The registration of trusts in Kenya is regulated by the Trustees (Perpetual Succession) Act. Recent amendments to this Act, introduced through the Statute Law (Miscellaneous Amendments) Act 2024 that was signed by President William Ruto on April 26, 2024, have brought about a significant change to improve the functionality and governance of trustee operations. This alert will focus on the major amendment involving the transfer of trust registration services to the Business Registration Service (BRS). 

Following this amendment to the law, the BRS together with the Ministry of Lands, Public Works, Housing and Urban Development, issued a Public Notice dated 22nd May 2024 notifying the public that, effective Wednesday 22nd May 2024, the State Department of Lands and Physical Planning shall cease receiving applications for registration and incorporation of trusts. 

For this reason, all new trust applications and related transactions shall be submitted to the BRS offices located at 316 chambers, 16th floor, 2nd Ngong Avenue, effective Monday 3rd June 2024.  

In conclusion, the transfer of trust registration services from the Ministry of Lands, Public Works, Housing, and Urban Development to the BRS marks a pivotal step towards enhancing the efficiency and governance of trustee operations in Kenya.  

This transition, effective from June 3, 2024, mandates that all new applications and related transactions be directed to the BRS offices. Stakeholders are encouraged to familiarize themselves with the new procedures to ensure a smooth transition and continued compliance with the updated regulatory framework. 

Please get in touch with the Netsheria team for any clarifications and assistance on the above by contacting us on +254 716209673 or via  email.

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Introduction

An affidavit is a formal written statement of fact, declared to be true by the person making it. This document is sworn under oath or affirmation, signifying that the deponent acknowledges the truthfulness of the contents under penalty of perjury. Affidavits are frequently utilized in legal proceedings, serving as evidence to support various claims or statements. 

Validity of an affidavit

The creation and validity of an affidavit is hinged on a crucial procedural requirement; that the deponent must swear to the truthfulness of their statements in the presence of a person who has the legal authority to administer such oaths. This authority figure, often referred to as a commissioner of oaths or a notary public in some jurisdictions, is responsible for overseeing the swearing process. Their role ensures that the affidavit is not only a truthful account but also one that has been duly sworn in accordance with legal standards. 

Affidavits in Kenya

In Kenya, a commissioner for oaths serves the role of authentication and swearing of affidavits. The presence of this official when the affidavit is sworn verifies the truthfulness of the deponent’s claims. This verification process involves the commissioner for oaths confirming the identity of the deponent, ensuring that the deponent understands the significance of the oath, and witnessing the signing of the document. 

The importance of this procedure cannot be overstated, as it lends a layer of legal credibility to the affidavit, enabling it to be used as reliable evidence in court or other legal contexts. The affidavit, therefore, becomes a powerful legal document that can substantiate claims, support motions, and provide a sworn statement of facts in various legal situations. 

Legal Framework 

1. The Oaths and Statutory Declarations Act (Cap 15): 

• This Act provides the primary legal basis for the administration of oaths and the making of statutory declarations in Kenya. It specifies who is authorized to administer oaths, including commissioners for oaths, magistrates, and judges. 

• The Act also details the format of affidavits and statutory declarations, including the required language and the attestation clause.
  

2. The Civil Procedure Act (Cap 21) and The Civil Procedure Rules, 2010: 

• These laws govern the procedural aspects of civil litigation in Kenya, including the use of affidavits as evidence in civil cases. 

• Order 19 of the Civil Procedure Rules specifically deals with affidavits, providing guidelines on their content, filing, and use in court proceedings. It includes provisions on who may swear an affidavit, the necessity of personal knowledge or the basis of the information contained in the affidavit, and the requirement for affidavits to be properly endorsed by a commissioner for oaths. 

3. The Evidence Act (Cap 80): 

• The Evidence Act governs the admissibility of evidence in Kenyan courts, including affidavits. 

• The Act addresses the circumstances under which affidavits can be admitted as evidence, emphasizing their use in instances where oral testimony is not possible or practical. 

4. The Notaries Public Act (Cap 17): 

• This Act outlines the role and responsibilities of notaries public in Kenya, who are also authorized to administer oaths and attest affidavits, similar to commissioners for oaths. 

• It details the appointment, duties, and powers of notaries public, ensuring that affidavits and other sworn documents are handled with legal authority and integrity. 

In summary, the legal framework for affidavits in Kenya is a composite of statutory provisions, procedural rules, and judicial interpretations that collectively ensure affidavits are used effectively and legally within the justice system. This framework ensures that affidavits serve their purpose as reliable and credible pieces of evidence in legal proceedings. 

Types of Affidavits 

In Kenya, affidavits serve various purposes and are categorized based on their specific uses and the contexts in which they are required. Here are some common types of affidavits used in Kenya: 

1. Affidavit of Service: 

This affidavit is used to confirm that legal documents have been served to the parties involved in a case. It includes details such as the date, time, and manner of service, as well as the identity of the person served. This is commonly used during civil proceedings and is provided for in the Civil Procedure Rules. 

2.Affidavit of Means: 

This affidavit is used to disclose an individual’s financial status. It is often required in family law cases, such as divorce or child support proceedings, to assess an individual’s ability to pay maintenance or support. 

3. Affidavit of Loss: 

This affidavit is used to declare the loss of important documents, such as a national identity card, passport, or title deed. It typically details the circumstances of the loss and is often required to obtain a replacement document. 

4. Affidavit of Identity: 

This affidavit is used to confirm an individual’s identity, often required when there are discrepancies in personal information or when formal identification documents are not available. 

5. Company Affidavits. 

Company affidavits include; affidavit for lost or damaged share certificate, affidavit for surrender of shares 

6. Affidavit of Birth: 

This affidavit is used to attest to the details of a person’s birth, especially in cases where an official birth certificate is not available. It can be required for various administrative or legal purposes, such as school enrollment or obtaining identification documents. 

7. Affidavit of Marriage: 

This affidavit is used to declare the details of a marriage, including the date and place of the marriage. It can be required for legal processes such as applying for spousal benefits or immigration purposes. 

8. Affidavit of Consent: 

This affidavit is used to indicate that a person has given their consent to a particular action or agreement. It is commonly used in family law cases, such as when a parent consents to a child’s travel or adoption. 

These are just but the few types of affidavits applicable. Each type of affidavit serves a specific function and must be tailored to meet the legal requirements of the situation for which it is intended. The preparation and use of affidavits in Kenya must adhere to the legal standards set out in the relevant statutes and procedural rules to ensure their effectiveness in legal proceedings and validity in the specific purpose. 

Please get in touch with the Netsheria team for any clarifications and assistance on the above by contacting us on +254 716209673 or via  email.

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Introduction

Estate planning entails the process of disposal of one’s assets in a structured manner that goes beyond the determination of who will benefit from the property. As such, one may need to consider whether it is appropriate in his/her circumstances to set up a trust as a form of estate planning in his/her lifetime and transfer some of his/her assets into the trust during his/her lifetime and/or after death.

Purpose of trusts

The main aim of estate planning is to reduce the uncertainties as to what fate would befall one’s estate upon death. Trusts can be extremely useful instruments in the long-term planning of the ownership and management of one’s private and business assets and estate as they provide certainty on the eventual ownership of the property during and after his/her life.

Creation of trusts

In Kenya, trusts serve as an alternative to disposing of an estate through writing a will. Setting up a trust revolves around an arrangement creating a relationship between the following key parties:

1. the person transferring his assets into the trust during his lifetime as ‘the settlor’
2. the appointed persons to hold the property for the benefit of a third party, ‘the trustee(s)’; and
3. the third parties receiving benefit of the property transferred as the ‘beneficiary’

Trusts are created through the execution of a Trust Deed as the instrument governing the relationship between the settlor and the trustee. Acting as the ‘constitution’ of the trust, almost akin to memorandum of association or articles of association of a company, it spells out the objects of the trust, properties held under the trust, power of trustees and the particulars of the administration of the trust. It serves as proof of the beneficial ownership of properties in the trust.

Once drafted and executed, the trust deed is required to be registered at the registrar of companies (owing to the Statute Law (Miscellaneous Amendments) Act, 2024 that amended the Trustees (Perpetual Succession) Act) to give the trust legal validity. The trust deed provides certainty of the beneficial ownership of the property owned as it clearly defines and easily identifies them. Certainty in the objects of the trust also makes the reason for the formation of the trust easily identifiable. Once payment of stamp duty is made, the trust can be registered and incorporated. The trust thus obtains a separate legal status, can own property in its own name, enter into contracts and carry out its activities as a separate and distinct legal entity.

Types of Trusts in Personal Estate Planning

There are several types of trust structures which an experienced lawyer can give advise on to determine which best suits one’s needs.

1. Family trusts – these are trusts in which the settlor appoints trustees manages and distributes the wealth and income out of the trust based on the changing circumstances and needs of the different family members. As a safeguard, a settlor can appoint an enforcer or protector of the trust who is a person who he trusts, who knows the family well, who can supervise the trustees and ensure the trustees carry out their duties properly. During the lifetime of the settlor, the settlor can be a protector and he can be a beneficiary as well. Family trusts can either be living trusts or testamentary trusts and may have charitable or non-charitable aspects.
2. Irrevocable trusts – these are trusts established with the express power of revocation. Where the trust provides for express power of revocation, but the settlor does not exercise the said power during their lifetime, the trust will be considered an irrevocable trust.
3. Non-Charitable trusts – these are trusts that do not have beneficiaries. They are set up for a specific legal purpose which, whether charitable or not, should be capable of fulfilment. They also have explicit provisions providing for the disposition of surplus assets of the trust upon its termination.
4. Charitable trusts – these trusts are established to be beneficial to the general public and may focus on human rights, environment, education and religious issues among other areas of public focus. They must be discretionary where although the trustee has total discretion in both the income and capital of the trust, they must act in the best interests of the beneficiaries while exercising their discretion. A charitable trust registered in Kenya can pursue its objectives in Kenya or any other jurisdiction. The trustee has the power to defer distribution for a period not exceeding the duration of the trust.

Advantages of setting up a trust

The primary objective of a trust is to create or preserve wealth for future generations. Its notable advantages include:

1. The major advantage of such a trust is that no probate and administration and therefore no court process will be required to follow upon a settlor’s death. This is because once the assets will have been transferred to the trust, the same are no longer considered as part of the settlor’s estate. This reduces the chances of family disputes over the assets, ensures there is continuity of ownership and that there are no delays in terms of use of assets. Beneficiaries can be identified as named persons or a category of persons, such as children and grandchildren
2. The settlor can use it as a wealth management and succession planning tool such that the trustees would invest and manage the assets and would make distributions of income to the beneficiaries based on the beneficiaries’ needs
3. The settlor may also be a beneficiary of a trust they have created thereby benefiting from the property in the share he/she deems fit
4. Family trusts offer protection for family members with special needs or medical conditions
5. Trusts offer tax and other efficiencies experienced as a result of having a family trust structure
6. Trusts safeguard against spendthrift beneficiaries by imposing conditions on access to the trust ensuring responsible financial management
7. Any disgruntled dependant or creditor would not be able to claim against the assets vested in the trust as they do not form part of the settlor’s estate on his/her death
8. On a divorce, the assets vested in the trust would not be subject to matrimonial proceedings and thus would not be subject to division and
9. Generational wealth is guaranteed as a family trust can hold and protect wealth forever if the trust is managed accordingly.

Conclusion

Effective estate and succession planning is important as it gives you control of how you would want your assets and wealth to be distributed and held including in the case of a trust on a long-term basis. A legal adviser can give effective solutions depending on your circumstances to achieve your wishes. Whether your circumstances are simple or complex, at the very minimum it is important to have a written will in place.

At Netsheria International, we pride ourselves for having a wide variety of skillsets, resources and expertise to meet your needs in matters related to trusts and subsequent incorporation. Kindly visit our website where you can access our services at the click of a button. You can also reach out to us via email or call us on +254 741 296 087  for any questions or guidance regarding this topic or any other legal queries you may have.

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The Tax Appeals Tribunal (the ‘Tribunal’) in Tax Appeal No. 65 of 2023 involving M-KOPA LLC [C/o M-KOPA KENYA LTD] (the ‘Company’), has upheld the principle that a foreign company can be considered a tax resident under Kenyan income tax laws if the Kenya Revenue Authority (KRA) proves that management and control of the Company’s affairs occurred within Kenya during the relevant taxing period.

In the above case, the Company appealed against the Commissioner of Domestic Taxes’ assessment of Kes. 368,507,926.00 concerning various tax heads for the year 2017. The main issues for determination were:

1. Whether the Company was a tax resident in Kenya as of 2017; and
2. Whether the Commissioner was justified in its decision dated 6th December 2022 on corporation tax, withholding tax and PAYE concerning the Company.

As the Company is the holding company with its subsidiary M-KOPA Kenya Ltd providing digital financial services in Kenya, the Company argued that it was a non-resident company as it was headquartered in the UK and its board meetings were mostly held outside Kenya.

On the first issue, the Commissioner contended that the Company was a tax resident, basing its arguments on the Company’s declarations to the Securities and Exchange Commission and the location of executive directors. The Tribunal considered the composition of the board and decision-making location of the Company and determined that its place of effective management was outside Kenya.

Over the second issue concerning the applicable tax heads, the Tribunal:

1. Ruled that grant income did not fall under the list of taxable incomes hence not taxable under the Income Tax Act (ITA);
2. Found that, on withholding taxes (WHT) over redeemable preference shares, Section 35(6) of the Income Tax Act Cap 470 Laws of Kenya (ITA) which allowed for collection of withholding tax (WHT) from non-withholding parties had been repealed and hence did not apply for the 2017 period.
3. Similarly ruled in favour of the Company regarding WHT on interests from non-resident third party investor loans as the Commissioner could not demand WHT directly from the Company for interest on loans under the repealed section.
4. Held that the calculation of taxable benefits from employee stock options (ESOPs) by the Commissioner was flawed as it did not follow the formula prescribed by the ITA.

Consequently, the Tribunal set aside the Commissioner’s objection decision and allowed the Company’s appeal. The Tribunal effectively drew its conclusions from the Organization for Economic Co-operation and Development (OECD)’s best practices on the concept of place of effective management emphasizing that the board must not simply rubber-stamp decisions made elsewhere for the concept to be established.

Its is also crucial to note from the foregoing that a company’s place of effective management is determined by the location of its board meetings provided that the directors are actively involved in decision-making and are adequately qualified.

For assistance on your tax obligations, disputes and general tax advisory reach out to Netsheria International LLP or call us on 0741296087 and we will guide you in making informed tax decisions, minimizing your tax liabilities and effecting proper transaction structuring to ensure compliance with your tax obligations.

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The Role of Intellectual Property in Growing and Protecting your Business Brand

In today’s competitive business landscape, developing a strong brand has become crucial for companies seeking long-term sustainability and growth. Therefore, one essential aspect of brand development that cannot be overlooked is the strategic utilization of intellectual property (IP) rights. IP serves as a valuable tool for businesses to protect their creative ideas, innovations, while growing their brand assets. This article delves into the significance of IP in brand development and highlights the multitude of benefits it offers, especially to small and medium enterprises (SMEs).

Branding

Branding encompasses an array of elements and strategies that set a company’s products or services apart from the competition. It goes beyond the visual and verbal identifiers like logos and slogans and encompasses an organization’s culture, business strategy, and marketing collateral. Successful branding helps create recognition, nurtures customer loyalty while contributing to long-term success.

Types of Brands

While not directly IP-related, understanding different types of brands provides a great insight into the multifaceted nature of branding. Types of brands include certification marks issued by recognized institutions (such as the Fair Trade Certified Mark); geographical indicators (such as champagne and scotch whiskey); product brands (e.g., Coca-Cola, Nescafé), service brands (e.g., British Airways, and hotel chains such as Radisson Hotels); and varietal brands (associated with protected varieties of products).

The Importance of Investing in Branding

Investing in branding endeavors aims to achieve goodwill for the Company. Goodwill in this case, represents the value derived from a company’s positive reputation among consumers for its products, customer service, and overall quality. Establishing goodwill is crucial and a pivotal element in achieving sustainable business growth. Apple is a good example of this, as it has solidified its market position and achieved long-term market sustainability simply by leveraging on its commitment to innovation, cutting-edge design, and a strong brand identity.

Understanding Intellectual Property Rights (IPRs):

Noting that branding is therefore important to develop goodwill, it is important to understand how to leverage the same through IPRs. IPRs are legal protections that allow individuals or entities to safeguard their creations and innovations. These rights grant exclusive usage privileges to creators and inventors over a specific period.

IP, though intangible in nature, possesses substantial value as a business asset. It can be sold, licensed, transferred, and even employed as collateral in different jurisdictions. There are various types of IPRs that SMEs can leverage to protect their brand, such as copyrights (for creative works), trademarks (distinguishing marks), industrial designs, geographical indicators, patents, and utility models.

The main rationale behind IPRs is that they play a vital role in promoting innovation by providing legal protection to creators and inventors. These protections enable right holders to generate more revenue, enhance business value, and gain a competitive edge in the market. By safeguarding their innovative products and services, companies can monetize their unique offerings and capitalize on their distinctiveness.

Value of IPRs for Building Brands:

IPRs offer several advantages to brands, including exclusivity, the ability to deter competitors, protection from unfair competition, the potential for premium pricing, and avenues for market expansion through licensing and franchising., detailed further below:Exclusivity

IPRs such as trademarks and copyrights offer businesses the power of exclusivity. By securing a trademark for a distinct logo, tagline, or product name, a brand can carve out a unique identity in a customer’s mind. This exclusivity sets them apart from competitors, allowing them to build recognition, loyalty, and trust among their target audience.

• Protecting your Business

IPRs also play a crucial role in protecting businesses and their innovative concepts. With patents, copyrights, trademarks, and trade secrets in place, organizations can confidently invest in research and development, knowing that their ideas are legally safeguarded. This deterrent effect sends a clear message to potential competitors: “Stay away, this is our territory.” IPRs serve as a formidable warning, deterring infringement and ensuring that businesses can thrive in a competitive marketplace.

• Defense against unfair competition

In the wild world of business, unfair competition can erode a brand’s market share and reputation. However, IPRs provide a vital legal shield, protecting brands against practices like counterfeiting, piracy, and deceptive trade practices. With this defense in place, businesses can compete on a level playing field, where the quality and uniqueness of their offerings become the deciding factors, eliminating the impact of underhanded tactics. IPRs ensure fairness and uphold the integrity of the marketplace for all participants.

• Premium Pricing

Consumers are often willing to pay a premium for products or services associated with established, trusted brands. IPRs enable businesses to create a perception of quality and authenticity, positioning their offerings at a higher price point. By effectively leveraging trademarks and patents, brands can emphasize the value they bring to the market, attracting discerning consumers who are willing to invest in a premium experience.

Conclusion

Intellectual property plays a vital role in brand development, offering legal protection and value creation opportunities for businesses. By leveraging IP rights effectively, SMEs can differentiate themselves in the marketplace, secure their market position, and maximize revenue.  However, it is crucial to approach IP investment strategically, supported by ongoing marketing efforts and comprehensive IP protection measures. With the right expertise and structured approach, businesses can unlock the full potential of their intangible assets and drive sustainable growth in an increasingly competitive global market. Explore more on Intellectual property.

Please contact us for our services via email or visit our website  for more information on our services. Lawyer on your laptop!

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5 dangers of unsigned contracts and agreements:

A contract has been defined as a written or spoken agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law. It is advisable that parties negotiate and manage contracts before concluding on it. One of the ways one can show that they do agree with the terms and with the other party’s condition, is when they sign or witness the contract/agreement.

Therefore, signed a contract is very important, the dangers of not signing a contract are as indicated below.

1. Lack of Legal Enforceability: Unsigned contracts and agreements are not legally binding. This means that parties may not be able to enforce the terms and conditions stated in the contract. This also is an indication that there was no agreement between the parties.
2. Ambiguity: An unsigned contract or agreement may lack clarity and precision in terms of obligations, duties, and responsibilities of both parties. This may lead to a misunderstanding or disagreement between the parties.
3. Misrepresentation: In the absence of signed contracts and agreements, one party may misrepresent their intent, obligations, or duties in the contract. This leads to the other party being misled and unprotected.
4. Unforeseen Circumstances: Unsigned agreements may not account for unforeseen situations that may arise during the performance of the contract. This may lead to conflicts and disputes between parties.
5. No Legal Record: Without a signed contract or agreement, there is no legal record of the terms and conditions agreed between the parties. This may lead to confusion, misunderstandings, and loss of evidence in case of a legal dispute or litigation.

In conclusion, it is advisable to always sign contracts and agreements to avoid the risks and dangers associated with unsigned contracts.

How can we assist?

The success of a business is pegged on how well it protects itself from loss and harm arising from contractual relationships. Such loss and harm is prevented or reduced by having an understanding of how contracts/agreements are drafted and negotiated. At Netsheria International, we offer a wide scope of legal documents and legal to meet the requirements for different businesses. For more information, kindly visit our website or contact us via email.

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WHY YOU SHOULD ALWAYS INCLUDE AN ARBITRATION CLAUSE IN A CONTRACT DOCUMENT

An arbitration clause is a provision in a contract that requires the parties to resolve any disputes that may arise through arbitration rather than through court litigation. The act defines an Arbitration as, a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. (Arbitration Act 1995).

It is important that when parties are drafting, negotiation or to always include a Dispute resolution method clause in the document, there are several Dispute resolution methods, Arbitration being at the core of them all. Here are some reasons why you may need to have an arbitration clause in every agreement:

1. Faster and Less Expensive Dispute Resolution: Arbitration is typically faster, less formal, and less expensive than court litigation. With an arbitration clause, the parties agree to avoid the expense and delay associated with court litigation.
2. Expertise and Neutrality: The parties can select an arbitrator with expertise and experience in the subject matter of the dispute, which can lead to a more informed and neutral resolution.
3. Privacy: Arbitration proceedings are generally private and confidential, which can be beneficial if the dispute involves sensitive or proprietary information.
4. Enforceability: Arbitration awards are generally easier to enforce than court judgments. If the losing party refuses to comply with the decision, the winning party can obtain a court order to compel compliance.

In conclusion, including an arbitration clause in every agreement can provide benefits such as faster and less expensive dispute resolution, expertise and neutrality, privacy, and enforceability. However, it is important to consult with legal counsel to ensure that an arbitration clause is appropriate for your specific situation.

How can we assist?

The success of a business is pegged on how well it protects itself from loss and harm arising from contractual relationships. Such loss and harm is prevented or reduced by having an understanding of how contracts/agreements are drafted and negotiated. At Netsheria International, we offer a wide scope of legal documents and legal to meet the requirements for different businesses. For more information, kindly visit our website or contact us via email.

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7 EXAMPLES OF WHAT TO DISCLOSE AT THE INITIAL STAGES OF CONTRACT NEGOTIATION

1. Material facts: Parties to a contract should disclose all material facts that are relevant to the transaction. This includes things like the terms of the contract, the price, and any relevant conditions.
2. Known issues: If there are any issues that the parties know about that could affect the value or performance of the contract, they should disclose them for example is the property charged to a bank in case of a land transaction.
3. Legal issues: Parties should disclose any legal issues that may affect the contract, such as any legal disputes or regulatory requirements, for example if it is a merger, Capital Markets Authority, the Competition Authority need to be notified and approved to avoid unfair competitive tendencies.
4. Financial issues: Parties should disclose any financial issues that may affect the contract, such as creditworthiness or bankruptcy this is made clear by providing audited reports on the books of accounts.
5. Intellectual property issues: If the contract involves any intellectual property, parties should disclose any issues related to ownership, infringement, or licensing.
6. Confidential information: Parties should disclose any confidential information that may be relevant to the contract, such as trade secrets or proprietary information.
7. Performance expectations: Finally, parties should disclose their expectations regarding the performance of the contract. This could include things like timelines, deliverables, and quality standards, payment terms, conflict resolution.

How can we assist?

The success of a business is pegged on how well it protects itself from loss and harm arising from contractual relationships. Such loss and harm is prevented or reduced by having an understanding of how contracts/agreements are drafted  and negotiated. At Netsheria International, we offer a wide scope of legal documents that can be tailored to meet the requirements for different businesses. For more information, kindly visit our website.

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BEWARE OF THESE RED FLAGS!!!!

Many clients have been asking us how to tell that a contract/agreement is not favorable, considering all clauses have been stated in the agreement. Some have signed and gone into contracts without noticing the RED FLAGS that can later cost them or make them lose millions of shillings. Below are the 9 examples of RED FLAGS to look out for in an agreement.

1. Unclear or ambiguous language: Any ambiguity in the contract can lead to disputes and disagreements down the line. Make sure all terms and language are clearly defined.
2. One-sided terms: A contract should be a mutually beneficial agreement. If one party is getting a significantly better deal than the other, it may be a red flag.
3. Missing or incomplete information: A contract should include all necessary details and information. If any key information is missing or incomplete, it could cause problems during the contract period.
4. Non-disclosure clauses: Non-disclosure clauses can be helpful in protecting confidential information, but they may also limit your ability to share or use certain information.
5. Lack of flexibility: Contracts that are too rigid may not account for unforeseen circumstances or changes in circumstances.
6. Short-term focus: Contracts that are focused solely on short-term gains may not account for long-term implications or consequences.
7. Lack of legal review: Contract negotiations should always be reviewed by a lawyer to ensure the terms are fair and legally binding.
8. Excessive demands: If one party makes excessive or unreasonable demands, it may be a sign that the other party should walk away from the deal.
9. Requesting that the work or the job commences without signing the contract first is a big red flag, often times the other party is not willing to commit or may not pay for the services offered to them and you shall have no proof of an agreement because it was not signed.

In conclusion, always be aware of these red flags before signing any contract or agreement.

How can we assist?

The success of a startup is pegged on how well it protects itself from loss and harm arising from contractual relationships. Such loss and harm is prevented or reduced by having understanding how contracts/agreements are drafted. At Netsheria International, we offer a wide scope of legal documents that can be tailored to meet the requirements for different businesses. For more information, kindly visit our website.

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4 REASONS WHY DISCLOSURE IS IMPORTANT IN AN AGREEMENT OR CONTRACT SIGNING

Disclosure is an essential component of any agreement or contract signing. It is the act of revealing all significant and relevant information to the other party involved in the agreement or contract. This information could include finances, obligations, liabilities, and other pertinent details that can affect the outcome of the contract.

When entering into transactions like mergers and acquisitions, construction agreements and general dealings even when buying a car or a house, disclosure if not honored can cause or lead to losses to the party investing in the transaction.

The importance of disclosure in contract or agreement signing lies in the following reasons:

1. Avoidance of legal issues: One of the main reasons why disclosure is crucial is to avoid any legal issues or disputes. It ensures that all parties involved in the agreement understand what they are getting into and reduces the risk of misunderstandings and conflicts.
2. Protection: Disclosure can protect both parties involved in the agreement. For example, if you are signing a contract to buy a car, the seller must disclose any defects or issues with the vehicle. This ensures that the buyer knows what they are getting and can make an informed decision.
3. Trust: Disclosure builds trust between both parties. If one party hides information or provides incomplete details, it can damage the trust they have and impact the relationship going forward.
4. Fulfilling obligations: Disclosure sets out the expectations and commitments of both parties. By revealing all necessary information about the agreement, it ensures that obligations get fulfilled on both sides.

In conclusion, disclosure is a critical component of any contract or agreement, and both parties must understand the importance of full and transparent disclosure. This ensures that everyone involved can make informed decisions and fulfill their obligations without any legal issues or disputes.

How can we assist?

The success of a business is pegged on how well it protects itself from loss and harm arising from contractual relationships. Such loss and harm is prevented or reduced by having understanding how the contracts are reviewed, managed and negotiated. At Netsheria International, we advise on contract negotiation and also review contracts. For more information, kindly visit our website at www.netsheria.com

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