Ethiopian Commercial Registration and Business Licensing Proclamation No. 980/2016

The Ethiopian Commercial Registration and Business Licensing proclamation 980/2016 is issued by the House of Peoples Representatives in order to make the registration and licensing process fast, accessible and modern. The provisions are divided into 5 parts and 53 articles.

Part 1: General

The first part of the proclamation deals with defining important terms used in the entire law. It also states the scope of application in which it says that the proclamation applies to any person engaged with commercial activity, any business persons, sectoral associations and commercial representatives. Finally, it lists down the powers and duties of the Ministry of Trade.

Part 2: Commercial Register

Under this part, the proclamation states the Ministry of Trade is the responsible organ for registration of business in Ethiopia. This authority can delegate this power to the Ethiopian Investment Commission and regional organs in charge of commercial activities. It also provide the required process for registration. Furthermore, it states the required process for registration.

The process of registration is:-

• Verify the trade name to check whether the name is not taken by another business organization.
• Signing the Memorandum of Association and Article of Association at the Document Authentication and Registration Agency.
• Tax identification number from the tax collection authority will be required by the registering office.
• There shall be a submission of an application form or commercial registration. If this form is accepted, the registering office will register the application.
• Publicizing the business organization on a newspaper that has nationwide circulation.

It also has provisions dealing with amendment of commercial registration. Within sixty days after its authentication by a notary, an amendment on a commercial organization needs to be registered. Additionally, the notary has the responsibility of authenticating the memorandum of association and article of association to which an amendment is made.

The Commercial Registration and Business Licensing proclamation also states, under this part, that the registering office has the power to cancel a commercial registration where there is:-

• False information when registering the business.
• Violation of relevant rules.
• Abandonment of business activity by the business person.

Part 3: Trade Name in Registration and License

This part of the proclamation deals with what kind of things a trade name should consists of, the required process for registering trade name, grounds for cancelling trade names and altering trade names.

Part 4: Business License

In order to conduct a business activity in Ethiopia, issuance of business license that is valid is a must. This part deals with this area exhaustively. The relevant government authority has the responsibility of issuing a business license. It deals with the process of issuing business license. The important steps for this includes:

• Filling out the application form for the issuance of business license and submit it to the relevant authority.
• Submitting all relevant documents as required by the authority.
• Paying the required service fee.

Additionally, the rights and obligations of the business person that issued a license are stated under this part.

The obligations includes:

• Not leasing or pledging the license for the benefit of other person.
• Respect the rules the specific business activity requires, display the business license in a clearly noticeable place, respect administrative measures.

The rights includes:

• Undertake any business activity which is under the scope of the license.
• Seek information on registration and licensing service.
• Obtain additional license for branches in similar business.

Renewal of license is also provided under this part of the proclamation. The renewal period of a certain business license is in sixth month period. Renewal is a mandatory requirement thus failure to renew the business license within the appropriate time stated by the law will result in penalty.

Besides from renewal and issuance of business licence, suspension and cancellation is also stated under this part. Suspension of a business license would be made by the relevant authority when the business person failed to comply with relevant laws, failed to discharge obligations stated under this proclamation, license used for unauthorized purpose and other conditions stated under Article 29(1) of the Commercial Registration and Licensing proclamation. Additionally, cancellation would be made when the business person terminates the business activity, where the license is issued based on false documents and where the business person is declared bankrupt.

Part 5: Miscellaneous Provisions of the proclamation

This part of the proclamation deals with the provisions of branch offices of Foreign Chamber of Commerce, certificate of competence, managers of business organizations, duties of a commercial agent and the like.

You can view the full Ethiopian Commercial Registration and Business Licensing proclamation No. 980/2016…..