Business Law: Enterprise & Legal Structures

• The text addresses business law, including implicit labor laws
• Business law applies to economic activities as they exist today

Enterprise Definition

• It's an economic unit
• A unit of organized production or distribution
• Has a permanent nature, pooling human and material resources to seek profits

Infraction Levels

• Contravention
• Misdemeanor
• Crime

Legal Structures

• Law consists of rules binding on individuals within a territory
• Individual businesses blur the line between the entity and the entrepreneur
• Unit of assets are discussed, even if there is a sole proprietorship (OHADA).
• Companies are distinct legal entities from their members
• A company agreement creates a commercial entity (Chapter 3)
• Regardless of individual or corporate status, businesses operate in a competitive environment

Important point

• A person is called so because they have the legal right to own property, the ability to hold rights and assume obligations
• The consequences include name, address, nationality and property
• Assets equal property plus debt plus credit

Individual Businesses

• Do not have legal existence
• The entrepreneur operates in their name and on their account
• In most cases, such an activity is commercial and gives its holder merchant status (Section 1)
• It's assets consist partly of business

Merchant Legal Status (Section 1)

• The OHADA Uniform Act came into effect in 1998
• According to Article 2 of the Uniform Act on General Commercial Law: "Merchants are those who perform acts of trade and make them their habitual profession."

Act of Commerce

• Exchanges to obtain profit
• Habit is characterized by the constant repetition of acts of the same nature
• A trader is defined by the nature of actions performed (Paragraph 1)
• An occasional exercise does not automatically confer merchant status
• The definition excludes those who retain civil or liberal character (e.g. farmer, doctor, lawyer)
• Access to commercial profession is strictly governed by law (Paragraph 2)

Acts of Commerce

• The Uniform Act on General Commercial Law lists an act that, when performed, necessarily creates a commercial element
• Three categories are distinguished, those by nature, form and the theory of accessory

Acts of Commerce by Nature

• Purchase of movable or immovable property for resale
• Banking, exchange, stock exchange, transit, insurance, brokerage
• Industrial exploitation of mines, quarries and natural resource deposits
• Movable property rental transactions
• Manufacture, transport, telecommunications transactions
• Intermediary operations (broker, agent, commission agent)
• Sale or rental of businesses, shares in commercial companies

Commercial Acts by Form

• According to Article IV of the Uniform Act on General Commercial Law, the letter of exchange, the bill of exchange and the ? constitute acts of commerce by form
• They are trade bills, i.e. negotiable instruments used by the trader in the course of his trade or exchanges

Commercial Acts by Accessory

• Accessory acts of commerce are purely civil acts carried out by traders in the course of their business
• for example, purchasing computers, office equipment, etc for the needs of the business

Access to The Commercial Profession

• Law sets a principle (A) but this principle admits exceptions (B) to access the commercial profession

The Principle

• Derives from the principle of freedom of trade and industry
• Any person may normally declare them self as a trader or manufacturer, without impediment, and freely exercise the profession of entrepreneur
• It entails freedom of exercise and freedom of choice of commercial activity
• This freedom of enterprise and the exploitation of all trade is a public freedom, but this principle admits exceptions.

Exceptions to The Principle

• Restrictions apply to individuals (a) and to businesses (b)

Restrictions Relating to Persons

• Meant to protect a private or public interest
• Concern incapacities, prohibitions and incompatibilities

Incapacities

• Restrictions intended to protect individuals who wish to practice the commercial profession
• Article VI of the OHADA Uniform Act on General Commercial Law states that "No one may perform commercial acts on a regular basis unless they are legally capable of practicing commerce"
• Concerned are unemancipated minors, immature persons, adults who do not enjoy all their mental faculties and persons recognized as unable to manage their own affairs

Prohibitions

• Removal of a power rather than legal capacity
• Those convicted of economic or financial crimes
• The aim of the prohibition is to remove from the world of commerce certain persons who do not offer a necessary and sufficient guarantee of morality to practice commerce

Incompatibilities

• Concerning persons whose profession is incompatible with carrying on a commercial activity
• There is no incompatibility without a text (it is the law that provides for incompatibilities)
• Incompatibility results either from a special status established by national law or from Article IX of the OHADA Uniform Act
• This Article concerns civil servants, staff of public authorities, ministerial officers and judicial auxiliaries such as lawyers, bailiffs, accountants and chartered accountants, notaries, commissioners and marine experts
• Consequences for non compliance, they will be suspended or removed from office

Restrictions Relating to Certain Trades

• Admitted in the general interest that the authorities restrict the practice of certain trades
• Reference is then made to prohibited businesses and businesses subject to administrative authorization
• Prohibited businesses; for public safety reasons, sale of drugs or weapons is prohibited
• Businesses Subject to Administrative Authorization; these restrictions allow the state to control the country
• Authorizations take the form either of an establishment permit, or a license to operate (road transport)
• For foreign personnel, an authorization is also required unless there is an establishment agreement between the country of origin and the country of residence

Obligations of The Trader

• The obligation of the trader to register with the registry of trade and regular business
• Registration is carried out at the Registry

The Obligations of The Trader

• Provide all information concerning identity, marital status and activity
• A registration number will then be provided

The Accounting, Tax and Financial Obligations

• Keeping accounts is a characteristic major obligation.
• The trader must keep a journal, a ledger, and an inventory book, with an overall recapitulative balance sheet
• These documents must give a true and fair picture of the company's assets, financial situation and results
• This true image must comply with the accounting principles recognized
• Failure to comply with accounting obligations entails two types of sanctions: tax sanctions and criminal sanctions
• There are other obligations, such as the obligation to pay the license fee (business tax), income tax and corporate tax
• VAT is collected by the trader and paid by the customer.
• The court will be able to ascertain the causes and decide either on judicial reorganization or liquidation of assets if it consults the books of commerce in the event of bankruptcy (failure)

Compliance with Competition Law Rules

• Set by Law No. 94-63 of 22 August 1994 on prices, competition and economic litigation

Compliance with Labor Law Rules; in the form of work

Trader Rights

• Law provides a certain number of prerogatives

The Right to Have Recourse to Arbitration

• Alternative means
• Recourse is conditional for legal arbitration
• There are two forms: an arbitration clause inserted in the basic contract and this clause provides that the dispute will be settled by arbitration in the event of a conflict
• Arbitration is a procedure that allows recourse to private individuals with certain expertise in a well-defined area to resolve a commercial dispute
• The arbitrator then renders a decision called an arbitral award
• The award is given in law or in equity and can be enforced by the competent court
• In commercial matters, arbitration takes place under the aegis of the Common Court of Justice and Arbitration of OHADA

The Right to Have Recourse to The Principles of Freedom of Proof

• Evidence is made by average cost in commercial matters: it is the principle of freedom of evidence that applies
• The different means of proof are: writing; this writing may take the form of an authentic instrument or a private agreement
• Testimony
• Swearing
• Admission
• Presumptions
• Common Fame
• Since 2008, electronic evidence has been admitted

The Right to Renew a Lease

• Well protected by the law against arbitrary expulsions, as a trader, tenant of the premises where they carry on business
• Therefore, in order to terminate the lease, a legitimate reason is required

Business Assets

• The traders assets consist essntially of the assets of the business including a certain number of items

The Constituent Elements of The Business Assets

• It consists of two elements: tangible and intangible

Elements of Corporeal

• The tangible property used for the operation of the business: furniture, industrial equipment, tools
• Merchandise; goods intended to be sold in the state strict sense merchandise or finished products or after processing row materials or semi finished products

The Intangible Elements

• Determine its legal nature of movable incorporeal property
• Goodwill: defined from the clientele for the fund allows the merchant to attract and preserve customers
• Goodwill becomes the essential element because the clientele is made up of all the people who are in business with a trader. the clientele is the main fund of the business
• Achalandage; designates occasional or passing customers.
• Trade Name; Name under which a person trades

The Sign

• Emblem by which an institution is distinguished from other institutions engaged in similar activities and serves to attract customers
• Intellectual Property Rights: Rights or that are both
• Two categories: Industrial Property Rights (patents, designs and models, trademarks) and Literary and Artistic Property Rights (monopoly

-Industrial property right grants its holder an exclusive exploitation right for an invention or for exploitation or for a discovery

Operations on Business Assets

• A business asset may be affected by three legal transactions.
• Sales, pledging (loans money) and lease Management
• A contract is a manifestation of will between two or more persons creating obligations and for the benefit of another
• The same operation is called cession of funds of trade or cession of debt; the cession of trade

Lease Management

• Occurs when the owner of a business grants a lease to a manager who operates it at their owns risk, allows for a separation between ownership and operation of the fund
• In the event creditors’ insolvency occurs, the law specifies the relations between the manager and the contract’s lessors

Business Asset Insurance

• Transaction that does not involve dispossession of the owner

Intangible elements

• Clientele: everyone who does relation with merchants and is the main factor
• Achalandage: people who occasionally pass by

Trade Name

• Name or Fantasist

Related Intellectual Properties

• Patrimonial Rights
• Two categories: Industrial property (patents, licensing commercial brands) and Literary rights.

Trade Name Protections

• Legal action and or conventional (clauses in contractual)
• Protections are related to criminal code of commerce

Society and Moral Personality

• Resulting from entrepreneur’s choice and partners
• To create moral personality that distinct from partners: which signifies the separation of all risks Any moral person will have governing functions in the society.

Rules that must be known to make proper society:

• The capacity to contract parties: must have juridical aptitudes depending on the case like SA, SARL, or SCS
• The consent of all parties to collaborate to be collaborative and collective: affectio societatis
• All capital should be shared and brought in together: which also can be monetary or categorized

Different forms of shared Capitals

• Numerical Support : Monetary Support, ½ capital in SARL and ¼ in SA has to liberated.
• Natural State : furniture or real-estate whether its corporeal or incorporeal.

Industrie Support

• SNC (Non collective Society) SAS ( Simplified Society) its expertise techiniques or skills which fixed in statuts of society

Securities

• All securities give and are given by the power of votes, with the exemption that industrial support cannot exceed 25 percent

Societal Object

• What separates between civilian and commercial society
• Example commercial for communications means it can communicate
• The legal capacity is limited to his objects in the society

Reason

• Profit together or suffer losses together

Society Contract :

• Should be written in statuts, for a society to be establish with the inscription of juridical inscription.

Statuts:

• Should be written by founders publically or authentically and should include
  • The form of the society , its object social, the adress, maximal duration of society which are 90 renewlable, capital and the functions

Registration At the registry of trade

• All societies ought to be to registred with the tribunal that as commercial competence with the exemption of SP (part Society which entail the nullity of societal function)

To remedy this situation

• To apply a penalty for the people that don’t respect all condition of forms
• With two hypothesis when a society created -Created from fact: When people act as fact but it created from SAS or SARL -Society from Acts juridical when has faults with juridical rules, from the lack of societal inscription it follow the rules of the non-associative society

With Solidarity between commerce

When a business is established, regulation requires defining rules function the organizations (3 organs) of society

Organs Associations

• Establish foundations and societal chief it those who drive before constitution of society
• Function of founders is finished for the society when it is created from signatures in society

Societal Directors

• People whom make those function in societal with inscription juridical, also the function is open to all personal associatives or not

Power of directors

• Legal power is representative of the society, they poses the most extensive, they should in all condition respect what societal status asked for
• Each societal director that take action may engage societal if it confirm to object social but if the opposite is it for the better, societal doesn’t commit
• Civilly and illegally, if commit faults it his manage societal which engage visibility of associtives

Society control

• Are commissarites that have an essential mission is to survey and control accounts
• Commissariates should be invoked when the society assembly should present certification motifs of reserves when certification are shown Commissiariat should help to clarifies societal

Organe of Deliberation

• Take a part actions shareholders
• A Societal action is a decision or a extra ordinaire
• A societal that doesn’t affect actions of statuts
• An extraordinaire societal modify that does affects rules of society

Rights of associated and actions

• Associates that are in action it two kind numericals emissaries societal capitals associates in support that obligated in status it support

In SARL

• Associates and action that share that benefit from the society liquid funds societal parts, but also for voting time also to has 2 vote and right for communication for society action for good action and to good managerial

The Ends

• Society to evolve and to disappear, there are fusion.

What can happens

-The business encountered economic issues with the judgement pronounces society that gives economic stability juridlical liquidation that sanction chiefs for committing faults

• To study the specified rules functions to society types, to societal and action capital and the function’s to SARL -Associaties are commercial for SNC 18mineur accepted in SCS societal to be transformed in SarL

Society of numerical are and SAS 3 actions minitaires with a chief

SarL is an hybride society that isn’t limited but the value can’t BE under 5milliers , Death that donèsnt end in society expect if clauses 2-Part law: It constitutions the subordonnes functions and laws It constitutions sources or constitution and conventions

• Law 9717 ,7 junvier 1997.

Labour Law, and it Constitutions that it is a branch private

• It constituted the functions of the 22 janvier 2001 conventions that constitute the tribunal to apply to contrat The juridcional pridence is constituted the assembée which exists with activities It study contracts and their functions , suspendus

From Functions which the worker commits to take the responsabilities and execute workers

• Can only happened with worker commit

• Juridlicaux of the worker to take decisions

• Remunerer which can apply to all types of services which a societal worker perform with a salary -Accesso to functions contrat of professional functions contrat with apprentice

Contrath Of stage

• With the apprentie is a juridlical that it professional metho
• All contrats with apprentices should need writing.

Contrath Engagement

• Functions of services contrat and all engagements by contracts.
• Conditions is work , security remunerations where applicable can lead to an indéfini term where 6 months maximals is renewed with one -Can all be finished for all momment.

Stage in societal

• Law 20157 modifications in the code of juridliction of workers for interdoucing stage for workers.

A code for all personel who 16 plus and the following diplômes from the school contratl should written and the services more de 2 years Au senegal functions the stage

Permanent fonction

• Functions with the right functions when time is the right to professional stability . written when
• L’emploi functions, determinati fonctions with workers and functions for temporaty moments.

Durée Determiner

Written when you can expect from the entreprises contrat with entreprise

• Workers should write it determinement

contrat should

• A duration légales years that renouvelable is also accepter with functions with stage is a partiels

Exceptions: contrat the term is renewed when the person commits the service

• It for only one with fonction, not written so it can benefit worker in general

Explore business law, including implicit labor regulations, and the definition of an enterprise as an organized economic unit. Understand infraction levels (contravention, misdemeanor, crime) and legal structure distinctions between individual businesses and companies. Chapter 3 company agreements are discussed