Blog By Date

January 2022
S M T W T F S
« Nov 2021
1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31

Posts from 2021-11-28

Types of Business Organizations in Ethiopia

Types of Business Organizations in Ethiopia

There are seven types of business organizations as per Article 174 of the Commercial Code of Ethiopia.

1. General Partnership: is established by 2 or more partners with a Memorandum of Association. It has a legal personality and the partner’s liability is unlimited. The name consists the names of least two of the partners. The partners can be managers.

2. Limited Partnership: is established by 2 or more partners with a Memorandum of Association. It has a legal personality and the partner’s liability could be either limited or unlimited because it is composed of General Partners & Limited Partners. Limited Partners can’t be managers.

3. Limited Liability Partnership: is established by 2 or more partners with a Memorandum of Association. It has a legal personality and the partner’s liability is limited. It is formed by licensed professionals to render professional services.

4. Joint Venture: is established by 2 or more partners with simple agreement among the partners. It doesn’t have a legal personality and the partner’s liability is unlimited. There is no registration requirement & it’s not known to third parties.

5. Share Company: is established by 5 or more partners with a fully paid-up capital of 50,000 Birr or above and a Memorandum of Association. It has a legal personality and the partner’s liability is limited. One share has a minimum value of 100 Birr.

6. Private Limited Company: is established by 2 -50 partners with a fully paid-up capital of 15,000 Birr or above and a Memorandum of Association. It has a legal personality and the partner’s liability is limited. One share has a minimum value of 100 Birr.

7. One Member Private Limited Company: is established by one person with a fully paid-up capital of 15,000 Birr or above and a Unilateral Declaration. It has a legal personality and the owner’s liability is limited. It could be formed by a conversion from PLC or sole proprietorship.

Relevant Law: Commercial Code of Ethiopia, Proclamation No. 1243/2021

የንግድ ማኅበር ዓይነቶች በኢትዮጵያ

በኢትዮጵያ የንግድ ህግ አንቀፅ 174 መሠረት ሰባት(7) አይነት የንግድ ማኅበር ዓይነቶች አሉ።

1. የኀብረት ሽርክና ማኅበር፡ 2 ወይም ከዚያ በላይ በሆኑ አባላት በመመስረቻ ፅሁፍ የተቋቋመ ህጋዊ ሰውነት ያለው ማህበር ነው። የሸሪኮቹ ሃላፊነትም ያልተወሰነ ነው። የማህበሩ ስም ቢያንስ የሁለቱን ሸሪኮች ስም ያካትታል፤ ሸሪኮች ስራ አስኪያጅ መሆን ይችላሉ።

2. ሁለት ዓይነት ኃላፊነት ያለበት የሽርክና ማኀበር፡ 2 ወይም ከዚያ በላይ በሆኑ አባላት በመመስረቻ ፅሁፍ የተቋቋመ ህጋዊ ሰውነት ያለው ማህበር ነው። የሸሪኮቹ ሃላፊነትም ሁለት አይነት ነው፤ የተወሰነ እና ያልተወሰነ። ኃላፊነታቸው የተወሰነ ሸሪኮች እና ኃላፊነታቸው ያልተወሰነ ሸሪኮች አንድ ላይ የሚመሰርቱት ነው፤ ኃላፊነታቸው የተወሰነ ሸሪኮች ስራ አስኪያጅ መሆን አይችሉም።

3. ኃላፊነቱ የተወሰነ የሽርክና ማኅበር፡ 2 ወይም ከዚያ በላይ በሆኑ አባላት በመመስረቻ ፅሁፍ የተቋቋመ ህጋዊ ሰውነት ያለው ማህበር ነው። የሸሪኮቹ ሃላፊነትም የተወሰነ ነው። ሙያዊ አገልግሎቶችን ለመስጠት ፍቃድ ባላቸው ባለሙያዎች የሚቋቋም ነው።

4. የእሽሙር ማኀበር፡ 2 ወይም ከዚያ በላይ በሆኑ አባላት በስምምነት የተቋቋመ ህጋዊ ሰውነት ያሌለው ማህበር ነው። የሸሪኮቹ ሃላፊነትም ያልተወሰነ ነው።  እንደማህበር መመዝገብ ሳያስፈልገው፣ በ3ኛ ወገኖች ሳይታወቅ የሚመሰረት ነው።

5. የአክሲዮን ማኅበር፡ 5 ወይም ከዚያ በላይ በሆኑ አባላት በመመስረቻ ፅሁፍ እና በሙሉ በተከፈለ ከ50,000 ብር ያላነሰ ካፒታል የተቋቋመ ህጋዊ ሰውነት ያለው ማህበር ነው። የአባላቱ ሃላፊነትም የተወሰነ ነው። የአንድ አክሰዮን ዋጋ ከ100 ብር አያንስም።   

6. ኃላፊነቱ የተወሰነ የግል ማኅበር፡ ከ2 እስከ 50 በሚደርሱ አባላት በመመስረቻ ፅሁፍ እና በሙሉ በተከፈለ ከ15,000 ብር ያላነሰ ካፒታል የተቋቋመ ህጋዊ ሰውነት ያለው ማህበር ነው። የአባላቱ ሃላፊነትም የተወሰነ ነው። የአንድ አክሰዮን ዋጋ ከ100 ብር አያንስም።   

7. ባለአንድ አባል ኃላፊነቱ የተወሰነ የግል ማኅበር፡ በአንድ አባል (ባለቤት) በግል መግለጫ እና በሙሉ በተከፈለ ከ15,000 ብር ያላነሰ ካፒታል የተቋቋመ ህጋዊ ሰውነት ያለው ማህበር ነው። የባለቤቱ ሃላፊነትም የተወሰነ ነው። ኃላ.የተ.የግ.ማህ. ወይም የግለሰብ ነጋዴ በቀላሉ ወደ ባለአንድ አባል ኃላ.የተ.የግ.ማህ.  መለወጥ ይችላሉ።

አግባብነት ያለው ህግ፡ የኢትዮጵያ የንግድ ሕግ አዋጅ ቁጥር 1243/2013

 

 

The Power to Issue Criminal Law in Ethiopia

1.   The Power to Issue Criminal Law in Ethiopia

1.1.         Short Historical Review

Before 1955: “Fewuse Menfessawi” was the first attempt to compile criminal laws in Ethiopia. It was enacted during the Imperial system of government when kings had the ultimate power of making criminal laws. Since “Fewuse Menfessawi” was made by Ethiopian Orthodox Church Scholars, they also might have some level of power to issue criminal laws (but only through the kings’ approval). The “Fetha Negest” also has similar features.

After 1955: The year 1955 introduced a new Revised Constitution to the ‘Empire of Ethiopia.’ Under this Constitution, in addition to the powers vested to the emperor, the parliament was also allotted some legislative powers. Article 31 states: “… The emperor has the right to initiate legislation, to originate other resolutions and to proclaim all laws after the same has been passed by the parliament.” The phrase ‘all laws’ means that the provision also applies to criminal laws. In addition, Article 86 of the Revised Constitution states that “laws may be proposed either, or both Chambers of Parliament; by the emperor or by ten or more members of either Chambers of Parliament.” The Penal Code of 1957 was enacted after these reformations. Similarly, the National Shengo was given the same power under the 1987 Constitution.

1.2.         The Guiding Principles of Criminal Legislative Power

So as to determine which body is authorized to issue a criminal law, it is vital to say something about the guiding principles of criminal legislative power. Since Ethiopia has a federal state structure, the discussion targets countries which follow a federal form of government and dual federalism in particular.

We have two guiding principles of criminal legislative jurisdiction. The first one is the principle of subsidiarity. This guiding principle proposes that the power of legislating criminal matters should be localized at a regional level. According to the guiding principle, the federal government should have a subsidiary power due to having higher political power. This is because, even if regional states are authorized to enact their own criminal laws, a question will arise on the applicability of some criminal cases due to a common interest. Therefore, since the federal government is economically and politically powerful, it would be capable of enacting and applying complicated and general criminal cases.

The other guiding principle is the laws breached principle. This guiding principle is based on the breach of law. The guiding principle applies in the countries which have dual federalism. This principle asks a question: if both of the governments are authorized to enact criminal law, which laws are considered to be violated and which level of government has the power to criminalize one act as a crime? For the above question, they assume that if the criminal matters violated fall under the jurisdiction of the regional states, then the regional states would have an exclusive criminal legislative power. On the other hand, if international and federal laws are violated, the central government would have the same power as the previous one.

Which body has the power to issue criminal law in Ethiopia?

Art. 55(5) of the FDRE Constitution provides that the federal government has the power to enact a Penal Code. Without prejudice to the foregoing, the States shall have the power to enact penal laws on matters not covered by the Penal Code of the Federal Government. By virtue of the above provision of the FDRE constitution, the regional states are empowered to enact criminal legislation (but not criminal codes) that are not specifically covered under federal laws. Even though regional states are empowered to enact criminal legislation, these legislations should not be contrary to and covered under the Federal Criminal Code or other federal laws.

The opponents argue: why regional states are not empowered to issue criminal codes? They base their argument on the doctrine of constitutional supremacy. All the regional states with the inclusion of the federal government respect the supremacy of the constitution. Pursuant to Art.9(1) of the FDRE Constitution provides that all laws, customary practices, and decisions made by state organs or public officials inconsistent therewith, shall be null and void. If the criminal code of the regional states is inconsistent with the FDRE constitution, its fate is becoming null and void. If so, what challenges might we come across in maintaining a uniform criminal justice system? 

If the criminal matter has a nationwide effect, it means that laws that are related to the laws of the federal government, international laws and laws that are applicable nationwide. The federal government would have jurisdiction over these matters. At the same time, if the criminal matter has a regional character, the regionals should be authorized. Besides, they point that the centralization of criminal legislative power goes against the right of self-determination which is recognized under the FDRE Constitution. According to Art. 39 of the Constitution, all nations, nationalities and peoples are entitled to promote and preserve the culture, language, identity and historical background. Hence, to make these rights applicable, their legislative power recognized under Art.52(2) of the FDRE Constitution should be extended to the extent of enacting criminal code, some might argue. Here what is important to keep in mind is that the opponents do not deny the enactment of the general provisions of the Criminal Code by the federal government could maintain uniformity nationwide. But their argument is regarding the specific criminal matters that should be criminalized and the punishment that has to be imposed.

The proponents reply saying the Constitution has acknowledged the equality of all languages, cultures and religions. So how does self-determination will not be applicable? Second, if regional states are authorized to issue criminal codes, the proponents alarm that instead of achieving a uniform criminal justice system, the outcome may be a disparity in criminal laws.                                                  

Most of the time, since the law is considered to be the reflection of the society,  If regional states are empowered to issue their own criminal code, due to the prevalence of diversity in language, culture, the criminal codes issued by these regional states may be influenced by the custom or religion of a particular nation. These custom-based laws may go against the living style of other peoples that reside in that particular nation. The penalty that is imposed on the criminals may be disproportionate, an act or an omission criminalized in one state may not be criminalized in the other state. Third, if the issuance of criminal law is not centralized, an inconsistency will occur between the regional and the federal government criminal codes.

As an example, they mention Oromia national regional state forest proclamation and the federal law forest proclamation which has an inconsistency on the penalty that is imposed on the criminals. When the penalty clause under federal forest laws, the minimum punishment is 6 months and 5,000 Birr and on the other hand, the maximum punishment is 15 rigorous imprisonment and 30,000 Birr, the federal forest law imposes a minimum punishment of 5 years imprisonment and a maximum punishment of 15 years rigorous imprisonment with the exclusion of the punishment of fine. In general, the disparity of laws may have a far-reaching risk up to violating constitutionally recognized human and democratic rights.

Generally, the main justification for centralizing criminal legislative power emanates from the fact that in building a single economic community. The constitution provides that this goal will be achieved through a means of creating and setting a uniform criminal justice system. In sum, when the law breached the guiding principle that we have seen above goes together with the argument of the opponents but none of the two guiding principles goes together with the view of proponents.

The power of issuing or legislating criminal law between the federal and the regional government when we see Article 55 Sub-Article 5 of the Ethiopian constitution, we can understand that the federal government has the power to issue criminal or penal law. And also, the same provision, tells us that the regional state can issue criminal laws which are not specifically covered by the federal criminal law. Furthermore, when we look at Article 55 Sub-Article 1 it states that "The House of Peoples’ Representatives shall have the power of legislation in all matters assigned by this Constitution to Federal jurisdiction." so from this provision, we can understand that if it says in “all matters” thus issuing a criminal law primarily belongs to the House of Peoples’ Representatives. As the House of Peoples’ Representatives is being the highest organ in law-making matters, the power to issue the criminal law could mainly fall to this organ of the government. We can agree that criminal law is centralized by the parliament in Ethiopia to its legislative aspect. And also, we can understand that the main concern is given to the federal government than that of the regional state in issuing criminal law.

Some crimes are prohibited under the Criminal Code of FDRE but may not be criminalized under regional laws. For instance, when we see the case of bigamy, under article 650 of the criminal code punishes such act but in the subsequent provision, which is article 651 states that the preceding Article shall not apply where bigamy is committed in conformity with religious or traditional practices recognized by law.  so by looking at these two articles, we can understand that the regional states have the power whether to criminalize or not to criminalize bigamy according to the region's culture, belief and etc.

There are a few instances in which the regional states exercised to enact criminal law which is related to pity offenses. For instance, the Oromia regional state under proclamation 130/2007 Article 27 of the Proclamation clearly describes that any land user who violates the provision of the Proclamation or regulation issued for the implementation of the Proclamation shall be tried under the applicable law.  “The Oromia regulation for the implementation of rural land administration and use” is one law that imposes criminal punishment. This regulation is used to enforce Oromia Rural Land Administration and Use proclamation. Under article 27 of this regulation, puts a punishment of 1 month to 5 years of imprisonment. These criminal punishments for instance are imposed on crimes on the illegal holding of rural land and illegal construction of a house on land which is punishable from 1 to 5 years imprisonment. It also puts a punishment from 1 to 5 years on the appropriate or responsible official who illegally issue, cancel, or change land use certificate. In another way, the Oromia regional state under Proclamation No. 66/2003 exercised its power of issuing criminal matters especially under its Articles 14 to 38.

2.   Other Federal Countries and How They Assign The Power to Issue Criminal Law

·      United States of America

In the USA, there are three sources for Criminal Law: The Constitution, Statutory Law and Case Law. Most statutes are written and voted into law by the legislative branch of government. This is simply a group of individuals elected for this purpose. The US legislative branch is called Congress, and Congress votes federal statutes into law. Every state has a legislative branch as well, called a state legislature, and a state legislature votes state statutes into law. Often, states codify their criminal statutes into a penal code.

Limits on the Congress’ Power: State and federal legislation are subject to the strictures of the United States Constitution (and, with state laws, the constitution of the relevant state).

The only crimes Congress is specifically authorized to punish are piracies and felonies on the high seas, counterfeiting and treason. The power to enact criminal laws belongs almost exclusively to the States. Approximately 90% of all criminal laws are State laws rather than Federal Laws. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties and properties of the people, internal order, improvement, and prosperity of the state. It is up to the States to enact the criminal codes which apply to the people within their borders.

·       Australia

The jurisdiction of criminal matters is similar to American Criminal Law. This means the federal government has its own criminal jurisdiction for offenses against federal laws. Even if the federal government is supreme, it has a more limited power than the States.

Provisions creating offenses that impose significant criminal penalties (imprisonment or fines equal to more than 50 penalty units for individuals or more than 250 penalty units for corporations) are not delegated.

Comparison with the Ethiopian Case:

In other federal countries, the federal legislative organs exercise limited power when it comes to criminal issues. They have the power to create a statute that is a necessary and proper means of exercising the federal authority that permits parliaments to create federal criminal laws.

In Ethiopia, more power is delegated to the federal legislator instead of the Regional States. All criminal issues are matters of the federal government, but if some issues are not covered in the federal penal law, then those issues can be matters of state legislators.

As we can see from the upper comparison, the Ethiopian federal structure gives almost absolute power to the legislative body, specifically HPR. But it is not completely absolute since the Constitution is its boundary as it couldn’t be exercised contrary to the Constitution.    

3.   Delegation of Legislative Power in Ethiopia and Its Limits

Delegated legislation is the exercise of legislative power by an agency that is subordinate to the legislature. The power of agencies to enact binding rules which are subordinate or auxiliary (ancillary) to primary legislation. The issue of delegation may be challenged by doctrines like the doctrine of non-delegability of power and the doctrine of separation of power. But a rigid application of the doctrine of non-delegability of powers or separation of powers is neither desirable nor feasible in view of the new role of the welfare state. In Ethiopia, it refers to directives and regulations issued by administrative agencies and the council of ministers, respectively.

The main purposes of delegating legislative power are limitation on parliamentary time, technicality subject of matter (specialized expertise), flexibility and emergency. 

The Constitution lays down some rules related to how the power to legislate could be exercised. Article 77 (13)  of the Constitution provides the Council of Ministers with the power to enact regulation pursuant to powers vested in it by the House of peoples Representatives.

“The country has at present twenty ministries and the Council of Ministers, headed by the Prime Minister. The area of jurisdiction of each ministry includes the whole range of social politics, as indicated by the nomenclature of the ministries: Ministry of National Defence, Ministry of Federal Affairs, Ministry of Foreign Affairs, Ministry of Justice, etc. As a result, regulations are made by way of implementation. Accordingly, there are 256 regulations enacted by different Ministries between the years 1991 to 2011 and most regulations refer to specific proclamations.”

Therefore, Proclamations made by the HPRs are always followed by regulations under the guise of implementation purposes. The proclamations leave the details for the Council of Ministers with the power of issuing regulations. But there is a limit to their delegation. The limit is usually included in each proclamation and it reads: No law, regulation, directive or practice shall, in so far as it is inconsistent with this Proclamation, have force or effect with respect to matters provided for by this Proclamation”.

Sometimes power may be delegated to an administrative agency to prescribe punishment for the violation of rules. Usually, making an act penal is a parliamentary function and cannot be delegated to the administrative agency.

Even though the parliament can delegate its legislative powers, it can’t delegate its power of issuing criminal laws to other organs of government. That is why we find criminal laws only in the Constitution, the Criminal Code and some special proclamations enacted by the parliament. Criminal laws are not found in directives and regulations. Violating directives and regulations is not a criminal act unless it is specified under the guiding proclamation.   

Conclusion (Main Points):

  • In Ethiopia, the HPR has the power to enact criminal laws. 
  • State legislative branches can also enact criminal laws if the specific topic was not covered by the laws enacted by the HPR. 
  • All criminal laws shall not be contrary to the Constitution.
  • Delegation of the power of issuing criminal laws only applies in a limited way. Delegated powers are bounded by guiding proclamations. Directives and regulations under a specific proclamation, which is a concern of criminal law, shouldn’t contradict the basic principles of that specific proclamation.

 

 

 

 

 

ET-AFRO LAWYERS

Our mission is to provide a high quality and creative legal service with integrity and professionalism. In doing so, we enjoy and strive for a collegial group practice while recognizing that our principal goal is to serve our clients effectively.

Working Hours

  • Mon - Fri 8:00 - 17:30

 

Services

  • Legal Consultancy
    advising clients as to the law of ethiopia
  • Registration & Liqudation of a Company
    recommendation about the laws and regulation
  • Retainer Service
    permanent legal consultancy
  • Court Representation
    legal representation of individual and corporate clients

Get In Touch

Address: Addis Ababa, Lideta Sub City, Dama House Building, 5th Floor, Room No 510

Addis Ababa, Ethiopia

Phone No. : +251 911 50 49 03  
                       +251 911 86 29 57

Email: info@et-afrolawyers.com

 

©2022 ET-AFRO Lawyers Law Office. All Rights Reserved.

Search