KB & Co Solicitors

17/06/2026

The below is a must for either a businessperson or an investor who is planning to invest in Africa.

I have never met a business that regretted entering Nigeria too early. But I have met many that regretted waiting too long. Most businesses wait until everything is perfectly structured. The funding is secured, the product is refined, the strategy is airtight, the team is in place. And then they mov...

16/06/2026

Why Every Startup Needs a Founders’ Agreement Before Launch.

The best time to negotiate a founders’ agreement is before success arrives. It is also before disputes arise. A founders’ agreement does not signal mistrust. It demonstrates foresight.

Whether operating under the OHADA framework or within a common law jurisdiction, founders who invest time in establishing clear legal foundations significantly improve their chances of building sustainable and investment-ready businesses, because when disputes arise, memories fade, expectations differ, and relationships change. The document that remains is the agreement. And that agreement may ultimately determine whether the business survives or collapses.

16/06/2026

Why Every Startup Needs a Founders’ Agreement Before Launch (contd).

The Common Law Perspective

Courts generally give considerable weight to written agreements.
Founders frequently assume that friendship, emails, or verbal promises will be sufficient evidence if disagreements occur. In reality, the absence of a formal agreement creates uncertainty. One of the most common disputes in startup ecosystems concerns equity ownership. A founder leaves after six months but retains a substantial percentage of shares. The remaining founders continue building the business for years. Investors later discover that a significant portion of the company is owned by an inactive founder. This often complicates fundraising and can reduce investor confidence. A founders’ agreement containing vesting provisions could have prevented the problem entirely.

Real-Life Lessons from Startup Disputes - Many high profile startup disputes around the world have involved:

- Founder removals
- Ownership disputes
- Intellectual property conflicts
- Investor disagreements
- Governance deadlocks

The pattern is remarkably consistent - The business grows, the stakes increase. The founders’ interests begin to diverge. The absence of clear legal documentation then turns a manageable disagreement into a major dispute. The legal costs, management distraction, reputational damage, and lost business opportunities can be enormous.

Why Investors Care About Founders’ Agreements - Investors do not merely invest in products, they invest in structures, before investing, most investors want clarity regarding:
- Who owns the company?
- Who controls key decisions?
- What happens if a founder leaves?
- Who owns the intellectual property?
- How are disputes resolved?

A startup with no founders’ agreement presents avoidable risks. A startup with a well drafted founders’ agreement demonstrates professionalism, preparedness, and governance maturity.

What Every Founders’ Agreement Should Include- At a minimum, founders should address:
- Ownership
- Share allocation
- Vesting provisions
- Future dilution mechanisms;
- Governance
- Voting rights
- Reserved matters
- Management authority;
- Intellectual Property
- Ownership and assignment provisions
- Confidentiality obligations;
- Exit Mechanisms
- Voluntary departure
- Removal for misconduct
- Death or incapacity;
- Dispute Resolution
- Mediation procedures
- Arbitration clauses
- Governing law;
- Financial Distress
- Capital contribution obligation
- Founder loans
- Insolvency related provisions

15/06/2026

Why Every Startup Needs a Founders’ Agreement Before Launch

An OHADA and Common Law Perspective

Many startups spend months developing business plans, refining products, building websites, & preparing investor presentations. Yet an important documents a startup should have is often overlooked: The Founders’ Agreement.

In my experience as an arbitrator, insolvency practitioner, and OHADA consultant, some of the most damaging disputes I have encountered did not arise between businesses and their competitors. They arose between founders. The irony is that founders usually begin their journey with complete trust in one another. Friends become business partners. Family members become co-founders. Former colleagues decide to build a company together, because relationships are strong at the beginning, difficult conversations are often postponed.

Unfortunately, when success arrives or when financial difficulties emerge those unanswered questions can become the source of serious conflict. A founders’ agreement is not a document for when things go wrong, It is a document designed to prevent things from going wrong. Founders’ Agreement - is a legally binding document that establishes the rights, responsibilities, and expectations of the individuals creating a business. It typically addresses:
- Ownership and shareholding structure
- Roles and responsibilities
- Decision making authority
- Intellectual property ownership
- Capital contributions
- Founder exits
- Dispute resolution
- Death, incapacity, or insolvency of a founder. Simply put, it answers the difficult questions before they become expensive disputes.

The OHADA Perspective
Across OHADA member states, many businesses begin informally. The founders often rely on mutual trust and verbal understandings.
However, once the company begins attracting customers, investors, or lenders, those informal arrangements become problematic. Under the OHADA legal framework, corporate governance and shareholder rights are governed by clear legal rules. When disputes arise, courts and arbitral tribunals look to documented agreements rather than verbal understandings.
Consider a common scenario. Three entrepreneurs establish a technology company. One founder contributes capital, another develops the software & the third focuses on business development. No written agreement exists. Two years later, the company becomes profitable. A dispute emerges regarding ownership percentages and control of the software, without a founders’ agreement, resolving the dispute becomes significantly more difficult, costly, & disruptive. A properly drafted agreement would have addressed the issues from the outset.

27/05/2026

What Does a Competitive and Integrated African Market
Require? Part 3

5. Digital Trade and Financial Interoperability Are Critical

The future of African integration will not be driven solely by physical trade. It will also be driven by digital commerce. A competitive African market requires:

* interoperable payment systems,
* digital identity frameworks,
* fintech integration,
* e-commerce regulation,
* cybersecurity protections,
* and digital trade governance.

Cross-border payments remain one of the largest barriers to African trade.

Many African businesses still rely heavily on foreign intermediary currencies for transactions within Africa.

This increases:

* transaction costs,
* currency risks,
* settlement delays,
* and dependency on external financial systems.

Digital payment interoperability is therefore not simply a technological issue. It is an integration issue.

The ability of African businesses to transact seamlessly across borders will significantly influence the practical success of continental trade integration.

6. Political Will and Institutional Coordination Matter

Economic integration cannot succeed without political commitment. Many African integration initiatives historically struggled because implementation lagged behind political declarations. A competitive African market requires:

* coordinated implementation,
* institutional discipline,
* policy consistency,
* and long-term strategic commitment.

Governments must resist:

* protectionist reversals,
* arbitrary trade restrictions,
* sudden border closures,
* and inconsistent policy shifts.

Businesses and investors require confidence that integration frameworks will remain stable and enforceable. Regional Economic Communities, national governments, regulators, and continental institutions must therefore operate with greater coordination rather than fragmented policy approaches. Integration cannot function effectively where institutions compete instead of cooperate.

26/05/2026

What Does a Competitive and Integrated African Market Require (contd)? Part 2

2. Africa Needs Infrastructure That Supports Trade, Not Just Geography

Africa cannot achieve meaningful integration while logistics remain fragmented. Trade does not move on policy alone.

It moves through:

* roads,
* rail systems,
* ports,
* aviation networks,
* energy infrastructure,
* digital infrastructure,
* and payment systems.

One of the greatest contradictions in African trade is that moving goods within Africa is often more expensive and slower than exporting outside the continent.

A competitive African market therefore requires:

* modern transport corridors,
* efficient port systems,
* regional rail integration,
* stable electricity supply,
* broadband expansion,
* and interoperable digital systems.

Without infrastructure integration, market integration remains theoretical. The success of the AfCFTA will depend not only on tariff reductions, but on Africa’s ability to physically connect production centres to markets efficiently.

3. Competitive Markets Require Strong Competition Law and Enforcement

An integrated market without competition safeguards can easily become concentrated and exploitative.

Economic integration must therefore be accompanied by robust competition regulation capable of preventing:

* monopolistic conduct,
* abuse of dominance,
* anti-competitive mergers,
* cartel behaviour,
* market exclusion,
* and unfair state supported advantages.

Competitive markets encourage:

* innovation,
* efficiency,
* lower consumer prices,
* private sector growth,
* and investment confidence.

As Africa integrates, regional and continental competition frameworks will become increasingly important to ensure that market integration benefits businesses and consumers broadly rather than concentrating power among a few dominant actors.

A competitive Africa cannot merely become a larger marketplace. It must become a fairer one.

25/05/2026

What Does a Competitive and Integrated African Market Require? - Part 1

Africa stands at one of the most defining economic moments in its modern history. For decades, the continent’s economies largely operated in fragmented silos:

- different regulatory systems,
- disconnected markets,
- weak transport corridors,
- inconsistent trade policies,
- currency limitations,
- and restrictive border processes.

The result was paradoxical. A continent rich in:
- people,
- natural resources,
- entrepreneurial talent and consumer potential, continued to trade more with external markets than within itself. This is precisely why the Acfta represents more than a trade agreement. It represents an attempt to redesign Africa’s economic future, but creating a truly competitive and integrated African market requires far more than signing protocols and reducing tariffs. Integration is not merely political. It is structural, and competitiveness is not achieved through declarations alone. It is built through institutions, infrastructure, regulation, industrial capacity, legal certainty, and coordinated implementation. The real question therefore is not whether Africa desires integration. The real question is whether Africa is prepared to build the systems necessary to sustain it.

1. A competitive African market requires regulatory harmonisation; One of the greatest barriers to intra-African trade is regulatory fragmentation. Businesses operating across African borders frequently encounter:

- conflicting customs rules,
- inconsistent standards,
- overlapping certifications,
- duplicative licensing requirements,
- divergent taxation systems,
- and unpredictable compliance obligations. This increases:

- transaction costs,
- operational delays,
- investor uncertainty,
- and legal exposure.

A truly integrated market requires harmonised legal and regulatory systems capable of creating predictability across jurisdictions.
This includes:
- customs procedures,
- competition law,
- investment regulation,
- intellectual property protection,
- digital trade standards,
- consumer protection frameworks,
- insolvency laws,
- and dispute resolution mechanisms.

The work already undertaken by OHADA in Africa demonstrates how legal harmonisation can strengthen investor confidence and commercial certainty across multiple jurisdictions.

Predictability is one of the most valuable economic assets any market can offer. Investors do not only seek opportunity. They seek legal certainty.

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23/05/2026

The Most Dangerous Weaknesses in Founders’ Agreements (Part 5)

The questions most African startups ask to late.

Arbitration Clauses Matter More Than Founders Think
Founder disputes are uniquely destructive because they involve:
- control,
- identity,
- money,
- reputation,
- emotional investment.

Traditional litigation often destroys the business before judgment is delivered. This is why arbitration has become increasingly important in startup governance. An effective arbitration clause can provide:

- confidentiality,
- speed,
- specialist expertise,
- enforceability,
- reduced reputational damage.

In cross border African transactions, arbitration is especially valuable because investors prefer dispute resolution systems capable of operating across jurisdictions efficiently. A poorly drafted arbitration clause, however, creates enormous procedural uncertainty. The clause should clearly define:

- governing law,
- arbitration seat,
- applicable rules,
- number of arbitrators,
- language,
- emergency relief procedures.

The Insolvency Reality Founders Ignore; every startup plans for growth. Almost none properly plan for distress, but insolvency is where governance documents are truly tested. When financial pressure begins:

- investors seek protection,
- creditors become aggressive,
- founders turn defensive,
- documentation becomes critical.

At that point; Friendship no longer governs the company. The documents do. This is why founders’ agreements must align with:

- articles of association,
- shareholder agreements,
- financing documents,
- employment structures,
- director obligations,
- insolvency protections.

22/05/2026

The Most Dangerous Weaknesses in Founders’ Agreements (Part 4)

The questions most African startups ask to late.

4. Deadlock Clauses Are Missing

Founder disputes are inevitable. The issue is not whether disagreement will occur. The issue is whether the company can survive it. Deadlocks commonly arise over:

- fundraising,
- expansion,
- hiring,
- debt exposure,
- acquisitions,
- insolvency strategy,
- leadership control.

Where voting rights are evenly divided, businesses can become completely paralysed. A serious founders’ agreement should therefore include:

- escalation procedures,
- mediation requirements,
- arbitration clauses,
- buy sell mechanisms,
- shotgun provisions,
- casting vote arrangements.

As an arbitrator, I have seen profitable businesses destroyed not by insolvency, but by unresolved founder warfare.

5. Insolvency is never properly addressed: Most founders’ agreements are drafted for growth, Very few are drafted for distress. This is a serious mistake. Once a company approaches insolvency, legal duties begin shifting. Under common law systems, directors may owe heightened obligations toward creditors once insolvency becomes probable. This changes the governance landscape entirely.

Improper conduct during distress can trigger:

- wrongful trading claims,
- fraudulent trading allegations,
- director disqualification,
- personal liability exposure,
- shareholder litigation.

Yet many founders’ agreements say nothing about:

- emergency governance,
- restructuring authority,
- creditor negotiations,
- insolvency triggered removal,
- founder misconduct,
- distressed financing.

This creates confusion precisely when legal clarity becomes most important.

20/05/2026

The Most Dangerous Weaknesses in Founders’ Agreements (Part 3)

The questions most African startups ask to late.

1. Undefined Equity Structure:
Many startups divide ownership emotionally rather than strategically.
Examples include: “We are all equal.” “He is my friend.” “She came up with the idea.” “We will fix it later.” This becomes catastrophic during:
- fundraising, acquisition negotiations, insolvency proceedings, shareholder disputes. A serious founders’ agreement must clarify: issued shares, vesting schedules, dilution mechanisms, equity forfeiture, voting rights, transfer restrictions. Without vesting provisions, inactive founders can retain large ownership positions despite contributing nothing after incorporation. This creates what investors call “dead equity.” Dead equity destroys fundraising confidence.

2. No Founder Vesting; This is one of the biggest governance failures in African startups. A founder leaves after six months but retains 30% ownership forever. The remaining founders continue building the company for years while the inactive founder waits for liquidity. This creates: resentment, governance paralysis, acquisition complications, investor distrust. Sophisticated investors increasingly insist on vesting provisions before investing. A proper vesting structure usually includes: time based vesting, milestone based vesting, cliff periods, bad leaver provisions & good leaver protections.

3. Intellectual Property Is not assigned properly: this is one of the most dangerous legal gaps in startups. Founders frequently assume the company automatically owns: software, branding, code, databases, designs, business systems. Legally, that assumption may be incorrect. Under common law principles, intellectual property ownership usually remains with the creator unless formally assigned.

This becomes catastrophic during: due diligence, investor negotiations, acquisitions, insolvency proceedings. If the company does not legally own its core assets, enterprise value becomes unstable. No sophisticated investor wants to fund uncertain ownership.

Part 4