Prisoners’ Rights Advocacy Initiative holds session to encourage Prisoners to join Ikoyi Prison School

by Legalnaija | Oct 9, 2017 | Uncategorized

The Prisoners’ Rights Advocacy Initiative on 09/10/2017 had 226 inmates in attendance at its motivational session geared towards encouraging inmates to enroll in the Ikoyi
prison school this  academic session. There were 4 successful ex-inmates,
led by Harrison Gwamnishu(2017 Mandela Washington Fellow), on ground to
motivate the inmates.

They spoke about the value of education and
how they were able to turn around their misfortune of incarceration into
fortune. We are  hopeful that a good number of inmates would be motivated
to register in the school this session.

We provided refreshment for those in
attendance. 

To support  our programmes, kindly
make your donations to:

A/c Name: Prisoners’
Rights Advocacy Initiative

A/c number:
0124553447

Bank: GTBANK  
Contact: aadetolakazeem@prai.org.ng

– Ahmed Adetola Kazeem 

Explained: Why LIRS wants to tax loans you got from your employers

by Legalnaija | Oct 9, 2017 | Uncategorized

The Lagos State Internal Revenue Service
(LIRS) recently issued a public notice (the Notice) with respect to taxation
of interest benefits accruing to employees on loans granted by employers.

Why tax it?

The Notice aims at addressing arrangements
where loans are granted to employees at no interest or interest rates lower
than market rates. LIRS posited that such arrangements give rise to
a benefit which is taxable in the hands of employees.

Consequently, employers are
required to deduct tax on such interest benefits accruing to employees and
remit same to LIRS under the pay-as-you-earn (PAYE) scheme.

How it will be calculated

The benefit is calculated as the difference
between actual interest rate and adjusted monetary policy rate (MPR) on
the outstanding loans granted to employees. The adjusted MPR is currently 11%,
which is the prevailing MPR (i.e. 14%) minus 3%.

LIRS cited reliance on Section 3(1)(b) of Personal Income Tax Act (PITA), which
imposes tax on all gains or profits from employment including compensations,
bonuses, premiums, benefits or other perquisites, as basis for its position.

Other highlights of the Notice
include:

• Assessment of tax on the interest benefit
to be done by employer in line with the loan repayment plan i.e. assessment to
be made monthly where payment is made on monthly basis and annually, where
payment is made on annual basis

• Requirement for employers to file a schedule showing information
on employee loans and payments terms along with their annual
returns

• The directive applies to shareholders, directors and employees of a company
and will continue to apply after the relationship with the company has been
terminated, until the loan is fully repaid.

We explain

It appears LIRS has likened the interest
benefits enjoyed by employees to benefit-in-kind, which constitute taxable
income.

LIRS has not indicated if the directive
will be applied retrospectively or take effect from the date of the Notice.
Further clarification on the effective date is therefore expected to be
provided by LIRS.

The above notwithstanding, we advise
employers and other stakeholders to take note of LIRS’ directive and ensure
compliance.

Source: Nairametrics 

Why Start-ups need to hire a lawyer or fail | Damilola Oyebayo and Dayo Dauda

by Legalnaija | Oct 9, 2017 | Uncategorized

The Nigerian start-up
ecosystem has evolved in the past few years, many startups have emerged, some
have won while some have lost, regardless of the industry or the nature of the
product or services being offered by a start-up, there are some common success
factors shared by companies that have grown in the past few years. For
instance, issues like; traction, leadership, funding and legal structure are a
few of the differentiating factors of start-ups in Nigeria and even globally.

Often times, when we interact
with many founders, it is often discovered that product development does not
qualify as entrepreneurship, as many founders even find it hard to understand
the business aspect of the technology they have invented, thus, it is no
surprise that they usually overlook the importance of having a serious legal
backing while embarking on their entrepreneurial journey. While some do not
right this wrong until they encounter a serious legal problem like Privacy or
Intellectual property or employee or shareholders agreement, others do not even
get a second chance and this latent defect literally kills the business before
it even takes off.

Interestingly, in the new
global business ecosystem, a start-up surely does not need a lawyer for the
sake of hiring one, there is no point hiring a lawyer that hinders innovation,
start-ups should pay attention to lawyers that understand business and are
ready to add value to the company by providing business friendly legal
solutions, in essence, if your lawyer is not adding any real value to the
business objectives of your start-up, definitely, there is no point engaging
such lawyer any further.

At the recently concluded
Paystack event tagged “Y Combinator Lagos meet up”, held at the Paystack
Headquarters, we had the opportunity to talk to some Tech Founders and ask them
about the role a lawyer plays in ensuring the growth and success of start-ups.
They could not over-emphasize the importance of Lawyers and from our
interaction with them, we observed that the type of value a lawyer provides,
usually depends on the growth stage of the start-up, at the early stage, the
lawyer is involved in the following;

Incorporating the start-up –
this requires drafting and filing the incorporation documents at the Corporate
Affairs Commission. This is very paramount given how the lawyer would from the
information provided by the founder/promoter of the startup and the needs of
the startup advise on the best type of company to register and to also (where
necessary) obtain all relevant permits and licenses. More importantly, the
lawyer would advise on the best time to register the startup in line with the
provisions of the Companies and Allied Matters Act, 2004 which expressly
provides for the timeline for commencing business whether before or after incorporation
(depending on the nature of business)

Product development–
One would find this rather shocking, after all, the lawyer is not expected to
be a technical developer of the product. However, the unique nature of
start-ups always require interaction with users, thus, startups need documents
like Terms and Conditions, Privacy Policy, etc. to regulate the manner of using
the products by customers. These documents are like the undertakings of the
start-up to the customers and vice-versa, of course, it is drafted according to
the business model of the start-up. Therefore, the lawyer handles this in order
to ensure compliance with all relevant domestic and international laws

Creating the legal and
ownership framework- there are certain must haves for start-ups at the early
days, to begin with, a lawyer can help determine the structure and ownership of
the company, this will eventually influence the drafting of Co-founders
agreement (where they are more than one) and deciding stock options among
co-founders (this information must be included in the incorporation documents)
and Employees Stock Options (ESOP)

Determining and protecting
Intellectual Property created by start-ups– expectedly,
start-ups will create a number of Intellectual Property Rights (IPRs) like
Patents, Trademarks, Designs, Copyrights, Trade Secrets, Domain names, etc. it
is the responsibility of the lawyer to protect all these IPRs by registering
same at the Trademark, Patent and Design Registry and ensure the ownership of
these rights by the start-up by drafting documents like IP Assignment
Agreements, Employment Contracts, External Vendor (Consultant) Agreements,
Product Development Agreements etc.

Raising Funds–
this is by far the most important need of a start-up, and although, it is a non-legal
role, however, in the global start-up ecosystem, lawyers have been the nexus
between founders and investors and they have consistently helped founders raise
funds. Lawyers facilitate interactions that eventually lead to funding between
founders and investors/venture capitalists, mentors and accountants.

A seasoned start-up lawyer
can handle these responsibilities in order to promote the business objectives
of the start-up at the early stage. At the scaling stage, the lawyer plays a
host of different roles like sitting on the board to advise, company
secretarial functions, advisory services during mergers and acquisitions, these
and many more will be discussed in the subsequent series of this publication.

Damilola
Oyebayo and Dayo Dauda

Management Consulting and ICT Law Enthusiast

Source: Linkedin 

Senate Roundtable on Youth Unemployment and Development

by Legalnaija | Oct 9, 2017 | Uncategorized

Earlier today @thenigeriansenate Roundtable on Youth Unemployment and Development to review the efficacy of policies, programmes and other interventions intended to reduce the political marginalisation and support the development needs of today’s youth.

The Senate  highlighted some of the Bills that the 8th Senate has passed since it took off in June 2015 and those in different stages of consideration that can tackle unemployment problem

The Bills are as follows:

1. Secured Transaction in Movable Assets Act (Amendment) Bill 2016.

Stage – Passed and signed into law

2. Credit Bureau Reporting Bill

Stage – Passed and signed into law

3. Electronics Transaction Bill 

Stage – Passed

4. Public Procurement Act Amendment Bill

Stage – Passed

5. National Lottery Act 2005 Amendment Bill 2017

Stage – Passed

6. Warehouse Receipts Act (Amendment)Bill – Passed

7. Federal Competition Bill – Passed

8. Agriculture Credit Guarantee Scheme Act( Amendment) Bill – Passed

9. Petroleum Industry Governance Bill – Passed

10. National Poverty Eradication Commission Establishment Bill – Passed

11. Commercial Agriculture Credit Scheme – Passed

12. Discrimination Against Persons With Disabilities (Prohibition Bill) 2015 – Passed

13. Nigerian Peace Corps Bill – Passed

14. Maritime University of Nigeria, Okerenkoko – Passed

15.  Nigerian Ports And Harbours Authority Bill – Passed

16. Nigerian Railway Authority Bill – Passed

17. Bankruptcy and Insolvency Act (Repeal and Reenactment)  Bill – Passed

18.  North East Development Commission Establishment Bill – Passed

19. Federal Road Authority Bill – Passed

20. NYSC Act Amendment Bill – under consideration

21. Federal Entrepreneurship Centres Establishment Bill – under consideration

22. Nigerian Tourism Development Act ( Repeal and Reenactment) – under consideration

23. Skill Acquisition and Development Trust Fund – under consideration

24. Industrial Revolution Bill – under consideration

25. National Development Bank of Nigeria – under consideration

26. Nigerian Merchant Navy Coast Guard Security and Safety  Corps –  under consideration

27. Equal Opportunity Commission – under consideration

@Legalnaija 

Photos via @thenigeriansenate 

The Glorious Dawn Is Right Ahead- Senator Gbenga Ashafa’s 2017 Independence Day Message

by Legalnaija | Sep 30, 2017 | Uncategorized

 “After rain comes sunshine; After
darkness comes the glorious dawn. There is no sorrow without its alloy of joy;
there is no joy without its admixture of sorrow. Behind the ugly terrible mask
of misfortune lies the beautiful soothing countenance of prosperity. So, tear
the mask!” – Chief
Obafemi Awolowo

As our dear country marks her 57^th Independence
anniversary, I draw inspiration from the words of one of our founding fathers,
Chief Obafemi Awolowo as quoted above.

For so long, the Nigerian State has demanded
of Nigerians to be ready to sacrifice for the eventual benefit of all.
Nigerians have been asked to manage, to bear the burdern and sometimes be
willing to suffer until the ship of state arrives at the place of hope.

However, what we have experienced in the
past 2 years can be likened to darkness caused by years of decay, which led us
into the recession, which we are now coming out from. We are not only coming
out of the recession, we are coming out of it with a diversified economy, a
more entrepreneurial population, lesser dependence on crude oil, a more
informed people, a more solid foundation for our economy and the institutions
of state. We are making haste slowly, we are coming out a better country.

I therefore believe that there is no better
time than now for us as a country to come together as one in order to emerge
together into the “glorious dawn” that lies ahead. Our differences are many,
our tongues differ but we must be willing to come together to forge a road map
for this bright future together and through the legitimate institutions of
state.

Dear Nigerians, Lagosians and the Good
People of Lagos East, I urge you all to rally round the leadership at various
levels. I believe that this is the time to support our leaders with effort, counsel
and constructive criticism, as we work together to create the Nigeria of our
dreams.

Happy Independence day Nigeria.

Happy Independence Nigeria

by Legalnaija | Sep 30, 2017 | Uncategorized

Happy 57th Independence fellow Nigerians from Legalnaija 

God bless Nigeria

Taxation Of Employee Loan | Theophilus Olufemi

by Legalnaija | Sep 28, 2017 | Uncategorized

BACKGROUND

September 15, 2017, the Chairman of the
Lagos State Board of Internal Revenue issued a public notice to the tax payers
in Lagos to clarify the tax implication of the interest on the loan granted to
employees by their employers.

DEFINITION OF EMPLOYEE LOAN

According to the public notice, employee
loans include the loans granted by an employer to its employees for specific
reasons with the expectation that such loans will be repaid in full to the
employer through a pre-agreed deduction from the employer’s salary, with or
without any interest.

LEGAL BASIS

Section 3 (1)(b) of the Personal Income Tax
Act (PITA) imposes tax on any salary, wage, fee allowance or other gain or
profit from employment including compensation, bonuses, premium, benefits or
other perquisites allowed, given or granted by any person to any temporary or
permanent employee. More often than not, an employer may offer loans to its
employees at an interest rate lower than the market interest rate or a zero
percent interest rate. This arrangement gives rise to a benefit which is
taxable in the hand employees.

EMPLOYERS’ OBLIGATION

It is mandatory that all employers compute
tax on the difference between adjusted Monetary Policy Rate (MPR) and the
interest rate applicable to loan given to its employees and remit this to the
relevant tax authority. Please note that adjusted MPR is MPR (this is currently
at 14%) minus 3%.

Employers are required to file, alongside
their annual returns, a schedule showing the information on its employee’s
loans and payment terms.

WHO IS AFFECTED

This provision will apply to directors and
employees of a company and will continue to apply even after the relationship
with the company has been terminated as long as the loan remains unpaid.

CONCLUSION

In the light of this clarification, it is
expected that employers will comply with the public notice as issued by the
Lagos State Board of Internal Revenue with immediate effect.

For further clarifications do not hesitate
to contact us me.

THEOPHILUS
OLUFEMI                             

theophilus@tacgroupng.com

08138214124, 08096257081

9, Military Street, Off King George V Road,
Onikan, Lagos Island, Lagos.

A New Dawn for Arbitration in Nigeria | Abayomi Okubote

by Legalnaija | Sep 28, 2017 | Uncategorized

Nigeria has been ranked the 19th most
attractive economy for investments in Africa, according to the Africa
Investment Index 2017. It was reported that in 2015, Nigeria attracted a net
foreign direct investment of US$3.1 billion. This inflow of investments
unavoidably presents dispute and ultimately triggers a need for dispute
resolution. Arbitration is now recognized as the principal process of resolving
disputes in almost every aspect of commerce, investment and international
trade.

Whilst the practice of arbitration is
rapidly growing and several arbitration institutions are being established in
Nigeria, the country’s judiciary has been viewed as “interventionists” or
rather not supportive of arbitration. It is on this score that Nigeria remains
one of the least arbitration destinations in Africa. This view may not be
unconnected with the previous decisions by some Nigerian courts, showing lack
of support for arbitration. As confirmed by the 2015 QMUL Survey, the most
important factor influencing the choice of the seat for arbitration is the
‘formal legal infrastructure’ at the seat – the courts playing a crucial role
in the legal infrastructure.

However, the anti-arbitration approach by
some of the courts is not determinative of the judicial fabric in Nigeria. For
example, the Court of Appeal in Aye-Fenus Ent. Ltd. v. Saipem Nig. Ltd [2009]
2 NWLR (Pt. 1126) 483, held that “parties to a transaction choose their
Arbitrator for better or for worse to be the Judge both as to the decisions of
law and decisions of fact in dispute between them. Thus, none of them can when
the Award is prima facie good on the face of it, object to its
decision whether upon the law or the facts, simply because the Award is not in
his favour.”

Also, the High Court of Lagos State in Guinness
Nigeria Plc. v. NIBOL Properties Ltd, [2015] 5 CLRN 65 took a similar
pro-arbitration approach, when the learned judge held that “I am in total
agreement … that there is a live Judicial Policy of ascribing priority to the
upholding of Arbitral Awards, by the regular Courts … and that there is a
narrow compass that attracts the Courts to override this Policy by setting
aside an Award. This argument is valid and pivotal for a Court to keep in mind
in this type of matters for reasons espoused in the Case Law”.

Notably, the incumbent Chief Justice of
Nigeria (CJN), recently issued a Directive [dated 26 May 2017] requesting all
heads of court in Nigeria to invoke their powers under the respective rules of
court, to issue Practice Directions in the following terms:

“1. That no court shall entertain an action
instituted to enforce a contract, claim, or damages arising from a breach
thereof, in which the parties have, by consent, included an arbitration clause
and without first ensuring that the clause is invoked and enforced.

2. The courts must insist on enforcement of
the arbitration clause by declining jurisdiction and award substantial costs
against parties engaged in the practice.

3. A party who institutes an action in
court to enforce breach of contract containing an arbitration clause without
first invoking the clause is, himself, in breach of the said contract and ought
not to be encouraged by the courts.”

The foregoing represents a significant
development in the arbitration practice in Nigeria and the Chief justice of
Nigeria should be commended for this pro-arbitration approach. Whilst the
Directive will have the effect of a soft law on the courts, the fear of
sanction against a judge who fails to comply will be a compliance pull towards
the observance of the Directive and appears to be the solution to the perennial
problem of courts refusing to abdicate jurisdiction where there is a clear-cut
agreement to arbitrate.

In the closing paragraph of the Directive,
his Lordship noted “…the time saving nature of an arbitration
proceeding encourages heightened commercial and economic activities and foreign
investments and therefore needs the support and encouragement of the
judiciary.” This is a good response to the backlash given to the Nigerian
judiciary by the English Court of Appeal in IPCO v. NNPC (No
3) [2015] EWCA Civ 1144 & 1145, where the court held that “Nigerian
judicial system has not kept pace with the need to give effect to the
principles underlying the New York Convention”

I believe the Directive will foster the
development of arbitration in Nigeria and is a good signal to foreign investors
on the pro-arbitration approach of our courts under the incumbent CJN’s
dispensation.

Abayomi Okubote 

PhD Candidate – International Arbitration, 

Queen’s University, Canada

Source – Linkedin 

Nature Of Matters Handled At The Lagos Multi-Door Courthouse (LMDC)

by Legalnaija | Sep 28, 2017 | Uncategorized

The LMDC handles various types of cases. They include but are not
limited to the following;

·       
Banking disputes

·       
Business/Commercial

·       
Construction

·       
Maritime

·       
Telecommunication

·       
Energy

·       
Civil Rights

·       
Education

·       
Employment

·       
Matrimonial Causes

·       
Family Disputes

·       
Custody

·       
Insurance

·       
Intellectual Property/Technology

·       
Labour

·       
Personal Injury

·       
Product liability

·       
Professional liability

·       
Professional malpractice/negligence

·       
Real property

·       
Securities

·       
Shipping/Transportation

·       
Libel and slander

·       
Administration of Estate

·       
Accident and tort

·       
Medical negligence

·       
Contracts enforcement

·       
Small claims

·       
Landlord and Tenant amongst others

Mediation and other forms
of Alternative Dispute Resolution (ADR) can NEVER replace the courts but should
be seen as part of the court system which is primarily aimed at resolving
disputes. ADR is achieving Justice by Consensus and the hope of the LMDC is
that only cases which should be in the courts get to the courts.

Footnotes:* Standing Conference
of Mediation Advocates (SCMA) *The Lagos Multi- Door Courthouse Law (LMDC)
2007* The LMDC Practice Direction on Mediation Procedure* The Multi Door
Courthouse Code of Ethics for Mediators* Guidelines For Enforcement Procedure
*Guidelines for Court referrals to Alternative Dispute Resolution *Principles
of Alternative Dispute Resolution by Stephen J.Ware *Effective Mediation
Advocacy by Andrew Goodman.*The Lagos Multi-Door Courthouse Neutrals’ Handbook.

Follow us on;

Facebook Page: fb.me/dmediationlawyeristng

Instagram: http://www.instagram.com/DmediationLawyerist

Twitter: mediationlawng

For Lawyers – Should My Firm Outsource its Legal Case Files to Other Lawyers?

by Legalnaija | Sep 28, 2017 | Uncategorized

This is a
question that is making the rounds in legal circles around the world lately.
Many firms have questions about their case files which keeps on piling and
piling upon each other, with few associates to work on them. In other words,
they are all overworked and need solutions. Fast.

ILLUSTRATION

KUA LP is a
commercial business advisory law firm in Lagos. It keeps getting newer clients
by the day because of its excellent legal services. It has seven lawyers, two
paralegals, a secretary, and other miscellaneous staff. However, even though it
is getting bigger clients who are in need of swift, top-notch legal service,
the lawyers of the firm are thoroughly overworked because of the amount of
files they have to handle. They know they need more lawyers, but they cannot
afford to start expanding their space to accommodate newer lawyers. They come
to work very early in the morning and leave very late, yet they are unable to handle
all their daily tasks. Some are furious with the senior partner, thinking of
quitting. They are not getting enough time with their families; they are not
taking care of themselves and spending time with their families even though
they make loads of money.

What should they do?

ANALYSIS

The
aforementioned scenario encapsulates the dilemma many busy law firms find
themselves in. There are more work than there are lawyers on hand to do the
work. They are groaning under the weight of work needed to be done. They are
burning out. And in case you don’t know the terrible effects of burnout, kindly
check out articles about professional burnout and the type of terrible problems
it can bring for people.

Still, it boils
down to this question: WHAT CAN THEY DO?

POSSIBLE SOLUTIONS

Legal
outsourcing may be the solution that can save their time and their lawyers from
going out of their minds. Law firms may get a lot of work to do but have little
manpower to do so. They may also not have enough funds to think of expansion.
They groan under the weight of their work. So, the solution would be to
outsource the legal work. Free themselves of the drudgery of having to do a lot
of the work themselves, thus leaving them free to handle the ones that truly
needs their attention.

FACT

There are many
lawyers living across Nigeria, some with extraordinary skill sets, who are
either unemployed, or seriously underemployed in firms that use their time and
pay them peanuts. Some of the lawyers sit around the office with little or
nothing to do. They want to be stimulated intellectually; they want to be
challenged. However, they do not find avenues that can challenge them fully.

SOLUTION

In the
foregoing, I have highlighted the two groups that legal outsourcing work can
easily benefit: overworked law firms and under-worked lawyers seeking for more
opportunities.

The solution is
to bring these two sets together.

The law firms
doesn’t have to hire those lawyers they are outsourcing their legal work to.
They are merely engaging them on short, contractual, work-by-work basis. They
get paid by their clients, forward the work to intellectually deserving
lawyers, pay those lawyers perhaps a fraction of what the clients pay in return
for great legal work, and the finished product is forwarded to the client. That
way, law firms are free to do their normal work, get more clients and make
great turnaround time on the briefs they handle, while not compromising on the
quality of work done and the health of the firm’s practitioners. They also
expand their circles and give other lawyers that opportunity to expand.

POSSIBLE PROBLEMS?

What if I give
the files to this lawyer and he absconds with it? What if they try to snatch my
client away? What if they ?????? The what-ifs are much, agreed.

SOLUTION TO THE POSSIBLE PROBLEMS

You can always
protect yourself. Besides that, it would be stupid for a lawyer handling a file
on an outsourced basis to try to take a client. After all, the client belongs
to the firm and had hired the firm to do its work because of the trust placed
on the firm. Not only that, there is a saying that you do not shit where you
eat. Since these outsourcing contracts can potentially lead to the financial
stability of the contract lawyer, it would be crazy for such a lawyer to try
anything funny. Also, it is unprofessional.

Finally, the
law firms can create a watertight contract of engagement agreement and throw in
terms that will protect the firm against unnecessary competition by throwing in
non-compete clauses and other protective shields. I have done this myself.

BRINGING IT ALL TOGETHER

Law firms may
get a lot of work, but instead of overworking associates, legal outsourcing may
be the stunning solution. That way, the law firm does great work fast through
its contract lawyers and still retain the confidence of the clients. The
partners and the associates can also have some personal me-time on their hands
to attend to other matters and pressing issues without having to groan because
of the work of demanding clients that want their work done at the speed of
light.

Isn’t this a
great working solution for lawyers and legal service providers in Nigeria?
Wouldn’t it be great for lawyers to be able to work in collaboration with other
lawyers who may desperately need to be stimulated by certain work?

About the Author:

Kingsley
Ugochukwu Ani is a corporate lawyer with particular emphasis on IP, Real Estate
& IT areas. He can be reached on aniugochukwu@gmail.com
and +2347035074930. He is also a writer and business development strategist.

Photo Credit – Here