Introduction

Creative industries refer to industries that have their origin in individual creativity, skill and talent which have the potential for wealth and job creation through the generation and exploitation of intellectual property. Simply put, creative industries refer to businesses with creativity at their heart. This would include design, music, publishing, film, visual arts and any other range of economic activities that are concerned with the generation and commercialization of creativity, ideas, knowledge and information.

A key feature of the creative industry is that its origin is rooted in individual creativity which fosters a suitable breeding ground for the interplay between human creativity, ideas, intellectual property, knowledge and technology. Owing to the above concept, the creative industry is that which combines the creation, production, and commercialization of creative content, which can have the form of a good or a service.

Creative industries are considered one of the fastest growing sectors in the global economy. This is due to the fact that they are a driver of innovation and a source of creative skills with strong backward and forward linkages in the economy. The same act as magnets which help drive growth in other sectors. Owing to this important feature, various governments have put in place mechanisms and policies that seek to foster the growth of the creative economy in their respective jurisdictions. Kenya is no stranger to this initiative as it is in has since drafted a Creative Industries Bill, 2023 (the “Bill”) that seeks to nurture and support the development of the creative industries within the country.

Key features of the Creative Industries Bill

1. Applicability

Owing to the broad coverage of creative industries, the provisions of the proposed Bill will be limited to visual arts and crafts, performing arts, literary arts and design and creative services. Noting that the above Bill will focus on development within the creative industry, the same will not reflect in relation to intellectual property rights. Nonetheless, various legal instruments exist in regard to protecting intellectual property such as the Copyright Act, 2001 and the Trademarks Act Cap. 506 Laws of Kenya as some examples. Since intellectual property is integral to the advancement of the creative industry, it will be interesting to note how protection of intellectual property will be advanced within the creative industry.

2. Support measures for the creative industry

a) Infrastructure support

As has been previously stated, creative industries are the lifeblood of an economy. It is considered to be an important source of commercial value and as a result, the proposed bill seeks to harness various avenues in which the creative industry may be gainfully exploited by all the involved stakeholders by providing the following support systems:

• Provision of subsidized rental schemes for studios;
• Setting up training centers which are centered on honing skills and productivity of creatives;
• Provision of digital infrastructure, including internet connectivity, cloud services, and content distribution platforms;
• Putting in measures such as promoting public-private partnerships;
• Availing shared service facilities for collective use, such as machinery, equipment, tools, systems, and other requisite tools; and
• Facilitating access to incubation and accelerator programs, providing resources, mentorship, and guidance for budding ventures within the creative industries just to name a few.

b) Research Funding

The above shall be availed to persons advancing projects aimed at resolving specific challenges within the creative industries through appropriate scientific and technological interventions and seek to expedite the adoption and commercialization of innovations developed within creative industries.

c) Provision of credit

In line with nurturing and supporting the creative industry, the Bill seeks to cater to the provision of financial assistance through credit. The same would be effected through collaborating with affiliated financial institutions to formulate credit facilities tailored to suit the creative industry, promoting financial literacy programs specific to the creatives industry and engaging with international financial partners to harness best practices and financial support for the creatives industry.

d) Designation of creative clusters and development hubs

In a bid to foster collaboration among various stakeholders within the industry, the Bill seeks to promote the creation of creative clusters and development hubs which will work to provide an array of services ranging from tax reliefs, tax incentives, provision of access to essential resources, tools, and equipment for the creatives; offering training, mentorship, and capacity-building programs specifically designed for creatives; facilitating interaction, collaboration, and partnerships within the sector; and showcasing and promoting local creatives to a wider audience, both domestically and internationally.

Conclusion

Other key features of the bill include creation of a creative industry development fund, creating a one-stop service center for creatives, green incentives and registration of creative industry organizations.

Currently, as it stands, the State Department for Youth Affairs and Creative Economy is in the final stages of conducting public participation for the draft bill. Hopefully, with the incorporation of various views from relevant stakeholders, the Creative Industries Bill will grant appropriate parties relevance and access to the market and consequently promote a vibrant and beneficial industry for all those that it seeks to benefit.

How can we assist you?

Netsheria International can advise you on setting up of the appropriate business entity for various creative industries and assist in compliance of the entities with the provisions of the Bill. Please contact us for our services via email or visit our website for more information on our services.

The post Overview of the contents of the creative industries bill, 2023 appeared first on Netsheria.

Introduction 

Cloud computing is the delivery of different services through the internet through resources including tools and applications such as data storage, servers, databases, networking and software. It is referred to as cloud computing as the information accessed is found remotely in the cloud or a virtual space. Users store files and applications on remote servers and then access all the data via the internet hence allowing the user to work remotely.  

Types of Cloud Services

Cloud computing services provide users with a series of functions including; email, storage, backup and data retrieval, creating and testing apps, analyzing data, audio and video streaming and delivering software on demand. This may be done through public, private or hybrid clouds each of which is different from the other. 

Public clouds provide their services on servers and storage over the internet where clients access services through accounts. Private clouds are reserved for specific clientele where the firm’s data service center may host the cloud computing service. Hybrid models are a combination of both public and private services which allow users more flexibility and helps optimize user’s infrastructure and security.  

Types of Cloud Computing

Unlike a single piece of technology, cloud computing comprises of three services: software-as-a-service (SaaS), infrastructure-as-a-service (IaaS) and platform-as-a-service (Paas). 

1. Software-as-a-service (Saas) 

It involves licensing of a software application to customers where the license is provided through a pay-as-you-go model or on-demand such as Microsoft Office 365. 

2. Infrastructure-as-a-service (Iaas) 

It involves a method of delivering everything from operating systems to servers and storage through IP-based connectivity as an on-demand service. Clients avoid the need to purchase software or servers and instead procure the resources in an outsourced, od-demand service such as IBM Clod and Microsoft Azure. 

3. Platform-as-a-service (Paas)  

It shares some similarities with SaaS where the primary difference is that instead of delivering software online, it is actually a platform for creating software delivered via the internet such as Salesforce.com and Heroku. 

Cloud and Cybersecurity 

Cloud security refers to the measures undertaken to protect digital assets and data stored on cloud-based services such as two-factor authorization (2FA), use of virtual private networks, security tokens, data encryption, penetration testing, obfuscation, firewall services and avoiding public internet connections.  

Major threats to cloud security include data breaches, data loss, account hijacking, service hijacking, insecure application program interfaces (APIs), poor choice of cloud storage providers and shared technology can compromise cloud security. Denial-of-service cyberattacks prevent legitimate users from accessing a computer or network. Distributed denial of service (DD0S) attack overwhelms a service with data so that users cannot access their accounts, such as banks or email accounts.  

Cyberattacks impeding cybersecurity fall into three main categories: criminal, personal or political. Criminal motivated attacks seek financial gain. Personal attacks may occur when disgruntled persons seek retribution, steal money or data or simply wants to disrupt a company’s systems. Sociopolitical attackers also known as hacktivists seek attention for their causes.  

Cybersecurity on the other hand refers to measures taken to protect internet-connected devices, networks and data from unauthorized access and criminal use. These measures include preventing, detecting and responding to cyberattacks. Encryption and use of antivirus software may be used to prevent and detect suspicious activity online and block most software attacks.  

Types of Cyberattacks

1. Phishing 

This is where and email or text appears to be sent from a reputable source to trick the recipient into sharing sensitive information such as login credentials or to install malware on the victim’s device.  

2. Malware 

Malware such as viruses, worms, spyware and ransomware are malicious software intended to cause damage to a device or network. It can find its way onto devices when a user clicks a link or attachment that installs the malicious software. Malware blocks access to key components of the network, covertly obtain information by transmitting data from the hard drive, disrupt components and render the system inoperable. 

3. Eavesdropping attacks 

This is where a hacker intercepts, deletes or modifies data as it is transmitted over a network by a connected device. It occurs when a user connects to a network that is not secured or encrypted and sends sensitive data to somewhere else. 

4. Denial of service attacks (DoS) 

These attacks target devices, information systems and other network resources to prevent legitimate users from accessing services and resources. The server and host are flooded with traffic from a single location to the point that it becomes inoperable and crashes.  

5. Distributed Denial-of-service attacks (DDoS) 

These attacks are similar to Dos, only that the attack comes from multiple remote machines which can be deployed much faster and with more traffic making them harder to detect than DoS attacks. 

Conclusions

Due to ongoing and increasing cybersecurity threats, the tech industry and players need to constantly adjust to new technologies and developments to stay one step ahead as hackers also adapt their methods to new forms of cybersecurity and render previous measures ineffective.  

Netsheria LLP International, a provider of strategic legal expertise and analytical capabilities for tech startups and SMEs remains your dedicated partner in your business growth journey while ensuring your technological intellectual property is safeguarded from infringement.  

Join us in our next part of this series where our lawyers discuss on Cloud Computing Agreements and Contracts, their use, terms and conditions and key clauses to look out for in such agreements. 

To learn more about how Netsheria can help you secure your digital assets, visit our website or contact us today via Email.

The post Nuts & Bolts of Cloud Computing & Cyber Security in Kenya appeared first on Netsheria.

Introduction

Cloud computing is the delivery of different services through the internet through resources including tools and applications such as data storage, servers, databases, networking and software. It is referred to as cloud computing as the information accessed is found remotely in the cloud or a virtual space. Users store files and applications on remote servers and then access all the data via the internet hence allowing the user to work remotely.  

Types of Cloud Services

Cloud computing services provide users with a series of functions including; email, storage, backup and data retrieval, creating and testing apps, analyzing data, audio and video streaming and delivering software on demand. This may be done through public, private or hybrid clouds each of which is different from the other. 

Public clouds provide their services on servers and storage over the internet where clients access services through accounts. Private clouds are reserved for specific clientele where the firm’s data service center may host the cloud computing service. Hybrid models are a combination of both public and private services which allow users more flexibility and helps optimize user’s infrastructure and security.  

Types of Cloud Computing

Unlike a single piece of technology, cloud computing comprises of three services: software-as-a-service (SaaS), infrastructure-as-a-service (IaaS) and platform-as-a-service (Paas). 

1. Software-as-a-service (Saas) 

It involves licensing of a software application to customers where the license is provided through a pay-as-you-go model or on-demand such as Microsoft Office 365. 

2. Infrastructure-as-a-service (Iaas) 

It involves a method of delivering everything from operating systems to servers and storage through IP-based connectivity as an on-demand service. Clients avoid the need to purchase software or servers and instead procure the resources in an outsourced, od-demand service such as IBM Clod and Microsoft Azure. 

3. Platform-as-a-service (Paas)  

It shares some similarities with SaaS where the primary difference is that instead of delivering software online, it is actually a platform for creating software delivered via the internet such as Salesforce.com and Heroku. 

Cloud and Cybersecurity

Cloud security refers to the measures undertaken to protect digital assets and data stored on cloud-based services such as two-factor authorization (2FA), use of virtual private networks, security tokens, data encryption, penetration testing, obfuscation, firewall services and avoiding public internet connections.  

Major threats to cloud security include data breaches, data loss, account hijacking, service hijacking, insecure application program interfaces (APIs), poor choice of cloud storage providers and shared technology can compromise cloud security. Denial-of-service cyberattacks prevent legitimate users from accessing a computer or network. Distributed denial of service (DD0S) attack overwhelms a service with data so that users cannot access their accounts, such as banks or email accounts.  

Cyberattacks impeding cybersecurity fall into three main categories: criminal, personal or political. Criminal motivated attacks seek financial gain. Personal attacks may occur when disgruntled persons seek retribution, steal money or data or simply wants to disrupt a company’s systems. Sociopolitical attackers also known as hacktivists seek attention for their causes.  

Cybersecurity on the other hand refers to measures taken to protect internet-connected devices, networks and data from unauthorized access and criminal use. These measures include preventing, detecting and responding to cyberattacks. Encryption and use of antivirus software may be used to prevent and detect suspicious activity online and block most software attacks.  

Types of Cyberattacks

1. Phishing 

This is where and email or text appears to be sent from a reputable source to trick the recipient into sharing sensitive information such as login credentials or to install malware on the victim’s device.  

2. Malware 

Malware such as viruses, worms, spyware and ransomware are malicious software intended to cause damage to a device or network. It can find its way onto devices when a user clicks a link or attachment that installs the malicious software. Malware blocks access to key components of the network, covertly obtain information by transmitting data from the hard drive, disrupt components and render the system inoperable. 

3. Eavesdropping attacks 

This is where a hacker intercepts, deletes or modifies data as it is transmitted over a network by a connected device. It occurs when a user connects to a network that is not secured or encrypted and sends sensitive data to somewhere else. 

4. Denial of service attacks (DoS) 

These attacks target devices, information systems and other network resources to prevent legitimate users from accessing services and resources. The server and host are flooded with traffic from a single location to the point that it becomes inoperable and crashes.  

5. Distributed Denial-of-service attacks (DDoS) 

These attacks are similar to Dos, only that the attack comes from multiple remote machines which can be deployed much faster and with more traffic making them harder to detect than DoS attacks. 

Conclusions

Due to ongoing and increasing cybersecurity threats, the tech industry and players need to constantly adjust to new technologies and developments to stay one step ahead as hackers also adapt their methods to new forms of cybersecurity and render previous measures ineffective.   

Netsheria LLP International, a provider of strategic legal expertise and analytical capabilities for tech startups and SMEs remains your dedicated partner in your business growth journey while ensuring your technological intellectual property is safeguarded from infringement.  

Join us in our next part of this series where our lawyers discuss on Cloud Computing Agreements and Contracts, their use, terms and conditions and key clauses to look out for in such agreements. 

To learn more about how Netsheria can help you safeguard your business, visit our website or contact us today. 

The post Cloud Computing & Cyber Security in Kenya appeared first on Netsheria.

Thousands of Kenyans queued up at registration centres to get the currency tokens worth about $49. (Ksh. 7,232.40) by having their iris scanned which event sparked social conversations with the government coming under fire to explain how Worldcoin operations were allowed in the country in the first place. 

Stakeholder Concerns 

The Communication Authority of Kenya raised its concerns about how the biometric data was stored, offering money in exchange for data and the issue of having public data in the hands of a private company. This prompted the ministry of interior to launch an investigation into Worldcoin and called on security services and data protection agencies to establish the authenticity and legality of Worldcoin operations in Kenya.  

The Worldcoin operations took the country by storm with many skeptical of how the cryptocurrency works and where or how the universal basic income is sourced. The company claimed on its website to creating the world’s largest identity and financial network as a public utility, giving ownership to everyone and establishing universal access to the global economy regardless of country or background.  

From the noted concerns, Kenya’s Office of the Data Protection Commissioner (ODPC) called for scrutiny and vigilance from the public when using Worldcoin saying the process requires “demonstration of proper safeguards under the Data Protection Act, 2019”. This was also echoed by the Capital Markets Authority (CMA) which stated its concerns about the ongoing registration and notified Kenyans that Worldcoin was not regulated in Kenya. 

Given Kenyan law providing individuals the right not to have any personal information unnecessarily required or revealed, this sparked the debate surrounding Worldcoin and prompted the government to step in. 

Worldcoin operations halted 

Subsequently, this led to an investigation of Worldcoin operations in Kenya by the National Assembly Committee which kicked off its inquiry on 29th August, 2023. The Office of the Director of Computer and Cyber Crime revealed to the committee that since November 2022, the cryptocurrency firm had engaged 11 companies in Kenya with the Head of Cyber-security Standards and Policy warning that the collection of data collected from more than 250,000 Kenyans is not safe. This was after the platform confirming that the data collected from the iris scan will be transferred to Amazon servers based in the United States. This was highlighted to poses a great risk due to the sovereignty of the information whose safety is not guaranteed, recommending a thorough investigation. 

The Committee interviewed the ODPC who confirmed that it had revoked the cryptocurrency’s firm license in June 2023 as a result of failure of the company to stop data collection despite a cessation order. Eventually, the Data Commissioner was found to have registered the firm despite raising issues on its operations. The Commissioner had raised concerns on the consent to transfer personal data, as well as impact assessment report submitted by the firm. The ICT Cabinet Secretary appeared before the ad hoc committee where a finger pointing melee was witnessed between the CS and the ODPC. 

Sector reforms 

The Worldcoin saga was probed by the ODPC in collaboration with the Communications Authority of Kenya, the Central Bank of Kenya, the Ministry of ICT and the National Computer and Cybercrime coordination committee. The ad hoc parliamentary committee finally suggested that Worldcoin operators seek approval from CMA which will run tests on its products, solutions and services before rollout to the Kenyan market.  

It was further agreed that all WorldApps be taken down from all App stores within Kenyan region for one year pending the approval of the company. On legal reforms, the Taskforce has mandated the ODPC to impose administrative fines on companies doing commercial activities on data collection which is a threat opt national security and the economy. 

The Attorney General, Capital Markets Authority and Central Bank of Kenya have been tasked with spearheading regulations of digital assets and cryptocurrency. 

In coming up with the recommendations, the team according to the ODPC established that consent obtained from Kenyans was insufficient and did not comply with provisions of the Data Protection Act. 

Conclusions 

The Worldcoin saga comes as a major test to Kenya’s preparedness to cyber threats and primarily testing the scope of our data protection laws. The saga exposed various weaknesses captured above and highlighted the need for reforms of the current data protection and cyber use regime.  

It should be interesting to see Worldcoin operations return to the country and how reforms made will have aligned Kenya’s view on cryptocurrency, data protection and cyber management.  

The post World coin saga appeared first on Netsheria.

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!

The post The Role of Intellectual Property in Growing and Protecting your Business Brand appeared first on Netsheria.

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.

The post Red flags in Contracts appeared first on Netsheria.

The 5 Types of Construction Contracts You Need to Know

A construction contract can be defined as a legal document that is can be entered into between all parties involved in the construction and details the scope and terms of the project or development.

There are 5 types of construction contracts. These are:

1. Lump sum contract– This contract sets a fixed total price for the entire project rather than individual aspects. In most cases, it is set for straightforward projects with a clearly defined scope of work. For instance, a software installation company may enter into a lump sum contract for installing multiple data processing systems in a building. The installation company would receive a lump sum upon completion of the project. Lump sum contracts involve a fair amount of risk for contractors because they don’t take into consideration the unexpected costs or delays after the project is started.

The downside of lump sum contracts are that one may make less money, or, even worse, lose money on a construction project.

2. Time and materials contract– This contract works best for projects in which the scope of work is not well-defined. It is entered into where contractors of a project are reimbursed for the cost, materials, and labor at an agreed pay rate; daily or hourly. This is often used for projects without a clearly defined scope of work. For example, where a client wishes to redo their veranda, the contractor is expected to look at the scope of the work/ project, the materials required and the expected time to complete the work.
3. Cost-plus contract– This contract is also known as a cost- reimbursement contract. It is entered into where the owner pays the contractor for direct costs such as materials and labor, and indirect costs such as all overheads incurred during the project, travel and insurance expenses as well as a preset profit margin. The importance of this contract is that it offsets contractor risk for projects that involve design changes. The majority of the risk is borne by the owner/ developer. This is because the contractor gets to be paid for all costs incurred during the project and any unforeseen expenses are borne by the owner/ developer. For example, where a XYZ Limited, a construction company is hired to construct a property for a consideration of Kes 20 million, subject to it been completed within 12 months, if the project is completed within 11 months, they are subjected to a 5 % incentive of the total consideration of Kes. 20 million.
4. Unit price contract– This contract is also known as measurement contracts, measure and pay contracts, or remeasurement contracts. It divides the work to be completed into separate units, which the contractor bills for individually. The importance of this contract is that it allows the construction work to start before the full extent of the project can be determined. This removes the risk of inaccurate estimation of the quantities. For example, the cost of constructing a road might have been laid out based on an approximate estimate of the distance required, and then the actual payment calculated based on the final length of the road.
5. Guaranteed Maximum Price (GMP) contract– This contract seeks to establish an upper limit for construction costs and contractors absorb costs above this set point. This means that customers agree to reimburse the contractor for labor costs, cost of purchase of materials and the contractor’s fee that cover profits. This contract is best suited to projects with few unknowns, meaning that the building plans have been repetitively used and thus removing any uncertainty.

The key advantage of a GMP contract is that it shifts the risk to the contract since the owner does not pay for any cost overruns.

Conclusion

Every construction project requires properly drafted contracts that seek to protect the interests of the parties. At Netsheria International LLP, we offer various construction contracts that seek to protect the interests of the parties. For more information, visit our website at www.netsheria.com

The post The 5 Types of Construction Contracts You Need to Know appeared first on Netsheria.

THE 8 KEY ESSENTIAL DOCUMENTS REQUIRED FOR STARTUPS?

A startup is as a company at its initial stages in its business. When a startup is newly formed it often requires financing either through capital contribution from the company’s owners/ promoters or through investor financing, loan facilities and venture capitalists.

The formation of a startup company is pegged on two considerations namely; registration and incorporation.

1. Term sheet- This is a nonbinding agreement between parties, having the basic terms and conditions of an investment. The nonbinding effect of a term sheet signifies the avoidance of legal formalities that arise when seeking investment prospects. Once parties have agreed to the terms of the term sheet, a legally binding agreement or contract is then drawn up.
2. Shareholder Agreement- This agreement states the class and number of shares allocated to each shareholder.
3. Share Subscription Agreement– This agreement is essential in the transfer of new shares to investors where they inject capital into the business. The company allots shares to them upon revaluation of their total issued share capital.
4. Contractual Agreements- These are necessary where the startup is entering into obligations for various purposes such as service agreements for services to be rendered, supply agreements for supply of merchandise etc.
5. Employment Contracts- These are necessary where the startup seeks to hire new staff.
6. Tenancy Agreements- These are necessary where a startup is renting business premises. It would enter into tenancy agreements with the owner of the property either on a periodic tenancy basis or as a lease.
7. Non- Competition Agreements- These agreements are also referred to as restrictive contracts. They are entered into between employers and employees where they prohibit employees from revealing trade secrets about the startup to competitors or other outsiders. It also forbids workers from themselves competing with their ex-employer for a certain period of time after leaving employment.
8. Non- Disclosure Agreement- These agreements create a confidential relationship between an individual with sensitive or privileged information and an individual who will access such information.

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 the right contracts in place. At Netsheria International, we offer a wide scope of legal documents that can be tailored to meet the requirements for a startup. For more information, kindly visit our website at www.netsheria.com

The post The 8 key essential documents required for startups? appeared first on Netsheria.

TERMINATION OF EMPLOYMENT CONTRACTS: TERMINATION ON NOTICE (PART 1)

A contract of employment in Kenya may be terminated in the following ways, namely:

1. Termination on notice;
2. Summary dismissal; or
3. Termination on account of redundancy.

Termination on Notice

This refers to a situation where an employment contract is terminated by either party i.e., employer or employee, where one party gives notice to the other.

This is provided for in section 35 of the Employment Act which states that an employment contract can be terminated via notice in the following ways depending on the intervals when wages are to be paid:

1. a one-day notice, if wages are to be paid daily e.g., casual labourers
2. a less than one-month notice (based on the specific interval) if wages are to be paid at intervals of less than one month.
3. a one-month notice if wages are paid at monthly intervals or more.

An employee may terminate an employment contract without reason. However, section 45 of the Employment Act provides that an employer can only terminate an employment contract if he has fair and valid reasons. These reasons could be related to employee’s conduct, capacity or compatibility or based on the operational requirements of the employer.

The process of termination of employment has to comply with fair procedure, that is, the employer must explain to the employee the reason for considering his termination before the employee and another employee or shop floor union representative and give the employee a chance to defend himself.

The following reasons are deemed to be unfair reasons for the termination of an employment contract:

1. a female employee’s pregnancy, or any reason connected with her pregnancy;
2. the proposal to go or the going on leave of an employee where the employee is entitled to take leave;
3. an employee’s membership or proposed membership of a trade union;
4. the participation, or proposed participation of an employee in the activities of a trade union outside working hours, or, with the consent of the employer, within working hours;
5. an employee’s seeking of office as, or acting, or having acted as an officer of a trade union or a workers’ representative;
6. an employee’s refusal or proposed refusal to join or withdraw from a trade union;
7. an employee’s race, colour, tribe, sex, religion, political opinion or affiliation, national extraction, nationality, social origin, marital status, HIV status or disability;

If an employee is found guilty of misconduct, poor performance or physical incapacitation, the employer may terminate the employee and pay the employee in lieu of notice, in accordance with the employee’s contractual notice period.

Prior to terminating an employee’s contract on grounds of poor performance the Employment and Labour Relations Courts have established that an employer is required to first put the employee on a performance improvement plan.

The termination procedure set out under Section 41 of the Act requires:

1. explaining to an employee the reasons why the employer is considering terminating the employee;
2. informing an employee of his right to have either a fellow employee (if unionized) or a shop union representative (if unionized) present during the disciplinary proceedings;
3. the employee should be allowed reasonable time to prepare a defence in response to the notification of allegations received;
4. conduct of a hearing before an impartial disciplinary committee;
5. communication of the decision arrived at by the disciplinary committee and reasons for the decision; and
6. the employer’s internal disciplinary procedures should provide an appeal mechanism.

How can we assist you?

We can advise you on ways of terminating contracts for employers and employees. Please contact us for our services at info@netsheria.com or visit our website at https://netsheria.com/ for more on our services.

The post Termination of employment Contracts appeared first on Netsheria.

Why Corporate Governance Experts Recommend specially designed articles of association for your Start Up

Introduction

The articles of association (AoA) are basically regarded as the “constitution of a company.” They outline the rules and regulations that stipulate a company’s internal affairs. The articles of association are also considered a user’s manual for an organization that states the purpose of the organization and its strategies to accomplish its short-term and long-term goals.

Section 13 of the Companies Act of 2015 provides that a person who wishes to register a company shall lodge with the Registrar—

1. an application for registration of the company
2. a memorandum of association of the company; and
3. a copy of the proposed articles of association.

The articles of association of a company are required to; be contained in a single document, be printed, be divided into paragraphs numbered consecutively, be dated; and be signed by each subscriber to the articles.

Model Articles of Association

Part 3 of the Act provides that the regulations may prescribe model articles for companies. Different versions of model articles may be prescribed for different descriptions of companies. The Companies Act of 2015 prescribes three types of model Articles;

• Private companies limited by shares
• Private companies limited by guarantee and
• Public companies

Important features in articles of association

Some of the salient clauses to include in an Article of Association, depending on the type of company, include;

1. Transfer of Shares – the procedure of transferring of shares by director(s) or shareholders has to follow a process that is enclosed on the Article of Association. For example, any member wishing to transfer their shares will need to give a notice in writing, a price of the shares needs to be agreed upon.
2. General Meetings – you can set the minimum quorum of members that requires for a general meeting to take place.
3. Voting Rules – every director(s) or shareholder(s) are entitled to one vote for every share they hold.
4. Numbers of Directors – the number of directors shall not be less than two [2] and, shall not exceed seven [7].
5. Add/Remove Director – the article of association explains the threshold of removing a director from the company.
6. Winding up – If you are looking to close your business, the article of association will give you directions on the process that you will need to follow within the law.
7. Arbitration – if there is any disputes or differences between directors or shareholders on company matters, then an arbitrator will be appointed to resolve the issues.

Because model Articles are designed to be a ‘one size fits all’ solution, they may not suit your business.  Whereas you may choose to adopt the Model Articles in their entirety, it is much more preferable to have a lawyer draft bespoke set of Articles which might incorporate some provisions from the Model Articles, allow for inclusion of terms that are specific to your company, and excludes other provisions that may be unsuitable.

Specially designed articles of association, in contrast to the model articles may permit you to:

• create more than one class of share in the articles
• the articles may be redesigned to allow for alternate directors
• the articles may also give room to create space for a company secretary

• The redesigned articles can also include clauses to avoid deadlock situations for instance the chair can have a casting vote.

• The articles may also provide for the rights of pre-emption which basically is the right of first refusal to existing shareholders whenever new shares are issued
• On notices and meetings, the advancement in technology as brought about post the COVID-19 pandemic allows for remote and virtual meetings, a clause that is not yet reflected in the model articles but one which you can resolve to have included in the specially designed articles.

In the alternative, company promoters may as well choose to remove certain provisions from the model articles such as:

• allow board meetings to be quorate when there’s just one director
• to allow directors to vote if they have a conflict of interest

Conclusion

While Model Articles may be readily available for adoption and therefore seem convenient in the instant, they may not cater for the unique needs or provide suitable solutions to meet your Company’s needs. It may be necessary, therefore to consider specially designed Articles of associations to match your Company’s requirements.

How can we assist you?

At Netsheria International, we have an experienced team of lawyers who can offer you legal assistance in drafting and specially redesigning your articles of association for your business. Please contact us for our services at info@netsheria.com or visit our website at https://netsheria.com/ for more information on our services.

The post Why Corporate Governance Experts Recommend specially designed articles of association for your Start Up appeared first on Netsheria.