Chapter-2 Construction Laws and Regulations: Construction Law Handout For COTM 4 Year Regular Students
Chapter-2 Construction Laws and Regulations: Construction Law Handout For COTM 4 Year Regular Students
Chapter-2
2. Construction laws and regulations
2.1. INTRODUCTION
CONSTRUCTION
In the fields of architecture & civil engineering, construction is a process that consists of the building
or assembling of infrastructure.
The term construction is not defined directly by law in Ethiopia. The concept is known as “works”.
According to Article 2(3) of Proclamation No. 649/2009 i.e. the Ethiopian Federal Government
Procurement & Property Administration Proclamation, works is defined as follows.
“Works mean all work associated with the construction, reconstruction, upgrading,
demolition, repair or renovation of a building, road, or structure, as well as services
incidental to works, if the value of those services does not exceed that of the works
themselves and includes build-own-operate, and build-own operate-transfer and build-
operate-transfer contracts.”
The definition encompasses the following points:
It includes all possible works;
It provides illustrations for the works;
It includes also services incidental to works;
It includes also possible types of contractual arrangements based on the possible
contractual obligations of that of the contractor.
According to Article 2(9) of the Ethiopian Building Proclamation (Proc. No. 624/2009) the term
construction, from building perspective, has been defined, as follows:
““Construction” means the construction of a new building or the modification of an existing
building or alteration of its use.”
Construction Law
Construction law is a body of law that deals with matters related to building construction & related
fields. It covers a wide range of legal issues including contract law, bonds & bonding, guarantees &
securities, liens & other security interests, tendering, construction claims & related consultancy
contracts.
There is no definition given to construction law under the Ethiopian law.
Construction law may cover the whole range of the relevant legal regulation in terms of the
construction project’s planning, study, design, financing, execution, (in terms of say: maintenance,
repair, demolition…) supervision & operation or use of same.
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Construction law handout for COTM 4th year regular students
The scope of construction law should be seen from the following perspectives or dimensions i.e. in
terms of legal regulation of:
investment in construction; ethics & anti-corruption in
construction business; construction;
construction project; public decision services; and
contracts; legal liability;
dispute resolution;
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Construction law handout for COTM 4th year regular students
The peasants and pastoralists are affected in terms of their possession of land and any financial or
proprietary benefit on the land.
The urban dweller is affected in terms of his possession of land & ownership to his building...
The public enterprises are affected in terms of their service supply network (utility lines). Utility
lines means telecommunication lines, electric lines, water lines, sewerage lines. …And others
The expropriation measure has to be taken in advance to avoid any possible delay or disruption to
the Construction Project.
The urban land shall be ready through the process of land clearance.
The lease system is followed, as per Proc. No. 272/2002.
Expropriation of Landholdings for Public Purposes and Payment of Compensation
Proclamation (Proclamation No.455/2005)
"compensation" means, payment to be made in cash or in kind or in both to a person for his
property situated on his expropriated landholding;
"landholder" means an individual, government or private organization or any other organ which
has legal personality and has lawful possession over the land to be expropriated and owns
property, situated there on;
Power to Expropriate Landholdings
A woreda or an urban administration shall, upon payment in advance of compensation in
accordance with this Proclamation, have the power to expropriate rural or urban landholdings
for public purpose where it believes that it should be used for a better development project to be
carried out by public entities, private investors, cooperative societies or other organs, or where
such expropriation has been decided by the appropriate higher regional or federal government
organ for the same purpose.
Notification of Expropriation Order
1. Where a woreda or an urban administration decides to expropriate a landholding in accordance
with Article 3 of this Proclamation, it shall notify the landholder" in writing, indicating the time
when the land has to be vacated and the amount of compensation to be paid.
2. The period of notification to be given in accordance with Sub-Article (1) of this Article shall be
determined by directives; provided however, that it may not, in any way, be less than ninety
days.
3. Any "landholder who has been served with an expropriation order in accordance with Sub-
Article (1) of this Article, shall handover the land to the woreda or urban administration within
90 days from the date of payment of compensation or, if he refuses to receive the payment, from
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the date of deposit of the compensation in a blocked bank account in the name of the woreda or
urban administration as may be appropriate.
Responsibilities of the Implementing Agency
The implementing agency shall have responsibilities to:
1. prepare detail data pertaining to the land needed for its works and send same, at least one year
before the commencement of the works, to the organs empowered to expropriate land in
accordance with this Proclamation and obtain permission from them; and
2. pay compensation in accordance with this Proclamation to landholders whose holding have been
expropriated.
Procedures for removal of Utility Lines
1. Where land over or under which utility lines, owned by a federal or regional government office
or public enterprise, pass is to be expropriated, the body requiring the land shall submit, in
writing, its request to the owner by indicating the exact location of the lines to be removed.
2. The body which has received are quest under Sub..Artic1e (I) of this Article shall' within 30 days
from receipt of such request determine a fair compensation required to replace the lines to be
removed and send details of its valuation to the requesting body.
3. The body which requested the removal of utility lines, shall pay compensation to the owner
within 30 days from the date of receipt of the valuation under Sub-Article (2) of this Article. The
owner shall also remove the utility lines and vacate the land within 60 days from the date of
receipt of compensation.
Determination of compensation
1. The amount of compensation for property situated on the expropriated land shall be Determined
on the basis of replacement cost of the property.
2. Where the compensation referred to under Sub-Article (2) of this Article is pay able to an urban
dweller, it may not, in any way be less than the current cost of constructing a single room low
cost house in accordance with the standard set by the concerned region.
3. Compensation for permanent improvement to land shall be equal to the value of capital and
labour expended on the land.
4. The cost of removal, transportation and erection shall be paid as compensation for a property
that could be relocated and continue its service as before.
5. Valuation formula for determining compensation for various properties and detail prescription
applicable there to shall be provided for by regulations
Displacement Compensation
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1. An urban landholder whose landholding has been expropriated under this Proclamation shall:
A. Be provided with a plot of urban land, the size of which shall be determined by the urban
administration, to be used for the construction Of a dwelling house; and
B. Be paid a displacement compensation equivalent to the estimated annual rent of the demolished
dwelling house or be allowed to reside, force charge, for one year in a comparable dwelling
house owned by the urban administration.
Valuation of Property
1. The valuation of property situated on land to be expropriated shall be carried out by certified
private or public institutions or individual consultants on the basis of valuation formula. adopted
at the national level.
2. Until such time that the Ministry of Federal Affairs, in consultation with the appropriate federal
and regional government organs, ascertains the creation of the required capacity to take
valuation of property as specified under Sub-Article (I) of this Article, such valuation shall be
carried out by' committees to be established in accordance with Article (10) of this Proclamation
and owners of utility lines in accordance with Article (6) of this Proclamation
Property Valuation Committee
1. Where the land to be expropriated is located in a rural area, the property situated thereon shall
be valued by a committee of not more than five experts having the relevant qualification and to
be designated by the woreda administration.
2. Where the land to be expropriated is located in an urban center, the property situated thereon
shall be valued by a committee of experts having the relevant qualification and to be designated
by the urban administration.
3. Where the property situated on a land to be expropriated requires specialized knowledge and
experience, it shall be valued by a separate committee of experts to be designated by the Woreda
or the urban administration.
4. The working procedures for the committees established in accordance with this Article shall be
determined by directives.
Complaints and Appeals in Relation to Compensation
1. In rural areas and in an urban center where an administrative organ to hear grievances related
to urban landholding is not yet established, a complaint relating to the amount of compensation
shall be submitted to the regular court having jurisdiction.
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2. Where the holder of an expropriated urban landholding is dissatisfied with the amount of
compensation, he may lodge his complaint to the administrative organ established by the urban
administration to hear grievances related to urban land holdings.
3. The organ referred to in Sub-Article(2) of this Article shall examine the compliant and give its
decision with in such short period as specified by directives issued by the region and
communicate its decision to the parties in writing,
4. A party dissatisfied with a decision, rendered in accordance with Sub-Article (I) and(3) of this
Article may appeal, as may be appropriate, to the regular appellate court or municipal appellate
court within30days from the date of the decision. The decision of the court shall be final.
5. An appeal submitted, pursuant to Sub-Article (4) of this Article, by any landholder served with
an expropriation order maybe admitted only if it is accompanied with a document that proofs
the handover of the land to the urban or Woreda administration.
6. The execution of an expropriation order may not be delayed due to a complaint regarding the
amount of compensation.
2.2.1.2. Re-Enactment of Urban Lands Lease Holding Proclamation
(Proclamation No.272/2002)
"Lease" means lease-hold system in which use right of urban land is transferred or held
contractually;
"Appropriate Body" means a body of a Region or a City Administration. Vested with the power to
clear by lease and administer land;
Period of Lease
the period of lease shall be vary depending on the level of urban' development and sector of
development Activity or the type of service 'and shall have the ceiling of:
A) In any town
1. up to 99 years for housing (personal and leasable), science, technology; research, and study,
government office, non-profit making philanthropist organization, religious institution; ,
2. Up to 15 years for urban agriculture;
3. as per government agreement for diplomatic missions and international organizations;
B) In Addis Ababa and in a town designated as of the grade of Addis Ababa:
1. Up to 90 years for education, health, culture, sports; ,,‘
2. Up to 60 years for, industry;
3. up to 50 years for commerce;
4. up to 50,years for Others.
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C. shall make payment every year, and the yearly payment shall amount to the average price of the
remaining lease payment divided over the period payment;
D. shall pay interest over the remaining payment as per the rate of interest on loan offered by Bank.
E. shall pay penalty fee according to the rate of penalty fee imposed by Bank upon debtors on
account of default of loan payment; ,
Termination of Lease-hold and Payment of Compensation
1. The lease-hold of urban land shall be terminated:
A. Where the lease-hold possessor has failed to use the land in accordance with Sub-Article (1) of
Article 12;
B. where it is decided to use the land for a public interest; or
C. where the period of lease is not renewed in accordance with Sub-Article (1) of Article 7.
2. The lease payment shall be returned subject to the reduction of costs incurred and penalty fee,
where the lease-hold of urban land is terminated' in accordance with Sub-Article (1) (a)of this
Article.
3. Where the lease-hold of urban land is terminated in accordance with Sub-Article, (1)(b) of this
Article, the lease-hold possessor shall be paid commensurate compensation in conformity with
the pleadings institution procedure set forth in Article 17.
4. Where the lease-hold of urban land is terminated in accordance with Sub-Article (1) (c) of this
Article the lease-hold possessor must hand over the land to the body which gave it by removing
within one year the property he has on the ground.
5. The body, which handed the urban land over to the lease-hold possessor, may take over the land,
together with the property thereon without any payment, where the latter has failed to remove
the property on the ground within the period of time set forth in Sub-Article (4) of this Article It
may order the Police where it finds it necessary for the execution thereof.
6. Where contract, of lease is terminated in accordance with the provisions of this Article, the
taking over of the land shall take place pursuant to the provisions of Article 20.
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Theoretical Background
There is no unified and comprehensive body of Environmental Law in Ethiopia and in most
developing countries.
Environmental Law is a growing field of Law.
The scope of “environment” is wide enough to include everything.
Environment may be considered as everything surrounds us. It is composed of both living &
nonliving things.
For our discussion, it is better to understand the concept of “sustainable development”.
Definition of & Approaches to Sustainable Development
Sustainable Development means development that meets the needs of the present
generation without compromising the ability of future generation to meet their own needs.
There are four elements embodied in this broad definition:
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The need to preserve natural resources for the interest of future generation. It
contains intergenerational equity. This shows distribution (of natural resources) in
terms of time.
It embodies the principle of sustainable use (of natural and environmental
resources).
It embodies intra generational equity. That is the distribution of natural resources
among the members of the present generation. This is distribution (of natural
resources) in terms of space.
It embodies integration of environment with development. It means development
activities should go harmoniously with the environment.
The last one is crucial and relevant to the Construction Project.
Based on the definition given to Sustainable Development there are the following
approaches/scenarios:
Strong Sustainability;
Weak Sustainability; and
Intermediate Position/ Scenario;
According to strong sustainability we should leave future generations the same
environmental resources as we ourselves inherited. It does not consider the issue of non-
renewable energy.
According to weak sustainability distinctive justice between generations requires each
generation to pass onto the next generation an equivalent or better total stock of overall
resources including infrastructure, knowledge and technological capacity than it inherited. It
allows the degradation of the environment as long as we substitute man-made capital or
leave a fund to an equivalent value so that the total level of consumption remains the same.
According to the intermediate position, we must leave our successors the same options that
are available to us. For example, if we use up oil we must provide alternative energy sources.
The Ethiopian Constitution adopted the intermediate position.
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contravention of any condition, limitation or restriction made under this Proc. or under any
other relevant law.
Pollution may result by any substance (pollutant) either in solid or liquid or gaseous form.
The policy reason to enact such Law is:
Some of the social & economic development endeavors may be capable of causing
environmental impacts that might be detrimental to the development process itself;
The protection of the environment in general and the safeguarding of human health
and wellbeing , and the preserving of biota is the duty and responsibility of all; and
It is essential to prevent or at least minimize to acceptable levels pollution resulting
from economic development through appropriate measures;
To fully enforce this Proc. there is a critical pre-requisite to be fulfilled: the enactment of
Environmental Standards.
These standards are necessary to determine pollution with respect to water pollution, air
pollution, soil contamination, noise pollution, atmospheric pollution…
There is also a need to establish a well-equipped Environmental Laboratory.
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2. Any person who, without to obtaining authorization from the Authority or the relevant regional
environmental agency, or makes false presentations in an environmental impact assessment
study report commits an offence and shall be liable to a in of not less than fifty thousand birr and
not more than one hundred thousand Birr.
3. Any person commits an offence if he fails to keep records or to fulfill conditions of authorization
issued pursuant to this Proclamation and shall be liable to affine of not less than ten thousand
Birr and not more than twenty thousand Birr.
Employing & administering workers under the Labour Law brings with it certain peculiar environment
& legal consequences. The legal framework is provided under: Labour Proclamation No, 377/2003;
Labour Proclamation (Amendment) No. 466/2005;
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The specified piece of work or definite period Contract of Employment is highly relevant for the
employment of Workers for the Construction Project.
2.2.3.2. The Public Service Law
The legal framework is provided under Federal Civil Servants Proc. No. 262/2002;
This law may not apply for the Construction Project. We may not discuss it, unless there is a special
interest.
Certain conditions of work much different from that of the Labour Law.
The institution responsible for the administration or the supervision of this law is the Federal Civil
Service Agency.
2.2.3.3. The Institutional Framework
The following institutions are part of the institutional framework. Because of the tripartite
relationship that exists in the sector the institutional framework presents a unique feature.
These are;
The Ministry of Labour & Social Affairs;
The Labour/ Trade Union, the relevant Federations, the Confederation;
The Employers’ Associations;
The Labour Courts;
The Labour Relations Board;
Labour Conciliation Forum;
Labour Arbitration Forum;
The Labour Advisory Board;
Other relevant institutions;
Recently, the Federal Government has issued a specific legislation in relation to building. This legislation
is called the Ethiopian Building Proclamation No. 624/2009. The legislation partially repeals Articles 8-
Article 14 of the Urban Zoning & Building Permit Proc. No. 316/1987.
The policy rational, as provided in the preamble of the said legislation, is as follows: “Whereas, it has
been found necessary to determine the minimum national standard for the construction or modification of
buildings or alteration of their use in order to ensure public health & safety;”
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The stated policy objective going to be achieved through the following regulatory enforcement at
different phases of the project or construction i.e. before construction; during construction; & on
completion of construction;
The Pro. Regulates the design of the structure in terms of different design aspects i.e. before issuing the
construction permit i.e. in terms of;
structural design; sewerage design;
electrical design; storm water management;
architectural design; industrial effluent management system;
water supply & sanitary design; solid waste treatment;
Fire codes.
The Pro. Regulates by providing precautionary measures during the construction phase as follows: see
Article 31:
not impairing the safety of people, other construction & property;
by taking adequate precautionary measure to ensure that the safety & stability of such
property or services; this is the case where excavation related to a building is likely to
impair the safety & stability of any property or service;
maintaining any excavation work safe;
obtaining prior written authorization of the urban administration(for such preventive &
precautionary measures) in case where the safety or stability of any property or service
is likely to be impaired by an excavation;
the load of any newly constructed foundation not to affect existing foundations, utility
lines or any other structure;
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Telecommunications & electric power networks all over the country are hereby
provided special protection by the proclamation.
Any federal and regional city administrative body shall ensure whether there are
telecommunications or electric power networks prior to issuance of construction
license and any person who acquired license, shall also guarantee that no damage
shall occur on telecommunications and electric networks.
According to Article 8(3)-Prohibition- of Proc. No. 10/1995;
No person shall construct any construction works, build a fence or plant trees or carry
such other works on already installed water and/or sewer lines and/or on a vacant plot
of land up to three(3) meters distance to the right & left from the point on which water
and/or sewer lines are installed.
The protection of utility lines, especially in the urban setting, may involve the taking of diverse
supportive measures.
The measures may have legal or technical or administrative dimension.
Strictly following and enforcing the structure plan & local development plan of a city, if
any;
Giving due attention during the study, design & construction of any construction works
by consultants and by contractors;
Establishing a data bank( integrated GIS system) of utility lines in the city by the permit
provider in consultation with the owners of the utility lines;
Coordinating, as far as possible, the plan & design of utility lines projects by public utility
institutions themselves.
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This will involve, in the first place, deciding whether there is a need for the particular
goods and services.
It will also involve ensuring that the purchaser has the legal power to undertake the
(procurement) transaction, obtaining any relevant approvals within the government
hierarchy and arranging the necessary funding.
The Tendering, Selection & Contract Phase
The second phase is then to choose which firm is to be the provider of the goods or
services, and to conclude a contract with the selected party.
Contract Administration
This includes supervising performance to ensure that the promised goods and
services are properly delivered, accepting performance, arranging for payment of the
contractor, dealing with disputes, and various other contractual matters.
The Public Procurement, thus, focuses on the second phase i.e. the tendering, selection & the conclusion
of a contract.
3. Methods of Procurement
The Proc. identifies the following methods of procurement for local & international
procurement, namely,
For Local
Open Tendering;
Request for Proposals;
Two-stage Bidding;
Restricted Tendering;
Request for Quotation;
Direct Procurement;
For International
Open International Tendering;
Other International Procedure;
(Such as restricted bidding or request for proposal)
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1) Open Tendering
It is regulated under Article 35- Article 48 of the Proc.
It involves, generally,
Making advertisement for all interested bidders through Invitation for Bids;
The issuance of Instruction to Bidders which contains:
The preparation & submission of Bids by the Bidders;
Receiving, opening, examination, evaluation and comparison of Bids by the
Procuring Entity;
Notification of Award & signing of Contract with the winning Bidder;
The provision of Bid Documents;
Other important guidelines such as the provision of Bid Security to bid, Contract Security, if
the bidder is successful & conditions.
Please, carefully read the provisions of Article 35-Article 48 for full information.
2) Restricted Tendering (Article 49 & Article 50)
Restricted Tendering may be allowed if the following conditions are met:
The goods, works or services, by reason of the highly complex or specialized nature, are
available only from a limited number of suppliers; or
The time and cost required to examine and evaluate a large number of bids would be
disproportionate to the value of goods, works or services to be provided;
It is the same as Open Tendering except with the following exception.
The Invitations for Bids is addressed to a limited number of qualified candidates which have
declared an interest in submitting bids.
The number of candidates invited should be made, if possible, sufficient to ensure competition;
Procuring Entities shall select candidates to be invited to bid from among those registered in the
suppliers list;
Bid Security may or may not be asked;
3) Direct Procurement Procedure (Article 51 & Article 52):
The conditions to be there for single source procurement are the following:
The goods, works or services can be supplied or provided only by one candidate;
For additional deliveries of goods by the original supplier;
When additional works which were not included in the initial contract have through
unforeseeable circumstances become necessary;
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For new works consisting of the repetition of similar works which conform to a basic
project of which an initial contract was awarded on the basis of open or restricted
bidding;
For continuation of consultancy services, where the original contract has been
satisfactorily performed and the continuation is likely to lead to gains in economy &
efficiency;
For purchase of goods made under exceptionally advantageous conditions which only
arise in the very short term;
The need is one of pressing emergency;
4) Request for Proposals (Article 53 & Article 54)
This is the case where the Procuring Entity seeks to obtain consultancy services or contracts for which
the component of consultancy services represents more than 50% of the amount of contract. Requests
for Proposals shall be addressed to not less than seven candidates selected by the Procuring Entity.
The Request for Proposals shall contain all the required information as provided under Article 46(2) of
the Proc.
5) Request for Quotations (Article 55 & Article 56)
Request for Quotations may be used for the purchase of readily available goods, or for procurement of
works or services for which there is an established market. Please see also Article 47 for detail
regulations of the subject.
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Elements of Business
Elements of business divided in to two major categories: Corporeal elements and incorporeal elements
Corporeal Elements
Equipment;
Goods;
Other tangible things;
The said equipment and Goods should be used to operate the activity of trade
or the business. Immovable properties are not part of the business.
Like the building in which the business is conducted.
Incorporeal Elements
According to Article 127 of the Commercial Code, the incorporeal elements of a business
are consisted of;
Mainly of a Goodwill; and
Other incorporeal elements ;
The Trade Name;
The Special designation under which the trade is carried on; the right to
Lease the premises in which the trade is carried on ;
Patents or Copyrights;
Such special right as attached to the business itself and not to the trader;
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Ordinary Partnership
It is regulated under Article 227-270;
It is an organization of a relatively small number of persons;
It may not be a commercial business organization;
The members do not have limited liability;
Membership interests are not freely transferable;
Joint Venture
It is regulated under Article 271-279;
It is usually formed with relatively small number of persons;
It is formed for a limited purpose or short period of time;
It has no legal personality;
It is sometimes called a silent partnership;
Its existence may not be disclosed to third parties;
Membership is not freely transferable;
The liability of the members depends on the memorandum of association;
General Partnership
It is regulated under 280-295;
It is usually formed with relatively small number of persons;
Membership is not freely transferable;
Its members do not have limited liability;
It is the most common form of business organization without limited liability;
It is governed by a substantial number of provisions concerning ordinary partnership as well;
Limited Partnership
It is governed under Article 296-303;
It is basically the same as the general partnership, with one exception: one or more (but not all)
of its members have limited liability;
Membership is not freely transferable;
It is governed by a substantial number of the provisions on general & ordinary partnership;
The provisions of Article 296-303 add to those provisions concerning general & ordinary
partnership modifications, which are required by the presence of members with limited liability;
Share Company
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1) Registration of Business
Registration is making a written record in the central or local register office information, which shows
the general picture of a sole trader or a business organization on the basis of statutory requirements to
be fulfilled.
Purposes of Registration
The general purpose of registration is to give reliable & accurate information on the
activity & position of the business.
The detail purposes of registration are as follows:
to plan business activity;
to facilitate a proper system of business & control;
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The act of registration, confer on business organizations, except in case of joint venture, a
legal personality.
The general effect of acquiring legal personality is to be entitled to the attributes of
personality i.e. to rights, duties/obligations and/or privileges.
The detail effects of acquiring legal personality with respect to business organizations are
as follows;
to sue or to be sued;
the property of the business organization is not available to satisfy
judgments against its member’s on their personal debts;
no set-off between debts owed by third parties to individual members &
that of the business organization;
up on the death of the member, his heirs inherit no rights of ownership
over the property belonging to the business organization;
a business organization may be put into bankruptcy or employ a scheme of
arrangement;
the business organization is primarily liable to pay the taxes on its
property, income & taxable activities;
acquiring rights & incur liabilities by its agents as per Article 216 of the
Commercial Code;
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Any person other than those principally registered by the Ministry (of
Trade & Industry), shall principally registered in the place where his head
office is situate.
Any person shall principally register only once even though he carries on
different commercial activities in different Regions.
Summary Registration
Article 5(4) may give us the notion of Summary Registration.
Any person, who establishes branches in several Regions outside the place
where he is principally registered, shall be summarily registered in those
Regions by making a reference to the principal registration.
2) Business License
The concept of license is basically relevant in terms of private law that is in case of property law (ex.
patent or otherwise), and public law that is in case of licensing business organizations.
Licensing in terms of public law means an act of conferring or granting a right to do some activities like
business or some profession.
Purposes of Licensing
In terms of public law, the purposes of licensing are the following:
to collect revenue;
restrict the number of persons who exercise a certain activity when it is
desirable in the public interest;
to ensure that the activity is carried on in particular manner in the interest
of public health, safety or the preservation of local amenities;
to obtain a record of persons engaged in particular activities;
to enable a person that he is eligible to engage in a certain activity;
Legal Regulation of Licensing
According to Article 21(1) of Proc. No.67/1997
“No person may carry on commercial activity without obtaining a valid business license.”
The institutions to issue the business license are the respective institutions:
the Ministry of Trade & Industry;
the Regions;
the City of Addis Ababa; and
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Suspension of license
Where the business license holder fails to rectify certain shortcomings as prescribed by Law, the
business license shall be suspended.
The following measures shall be taken against the business during suspension.
Temporal closure of the business, if the business found to be dangerous to public
health, to the national economy.
Cancellation of license
The following are grounds for the cancellation of the license.
If the business license was issued or renewed on the basis of false information;
If the license holder uses the license for the purpose other than for which it was
issued;
The use of the license for improper commercial activities;
If the license holder has become bankrupt; (The Bankruptcy Proceeding is
separately provided under Article 974-1170 of the Commercial Code.)
if the license holder ceased to operate his business;
If the license holder has failed to renew his license for the reason other than force
majeure;
Sanctions of license
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Construction law handout for COTM 4th year regular students
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Construction law handout for COTM 4th year regular students
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Construction law handout for COTM 4th year regular students
Reference
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