Know your Industry

Important Things to know about Commercial Contracts

  1. Commercially Sound and Viable Contracts: A contract is an agreement made between one or more parties setting out the matters agreed on by the parties. Contracts are indispensable in everyday business activities. It is therefore important to ensure that you have commercially sound and viable agreements to regulate your business relationships in order to enhance the success of your business.
  1. Standard Contracts/ Master Agreements: Where you are running a business that requires similar types of contracts, it is commercially sound to have standard contracts/master agreements that applies to your contracts portfolio for instance you can have a standard contract for suppliers. Netsheria offers standard agreements for the various sectors.
  1. Contract Validity: It is important to ensure that the contract is legally valid. A contract is valid where there is an offer, acceptance, intention to be legally bound and consideration. The parties also need to have the capacity to enter into the contract for instance a minor cannot enter into a contract. Netsheria offers commercial contracts that have been drafted by legal experts and have taken into considerations all factors to ensure that the contracts are valid.
  1. Stamp Duty: Once your contract has been signed by both parties, it is important to have it stamped by the Collector of Stamp Duty to make the contract admissible in court as evidence.
  1. Authorization: If the parties to the contract are legal persons i.e companies or limited liability partnerships, it is important to ensure that the parties that have signed the contracts on behalf of the legal persons are the authorized signatories.

Important Things to Know about Partnerships

  1. Partnership: A partnership is an association of two or more persons to carry out a business and share profits.
  1. Types of Partnerships: There are two types of partnerships general partnerships and limited liability partnerships. The liabilities of a general partnership are unlimited, while in a limited liability partnership, the liabilities are limited to the shares of the partners in the partnership.
  1. Governing Document: Partnerships are governed by a partnership deed. The partnership deed sets out the duties and responsibilities of the partners, the profit or loss sharing mechanism and other operational requirements of the partnership. A partnership deed is required to be registered.
  1. Company and Limited Liability Partnership: Both a limited liability partnership and a limited liability company are legal persons, with limited liabilities and perpetual succession. The key difference between a limited liability partnership and a limited liability company is that in company corporate tax is payable while in a limited liability partnership the partners pay tax from their profits.

Important things to know about Intellectual Property & Technology Media Telecommunication (IP-TMT).

  1. Intellectual Property Rights: Intellectual property rights are rights granted to a creator of invention, artistic and literary works, designs and symbols and names and images used in commerce. These rights are protected by law through patents, utility models, industrial designs, copyrights and trademarks. The protection prevents the owner and stops third parties from using the owners creation without the owner’s permission.
  1. Intellectual property rights are an important and valuable asset of each business. Businesses can use copyright laws to protect creative works or use patent law to protect inventions. Many businesses can use the law of trade secrets to protect confidential information. Every business can use trademark law to create and protect its brand.
  1. The communications and media industry are governed by the communications and media laws. These laws are applicable not only to journalists, publishers and telephone companies, but also to everyone publishing on the internet, blogging, online reviews and social media posts.
  1. The media and communications laws determine which forms of speeches are legally permissible and which ones are unprotected and could expose you to liability. Netsheria professionals are well experienced and always ready to help with such matters.
  1. Key Legal Issues: The key legal issues that arise in the field of media laws include intellectual property, defamation, confidentiality, privacy, freedom of information, data protection and privacy, employment and commercial contracts. Please click the legal documents portal to access all types of media and communications agreements.

Important Things to Know about Business Set UP

  1. Business Vehicle: When starting a business, it is important to use the most effective business vehicle. In Kenya, there are three common types of business vehicles, these are:


  • Companies limited by shares (either private or public) established under the Companies Act 2015.
  • Branches of foreign companies in Kenya registered under the Companies Act 2015 that maintain the same legal personality as the foreign company.
  • Limited liability partnerships (LLPs) established under the Limited Liability Partnership Act 2011.

             You may also register a sole proprietorship or a general partnership.

At Netsheria, we provide a cost effective legal advisory on the various special purpose vehicles and the pros and cons of each vehicle.

  1. Does your business have sufficient capital to meet the day-to-day business operations? This is very important in the performance of the business. A business can raise capital either through equity or debt.
  1. Key documents required when starting up a business are documents like Articles of Association (if a company) shareholders agreement, service agreement, employment agreements, policies such as employment policies, data protection policies and etc, if a partnership you will require a partnership deed. All these documents and more are available in our legal documents portal.

Important Things to Know about Capital Raising and Finance

  1. Every business requires financial capital to run effectively. Where the founders have insufficient capital to progress the objectives of the business they consider raising capital. This can be done either through debt financing or equity financing.
  1. Debt financing is done in the form of loans or issues of corporate bonds. Equity capital comes in the form of cash in exchange for company ownership, usually through shares.
  1. There are various documents that govern equity financing including share subscription agreements, investment agreements, share purchase, convertible loan agreements and etc. All these documents are available in our legal documents portal.
  1. The main documents that governs debt financing are the loan agreement and security document where the loan is secured. The loan agreement sets out the terms under which the loan is advanced. These terms including the loan amount, the repayment modes and term, interest and whether security is required.
  1. A secured loan is where the borrower charges or encumbers all or some of its assets in order to secure the loan advanced by the lender. This means that if the borrower fails to service the loan, then the lender may sell or undertake such course of action against the assets of the borrower as may be necessary to enable the lender to recover its money.

Important Things to Know about Employment and Labour Laws

  1. The labour practice is heavily regulated in Kenya. Before and on engaging an employee it is important to ensure that labour laws are strictly complied with as failure to do so would have a huge financial impact on the employer.
  1. Every labour practice ranging from the terms of employment of an employee, the performance of an employee, the conduct of an employee, the treatment of an employee and termination of an employee are regulated. It is an employer’s duty to prepare the employment contract.
  1. There are various mandatory policies required to be put in place by certain categories of employers such us the sexual harassment policy, equality policy, data protection policy, disciplinary process and etc.
  1. It is therefore important to seek legal advise when dealing with employment matters in order to avoid risking legal action for unfair labour practice. Netsheria professionals are highly experienced and well equipped to help with such employment matters.
  1. As a business you may also wish to engage independent contractors to provide certain services. Independent contractors are not considered as employees. However, the line drawn between whether a person is an employee or an independent contractor is dependent on the terms of the contract and the conduct of parties. We help structure this relationships and provide well crafted contracts.