How to Protect Your Business in a Collaboration
As a growing business, there are times that you would need to partner or collaborate with other businesses to carry out a project, series of tasks or to effectively run your business.
It is therefore important to ensure that not only is the collaboration productive but that your business is safe on all grounds.
A wrong collaboration can lead to your business being sued or in the mildest of cases, evoke a level of bad PR for your business.
Here are a few tips to stay safe and legally protect your business.
- Do your due diligence
Before you enter into any agreement or collaboration with any other business, do a thorough research of that business and its owners.
At the fundamental level, you must ensure that the company that you plan to work with is a legally registered business in Nigeria i.e. they are incorporated with the Corporate Affairs Commission (CAC) in Nigeria. To verify that a company is a legally registered business, you can either perform a CAC public search or use the company’s Tax Identification Number (TIN) to search on the Federal Internal Revenue Service (FIRS) website.
Reviewing the company’s website, online reviews, asking questions during pre-negotiation meetings with the company’s founders and carrying out findings in the business ecosystem about the company you are exploring a partnership with will also aid your due diligence process.
After you have carefully vetted the company you are collaborating with and you are satisfied and you are very sure that you want to commence the project with this company, you need to have a non-disclosure agreement. A non-disclosure agreement will help protect your company’s confidential information that you will be sharing with the other company you are collaborating with.
It would be heartbreaking to find your idea, trade secret or private information about your business made public or implemented by another party.
A non-disclosure agreement should be duly signed before discussions deepen. Instead of signing a separate non-disclosure agreement, confidentiality terms can be included in your collaboration agreement.
Continue reading to learn about collaboration agreements
- Have a clear Collaboration Agreement
A collaboration agreement is the detailed agreement that ensures that both parties are very clear about the mutual relationship that they are about to enter into.
It should contain details such as the scope of work, the collaboration period, payment terms and obligations of both parties. It also needs to address intellectual property rights, the duration of the collaboration and whether any specific officers are both businesses are designated to drive the collaboration.
A collaboration agreement should also include a dispute resolution clause, force majeure clause and if there’s no existing non-disclosure agreement, confidentiality clauses.
This should be drafted and reviewed by your lawyer.
- Use Collaboration Tools
To ensure smooth communication and productivity when you collaborate with other businesses, it is important to use collaboration tools.
Using collaboration tools such as Slack, Trello, Google Documents, Asana, Microsoft Teams goes a long way in ensuring that the collaboration goes smoothly.
There are amazing possibilities embedded in collaborations. However, it must be rightly done so your business doesn’t suffer from it.