Commercial Registration, Licensing, and Post-Licensing Inspection Directive No. 935/2022
Summary
This directive, issued by the Ministry of Trade and Regional Integration, provides comprehensive regulations for commercial registration, business licensing, and post-licensing inspections in Ethiopia. It aims to modernize and streamline these processes, ensuring efficiency, accessibility, and a conducive environment for businesses. The directive details procedures for registering, changing, substituting, and canceling business and trade names, as well as commercial registration certificates and business licenses. It also outlines provisions for sectoral associations, foreign chambers of commerce, holding companies, franchising, commercial representatives, and border trade. Furthermore, it addresses the transfer, merger, and division of business organizations, conversion of legal statuses, and special registrations. Finally, it establishes post-licensing inspection procedures and enforcement mechanisms to ensure compliance.
Who's affected
Businesses operating in Ethiopia, including sole proprietors, various types of business organizations (partnerships, share companies, private limited companies), foreign investors, and commercial representatives.
Action required
Businesses must review the directive to understand and comply with the new requirements for commercial registration, licensing, and post-licensing inspection procedures. This may involve updating existing registrations, obtaining new licenses, or adhering to inspection protocols.
Key points
7- Modernizes and centralizes commercial registration and licensing processes.
- Introduces detailed procedures for business and trade name management.
- Establishes clear guidelines for commercial registration and business license issuance, renewal, amendment, substitution, and cancellation.
- Outlines specific requirements for various business structures and foreign investment.
- Mandates post-licensing inspections and enforcement mechanisms.
- Promotes the use of information communication technology for service delivery.
- Repeals previous directives related to commercial registration, licensing, and post-licensing inspection.
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Requirements
15- Submission of specified application forms with required alternative names.
- Verification of business names against the central commercial registration database.
- Authentication of incorporation documents by authorized bodies.
- Obtaining tax identification numbers (TIN).
- Submission of audit reports for certain business organizations.
- Presentation of court decisions or legal documents where applicable (e.g., for minors, interdicted persons).
- Compliance with capital requirements.
- Submission of tax clearance certificates.
- For foreign investors, submission of investment permits and support letters from relevant authorities.
- For specific sectors (e.g., mining, transport), additional documentation like vehicle ownership certificates or professional competence certificates.
- Adherence to post-licensing inspection protocols and cooperation with inspectors.
- Notification of changes in business name, address, capital, or legal status.
- Proper procedures for business name and trade name registration, change, substitution, and cancellation.
- Commercial registration and business license renewal within stipulated periods.
- Compliance with all provisions outlined in the directive, related laws, and regulations.
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Rights and permissions
8- Right to engage in commercial activities upon proper registration and licensing.
- Right to use registered business and trade names.
- Right to obtain copies of information from the commercial register upon payment of fees.
- Right to receive services through online platforms.
- Right to be notified of inspection findings and administrative decisions.
- Right to appeal administrative decisions.
- Right to operate within the scope of the issued license.
- Right to renew business licenses.
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Restrictions
10- Business names and trade names cannot be identical, similar, or misleadingly similar to existing ones.
- Business names cannot impersonate government bodies or political parties.
- Business names cannot be offensive to good morals or public policy.
- The use of names of famous persons or national leaders requires prior authorization.
- Businesses must operate within the scope of their registered business type and license.
- Licenses cannot be transferred to third parties without proper procedure.
- Businesses are restricted from operating if their license is suspended or cancelled.
- Foreign investors are subject to specific regulations and investment permits.
- Specific capital requirements must be met for certain business structures.
- Restrictions apply to the use of certain names that may mislead the public or infringe on existing rights.
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Penalties
6- Cancellation or suspension of business licenses.
- Administrative and legal actions for non-compliance.
- Requirement to correct deficiencies within a specified period.
- Deletion of business names if not corrected within the stipulated time.
- Potential legal proceedings for operating without a valid license or while suspended/cancelled.
- Penalties for providing false information during registration or licensing processes.
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Objectives
4- To establish a uniform national practice for commercial registration, business licensing, and post-licensing inspection.
- To create a conducive environment for doing business through cost-effective, efficient, and accessible services supported by modern technology.
- To close loopholes in the law and practices related to commercial activities and increase satisfaction within the business community and society.
- To modernize and streamline commercial registration and business licensing services with efficient data management.
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Organizations
9- Ministry of Trade and Regional Integration
- Ministry of Justice
- Tax authorities
- Bodies authorized by law to authenticate documents
- Banks
- Courts
- External auditors
- Sectoral regulatory bodies
- Regional governments
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Legal references
4- Commercial Registration and Business Licensing Proclamation No. 980/2016 (as amended by Proclamation No. 1150/2019)
- Commercial Code of Ethiopia Proclamation No. 1243/2021
- Council of Ministers Regulation No. 392/2017 (as amended)
- Federal Administration Procedure Proclamation No. 1183/2000