I was giving a WhatsApp talk on Men’s Diary yesterday and I asked “who is a trader?”. One person said a buyam-sellam. He was not wrong, though that’s just an example of a trader.
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I will give you the definition according to the OHADA Uniform Act Relating to General Commercial Law. It is someone or a group of persons whose “regular occupation is to carry out commercial transactions”. In effect, you have to carry out this activity as an occupation and regularly.
There’s more to this than you will expect. For you to be considered as a trader, you are obliged to have the legal capacity to trade. The law states that no one without this legal capacity shall engage in trading as a regular business activity.
A trader can be a natural person, a commercial company or a corporate body. They are said to have a legal capacity when they are registered in the Trade and Personal Property Credit Register.
There are many people out there who claim to have businesses, but have no legal capacity. This is because their businesses are not registered. They carrying out commercial transactions illegally.
That notwithstanding, the law states that you have to register your business within the first month of carrying out business operations. I know many who have been running their businesses for years without registration. They rush to those with registered businesses when they have a client who needs legal documents.
You may not see the need, but one day, it will catch-up with you. Don’t wait for that to happen. You need to know what a registered business is all about.
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This content has been prepared for information purposes only. It is not intended to provide, and should not be relied on for, tax, accounting or legal advice. You need to consult your own tax, accounting or legal advisors before engaging in any transaction.