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BBS 3rd year business law important Question | Unit 10 (Contract of Indemnity and Guarantee)

 



Unit 10: Contract of Indemnity and Guarantee

LAW OF INTELLECTUAL PROPERTY

10.1 INTELLECTUAL PROPERTY RIGHT LAW

👉🏻MEANING OF INTELLECTUAL PROPERTY RIGHT

Intellectual property right refers to the legal rights obtained by an individual or institution over the ownership and use of the IPs, hence, it is the rights granted to the creator of his/her creation. It is a legal right established with the sole motive of protecting the creation of the intellect. Any sort of inventions, such as literature, designs, music, logos, images, etc., can be copied, hence to protect and restrict misusing of the creations, Intellectual Property Rights can be very advantageous. Intellectual property rights protect the interests of creators by giving them property rights over their creations.

👉🏻COPYRIGHT ACT, 2059

Copyright is that branch of law that grants authors the exclusive privilege to reproduce, distribute, perform, or display their creative works. The goal of copyright law is to encourage authors to invest effort in creating new works of art and literature. The specific objectives of this paper are as follows:

  • To familiarize the concept of intellectual property and copyright.
  • To find out the provision of the Copyright Act, 2002 for the protection of copyright works.

👉🏻MAJOR PROVISIONS OF THE COPYRIGHT ACT, 2059

The major provisions under the Act can be provided as under:

  1. Scope of the application of the law
  2. Rights of the authors
    • Economic Rights
    • Moral Rights
  3. Protected works
  4. Unprotected works
  5. Ownership of copyright and its transfer
  6. Terms of protection
  7. Limitations and exceptions
    • Private Use
    • Teaching and Illustration
    • Library and Archival Use
    • Reproduction for Information Purposes
    • Public Exhibition
    • Reproduction of Computer Programs
  8. Infringement of Copyright
  9. Remedies for Infringement
  10. Enforcement

👉🏻PATENT, DESIGN, AND TRADEMARK ACT, 2022

The Patent, Design, of and Trademark Act, 2022 provides protection for industrial property including patents, designs, and trademarks. Patent protection is afforded to and includes new inventions; principles and formulae; and the protection of design including physical shape and appearance. Trademark protections include the word, sign, picture, or combination thereof to differentiate the product from others in the market. The Act has authorized the Department to protect industrial property like patents, designs, and trademarks.

👉🏻TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS (TRIPS)

The TRIPS Agreement, which came into effect in January 1995 as a multilateral agreement between WTO countries, is to date the most comprehensive multilateral agreement on intellectual property. Its main objective is to provide strong and comprehensive protection of various forms of intellectual property, i.e. copyrights, patents, designs, and trademarks throughout the world. The agreement requires compliance with the most recent amended version of WIPO, the Paris Convention for the Protection of Industrial Property, and the Berne Convention for the Protection of Literary and Artistic Works. The TRIPS principally mandates member countries to formulate domestic IPR enforcement procedures to allow right holders to exercise their IPR rights and remedies for the contravention of the agreement.

👉🏻FEATURES OF THE TRIPS AGREEMENT

The four main features of the Agreement are:

  1. Standards
  2. Enforcement
  3. Dispute settlement
  4. Principle-based agreement

10.2 INDUSTRIAL ENTERPRISES AND FOREIGN INVESTMENT RELATED LAW

👉🏻INDUSTRIAL ENTERPRISES ACT, 2076

The Industrial Enterprises Act, of 2076 has been enacted to encourage national productivity and employment opportunities by making the industrial environment more congenial and investment-friendly to develop a strong, dynamic, and competitive production-oriented economy through industrial development by promoting export and replacing imports by using the natural, physical, and human resources available in the country. To achieve this objective, the Act has provided various provisions relating to the classification, registration, and licensing of industries, facilities, and concessions, and proper monitoring to foster industrial development through institutional regulation.

👉🏻SALIENT FEATURES OF THE ACT

  • Industry cannot be operated or established without registering as per this Act.
  • Registration Certificates of the industry will be provided within 15 days of the submission of the application.
  • Investor, if required, needs to conduct an Environmental Impact Assessment (EIA) or Initial Environmental Examination (IEE).
  • Export Industry has to export at least 60 percent of its products.
  • Licensing/Permission from the Industry and Investment Promotion Board is required to establish industries producing explosives, tobacco, and alcohol industries, industry producing sand, and stones, and industry producing radio communication equipment.
  • The investor is required to commence its operations as stated in the Registration Certificate.

👉🏻CLASSIFICATION OF INDUSTRY

The Industrial Enterprises Act, of 2076 has classified the industry into various divisions on different bases. The industries are divided not only for the sake of division but also for the basis of legal recognition and providing incentives, concessions, and special treatment to the specified industries. The industries classified under Section 17 of the Act are as follows:

👉🏻Classification of Industry on the Basis of Fixed Assets - S. 17(1)

  • Micro Industry
  • Cottage Industry
  • Small Industry
  • Medium Industry
  • Large Industry

👉🏻Classification of Industry on the Basis of its Nature - S. 17(2)

  • Information, communication, and information dissemination technology-based industry
  • Manufacturing industry
  • Agro and Forest-based industry
  • Mining industry
  • Infrastructure industry
  • Tourism industry
  • Energy-based Industry

👉🏻PROCESS OF REGISTRATION OF INDUSTRY

  1. Application of registration
  2. Certificate of registration
  3. Appeal against refusal
  4. Matters to be stated in the certificate of registration
    • Date of issue of the industry registration certificate.
    • Date of commercial production and transaction to be commenced by the industry.
    • Terms and conditions to be followed by the industry.
    • Other terms and conditions as prescribed as per the nature of the industry.
  5. Prior approval and monitoring
    • Industry provided under Schedule-1.
    • Industry is required to obtain the Board's approval pursuant to the prevailing law relating to foreign investment and technology transfer.

👉🏻 FACILITIES, CONCESSION AND REBATE

Chapter 5 of the Industrial Enterprise Act, 2076 has provided the various concessions, rebates, and facilities under different headings which are stated as follows:

  • Income Tax Concessions (Section 24)
  • Customs Duty Exemptions (Section 25)
  • Exemptions for Micro Industries (Section 26)
  • Additional benefits for Female Entrepreneurs (Section 27)
  • Other Exemptions and Facilities

👉🏻ONE-STOP SERVICE CENTRE

Under Section 37 of the Act, the Government of Nepal may establish and bring into operation a One Stop Service Centre, as prescribed for the purpose of providing incentives, exemptions, facilities, or concessions easily to those industries or investors entitled under this Act and other prevailing laws and performing the functions to be discharged by various bodies of the Government of Nepal through one place in a timely manner and delivering industry administration related services from the permission to establish, registration, expansion and liquidation of, industries.

👉🏻SICK INDUSTRIES

The Act has defined Sick Industry as the industry which has, after a minimum of five years of its operation, been continuously running under 30% capacity utilization and bearing loss for the last three years, because of the situation out of its control. The act has made some provisions for the revival of such a sick industry. After considering the contribution of such a sick industry before being sick to the foreign currency earnings, employment generation, substitution of import, and promotion of export, the government may make necessary arrangements for the revival of such sick industry. Further, no duty, fee, or tax of any kind shall be levied on the machinery imported by any industry necessary for the extension and diversification of such industry. Similarly, other exemptions, concessions, facilities, or rebates can be provided to such industries for their revival, reconstruction, and management.

👉🏻PROVISION AS TO SUPPLY OF INDUSTRIAL HUMAN RESOURCE

According to Section 49 of the Act, the human resources required for the industry are to be fulfilled by Nepalese citizens only. However, if a Nepalese citizen is not available for any skilled technical post or for senior level management post, the management may by submitting an application to the Department of Labour along with the evidence of such for approval appoint a non- Nepalese citizen. The DOL may grant approval to engage a non-Nepalese citizen at work for a maximum period of five years, not exceeding two years at a time. The Department may extend further two years in a specialized kind of skilled technical post.

👉🏻CORPORATE SOCIAL RESPONSIBILITY

Corporate social responsibility (CSR) indicates the need for corporations to follow sustainable business practices. In the context of corporate governance, CSR means that corporations have to take into account society and the environment as stakeholders and cater to their needs instead of just pursuing profits at the expense of everything else. It is hoped that corporations will be responsible for society and the environment.

👉🏻CSR REQUIREMENT FOR INDUSTRIES

  1. Applicability: Medium or large industry or cottage or small industry with an annual turnover of more than one hundred fifty million rupees.
  2. Amount for the CSR: At least one percent (1%) of the annual profit.
  3. Sectors specified for utilization of the amount of CSR: The areas as prescribed, upon making annual plans and programs.
  4. Reporting requirement: An industry shall submit details within six months after the end of the fiscal year.

👉🏻FOREIGN INVESTMENT AND TECHNOLOGY TRANSFER ACT, 2075

The Foreign Investment and Technology Transfer Act (FITTA), 2075 (2019) intends to increase the industrialization and foreign investment for long-term and sustainable growth in the national economy by utilizing the available resources and also by reforming the existing legal framework of foreign investment in Nepal to attract more foreign investments.

👉🏻MAJOR PROVISIONS OF THE FOREIGN INVESTMENT AND TECHNOLOGY TRANSFER ACT, 2075

The major provisions of FITTA are given below:

  1. Foreign Investment:
    • Investment in shares in foreign currency
    • Re-investment of dividends/Profits
    • Investment through the lease of airlines, ships, machinery, and equipment (Read in section 6)
    • Investment in Equity through "Venture Capital Funds" by "Corporate Foreign Investor" (Read with section 9)
    • Investment in the secondary stock market (Read with section 10) (Not effective until further notification from the Government)
    • Investment through the purchase of shares or assets (Read with section 5)
    • Investment by issue of securities in foreign stock markets (Read with section 11)
    • Technology transfer (Read with section 7)
    • Incorporating Branch Unit (Read with section 8)
  2. Foreign Investors
  3. Borrowings from Foreign Financial Institutions
  4. Application for foreign investment approval
  5. Approving Authority of Foreign Investment
  6. Repatriation of Profit or Gains on Sale of Shares (Section 20)
  7. One Stop Service Centre: Services to be availed from the Centre are as follows:
    • Industry Registration & its related services
    • Foreign Investment and loan approval
    • Company registration & its related services
    • Labor permission (Work Permit)
    • Visa Facility
    • Environment Impact Assessment (EIA) Approval
    • Focal Point for energy & infrastructure development
    • Provide Permanent Account Number (PAN)
    • Quality Measurement and control of products of the industry
    • Concession/rebate for the Industries
    • Approval for Foreign Exchange
    • Any other services required under this act
  8. Concessions, facilities, and incentives available to the Foreign Investors or Companies established under FDI
  9. Provisions for Visas (Section 30)
    • Non-tourist Visa
    • Business visa
    • Residential Visa

👉🏻SECTORS RESTRICTED FOR INVESTMENT

  • Primary agriculture sectors such as fish farming, animal husbandry, horticulture, milk business and others
  • Small and cottage enterprise
  • Personal service business such as tailoring, driving, barber shop
  • Arms and ammunition industry
  • Buying and selling of land and houses (other than the construction industry)
  • Retail business
  • Remittance service
  • Local catering, travel agency, trekking agency, homestay and rural tourism
  • Mass-media businesses such as newspapers, radio, TV, and online news
  • Movies of the national language
  • Management, accounts, engineering, and legal consulting services, language training, music training, computer training
  • Other consulting services shareholding

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