Mr A and Miss Z are high school friends and they have a vision to build a social network unique to Africans. They have shared this dream in high school and nurtured it for years. Shortly before graduation from the University, they proceed to register a company Afrinet Limited and start business right away.
Business is booming as the social network becomes the toast of a large number of African youths.
However, trouble looms as Mr A and Miss Z start having disputes. They cannot seem to agree on crucial decisions and their duties towards the business are over-lapping.
A promising business is being threatened because of personal differences of the co-founders.
Does this story sound familiar?
In some climes, people frown at getting into business partnership for several reasons especially lack of trust.
However two good heads are better than one. In spite of failure of business partnerships round the world, there are still those that have survived over the years.
What’s the difference?
One choose your business partners carefully, you want to be sure you can both take decisions together as a team. Running a business involves taking lots of decisions.
Two communicate your business model, vision, goals, strategy etc and make sure you are both on the same page. If you believe in a low-cost product for example, and your co-founder believes in a highly priced product, you both have to agree on what product to produce and when.
Three, document what you both agree. Most co-founders are so busy with building a business that they miss this important step. After agreeing on the important aspects, you both need to write it out in detail. Take a step further and make it a legally binding contract. Get your lawyer to prepare a co-founders agreement/partnership agreement/operating agreement.
Signing an agreement doesn’t mean you don’t trust each other, it rather shows that you both want to be accountable to the business and have what you agreed upon stated clearly in black and white.
Partnership isn’t evil, but first things first. In my own opinion, when starting a business, 2 to 4 partners/co-founders are enough. You can admit more partners as you scale up.
What is your ideal number of co-founders for a business? Would you enter a business partnership? Let’s discuss in the comment section.
Tosin Omotosho is a real estate and business lawyer. She helps business owners give legal structure to their business and avoid liabilities caused by legal mistakes. An avid reader and writer, She is the Principal Partner, Charis Legal Practice. Contact her here, to read more of her articles, click here.
The Importance Of Good Legal Advice When Doing Business In Nigeria Today – Morenike George-Taylor
Morenike George-Taylor, Group Managing Director of the Flux Group (Image: Morenike George-Taylor)
Every business owner and consultant knows that taking into consideration, COVID -19 lockdowns, END SARS protest, the twitter ban and the rate of the dollar to the Naira, business in Nigeria has been a roller coaster between 2020 and 2021. Business owners had to learn a lot of things and I hope to share them in a series of articles. However, I want to emphasize the importance of good legal advice when doing business in Nigeria. Simply put… it is critical.
Once the COVID-19 lockdown happened, it was a shock to everyone that we could all put our businesses on hold and be forced to work remotely. Zoom became more popular and it became more difficult to physically sign documents. People started using electronic signatures to sign their documents. The question is whether under Nigerian law, an electronic signature is as good as a physical signature. If someone appends an electronic signature to a document, how can you be sure it is their signature? How can you be sure that they wouldn’t deny that signature later on?
More legal issues arose with END SARS, more people had to look into what their insurance contracts cover and do not cover. With the rate of the dollar, loan agreements where businesses collected international funding went awry. A $100,000 loan given in 2019 and repayable in 2021 was now significantly harder to repay and businesses explored whether the drastic rise in the exchange rate was enough to constitute force majeure.
In the midst of all this, those with good lawyers were able to navigate the troubled waters and find solutions even where they were in between a rock and hard place. Those without good lawyers made mistakes that cost them a lot of money. A lot of businesses folded up because they were unable to survive. This is why I have the following tips:
- Always read legal documents before you sign them.
- Pay attention to the exclusion clauses in your insurance contracts.
- Only accept electronic signatures from trusted clients whose signatures you can confirm.
- Pay attention to force majeure clauses in loan agreements you execute and be careful and consider all mitigating and hedging products that can help when receiving loans repayable in foreign currency.
- Put everything in writing, agreements, orders, receipts and so on.
- Get a good lawyer on retainer.
We are all trying to survive and build thriving businesses. I hope these tips save you a penny or two as you run your business.
Article by: Morenike George-Taylor
South Africa: Guidance issued on mandatory vaccination policies for the workplace
South Africa: After months of speculation, the Department of Employment and Labour in South Africa has provided guidance in relation to vaccination policies within the workplace. On 11 June 2021, the Minister published an amendment to the Consolidated Direction on Occupational Health and Safety Measures in Certain Workplaces (Directive), which makes provision for employers to implement a mandatory vaccination policy in its workplace.
Implementing the policy
Before an employer implements such a policy, it must undertake a risk assessment within 21 days of the Directive being published, i.e. by 2 July 2021. This risk assessment must:
• take into consideration the employer’s operational requirements;
• indicate whether it intends to implement a mandatory vaccination policy;
• identify which employees it will require to be vaccinated based on the risk of acquiring COVID-19 at work, or the risk of severe COVID-19 symptoms due to the employee’s age or co-morbidities; and
• be conducted in accordance with section 8 and 9 of the Occupational Health and Safety Act, which places a duty on the employer to maintain a working environment for its employees and other persons that is safe and, as far as reasonably practicable, free from health risks.
Developing a plan
The employer must then develop a plan which sets out the measures it will implement to ensure the workplace is safe for its employees. This plan should indicate whether the employer intends to make the vaccine mandatory for any employees, and must identity the employees who will be required to be vaccinated, the process which will be followed to ensure compliance with the Directive and whether the employer plans to make the vaccine mandatory as and when it becomes available to employees. Any employer who is of the opinion that the vaccination of its employees is necessary for their health and safety may implement a mandatory vaccination policy. The employer’s risk assessment should, however, support this requirement and indicate that there is a legitimate need for the workforce to be vaccinated.
Right to refuse
The Directive sets out guidelines to employers when drafting and implementing a mandatory vaccination policy. In terms of the guidelines, importance is placed on “public health, the constitutional rights of employees and the efficient operation of the employer’s business.” Where an employer makes vaccination mandatory, it must notify each employee identified in the plan that such employee must be vaccinated as and when the vaccination is available to them, and that the employee may consult with a health and safety worker or trade union representative, should the employee wish to do so. Further, the employer must inform the employee of their right to refuse the vaccine on medical or constitutional grounds. These grounds are specified in the guidelines and makes provision for an employee to refuse the vaccine on the medical basis of a “contra‑indication” of the vaccine (i.e. an allergic reaction to the first dose of the vaccine or to a component of the vaccine), or the constitutional basis of the employee’s right to bodily integrity and/or right to freedom of conscience, religion, thought, belief and opinion, as set out in section 12 and 15 of the Constitution.
The Directive prescribes that where an employee does raise one of these objections, the employer is required to counsel the employee, refer such an employee for a medical evaluation for any allergic reaction to the vaccine and, where necessary, reasonably accommodate the employee in accordance with the Code of Good Practice: Employment of People with Disabilities, as published in terms of the Employment Equity Act. Such reasonable accommodation may include allowing the employee to work offsite, at home, in isolation at the workplace, or in limited circumstance, the employer may require the employee to work with a N95 mask.
Where an employer does implement a mandatory vaccination policy and an employee refuses to be vaccinated, the employer must ensure that the grounds for refusal are considered fully and that the employee is consulted in relation to the grounds raised. However, should the employer be unable to reasonably accommodate the employee and the employee continues to refuse to be vaccinated, an incapacity procedure must be followed before the employer may terminate the employee’s contract.
Paid time off
In terms of section 4(1)(k) of the Directive, employers must give employees paid time off at the date and time of their vaccination, regardless of whether such vaccination is in terms of a vaccination policy or not, and sick leave must be used should an employee experience any adverse side effects from the vaccine. An employer may request proof of the vaccination when returning to work, or proof that the vaccination will take place during working hours. Where an employee is vaccinated in terms of the mandatory vaccination plan, the employer must afford the employee paid time off for adverse side effects of the vaccine, even if the employee has exhausted their sick leave entitlement. Alternatively, the employer may lodge a claim with the Compensation Fund, in terms of the Compensation for Occupational Injuries and Diseases Act. In addition, the employer should organize transport to and from the vaccination site, if possible, for employees identified in the mandatory vaccination policy.
In order to comply with the Directive, employers must update their risk assessment of the workplace, taking into consideration any employees who are required to be vaccinated. Employers must take notice of the timeframe afforded by the Directive and ensure that the plan is in place before the 21 day period has lapsed. It is important for employers to conduct the risk assessment objectively and determine the actual need for vaccinations in the workplace and amongst certain categories of employees. Further, any objection raised by an employee should be considered seriously and the employer should try to accommodate such employee where possible. However, the employer may dismiss the employee for incapacity as a last resort.
By Kirsty Gibson, Associate, and Johan Botes, Partner and Head of the Employment & Compensation Practice, Baker McKenzie Johannesburg
Developments in competition law in post-pandemic Africa
Image Credit: Getty Images/iStockphoto
With the growth of economies across Africa, competition law has remained one of the key drivers for effective market participation, consumer protection and fair business practices. However, the global pandemic introduced new challenges for competition authorities in Africa and abroad, with each enforcer pursuing the most beneficial enforcement method for its national or regional jurisdiction.
According to Lerisha Naidu, Partner in Baker McKenzie’s Competition & Antitrust Practice in Johannesburg, “These efforts were aimed at curbing the persistence of unjustified price hikes, anti-competitive cooperation between competitors and other harmful business practices that sought to undermine competition. In addition to the urgent responses to the unprecedented impacts of the global COVID-19 crisis, competition authorities in countries and regions across Africa continued to introduce new laws and amend existing legislation as a sign of the rapidly increasing prioritisation of competition law enforcement on the continent.”
Competition authorities across the continent had already established strategies for maintaining competition and limiting instances of customer exploitation in their respective countries by early March 2020.
“Competition authorities in Kenya, Malawi, Mauritius, Namibia, Nigeria and South Africa reacted quickly to pandemic impacts by introducing new guidelines and regulations,” noted Angelo Tzarevski, a senior associate in Baker McKenzie’s Competition Practice in Johannesburg.
Amendments to existing laws
Various jurisdictions have recently strengthened their competition law regimes by way of amendments to the existing legislation or by introducing entirely new laws to facilitate their enforcement efforts.
“For example, Botswana’s Competition Act came into force at the end of 2018. Kenya recently introduced a host of new laws, guidelines and rules that relate to buyer power, the valuation of assets in merger transactions, block exemption of certain mergers from notification, merger thresholds and filing fees, market definition, and new guidelines for the determination of administrative penalties. Ghana’s Draft Competition Bill is currently before parliament awaiting passage into law, and Egypt and Mauritius amended their competition legislation by introducing or giving effect to new provisions and regulations. In South Africa, price discrimination and buyer power provisions that were previously introduced by the Competition Amendment Act have since come into effect. Regulations were also issued to facilitate the interpretation and application of these provisions,” said Tzarevski.
In addition to country-specific regulation, a number of regional competition regulators in Africa are impacting domestic markets. Such regulators include the West African Economic Monetary Union (WAEMU), the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA), the Economic Community of West African States (ECOWAS) and the Economic and Monetary Community of Central Africa (CEMAC). While not a regional regulator, the African Competition Forum, an association of African competition agencies, promotes competition policy awareness in Africa and the adoption of competition policies and laws. The Forum also facilitates regular contact between authorities, creating a platform for the sharing of best practice and domestic competition trends.
“African competition law continues to develop at a rapid pace, boosted by the implementation of protective strategies necessary during the peak of the pandemic. An increasing number of jurisdictions have adopted laws and regulations, established authorities, secured membership to regional antitrust regimes and ramped-up enforcement of suspected violations of prevailing competition laws at both domestic and regional levels.
As such, organisations transacting across borders in Africa must ensure they are compliant with a myriad of local and intersecting regional competition laws to avoid facing the wrath of the continent’s competition authorities. Access to standardised, cross-border information on the latest competition law developments in Africa has become essential for those transacting in the region,” added Naidu.
Baker McKenzie recently produced a comprehensive guide covering the latest developments in African competition law in 25 countries across the continent – An Overview of Competition & Antitrust Regulations and Developments in Africa: 2021
By Angela Matthewson for Baker McKenzie Johannesburg
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