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Introduction

Escalation in criminal activities, especially terrorism, kidnapping and armed robbery, has heightened security concerns and vigilance. This is especially as these criminal activities are carried out in contravention of International Criminal and Money Laundering Laws.

Some States have accordingly instructed all Hotels and other Hospitality Establishments carrying on business in their State to henceforth only admit and render services to Guests and other Customers who present valid National or International Identification Cards, or other forms of publicly verifiable identification documents (“ID”). Unbeknown to many of these States and Federal Authorities, the valid ID Pre-admission requirement is already a legal provision under the Money Laundering (Prohibition) Act (as amended) 2012.

Identification of Customers

Financial Institutions and Designated Non-Financial Institutions, of which Hotels and Casinos are in the latter group, are required by Section 3 of the Money Laundering (Prohibition) Amendment Act 2012, to ensure that they Identify all their Customers, using verifiable public identification documents like a Driver’s License, National Identity Card, International Passport, etc, bearing the Customer’s name and address before rendering any service to the Customer.

Financial Institutions and Designated Non-Financial Institutions are further required to preserve and keep the record of their Customer’s Identification data for a period of at least five (5) years after the closure of the Customer’s accounts, or the cessation or severance of relations with any such customer.

Other Mandatory Disclosures

Every Financial and Designated Non-Financial Institution must submit a Written Report to the Economic and Financial Crimes Commission (“EFCC”), of every single funds transfer, lodgment or payment in excess of 5,000,000 (Five Million Naira), in the case of an individual, or 10,000,000 (Ten Million Naira) in the case of a corporate body. Punitive fines for each day of not reporting such transactions to EFCC apply to this serious infraction.

Personal Liability of Directors and Managers

Where the identity of a customer is not independently verified, and the funds transferred is/are above the stipulated limit, the Directors and other key management personnel of the offending Institution who are culpable, or who conspired in promoting the infraction, shall be personally liable to submit to criminal prosecution and conviction if found guilty.

Conclusion

Recent Bomb Expulsions and other criminal activities in Hotels around the world can only place on the owners of these establishments a higher duty of care to ensure that their Hotel premises are secure and safe. Pre-obtaining and retaining customers’ verifiable data must be one, among many other security measures, that must be applied to achieve this Security Protective objective.

Disclaimer

This is a free educational material, which does not serve as a source of solicitation, advertisement or the offering of legal services or advice of any kind. No Client/Attorney relationship is therefore created. Readers are strongly advised to always seek, from qualified Legal Practitioners, professional legal counselling to their specific factual situation.

Intellectual Property Protected!

This material is protected by International Intellectual Property Laws and Regulations. This material can therefore ONLY be reproduced or re-distributed for non-profit educational purposes under the strict condition that our Authorship is explicitly acknowledged, and our Disclaimer Notice is prominently displayed.

 

Introduction

Disputes and disagreements between people are sometime inevitable. For any business concern, having in place well documented Agreements, with an efficient and cost-effective dispute resolution mechanism enshrined, is absolutely essential; particularly as not all disputes can be amicably resolved by the parties themselves.

Litigation or Arbitration?

Historically, most business disputes in the past were resolved by litigation. And most of the time, litigation is an expensive, time consuming dispute resolution mechanism. It is typically hostilely adversarial, with rigid court procedures and rules. Also, during litigation, business secrets and confidences will have to be disclosed to avoid liability or secure a favourable judgement.

Businesses over-time recognised the above-mentioned inimical nature of litigation to smooth enterprise. Arbitration therefore came to assuage the problems associated with litigation.

Essence of Arbitration

Arbitration is a more modern, more cost-effective, more private manner of resolving disagreements. Under the Arbitration process, the parties to a dispute voluntarily pre-agree to submit any dispute that may arise from their transaction to an Independent Arbitration Panel, which Panel may consist of a person or persons, or a body, or some other kind of Tribunal, to hear and deliver a final decision regarding the dispute.

Parties to an Arbitration process are also permitted to pre-agree to the set of rules and procedures that will regulate the Arbitration Proceedings.

Like all contracts, an Arbitration Proceeding and the outcome, which is in the form of an Award or judgement, have a limitation period. So too can the parties to an Arbitration Agreement enter into a new Agreement in the future waiving or amending the Arbitration provision, or its rules, venue, etc.

An Arbitration Award or decision is usually enforced by a Court of Law where any party to it does not willingly comply with the Arbitration Award.

Setting Aside an Arbitration Award

A party to an Arbitration Proceeding, who is dissatisfied with the decision of an Arbitration Panel, has a right to apply to a High Court for the decision or Award of the Arbitration Panel to be set aside.

Some of the common grounds for setting aside an Arbitration Award include that the Arbitration Agreement is not valid under Nigerian Law; the Arbitration Award is against Public Policy in Nigeria; the Award contains decisions on matters which are beyond the scope of the dispute submitted to the Arbitration Panel; the composition of the Arbitration Panel or the Proceedings themselves are not in accordance with the Agreement of the Parties or the Arbitration and Conciliation Act; a Party or Parties to a Arbitration Proceedings was/were not accorded fair hearing; the Arbitrator does not have the Qualifications pre-agreed by the Parties; there are justified doubts of the Arbitrator’s impartiality or independence; the Arbitrator misconducted himself by not complying with the terms of the Arbitration Agreement; the Arbitration Award was improperly procured; etc.

What is Conciliation?

Conciliation is another legal form of resolving disputes in a less adversarial or hostile, and private manner. Under this medium, the parties to a dispute agree to resolve their dispute through a neutral independent person known as the Conciliator. Unlike Litigation and Arbitration, the appointed independent and neutral Conciliator examines the statements of the Parties setting out the nature of the dispute, hears the parties, after which he submits to the Parties the Terms of Settlement for the parties to approve.

If the Parties do not approve the Conciliator’s recommended Terms of Settlement, they will be entitled to refer their dispute to Arbitration, where their Agreement provides for Arbitration; or institute a court action for a Court of Law to resolve the dispute.

Mediation

Mediation is a much more informal method of resolving disputes. Unlike Litigation, Arbitration or Conciliation, a Mediator applies unbinding communication techniques to guide the disputing parties to arrive at a common ground from which an amicable settlement is consummated.

Also, unlike Litigation, Arbitration or Conciliation, a Mediator has no enforcement authority. He instead relies solely on persuading the parties to reach an amicable settlement of their dispute. And where the Mediator cannot amicably settle the dispute, the Parties are entitled to resort to Arbitration or Litigation.

Disclaimer

This is a free educational material, which does not serve as a source of solicitation, advertisement or the offering of legal services or advice of any kind. No Client/Attorney relationship is therefore created. Readers are strongly advised to always seek, from qualified Legal Practitioners, professional legal counselling to their specific factual situation.

Intellectual Property Protected!

This material is protected by International Intellectual Property Laws and Regulations. This material can therefore ONLY be reproduced or re-distributed for non-profit educational purposes under the strict condition that our Authorship is explicitly acknowledged, and our Disclaimer Notice is prominently displayed.

Introduction - Taxation of Educational Institutions
 
It is a commonly held public opinion that Educational Institutions are not liable to pay, suffer or bear any form of tax on their profits or income.
 
The decision of the Tax Appeal Tribunal ("TAT" in Ikeja, Lagos in 2014, in the matter of the American International School of Lagos v. Federal Inland Revenue Service is sometime relied upon as the legal basis for the view that Educational Institutions are not liable to pay any Tax on their profits and or income.
 
An examination of the TAT's above decision is necessary to verify the credence of the Public Opinion that Educational Institutions' income and or profits are not liable to bear any tax obligation?
 
The TAT Judgment - The American International School of Lagos v. Federal Inland Revenue Service
 
The contention of the Educational Institution in this case was that it is exempted from paying Companies Income Tax ("CIT"), and Tertiary Education Tax ("TET"), on the grounds that it is an Educational Institution, Incorporated, Limited by Guarantee, engaged solely in educational activities of a public character.
 
The defence of the Respondent Tax Authority in this case was that the fees charged by the Appellant Educational Institution were not affordable by many Nigerians. The Respondent therefore contended that the Appellant Edcuational Institution did not qualify as an Educational Institution of a Public Character under Section 23 (1)(c) of the Companies Income Tax Act (as amended).
 
The final decision of the Tax Appeal Tribunal, in this case, was that as the Appellant is a not-for-profit registered company, Limited by Guarantee, with no evidence that its profits or other income were distributed among the Appellant Educational Institution's Directors or Guarantors, the Appellant is exempted from Companies Income Tax and Tertiary Education Tax obligations. The Tax Appeal Tribunal also held that the Respondent Tax Authority's contention that the School Fees charged by the Appellant Educational Institution is only affordable by a select few, and therefore not of a general public nature or character, was discountenanced as the Tax Authority did not tender any evidence in support of this allegation.
 
The Tax Appeal Tribunal accordingly ordered the Respondent Tax Authority to issue to the Appellant Educational Institution the necessary Tax Clearance Exemption Certificate.
 
TAT Judgment - Ratio Decidendi and Obiter Dictum
 
The legal basis for the Tax Appeal Tribunal decision in the above matter was that because the Appellant Educational Institution was a Not-For-Profit registered Company Limited by Guarantee, whose profits cannot be distributed among the Appellant's Directors or Guarantors, the Appellant Educational Institution is exempted from corporate tax.
 
The decision of the Tax Appeal Tribunal in the above referenced case would have been different if the Appellant Educational Institution was not a Company Limited by Guarantee, with no share capital, whose income, profits or assets are not distributable or transferable among the persons who control the Educational Institution, either directly or indirectly.
 
An Educational Institution that is not Limited by Guarantee or registered as a non-governmental charitable organisation, under Sections 26 and 370 of the Companies and Allied Matters Act respectively will find it very difficult to claim tax exemption under Section 23 (1) of the Companies Income Tax Act (as amended). The TAT Passing Remarks, which is what Lawyers call Obiter Dictum, that it is not strange that Educational Institutions generate their income from educational services that they provide, did not form the legal basis for the TAT bottom-line Ratio Decidendi decision.
 
Conclusion
 
Existing Laws already require all registered legal entities, including tax exempted Limited Liability by Guarantee Companies, and Registered Trustees who are more commonly known as NGOs, to file at the end of each financial year, an Annual Return to which must be annexed a Certified Income Statement containing the particulars of their indebtedness and the landed properties held, mortgages and charges, etc. Unfortunately, the enforcement of these statutory requirements by the Tax and Corporate Affairs Commission authorities remains very poor.
 
Subject to when the existing statutes are amended, some regulatory Guidelines on how the assets, income and the remuneration of the officers who control a tax-exempted entity in Nigeria are administered, is urgently required in order for there to be a fair playing field between the tax-exempted entities and the entities that do not enjoy Tax exemption.
 
Disclaimer
 
This is a free educational materia, which does not serve as a source of solicitation, advertisement or the offering of legal services or advice of any kind. No Client/Attorney relationship is therefore created. Readers are strongly advised to always seek, from qualified Legal Practitioners, professional legal counselling to their specific factual situation.
 
Intellectual Property Protected!
 
This material is protected by International Intellectual Property Laws and Regulations. This material can therefore ONLY be reproduced or re-distributed for non-profit educational purposes under the strict condition that our Authorship is explicitly acknowledged, and our Disclaimer Notice is prominently displayed.
Introduction - What is a Dividend? What is an Interim Dividend?
 
Dividend is customarily a portion of the after-tax profits of a company, which is distributed among the Shareholders of a company, in the proportion of the Shares that the Shareholders hold in such a company, as a return on their investment in that company.
 
In practice, Dividend is usually declared and paid at the end of a company's financial year. The Companies & Allied Matters Act ("CAMA") however allows the Directors of a company to recommend to its Shareholders the payment of an Interim Dividend, out of the distributable profits of the company, for the financial year in which such distributable profits were made by the company.
 
Taxation of Interim Dividend
 
All the profits of a company, accruing in, derived from, brought into or received in Nigeria are liable to bear a Companies Income Tax, at a tax rate of thirty per cent (30%) of the distributable profits of the company.
 
As already mentioned above, the taxes on the profits of a company are paid to the tax authority in the following financial year, for the previous financial year in which the said profits were made. The Companies Income Tax Act (as amended) ("CITA") however recognises that a company can declare an Interim Dividend before the end of the financial year in which the distributable profits were made by such a company.
 
The Nigerian Federal Tax Authority, which is the Federal Inland Revenue Service ("FIRS"), have not before now been insistent on the advance tax arising from an Interim Dividend being paid before the Interim Dividend can be distributed to the Shareholders of a company. This old regulatory attitude has now changed.
 
In compliance with the provisions of CITA, companies that declare an Interim Dividend must before paying such Interim Dividend to their Shareholders, do the following; firstly, furnish to FIRS the details of the profits from which the Interim Dividend is been declared; with the particulars of the Shareholders and the proportion of their Shareholding in the company declaring the Interim Dividend.
 
Following from the last paragraph above, the second obligation on the company declaring an Interim Dividend is that such a company must remit to FIRS the advance tax on the Interim Dividend - which is at the corporate tax rate of 30% of the declared profits - before the Interim Dividend can be paid to the company's Shareholders.
 
Interim Dividend Tax - An Advance Tax
 
The advance tax paid on an Interim Dividend however only constitutes a deposit against the final Corporate Tax for the company declaring the Interim Dividend, at the end of the financial year that the distributable profits were declared and paid.
 
When Not to Pay an Interim Dividend?
 
A company cannot declare and pay an Interim Dividend from or out of its working capital.
 
A company cannot also declare and pay an Interim Dividend if there are reasonable grounds for believing that the company is or would after the Interim Dividend is paid, become unable to pay its debts, or fail to remain a going business concern.
 
Conclusion
 
Arising from the enforcement of the collection of advance tax on Interim Dividend income is the new reality that tax payers must proactively continue to increase their tax compliance levels, as a sensible way to minimise their tax risks. This is especially as governments' would continue to aggressively expand the tax base and tax collection, in order to mitigate governments' losses arising from the continuing dwindling in crude oil prices.
 
Disclaimer
 
This is a free educational material which does not serve as a source of solicitation, advertisement or the offering of legal services or advice. No client/Attorney relationship is therefore created. Readers are strongly advised to always seek, from qualified Legal Practitioners, professional legal counselling to their specific factual situation.
 
Intellectual Property Protected!
 
This material is protected by International Intellectual Property Laws and Regulations. This material can therefore only be reproduced or re-distributed for only non-profit educational purposes under the strict condition that our Authorship is explicitly acknowledged, and our Disclaimer Notice is prominently displayed.
Introduction
 
The combined reading of the provisions of the Labour Act, the Employee's Compensation Act 2011, the Pension Reforms Act 2014, the Trade Unions Act 1973, the Industrial Training Fund (Amendment) Act 2011, and other similar legislations on labour or employment law, describes a worker or employee as any person who is employed in the public or the private sector of the economy, to carry out some function relating to the employer's business, whether on a temporary or causal or ad-hoc basis, for a period of not less than thirty (30) days.
 
The Contract of Employment could be oral or in writing; express or implied; continuous or part-time.
 
A strong global and unrelenting economic recession, with its associated uncertainties, has led to the continuing surge in unemployment; and where employment is available, such employment is more of a casual and sometime undocumented nature. This is because many Employers of labour are under the business "perception" that the expenditure for casual undocumented employees are cheaper than those for documented and permanent employees. Is this business "perception" supported by the existing Labour Laws and Regulations?
 
Employment Contracts
 
The Labour Act for example requires that casual or part-time employees, whose employment contracts are for a fixed term, or for a variable term, must like confirmed employees, also be given written employment contracts which enumerate the tenure or duration of the employment, the nature of work, the hours of work and overtime, the rate of wages with the regularity of the payment of such wages, the appropriate notice required to terminate the employment contract, etc.
 
The Labour Act also reiterates the old Common Law principle which makes employers indirectly or vicariously liable for all their employees' misfeasance or wrongdoing undertaken in the course of their employment, whether such employees are on full-time or part-time employment.
 
All employment contracts will be terminated either by the expiration of the term of the employment contract, or the death of either the employee or the employer, or by written notice of termination as contracted.
 
Other Statutory Rights of Casual Employees
 
In addition to casual employees having legal rights to be given written contracts of employments, to enjoy breaktime, have regularity in the payment of their wages and take maternity leave, all employees in Nigeria, including casual employees, are also entitled to earn the minimum wage as guaranteed under the National Minimum Wage (Amendment) Act 2011. The National Minimum Wage in Nigeria is N18,000 (Eighteen Thousand Naira) per month.
 
Under the Pension Reforms Act 2014, all employees, whether on full-time or part-time employment, are entitled to enjoy the benefits under the Contributory Pension Scheme. In addition to Pension benefits, the estate of a deceased employee is also entitled to enjoy the benefits which accrue from the mandatory Group Life Insurance Policy, which the Pension Reform Act 2014 requires all employers to take out on behalf of their employees.
 
Casual employees, also like their full-time counter-parts, are also entitled to, on their own free volition, join one Trade Union of their choice.
 
Conclusion
 
The inability of the government to formulate, drive and enforce policies which create more jobs in the private sector of the economy, with a weak and fragmented Labour Union infrastructure, has led to continuing job losses and more casual unsecured employment remaining the norm, in contrast to full-time permanent employment which prospers the economy.
 
Also, an educational curriculum without an entrepreneurial youths mindset will not promote permanent secured employment as employers present day business needs are not matched by the employees' theoretical curriculum and mindset.
 
Disclaimer Notice
 
This is a free educational material which does not serve as a source of solicitation, advertisement or the offering of legal services or advice. No Client/Attorney relationship is therefore created. Readers are strongly advised to always seek professional legal counselling to their specific situations from qulaified Legal Practitioners.
 
Intellectual Property Protected
 
This material is protected by International Intellectual Property Laws and Regulations. This material can therefore only be reproduced or re-distributed for only non-profit educational purposes with the strict condition that our Authorship is explicitly acknowledged, and our Disclaimer Notice is prominently displayed. You can visit our website - www.oseroghoassociates.com - for more legal materials which are also protected by Intellectual Property Laws.