The Legal Side Of Fashion

Equity. Share holding. Ownership. Phantom stock. These are some business terms that has to do with finance. Fashion, like every other business thrives on finance. To really understand the legalities involved with owning and dividing a business, Mrs Jane Maguegbuna, a legal practitioner and the co-founder of Afrinolly was invited to share her personal story.

She began with the quote from Peter Drucker: “wherever you see a successful business, someone once made a courageous decision.”

Starting from when you wake up in the morning, you make a conscious decision to either get out of bed or remain in bed; workout or not; go to work or not. Every decision you make adds up to where you end up. So, it is very crucial that you make decisions that reflect where you see yourself and the goals you’ve set for yourself. Most times, these decisions are difficult and they’re not fun but they have to be made.


Equity and Share holding

Who holds what?
What percentage is fair?
How do you determine percentage?
Should you keep a reserve equity?

Equity is shared in a company as follows CEO – CTO – COO, where CEO gets the largest number of shares.

Mrs Jane Maduegbuna’s advice: at first 10% may not seem like a big deal but further down the line, you will come to see the benefit of just that amount of shares. Be careful how much shares you give away and to whom.

Types Of Employee Equity

Direct Ownership

Synthetic equity/Phantom stock: Stock Appreciation Right [SAR]. This case, you still own the stock but this helps create loyalty. As the stock value of the company rises, so those the equity share, gains more value.

Also contributing is Mr Oluwaseun Ajasa, Managing Partner ATC Legal.

Register your business name, trademark your products and always seek legal counsel on any document.

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