. It is important to remember, tax money belongs to the government and not your business. So, you should always place this as a number one priority.

Failure to pay off your debts could result in the closure of your business. Future Strategy know all too well about that as they have helped hundreds of small business owners in the closing down of their businesses over the years. It is a complex process and one you want to try and avoid.

Don’t Hesitate to Talk to Lenders

Clear lines of communication are crucial in business. If you are in times of financial hardship it can help to have a good relationship with your lenders at it can help to ease the situation of a late payment. For example, if you are unable to make scheduled payments on your business loans then speak to the lender at your nearest convenience. If you default a loan, it can have serious consequences. You may be subject to a late fee or lower your credit score. You may be able to avoid this if you can promptly explain your situation to your lender.

Being confident with communication doesn’t come naturally to all business owners. This is why it is advised that you look into ways that you can brush up on these skills. You can learn more about how to get confident with communication through various online resources.

Procedure for Obtaining Mobile Money Operator License in Nigeria

On 3rd August 2021, the recent Central Bank of Nigeria (“CBN”) released the Guidelines for the Establishment and Regulation of Payments Service Holding Companies (“PSHC”) in Nigeria. The Guidelines requires companies that intend to offer both switching and processing and mobile money services to set up a PSHC structure.

The Guidelines defines PSHC as a company whose principal object clause is to be a holding company set up for the purpose of making and managing equity investment in 2 (two) or more companies, being its subsidiaries, which are payment service providers across the following categories:

  1. Mobile Money Operations (“MMO”)
  2. Switching and Processing
  3. Payment Solution Services.

(A) Share capital

The minimum issued share capital of a company seeking to apply for an MMO license is N2,000,000,000.00 (Two Billion Naira) (approximately US $ 3, 703, 704 (Three Million, Seven Hundred and Three, Seven Hundred and Four United States dollars) at 540 naira per dollar.

The PSHC and MMO are in the same category with the switching and processing and payment solution services subsidiary companies in terms of the minimum share capital requirement of N 2, 000,000,000.00 (Two Billion Naira) share capital which must be deposited with CBN before the completion of the license application process.

(B) Procedure for Obtaining a Mobile Money Operator License

The licensing requirement as provided in the CBN guideline requires the promoters of the companies to submit a formal application for the grant of a License addressed to the Director, Payments System Management Department of the CBN.

The licensing process shall be in two phases: Approval-in-Principle (AIP) and Final License stage.

(C) Requirements for Grant of Approval-In-Principle (AIP)

The application shall be accompanied with the following:

  • A non-refundable application fee of N1, 000,000.00 (One Million Naira) (approximately US $ 1, 852 (One Thousand, Eight Hundred and Fifty Two United States dollars) or such other amount that the CBN may specify from time to time; payable to the CBN, through electronic transfer.
  • Evidence of meeting the prescribed minimum paid-up capital subject to the satisfaction of the CBN.

Detailed business plan or feasibility report which shall, at a minimum, include:

  • Objectives of the PSHC and those of the subsidiaries it intends to establish/acquire.
  • Justification for applying for the payments service holding company.
  • Ownership structure in a tabular form indicating the name of proposed investor(s), profession/business and their percentage shareholdings.
  • Bio-data, resume/curriculum vitae of proposed investors.
  • Indication of sources of funding of the proposed equity contribution for each investor.
  • Where the source of funding the equity contribution is a loan, it shall be a long term facility of, at least, a 7-year tenor, and shall not be obtained from the Nigerian banking system or foreign subsidiaries of Nigerian banks.
  • Corporate Governance Charter of the PSHC stating the roles and responsibilities of the board and its sub-committees, among other things.
  • Criteria for selecting board membership.
  • Bio-data and detailed resumes of directors and board composition.
  • List of identified top/senior management staff, bio-data and detailed resumes stating qualifications, experiences, records of accomplishment, etc.
  • National or Government issued identity documents (International Passport, etc.) bio-data and Bank Verification Numbers (BVNs) of proposed Board and management staff of the company.
  • The Tax Identification Number (TIN) of the company and its Tax Clearance Certificate where applicable.
  • A schedule of services that will be shared in the group.
  • Five-year financial projection on the operations of the PSHC indicating expected growth and profitability, and details of the assumptions that form the basis of the financial projection.
  • Details of Information Technology (IT) infrastructure proposed to be deployed.
  • Information on and pictorial representation of the corporate group structure with shareholding percentage by the PSHC in each of the subsidiaries and their principal businesses and registered Head offices.
  • A written and duly executed undertaking by the promoters that the PSHC shall be adequately capitalised for the volume and character of its business at all times, and that the PSHC shall be under the supervisory authority of the CBN, as an Other Financial Institution (OFI).
  • For regulated foreign institutional investors, the CBN shall require a no objection letter from the regulatory body in the home country.
  • Shareholders’ agreement providing for disposal/transfer of shares as well as authorisation, amendments, waivers, reimbursement of expenses, etc.
  • Statement of intent to invest in the PSHC to be made by each investor in the PSHC.
  • Technical Services Agreement, where applicable.

Draft copy of the company’s Memorandum and Articles of Association (MEMART). At a minimum, the MEMART shall contain the following information:

  • Proposed name of the PSHC.
  • Object clause which shall be limited to the permitted activities of its license.
  • Subscribers to the MEMART.
  • Procedure for amendment.
  • Procedure for share transfer or disposal.
  • Appointment of directors.
  • Where the promoters of the PSHC are corporate investors, the CBN shall require them to forward the following additional documents.
  • Certificate of Incorporation.
  • Board resolution supporting the company’s decision to invest in the equity shares of the proposed PSHC.
  • Names, biometrics, BVNs and addresses (business and residential) of owners, directors and their related companies, if any.
  • Audited financial statements and reports of the company, including Tax Clearance Certificate for the immediate past 3 years.
  • Certified True Copies of the company’s CAC forms showing the details of allotment and particulars of directors.
  • Any other document/information that the CBN may require from time to time.
  • If satisfied with the application of the promoter(s), the CBN may grant an Approval in Principle (AIP).

Duration

The AIP stage usually takes a period of between 2-3 months to process.

(D) Requirements to Incorporate an MMO company

Companies in Nigeria are incorporated at the Corporate Affairs Commission (CAC). The requirements for incorporating a company are as follows:

  1. 2 (two) unique names of the proposed company to be reserved at the CAC;
  2. Name, address, phone number, email and means of identification of at least 2 Directors, one of which must be a Nigerian or a foreigner with business permit to carrying on business in Nigeria;
  3. Name, address, phone number, email, means of identification of at least one Share holder and in the case of corporate shareholder its incorporation Certificate and Board Resolution to acquire shares in the proposed company;
  4. Objects of the proposed company;
  5. Nigerian address, phone number and email of the proposed company;
  6. Special Articles of Association of the proposed company ;
  7. Name, address, phone number, email, means of identification of Company Secretary;
  8. Approval in Principle from CBN;
  9. Payment of statutory filing fees and stamp duty.

Duration

The incorporation stage will take a period of 7-10 business days.

(E) The Requirements for Granting a Final License

Within six (6) months after obtaining the AIP and incorporation of the company, the promoters of a proposed PSHC shall submit an application to the CBN for the grant of a final license.

The application shall be accompanied with the following:

  • Non-refundable licensing fee of N5,000,000.00 (Five Million Naira) (approximately US $ 9, 259), or such other amount that the CBN may specify from time to time, payable to the Central Bank of Nigeria by electronic transfer.
  • Evidence of promotion or investment of a payment service company.
  • Evidence of payment of capital contribution by each shareholder.
  • Evidence of location of Head Office (rented or owned) for the take-off of the PSHC.
  • Schedule of changes, if any, in the Board, Management, IT infrastructure and significant shareholding since the grant of AIP.
  • Evidence of ability to meet technical requirements and modern infrastructural facilities such as office equipment, computers, telecommunications, etc. to perform PSHC operations and meet CBN and other regulatory requirements.
  • Organisational structure, showing functional units, responsibilities, reporting relationships and grade (status) of heads of departments/units.
  • Board and staff training program.

Duration

The Final Licence stage usually takes a period of between 2-3 months to process.

(F) Requirements for Commencement of Operations

Upon obtaining the Final Licence, the PSHC shall inform the CBN of its readiness to commence activities and such information shall be accompanied with one copy of each of the following:

  1. Shareholders’ Register.
  2. Share certificate issued to each investor.
  3. Enterprise Risk Management Framework (ERMF).
  4. Internal Control Policy.
  5. Minutes of pre-commencement board meeting.
  6. Opening statement of affairs signed by directors and auditors.
  7. Date of Commencement of Activities.

(G) Conclusion

In order to manage financial risks and for efficiency of the business, the CBN expect promoters of a Mobile Money Operator company to form at least 3 (three) companies; first, the PSHC which is the holding company; second, a mobile money operator subsidiary and third, the switching and processing subsidiary. Each of the 3 (three) companies shall have a minimum share capital of N 2, 000, 000, 000 (Two Billion naira).

Fred-young & Evans LP

Fred-young & Evans LP

El Salvador becomes first country to accept Bitcoin as legal tender

El Salvador has become the first country in the world to make Bitcoin (BTC-USD) legal tender. The announcement comes amid protest and uncertainty, as questions remain about the integration of cryptocurrency into the Salvadoran financial system.

Multiple surveys reveal the level of distrust within El Salvador towards the new law. A poll of 1233 Salvadorans run by Disruptiva at the beginning of July revealed that two-thirds of participants were not willing to be paid in Bitcoin.

Recent studies conducted in late August by El Salvador’s University of Central America (UCA) revealed a high level of negative sentiment towards the Bitcoin law. The survey found that 80% of 1281 Salvadorans polled had no trust in bitcoin and only 17% think it will improve the economy.

Since the announcement, lawmakers in both Paraguay and Uruguay have proposed their own bitcoin legislation. In mid-August, president of Argentina Alberto Fernandez told one of the nation’s media channels that he was open to making bitcoin legal tender in the country.

Countries in other parts of the world, especially those with currencies pegged to the United States dollar, are keen to see if Bitcoin could offer them more monetary autonomy.

However, Nelson Rauda Zablah of El Faro digital newspaper, urged empathy towards Salvadorans who are in effect becoming guinea pigs in the world’s first state-run cryptocurrency experiment. He called for those “cheering the president from the side-lines” to consider what it would be like if their own national economy was about to be tossed into a “virtual casino,” and it was “their own business, credit rating, pension scheme, or savings at stake.”

6 Useful Facts Every Good Landlord Should Know

There are many things people can invest in, be it wines, jewellery or paintings. Folk can also get involved with the stock markets or multiple property ownership. One thing’s for sure: it pays to know what you’re doing in advance.

It may be tempting to assume that all landlords do is receive monthly rent checks. A chat with a landlord would quickly rectify this misunderstanding, however. There are multiple responsibilities and landlords need to be a ‘jack of all trades’ in order to do their jobs. If you read this article you’ll learn about six key facts every landlord should fully know.

You Need To Get The Finances Right

This applies each time a new property is considered. It’s important to do the maths and decide if it’s worth the investment. Think about the rents and involve an accountant in all your financial decisions.

In some cases, investors can afford to buy outright for cash. In many others, however, a mortgage will be required. For more information on this subject, it’s advisable to consult the internet. Should you visit largemortgageloans.com you’ll see that there are three types from which to choose: commercial buy-to-let, residential buy-to-let, and owner-occupied mortgages. Many landlords go online to discover what they can use as security for a commercial mortgage and learn about the benefits of having one.

You are well-advised to consult a reputable lender who can offer favourable rates. The price of property insurance is another expense you will need to factor into the calculations.

You Need To Wear Plenty Of Hats

We have just discussed the need to understand all things financial, as well as having property knowledge. There may be out-of-hours responsibilities too, such as tenants with plumbing issues or manual rent collections. When building work occurs it’s necessary to be a communicator with external companies and contractors. Sites may need to be visited regularly to check the work from a practical and legal angle.

Before investors buy homes they need to have an understanding of the property markets. This would include knowing the local area and being aware of e.g. unemployment issues or future developments that could affect their worth. When so many landlord roles are required, it’s not hard to see why they are so often delegated to others. People may appoint an accountant or rental company, debt collector, or maintenance overseer.

There Are Many Legal Responsibilities

If they are not met, external auditors could fine you – whether it relates to tax or safety. Landlords need to be aware of local and national legislation, zoning laws, and building regulations. It’s important to ensure the smoke detectors are fully working and that the emergency doors and windows are also functional. All plumbing and wiring should be certified safe and compliant.

One way to ensure you cover all the bases is by appointing a residential attorney. They would be able to use their experience and knowledge to keep you up to date. Help can also be received for preparing new leases and dealing with evictions.

Maintenance Is Not Optional

Any new tenant will require a warrant of habitability, certifying their new abode to be safe. You may have the responsibility to pay grounds people to care for the communal areas. Workers would be needed to deal with a range of tenant issues, from leaks and dampness to broken windows or appliances. Besides basic handyman jobs, there could be the need for professional plumbers and electricians.

It’s obvious that landlords want to attract and keep quality tenants who are faithful payers. If the properties look nice and are well-maintained this will help, and so will prompt attention to repairs. If you own an apartment block it’s wise to aim for consistency in appearance, and to use the time between tenants to upgrade the flats. Should damp issues be reported, it’s in your interests as well as the tenant’s that action is quickly taken.

You Need To Know Your Tenants

Everyone is different and will have different needs, whether it’s the number of bedrooms or the view. Accessibility is especially important for those with disabilities. If someone has an Emotional Support Animal (EMA) you’ll need to fully understand the person’s rights. Even if you have a ‘no pets’ policy you will be unable to refuse accommodation to someone on that basis.

The Fair Housing Act exists to protect people from discrimination in a number of categories. They include race, religion, national origin or ethnicity, or age. Added to that are gender and family status or people with mental or physical disabilities.

You Need To Understand The Tenancy Process

There are a number of options for you in regards to advertising vacant rooms and houses. You could use local adverts, notes in stores, or specialist websites.

New Tenants

Involve an attorney when someone applies to become a resident so that everything is done efficiently. Credit checks are a key part of the process, making sure the enquirer is not in debt or likely to be a bad payer. If someone was previously bankrupt this should also ring warning bells. Peoples’ references are important too. It’s wise to check the people who have supplied them, as they are vouching for your potential tenant’s character.

When the new tenant moves in, they need to be shown everything about their accommodation. Let them know their responsibilities and what they should do if there are any issues. Be sure to set up the rental payment arrangement too.

Eviction

There are certain circumstances where you can do this, and a legal procedure exists for it. Let your attorney include the various scenarios in the rental agreement, whether it’s non-payment, noise, and behaviour, or property damage. Both tenant notices and home inspections form part of the legal process.

It has now become clear that being a landlord requires an all-rounder from start to finish. They need wisdom in choosing and developing properties, overseeing the financial and legal aspects, and addressing ongoing tenant issues. In return, a stable income is often achieved, and profit may be made on the increased value of the properties too.

Valuable Facts You Need To Know Before You Start Investing

For many, many years people have been investing in numerous things. Some of them were more or less successful. As a newbie, this whole process may appear to be a bit intimidating at first.

And that’s completely understandable, however, if you get your facts straight and get yourself familiar with some things, you can definitely succeed. Just bear in mind that you’re not the only one who is doing it.

A lot of people have done the same and have managed to turn their life around. With a little bit of patience, effort, and discipline, anything can be done. To help you out, we’ve put together some extremely useful tips. Let’s check them out together!

Important Things Every Investor Should Know

Your Net Worth Must Be The Primary Personal Finance Number You Care About

So what does the term net worth even mean? What does it represent? It is actually the total value of all the things you own, such as your vehicle, house, and stuff that can quickly be resold, along with the balances of your savings accounts, checking account, or any type of investment that you have.

Of course, you also have to take into account the things that you’re forced to spend your money on, such as student loans, credit cards, mortgages, and many others. The whole point is to focus on the money that you already have and how you can increase that amount.

There are so many different ways you can do it. For instance, you can start by paying off all your debts, stop wasting money on things you do not necessarily need, and find a way to enhance your income.

One of the best ways to do it is to invest. Now, if you do not have a long-term perspective about certain things, then maybe investing is not the best option for you for the time being, or if you think that your current checking account balance is more crucial than your net worth.

Understand The Stock Market

There are some terms that you need to comprehend before you even begin. For example, when people say that the stock market is being down or up, they generally think of the biggest market indexes.

Namely, this index monitors the performance of various stocks which either represent a specific area of the market or the market as a whole. For instance, if you’re interested in the South African stock market, you can check out JSE Top 40 index to see what’s currently going on. Generally speaking, investors utilise indexes to assess the performance of their portfolios and sometimes, to state their stock trading decisions.

Furthermore, if you want to, you can always invest in a whole index by using exchange-traded funds and index fund, or even ETFs which supervise a particular index or one sector of the market.

Providing New Investors With More Useful Tips

You Must Pay Off All Your Credit Cards As Well As Other High-Interest Debts

If by any chance you have high-interest debts, anything that’s over eight percent interest rate, then one of the best things you can do for yourself is to work on paying down that debt. Namely, you are going to save so much money just by paying off the debt from your credit cards.

As previously mentioned, paying off any of your debt is going to have a huge, positive impact on your overall net worth which will lead to its slow increment because nothing will hold it back. More importantly, all of this will lead to fewer monthly costs, which means that you will have much more cash to invest than you did before.

All in all, if you have these high-interest debts, you should prioritise them and pay them off as soon as possible before you proceed with investing. Not only will they provide you with a better return, but you will drastically enhance your monthly cash flow and enhance net worth.

Assess Your Comfort Zone In Taking On Risk

The ugly truth is that every investment comes with certain risks and that’s something nobody can deny. If you want to acquire securities, like stocks, mutual funds, or bonds, then it’s of huge importance to comprehend everything before you proceed.

Otherwise, you are going to lose a bunch of money. Generally speaking, the cash you spend on securities normally isn’t federally insured. What does it mean? It means that you could potentially lose the amount of cash you’ve invested.

This can happen even if you acquire your investments via a bank. Does it mean that you shouldn’t risk at all? Definitely not! Who knows, maybe if you invest some money, you receive an amazing investment in return.

Furthermore, if you have a long-term financial goal, it is highly likely you’ll earn more money if you smartly invest asset categories with bigger risks, such as bonds or stocks, rather than focusing on assets with less risk.

On the other hand, if you have a short-term financial goal, then you can freely invest your money only in cash investment. The biggest problem when it comes to investing in cash equivalents is definitely inflation risk.

Your Spouse Must Agree With Your Plans

Of course, this segment refers to those who are married. Now, if that’s the case with you, then it would be recommendable to talk to your spouse about your financial plans and see what he or she thinks about it.

Moreover, this conversation should cover three major points. The first one explains your goals. Why are you focusing on a particular investment? What do you want to accomplish with it? The second one should refer to the plan.

Did you create any plan that is going to help you achieve this goal? Do you think that what you’re doing makes sense at all and where are the accounts and whose name did you put on them?

If you do not have this type of conversation with your partner, then you will potentially cause a huge problem? How come, you probably wonder? Well, that’s because if your spouse notices that the money is slowly vanishing he/she will want to know what is going on.

Nobody can ever tell you what you can and cannot do with your money, however, it doesn’t mean that you shouldn’t be smart about it. That’s precisely why we’ve created these guidelines, to help you be and stay successful on this journey.

DLA Piper advises Briq in US$30 million Series B financing

DLA Piper represented construction technology company Briq Technologies Inc. in its recent US$30 Series B financing led by Tiger Global Management LLC.

Briq’s corporate performance management (CPM) platform for construction financial professionals provides accurate and real-time forecasting abilities, automated workflows and interconnected systems that provide contractors with better visibility into their business.

“It was a pleasure to bring together our extensive experience advising emerging growth tech companies on complex transactions and our strong understanding of the construction industry to advise Briq on this financing, which will enable it to continue developing innovative construction technology for the benefit of its customers,” said David Richardson, the DLA Piper partner who led the firm’s deal team.

In addition to Richardson (Sacramento), the DLA Piper team representing Briq included associate Spencer Hodson (Sacramento) and partner Eileen O’Pray (Silicon Valley).

DLA Piper’s Emerging Growth and Venture Capital practice includes more than 200 lawyers in the United States who provide strategic counsel to emerging companies in high-growth industries, including healthcare, insurance, biotech, manufacturing, communications, software and semiconductors. Over the last three years, DLA Piper has completed more than 2,100 financings totalling over US$31 billion.

DLA Piper’s global Technology sector lawyers work across practice areas and offices to support technology clients – from start-ups to fast-growing and mid-market businesses to mature global enterprises – doing business around the world.

DLA Piper advises on all aspects of the fintech sector, representing a wide range of clients, including banks, private equity and venture capital funds, asset managers, broker-dealers, insurance companies, trading platforms and exchanges, and distributed-ledger technology platforms. The firm’s multidisciplinary team around the world offers integrated legal solutions that help clients navigate the increasingly complex environment at the intersection of transactions, technology and regulation. DLA Piper is also at the forefront of providing legal counsel and business support to emerging proptech companies, investors and developers of innovative real estate technology in areas critical to both their short-term and ongoing success.