_____________________________LEGAL ISSUES AND THE

ENTREPRENEUR_____________________________

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The major legal forms of business are the

1. Sole proprietorship, 2. Partnership,3. Corporation,4. Saccos,

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Doing Business in Kenya Procedure Time to

CompleteAssociated Costs

Name search at Sheria House 3 days KES 100 per name reservation

Stamp the memorandum and articles and a statement of the nominal capital

5 days 1% of nominal capital + KES 2,020, stamp duty on MOA and AA

Pay stamp duty 1 day (included in the previous procedure

KES 100 bank commission

Declaration of compliance (Form 208) is signed before a Commissioner of Oaths /notary public

1 day KES 200

File deed and details with the Registrar of Companies at the Attorney General's Chambers in Nairobi

7- 14 days KES 6360

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Doing Business in Kenya Register with the Tax Department for a PIN and VAT online

1 - 2 days no charge

Apply for a business permit 5 days KES 5,000Register with the National Social Security Fund (NSSF

1 day no charge

Register with the National Hospital Insurance Fund (NHIF)

1 day no charge

Register for PAYE 1 day no chargeCompany SealMake a company seal after a certificate of incorporation has been issued.

2 days KES 2,500 and KES 3,500

It is an enterprise that is owned and operated by one person.

Usually, he is the individual who ◦ has day-to-day responsibility for running the business◦ owns all the assets of the business and the profits

generated by it◦ assume complete responsibility for any of its liabilities

or debts◦ in the eyes of the law and the public, he is one in the

same with the business.

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SOLE PROPRIETORSHIP

Name search at Sheria House @ KES 100If the name is ok get license of operation from NCC @ KES 5,000

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Legal Requirements for Sole Proprietorship

A Partnership is where two or more people share ownership of a single business.

Like proprietorships, the law does not distinguish between the business and its owners.

The partners should have a legal agreement known as a partnership deed.

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PARTNERSHIP

Name search at Sheria House @ KES 100 Then get operating license of operation from NCC @ KES

5,000 Since a partnership has more than one owner entrepreneurs

are advised to register a partnership deed as well @ 3,999 to the lawyer

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Legal Requirements for Partnership

It is designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.

Formation is more complex and formal than that of a partnership because of MOA and AA

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LIMITED LIABILITY COMPANY (LLC)

There are 5 basic forms of intellectual property that can be protected:a) Patentsb) Copyrightsc) Trademarksd) Mask workse) Trade secrets.

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INTELLECTUAL PROPERTY

LACK OF PATENTING HURTS INFORMAL SECTOR INNOVATORS.docx

http://www.businessdailyafrica.com/Corporate%20News/Kenyan%20innovators%20face%20off%20with%20big%20business/-/539550/1048816/-/view/printVersion/-/idmtirz/-/index.html

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LACK OF PATENTING HURTS INFORMAL SECTOR INNOVATORS

A patent is a set of exclusive rights granted by a government (Kenya Industrial Property Institute)to an inventor for a limited period of time in exchange for the public disclosure of an invention.

When a patent is issued, the government grants the owner of the patent, the right to exclude others from making, using or selling the invention.

I.e. others may not make, use or sell the patented invention without the authorization of the patent owner.

After the patent expires, anyone may make, use or sell the invention.

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INTELLECTUAL PROPERTY: Patents

Inventions in any field of Technology. Any device, substance, method or process

Human Necessities: Agriculture, foodstuff, to personal or domestic articles, health and amusement.

Performing operations and transporting: separating, mixing, shaping, printing and transporting.

Chemistry and metallurgy. Textiles and paper. Fixed Construction: Building, earth moving

mining. Mechanical engineering, lighting, heating, weapons, blasting

including engines, pumps and engineering in general Physics: Instruments and nucleonic. Electricity

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What can you Patent?

“It is unfortunate that most of the innovators are losing big time for not registering their patents. They are going out there with their innovations before securing the rights over the ideas and in such cases, the innovation, irrespective of whether it is yours or not is as good as lost,” Such is the challenge that Ronald Angwenyi, a UON graduate in food science and technology, faced in his battle against Bidco Oil over a baking powder brand that the consumer goods giant launched in the Kenyan market last year.

Mr Angwenyi moved to court claiming that the product, launched under the Mariandazi trade name, was his invention. Bidco, he said, had used a formula he invented while on attachment with the consumer goods giant to develop the product without compensating him for his skill, knowledge and originality.

Bidco had argued the plaintiff had not registered the innovation as a patent and could therefore not claim ownership of it. Lady Justice Martha Koome ruled that with oral evidence, it was impossible to know whether Bidco was using Mr Angwenyi’s research paper and ideas to make the product and threw out the case. 14

CASES: Mariandazi

Equity Bank and Safaricom are facing a similar court battle against businessman Hoswell Mbugua Njuguna, who wants the two corporate giants blocked from using M-Kesho, the mobile banking platform that they launched in May and which has more than 600,000 users.Mr Njuguna alleges that M-Kesho is a registered trademark that Equity Bank got to know of four years ago when he presented the mobile banking concept to them but the meetings stopped without any deal being struck, Mr Njuguna submitted in a case that is fixed for hearing on November 19. Though not in the original suit, Safaricom has recently been enjoined in the suit as an interested party.

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CASE: M-Kesho

Nokia is fighting a similar battle against two University of Nairobi students, Pascal Katana and Jeremiah Murimi, who want the mobile phone manufacturer stopped from exploiting a device they claim to have invented to charge mobile phones.The duo accuses the company of unauthorised exploitation of the product that involves use of bicycles to charge phones for commercial gain without compensating them.

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CASE: M-Kesho: mobile phones device

The following are not regarded as inventions and are excluded from patent : 1. Discoveries or findings that are products or processes of nature where

mankind has not participated in their creation e.g. plants, microorganisms2. Scientific and mathematical methods and theories. 3. Schemes e.g. investment, methods of bookkeeping or insurance schemes. 4. Business methods e.g. credit or stock methods 5. Computer programs 6. Rules for playing games (The games equipment may be patentable). 7. Methods for treatment of human or animal body by surgery or therapy,

as well as diagnostic methods; 8. Public Health related methods of use or uses of any molecule or other

substances whatsoever used for the prevention or treatment of any disease which the Minister responsible for matters relating to health may designate as a serious health hazard or as a life threatening disease.

9. Mere presentation of information.

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Exceptions

There are 5 basic forms of intellectual property that can be protected:a) Patentsb) Copyrightsc) Trademarksd) Mask workse) Trade secrets.

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INTELLECTUAL PROPERTY

The exclusive legal right, given to an originator or an assignee to print, publish, perform, film, or record literary, artistic, or musical material, and to authorize others to do the same.

Copyrights are directed to forms of expression. A copyright is obtained the moment the expression is created so that it

may be perceived either directly or through the aid of a machine or device.

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INTELLECTUAL PROPERTY: Copyrights

Fight against software piracy.docx

http://softkenya.com/law-kenya/copyright-kenya.htm

http://www.mcsk.or.ke/ : Music copyright Society of Kenya

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INTELLECTUAL PROPERTY: Copyrights

Works covered by the copyright includes;i. Booksii. Musiciii. Dancesiv. Playsv. Moviesvi. Paintingsvii. Sculpturesviii. Photographsix. Broadcastsx. Sound Recordingsxi. Computer Software

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INTELLECTUAL PROPERTY: Kenya Copyright Board

There are 5 basic forms of intellectual property that can be protected:a) Patentsb) Copyrightsc) Trademarksd) Mask workse) Trade secrets.

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INTELLECTUAL PROPERTY

A Trade Mark is a sign which serves to distinguish the goods of an industrial or a commercial enterprise or a group of such enterprises.

The sign may consist of one or more distinctive works, letters, numbers, drawings or pictures,, signatures, colours or combination of colours etc.

A Trade Mark can be a word, a symbol , a design, or a combination of these, used to distinguish the goods or services of one person or organization from those of others in the market place.

Upon registration, a trademark is valid for ten years.

The regulatory authority in Kenya is Kenya Intellectual Property Institute located at South C, Nairobi.

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INTELLECTUAL PROPERTY: Trademarks

They protect the goodwill and reputation of therespective business entities.

They also prevent confusion, helping consumers identify the trademarked products or services.

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What is the purpose of a trademark?

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Example of trademark?

There are 5 basic forms of intellectual property that can be protected:a) Patentsb) Copyrightsc) Trademarksd) Mask workse) Trade secrets.

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INTELLECTUAL PROPERTY

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INTELLECTUAL PROPERTY: Mask works

A mask work is a creative work protected under the Semiconductor Chip Protection Act.

Although nowadays few chip makers worry about it, there was a time several years ago when semiconductor chip makers were concerned that a competitor would knock off a semiconductor chip by purchasing one of the chips, removing the semiconductor layers one by one, photographing the layers, and using the photographs to generate replicas of the chip.

The Semiconductor Chip Protection Act was intended to allow chip makers to register the masks, which would then provide certain remedies against copiers. The protection is thus a copyright-like protection.

There are 5 basic forms of intellectual property that can be protected:a) Patentsb) Copyrightsc) Trademarksd) Mask workse) Trade secrets.

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INTELLECTUAL PROPERTY

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INTELLECTUAL PROPERTY: Trade Secrets

A trade secret is a formula, practice, process, design, instrument, pattern, or compilation of information which is not generally known or reasonably ascertainable, by which a business can obtain an economic advantage over competitors or customers.

In some jurisdictions, such secrets are referred to as "confidential information" or "classified information".

To qualify as a trade secret, the company/owner must take reasonable efforts to keep it secret.

Sales and marketing plans can be considered trade secrets, as are computer files sales data.

Best example of a trade secret is the formula for Coca-Cola.

Conceive itBelieve itAchieve it!

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Motto for Entrepreneurs