**WHAT IS SURETY?**

Surety a person or organisation that takes responsibility for another's performance of an undertaking to pay the debt in case the debtor policy defaults or is unable to make the payments.

The party that guarantees the debt is referred to as the surety, or as the guarantor.

**WHAT IS A SURETYSHIP AGREEMENT?**

A suretyship agreement is an agreement in terms of which the surety undertakes liability towards a creditor for the proper performance of a portion of or the entire obligation of a debtor.

It is essential for there to be a valid principal obligation between the creditor and debtor in order for the suretyship agreement to be valid. A suretyship agreement is an accessory agreement, which only exists in the presence of a valid underlying agreement. Therefore, if there is no principal obligation, then there is no suretyship agreement. 

The obligation of the debtors towards the creditor continues to exist notwithstanding the suretyship agreement.

In simple terms, a suretyship agreement helps provide security for payment being made to the creditor by the debtor. If the debtor defaults, the creditor can look to the surety instead, in terms of the suretyship agreement, to recover the monies owing.

It is a requirement that a suretyship agreement must be in writing and signed by the surety in order for it to be valid. 

**WHY DO YOU NEED A SURETYSHIP AGREEMENT?**

A creditor who has enters into an agreement with another person or entity (debtor), where that debtor has to, or might in future, owe the creditor money, the creditor might like some security to ensure that they are able to recover the monies owing if the debtor defaults in payment.

**DIFFERENCE BETWEEN SURETYSHIP AND GURANTEE **

*Suretyship*

A suretyship is a contract between the creditor, the principal debtor and the surety. In his personal capacity the surety undertakes to step into the shoes of the principal debtor and pay the creditor if the principal debtor can’t. The suretyship agreement exists, dependant on an underlying agreement. 

The surety and the principal debtor become jointly and severally liable to the creditor.

*Guarantee*

An independent guarantee exists independently of any underlying agreement by the principal debtor to the creditor.

The guarantor irrevocably and unconditionally guarantees, as a primary obligation, in favour of the creditor, the payment by the principal debtor of all amounts it owes to the creditor and undertakes to pay the creditor on written demand all sums which are now, or at any time or times in the future due by the principal debtor to the creditor.

The guarantee is a continuing covering security and remains in force until the principal debtor pays everything it owes to the creditor.

**WHAT SHOULD BE INCLUDED IN A SURETYSHIP AGREEMENT? **

*Suretyship*

The primary obligation for which the suretyship agreement applies to must be agreed on and stated within the agreement to avoid any uncertainty.

The surety should undertake that they shall not be entitled to withdraw or cancel this suretyship unless and until all indebtedness, commitments and obligations have been fully discharged or extinguished. 

*Renunciations*

The surety should renounce all benefits arising from the legal exceptions and defences and agree and declare that the suretyship is to be in addition and without prejudice to any other suretyship/s and security/ies now or hereafter to be held by the creditor.

*Claims and/or counterclaims of the principle debt *

The surety should acknowledge that all amounts due and payable by the principal debtor to the creditor shall be recoverable from and paid by the surety notwithstanding that the principal debtor may have any claim or counterclaim of whatsoever nature and howsoever arising against the creditor.

*Release and Latitude*

Without affecting the rights of the surety, the creditor may be entitled to release securities and other sureties of the surety.

*Costs, Charges and Expenses*

The surety is responsible for all costs, charges and expenses of whatsoever nature which may be incurred by the creditor in enforcing their rights in terms hereof including, but not limited to, legal costs, collection commission and tracing fees irrespective of whether or not any action has been instituted against the surety.

*Application of Monies*

All parties should agree that the creditor is irrevocably authorised to apply any monies received in terms of this suretyship in such manner as the creditor in its entire discretion may think fit.

*Boilerplate clauses *

Just like any other agreement, the suretyship agreement should contain standard boilerplate clauses (also commonly referred to as standard or general clauses). These clauses are included in the agreement to ensure certainty and prevent ambiguity.

Boilerplate clauses to expect in a suretyship agreement:

1.  Severability 

2.  Notices and Domicillium 

3.  Variation 






SuretyShip Agreements

Vaccination policies in South Africa remain controversial however they are not illegal if the policy is implemented in a manner which conformed with the laws in South Africa. 

Many companies followed the Department of Employment and Labour *Amended Consolidated Direction on Health and Safety *which provided the circumstances under which an employee may implement a mandatory vaccination COVID 19 policy in their workplaces. 

However, now that South Africa is no longer in a National State of Disaster, is your vaccination policy still legal? We seek to provide you with the answer in this article and to assist you in drafting a legally enforceable vaccination policy.  

> To be clear, the law in South Africa still allows for vaccination requirements / policies in the workplace even outside of the National State if Disaster.   
>
> ** **
>
>  

**What does the law say? ** 

Even before COVID, the Occupational Health and Safety Act, 1993 (**OHSA**), provided for guidelines on vaccination policies in South Africa.  

Under OHSA, an employer in a company has a legal duty to ensure a working environment that is safe and without risk to the health of its employees.  

Under OHSA various regulations are published which help employers understand and practically implement the provisions of OHSA.   

For example, the Hazardous Biological Agents Regulations (**Hazardous Regulations**) were recently amended to state that the SARS-CoV-2 virus is classified as a Group 3 hazardous biological agent. The Hazardous Regulations further confirm that a registered vaccine for the SARS-CoV-2 virus (COVID) is available in South Africa. 

The law in South Africa states that employers are to conduct a risk assessment to determine if any employee could be exposed to a hazardous biological agent. If after conducting the risk assessment it is found that employees may be exposed to COVID or another hazardous biological agent at the workplace the employer must take steps to control such exposure in the workplace. 

The Hazardous Regulations go on to provide that, such control measures must include **making available effective vaccines** for employees who are not immune to the hazardous biological agent in question. 

How does an employer being to implement such control measures? 

**The Code of Practice** 

The Code of Practice: Managing Exposure to SARS-CoV-2 in the Workplace” (**Code**) is now in force. The Code states that every employer must undertake a risk assessment and based on the risk assessment must develop a plan to include** steps to be taken relating to the vaccination of its employees**.  

A vaccination policy is only necessary and therefore legally enforceable as a “reasonably practicable control measure” which the employer will determine based on its risk assessment. 

 

**What is a Risk Assessment?** 

What is a risk assessment and how do you go about doing one?  

Before developing a policy on vaccination, an employer needs to conduct a risk assessment. You can find our suggested risk assessment document here \[=].  

Legally an employer must inform all employees of the results of the risk assessment, and the employees must be given an opportunity to comment.  

If there is an employees’ union representing the majority of employees the employer must also consult with the union regarding the outcome of the risk assessment. To the extent that there is a health and safety representative/committee, the employer must also consult with the committee.   

**What does a Vaccination Policy look like? ** 

Once the risk assessment has been completed and the employer has determined that there is a need for a policy to ensure a safe working environment, the employer must draft a policy describing the steps to be implemented for vaccinations in the workplace.  

But what does this policy look like? You can find our suggested vaccination policy document here \[=]. 

The Code states that an employer must provide employees with information about:   

*   the nature of vaccines used in the country; 

*    the benefits of the COVID-19 vaccines;  

*   the nature and risk of any serious side effects; 

we would suggest providing employees with the following fact sheet – \[=].  

**Objections to vaccination: ** 

Employers are advised to note that an employee can object to a vaccination on medical and constitutional grounds.  

The Vaccination Policy must make provision for an objections process. Our Vaccination Policy sets out clear guidelines to be followed when an employee refuses a vaccination.  

 


Vaccination Policy South Africa

##### **WORKPLACE POLICIES** 

The Team at Hello Contract aim to ensure that each workplace is as safe as possible. This article was written for the benefit of both employers and employees. It is critical that the following workplace policies are in place in any South African work environment.  

Our workplace policies and procedures are set out in a template from for easy use. Simply answer a few questions and receive your very own customised workplace polices. A set of policies is a guiding principle used to provide guidance for your organization or company. The workplace policies are  usually published in a booklet or online and are widely accessible to all within the company.  

> Workplace policies are the most underestimated documents we see when practicing employment law. It is very easy to take control as an employer, but a significant number of employers do not have workplace policies in place.

##### **Anti-Fraud and Corruption Policy**&#xA;

An Anti-Fraud and Corruption Policy aims to ensure that all employees are made aware of the exact actions that constitute fraud and corruption in a particular workplace and generally. 

An Anti-Fraud and Corruption Policy further seeks to explain the exact steps that will be taken in instances of suspected fraud or corruption in a workplace.  

The Anti-Fraud and Corruption Policy also provides a mechanism for employees to follow when they suspect that there may be fraud or corruption in the workplace.  

The Anti-Fraud and Corruption Policy further provides protection for “whistle blowers” i.e. those who seek to report fraud and corruption in the workplace.  

This is an essential workplace policy for all private companies in South Africa.  

Get your Anti-Fraud and Corruption Policy here: [https://shop.hellocontract.co.za/employmentandlabourlaw/hr-policies/anti-corruption-and-fraud-policy ](https://shop.hellocontract.co.za/employmentandlabourlaw/hr-policies/anti-corruption-and-fraud-policy)

##### **Employment Policy - Conflict of Interests Policy** 

A conflict of interest occurs when an employee or its employer are compromised as a result of a clash between their personal (or self-serving) interests and their professional duties or responsibilities to act in the best interests of another (e.g. their employer or company).  

Problems arise when an employee or employer chooses personal gain over their duties to conduct themselves in the best interests of the company. When such a situation arises, the employee or employer is usually asked to remove themselves, and it is often legally required of them.   

A Conflict of Interest Policy applies to the following persons: 

1.  all Company employees (fixed term and permanent); 



1.  supervisors and management; 



1.  directors, public officers; and 



1.  consultants/contractors contracted by the Company. 

A Conflict of Interest Policy is informed by the South African Companies Act 71 of 2008 (Director’s fiduciary duties)  

By way of example a conflict of interest may arise when an employee, has a family member which he suggests should be used as a supplier by his or her new employer. This conflict of interest has arises as the employer is now unsure if the employee’s conduct, judgment and/or decision-making is unbiased. 

However, if an employee suggests a new supplier, which happens to be his or her family member, it does not necessarily imply wrongdoing on anyone’s part. 

However, the Conflict of Interest Policy is there to ensure that when a conflict of interest arises, it must be recognized, disclosed, managed, reduced and/or eliminated.  

Without a Conflict of Interest Policy in place, a company cannot manage conflicts of interest that may arise and therefore cannot determine which Conflicts are serious enough to warrant a dismissal or which Conflicts are to be simply disclosed and filed in the employees HR file. 

The Hello Contract Conflict of Interest Policy  is ready to be tailored to your company’s needs and should be considered a starting point for setting up your employment policies.  

Get your Conflict of Interest Policy here:  https://shop.hellocontract.co.za/employmentandlabourlaw/hr-policies/conflict-of-interests-policy

##### **Employment Policy - Human Immune Deficiency (HIV) & Acquired Immune Deficiency Syndrome (AIDS)** 

An HIV Policy is drafted to ensure that employees who have been medically diagnosed with or who are suspected of having the HIV virus and the AIDS virus are respected and measures are put in place to prevent the spread of the HIV virus and the AIDS virus.  

HIV and AIDS are serious public health problems in South Africa that have socio economic, employment and human rights implications.  The HIV and AIDS epidemic will affect every workplace, with prolonged staff illness and absenteeism and will impact on productivity, employee benefits, occupational health and safety, production costs and workplace morale.  

HIV and AIDS are still a disease surrounded by ignorance, prejudice, discrimination and stigma.  

One of the most effective ways of reducing and managing the impact of HIV and AIDS in the workplace is through the implementation of a HIV/Aids policy and programme. In the light of this, this policy has been developed as a guide to the Company’s management and employees. 

The purpose of this HIV Policy is to reassure employees that AIDS is not spread through casual contact during normal work practices and to reduce unrealistic fears about contracting an AIDS virus-related condition.  

In addition, the HIV Policy is there to protect the legal right to work of employees who are diagnosed with an AIDS virus-related condition and provides guidelines for situations where infection with the AIDS virus is suspected as to ensure individuals with HIV infection are not unfairly discriminated against in the workplace. 

##### **Employment Policy - IT Policy **

The use of technology in the workplace is an integral part of modern working live as it provides employees the opportunity to perform their daily tasks more efficiently and effectively, whether out in the field or in the office. 

This IT Policy draws on the relevant legislation in South Africa, in particular the Regulation of Interception of Communications and Provision of Communication Act (“RICA”), the Protection of Personal Information Act (“POPIA”) and the Electronic Communications and Transmissions Act (“ECTA”).  

The IT Policy will apply to all company personnel, employees, contractors etc. who make use of the company’s IT equipment as well as external third parties who may from time to time make use of the company’s IT equipment.  

The IT Policy will further go on to explain what exactly constitutes the company’s IT. For example, it will differentiate between hardware, software and telecommunications related tools etc.  

An IT policy is essential as it ensures that all employees, even when working from home, have guidelines to follow when using the company’s IT.  

##### **Q & A ON WORKPLACE POLICIES **

Q: Why does a company need workplace policies?  

A: Workplace policies are essential to ensure a safe work environment for all. Workplace policies provide guidelines for the relationship between the employee and the employer and ensure that both an employer and employee are made fully aware of their duties and obligations.

Workplace Policies you need in your business

**Service Level Agreements (SLA’s) – Here’s what you need to know about them.**

A Service Level Agreement (SLA) is a contract that sets out the services that one party has agreed to render to another. The parties to a Service Level Agreement are often referred to as service provider and client. The service provider being the party that renders the services and the client being the party who receives the services rendered or  receives the goods produced as a result of those services.

An SLA usually exists between a business and its customers/clients. Regardless of what type of SLA exists between parties there are common building blocks that should be included in each SLA.

In this blog we evaluate some of the key concepts and clauses that should be included in all Service Level Agreements, and provide some background on why these are important!

**If you would like to go directly to our shop and purchase our automated Service Level Agreement, click > **[**Service**](https://shop.hellocontract.co.za/businessandcommerciallaw/service-level-agreements/service-level-agreement)** Level Agreement **

Contents of this blog;

1.  [Commencement, Duration and Termination](https://hellocontract.co.za/?p=2207#Duration)

2.  [Services](https://hellocontract.co.za/?p=2207#Services)

3.  [Service Variation](https://hellocontract.co.za/?p=2207#ServiceVariation)

4.  [Fees](https://hellocontract.co.za/?p=2207#Fees)

5.  [Force Majeure Event](https://hellocontract.co.za/?p=2207#InterruptionEvent) 

6.  [Intellectual Property](https://hellocontract.co.za/?p=2207#IP)

7.  [Boilerplate Clauses](https://hellocontract.co.za/?p=2207#Boilerplate)

**Commencement, Duration and Termination**

It is of importance that the parties to the agreement agree on when the agreement will come into effect and for how long the agreement will be in existence for. The agreement should provide clarity on how the agreement will be terminated and which of the parties will be allowed to terminate the agreement and if they will be allowed to end the agreement without reason and the notice period in such a case.

**Services**

This clause is one of the most important clauses in the entire agreement. Here you will find the details of the services that the service provider has agreed to render to the other party. A brief summary of the services, to whom and how the services will be delivered are details that you would also want to include in this clause.

**Service Level **

An SLA should provide clarity on how the success of the services rendered by the service provider is to be measured or approved. Parties should agree on what measurement will be used to measure the success of the services and how and when the success should be measured, within the agreement. 

**Service Variation**

Service Variation means a material change in the services that is made at the reasonable discretion of the Service Provider or at the request of the client. It is important that the process to be followed if the service provider needs to make an adjustment to services be clearly stated within the agreement.

In the Service Variation clause, it would be advisable to include how the service provider should go about obtaining the consent of the client to vary the services. In the instance of service variation, the fees in respect to services rendered may also need to be adjusted. It is then important that this clause clarifies the procedures to be followed for the service provider to obtain consent from the client to effect a fee adjustment.

**Fees**

As with any agreement that involves compensation, there should be clarity on the fees that will be charged for services rendered. The fees should be agreed upon and the details of when, how often and how payment will be made should be clarified in the agreement. The agreement should state whether the service provider will require a deposit before starting to render services, and if so, how much that deposit will be, when and how it will be paid. Parties may also agree on the penalties that may be imposed should one of the parties make a late payment. 

**Intellectual Property**

While rendering services to the client, intellectual property, including inventions, product designs, creative works etc, may be created. For the avoidance of any doubt, it is thus very important to ensure that the parties agree on which party will retain ownership of any and all intellectual property that is created by the service provider while rendering services to the client.

**Boilerplate Clauses **

Apart from the above, all  Service Level Agreements should contain standard boiler plate clauses (or standard clauses) which are included to ensure certainty and prevent ambiguity. 

These clauses would include, for example:

1.  Domicilium and Notices 

2.  Non- Waiver

3.  Assignment

4.  Governing Law and Jurisdiction 

5.  Force Majeure Event 

6.  Dispute Resolution Procedures

7.  Non-Variation of Agreement Provisions

8.  Severability Provisions

9.  Whole Agreement provisions

To understand more about boilerplate clauses, please read [here](https://hellocontract.co.za/boilerplate-clauses-what-are-they-and-why-are-they-important/). 

At Hello Contract, we have taken into account all of the above considerations so that you can create a version of a Service Level Agreement that is perfectly suited to your needs, and which is available [here](https://shop.hellocontract.co.za/businessandcommerciallaw/service-level-agreements/service-level-agreement).









Service Level Agreements at Hello Contract

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*This Blog is part of our guide to starting your business. Copyrights and Trademarks are essential in building and maintaining your business value. In this blog we provide you a guide to understanding what these are, and how you can protect yours.*

## Protecting your Intellectual Property 

You may have had someone steal your intellectual property or at least heard of someone who has experienced this problem. It can be an absolute nightmare when someone steals your work, especially as a freelancer; it’s costly, disheartening and can be very confusing to your customers. 

Some of the ways you can protect your work is through copyrights and trademarks. Copyrights and trademarks protect distinct creations. Generally, copyrights protect creative or intellectual works, and trademarks apply to commercial names, phrases, and logos.

### Copyrights

You can get copyright protection for literary works, such as books, articles and scripts, cinematograph films, sound recordings, broadcasts, musical work, artistic work, computer programs, published editions and program carrying signals. 

The general requirements for copyright protection are:

*   The subject matter which you want to protect must be a “work”. It must be a literary work, cinematograph film, sound recording, broadcast, musical work, artistic work, computer program, published edition or program carrying signal.

*   The work must have a sense of originality; that is that you put your own effect into the work rather than just blatant copy pasting. 

*   The work must of a material form. You cannot have protection over ideas and so the work must be reduced to something that is material. 

*   You as the author must be a qualified person or first publication of the work must have occurred in South Africa. 

*   And the work must not offend public morals. 

Copyright protection in South Africa is limited or extended to the lifetime of the author plus 50 years from the day of the author’s death. However, this position is different from that of the USA. In the USA, copyright protection is limited or extended to the lifetime of the author plus 75 years from the date of the death of the author.

Copyright is the only form of intellectual property right which does not have some form of registration as a requirement for its subsistence. It grants the  owner of the right exclusive rights and the right to prevent others from performing restricted acts in relation to the protected works. These ‘restricted acts’ in effect entail the ways in which a protected work will normally be commercially exploited.

As a freelancer, you own the copyright to most of your work unless you've signed a contract specifically stating that you're transferring ownership to the client. The default copyright owner of any work you produce is you. There are exceptions to this, that is, if you are producing work that is intended for publication, created for payment, created as part of your employment duties or if there exercised an agreement that that your client will own the copyright. 

However, even if the work you do falls under these categories, you'd still need a written agreement that says you produce work for your client and the copyright belongs to them.

> It is very important to remember that copyright does not protect ideas. So, as a freelancer, if you go into a meeting discussing an idea for a client's website design and they don't hire you, they can still use your ideas.

Let's say that you write a great article for your client, but you still want credit for the work. In that case, you'd need to specifically ask for credit and have it written in your contract. Otherwise, the client isn't obligated to give you credit.

If it is your intention, you can transfer copyright ownership through a valid written agreement using language that transfers copyright to the client before the client can use your work.

Without a written agreement, it's assumed that the copyright for the work produced belongs to you, the author and that they've merely licensed use of that work to the client for a limited time and purpose.

It is very important to remember that copyright does not protect ideas. So, as a freelancer, if you go into a meeting discussing an idea for a client's website design and they don't hire you, they can still use your ideas.

This is why freelancers need to sign a contract before producing work for anyone. At a minimum, these contracts should detail the work you'll perform/produce, who owns the copyright, the pay for the work, and the date you'll get paid.

Should you find yourself in a situation where your client or someone else have infringed on your copyright then you have a right to claim for damages from the person infringing on your copyright, an interdict preventing the infringer from continuing to infringe your rights and/or an order that enables you to remove all infringing copies from the possession or control of the infringer so that they can be destroyed.

One of the reasons it’s essential for you to get a contract in place for every client you work with is that a contract gives you an opportunity to write out exactly what is the copyright status of any given piece of work you’ll be handing over to your client.

It’s in you and your client’s best interest to work out copyright ahead of time in a well drafted agreement to provide clarity and avoid any potential infringement claims. 

### Trademarks

A trademark is a type of intellectual property consisting of a recognizable brand name, a slogan or a logo. It identifies the services or goods of one person and distinguishes it from the goods and services of another. A trademark may be located on a package, a label, a voucher, or on the product itself.

> A trademark is a type of intellectual property consisting of a recognizable brand name, a slogan or a logo. 

You’ve probably created logos and brands for your business as a freelancer, in order to allow your customers and clients to distinguish  your products and services. It may have even cost you a lot of money to build your brand identity. That is why it is important that you protect your brand name, slogans and logos against copying and competition, to avoid other brands confusing your customers and clients and benefiting from your hard work. 

As a freelancer you may think that trademarks don’t apply to you and only apply to big companies like Coco Cola. However, a trademark is a unique and legitimate tool for the brand recognition, even  for small business and prevents competitors from using your logo, slogan or other brand identifications. It is especially important for you as a freelancer to protect your brand identity from copying by other business. Freelancing isn’t easy and that extra-legal protection definitely helps. 

A registered trademark can be protected forever, provided it is renewed every ten (10) years upon payment of the prescribed renewal fee.

#### Trademark Registration

Unlike copyright, trademarks can only be protected if they are registered.

There are many benefits of registering your trademark. Registering your trademark gives you the exclusive right to use your registered trademark as a brand name for the goods or services. There are many freelancers out there who may be providing the exact same services as you and it is important that your customers and clients can clearly identify your brand. You also don’t want anyone else creating a logo or slogan that will confuse your customers and clients.  Registering your trademark also means that should you wish to sell your business at any later stage you can actually benefit from the trademark as it can also be sold. One of the best advantages is the fact that one is afforded a monopoly in the specific trademark registration. This gives one the right to sue for infringements or object to other names as mentioned above.

The trademark application usually takes approximately 12-18 months to be examined, depending on the workload at the Trade Marks Office. Once any conditions have been met or refusals overcome, the application is accepted and published in the patent journal. If no oppositions are entered or any entered oppositions are overcome, the registration certificate will be issued. This entire process usually takes approximately 24-36 months but could also take longer.

#### The trademark registration process

Register your trademark with the Companies and Intellectual Property Commission (CIPC), to prevent your competitors from using it. CIPC administers the Register of Trademarks, which is the official record of all the trademarks that have formally been applied for and/or registered in the Republic of South Africa, since 1916.

Applications can be lodged in 45 different classes, depending on the goods and/or services for which the trademark will be used.

#### Where can you register your trademark?

New applications can be lodged via an e-filing application on the Companies and Intellectual Property Commission website. In addition, all documents may be submitted via post (mail) or placed in the drop box at the Companies and Intellectual Property Commission office. 

Manual Application

*   Complete form [TM1](http://www.cipc.co.za/index.php/download_file/view/202/).. The original form TM1 must be submitted to CIPC  via [post](http://www.cipc.co.za/index.php/contact-us/contact-address-details/), or courier services, or placed in the drop box outside the CIPC office at the dti Campus, 77 Meintjies Street, Sunnyside, Pretoria.

*   When applying for a trademark,\*\* please note \*\*that you have to file a separate trademark application for each international class of goods or services for which you would like to use your trademark. For example, if you manufacture and also sell cars, you have to lodge two trademark applications:



*   One in class 12 for manufacturing of motor vehicles; and

*   One in class 35 for selling of motor vehicle.



*   To identify the correct class for goods or services, view the[ International Classification of Goods and Services](http://www.cipc.co.za/index.php/trade-marks-patents-designs-copyright/trade-marks/ho/classification-goods-and-services). Alternatively, contact the CIPC Office for assistance. Our staff will be able to assist you to identify the correct class/es for your goods and/or services.

*   Indicate the class in Field 51 of form [TM1](http://www.cipc.co.za/index.php/download_file/view/202/).

*   Indicate all the goods and/or services for which you would like to use the trademark in Field 57 of form TM1.

*   Take care not to put goods or services belonging in different classes on one trademark application form. If you do so, your application will not be processed and will be returned to you requesting you to indicate the goods/services of interest for one class only, and also advising you to lodge further applications for the additional class/es.

*   Field 74 of form TM1 "address for service" is the address at which you will be receiving all the communications from the Office. Please be sure to inform the Office by requesting "a change of address for service" on form [TM2](http://www.cipc.co.za/index.php/download_file/view/203/) in case this address changes. The address for service MUST at all times be an address within the Republic of South Africa.

*   For further assistance, view [SAMPLE TM1](http://www.cipc.co.za/index.php/download_file/view/215/).

*   Should your application comply with all the formal requirements, and the required official fee has been received by the Office, the application will be allocated an application date and an official application number. All communications with the Office should at all times include the application number as reference.

*Electronic Application*

*   To lodge a new trademark application electronically, [click here](https://iponline.cipc.co.za/).

*   When applying for a trademark, \*\*please note \*\*that you have to file a separate trademark application for each international class of goods or services for which you would like to use your trademark. For example, if you manufacture and also sell cars, you have to lodge two trademark applications:



*   One in class 12 for manufacturing of motor vehicles; and

*   One in class 35 for selling of motor vehicle.



*   To identify the correct class for goods or services, view the[ International Classification of Goods and Services](http://www.cipc.co.za/index.php/trade-marks-patents-designs-copyright/trade-marks/ho/classification-goods-and-services). Alternatively, contact the CIPC Office for assistance. Our staff will be able to assist you to identify the correct class/es for your goods and/or services.

*   Take care not to put goods or services belonging in different classes on one trademark application form. If you do so, your application will not be processed and will be returned to you requesting you to indicate the goods/services of interest for one class only, and also advising you to lodge further applications for the additional class/es.

*   "Address for service" is the address at which you will be receiving all the communications from the Office. Please be sure to inform the Office by requesting "a change of address for service" on form [TM2](http://www.cipc.co.za/cipc/index.php/download_file/view/203/) in case this address changes. The address for service MUST at all times be an address within the Republic of South Africa.

*   Should your application comply with all the formal requirements, and the required official fee has been received by the Office, the application will be allocated an application date and an official application number. All communications with the Office should at all times include the application number as reference.

You do not need to be a South African citizen to register a trademark, but you must be using the trademark in the Republic of South Africa. To register the trademark, you must have a business address in South Africa. If you are represented by someone with an address in the Republic of South Africa, the representative must be an admitted attorney in South Africa. Trademark applicants may not be represented by auditors, accountants, etc.

The application fee for a trademark is R590.00 for each class in which you apply, and for each spare trademark. This amount will not be refunded if the application is refused.

It is highly recommended that you register your trademark as soon as possible. There is a surge in new business and the chances of someone else thinking of a logo, slogan or even a business name similar to yours are very high. You need to register your trademark to prevent any other business using anything that identifies your brand as your own as theirs. After all, it’s your hard work. Don’t let it go in vain.

Starting your business, Copyrights and Trademarks

## Getting your primary contracts set up

Once you have decided on your business structure, have trademarked your logo, it's time to think about your contracts., It is very important that you always have valid and enforceable contracts with all your clients. You may think it’s a waste of time to draw up a lengthy document for a project that’s going to last just a few days. However, running a business without contracts can only guarantee you frustrations and misunderstandings. You already face many challenges as a freelancer, you don’t need any more avoidable challenges. 

It may seem like a daunting task that you want no part of, but for your business to run well, you cannot afford to operate without contracts. Contracts are of great value and can protect you and your client in cases of unforeseeable circumstances. 

You may have worked with oral agreements before and it may have worked but it leaves so many blurred lines and can create expensive misunderstandings. For example, imagine you forget to discuss who will pay for your transport costs when you travel to shoot a client’s wedding and the client insists that you did not agree that they would pay and you are left with a hefty transport bill to pay. 

A contract sets out the relationship between you and your customer, helps you cover the bases in case a problem arises, and more importantly, ensures that everyone is on the same page in terms of expectations for project scope, deliverables, payment, timeline, etc. You need a solid contract whenever you’re doing business with a client, no matter how small the job may be. 

Here are some of the contracts you need to have in place

### Service Level Agreement 

A Service Level Agreement sets out the deliverables that you have agreed to provide to your client as well as the deliverables for the client.

You would need an SLA if you are rendering services to a client and you would like to outline the expectations of both you and your client. For example, a photographer who has been hired to shoot a client’s event, a social media influencer who has been asked to promote a brand or a developer creating software or applications.

A good Service Level Agreement will ensure that you and your client are clear in terms of expectations and will help with ensuring that your clients stay up to date with payments. 

### Independent Contractor Agreement 

An Independent contractor is a person/ business who is contracted to perform work or provide services to another for compensation. Independent contractors do not work regularly for an employer but rather as and when they are required. You will be considered an Independent Contractor if you have a somewhat continuous relationship with your client, but you only do work for them as and when required, for example, if you’re a blog writer.  

An Independent Contractor Agreement provides for the terms of working between you and your client. This contract gives you the necessary freedom to work on different projects simultaneously as opposed to the traditional employment agreement, freedom which you may require especially when you’re starting out. 

It is important that you have a good idea of the terms that you would like in the contract and you may want to consider having a personal Independent Contractor Agreement template that you adjust and customise for each client. Remember- contracts are not ‘one size fits all’.

What the difference between a Service Level Agreement and Independent Contractor Agreement?

An SLA is mainly about performance measuring and outlines the deliverables between you and your client. An SLA is required for projects and does not create any kind labour relationship whereas, an Independent Contractor Agreement creates a relationship that is similar to that of an employment relationship. As a freelancer you would decide to use an SLA for once off projects, whereas you would opt for an Independent Contractor Agreement when the work that you will be doing is continuous but required on an ad hoc basis.

### Termination of Independent Contractor Agreement 

It is natural that you may want to terminate your Independent Contractor Agreement for one reason or another. 

Your Independent Contractor Agreement will most likely have a clause in it which allows for the termination of the Agreement for any reason or no reason at all.

A Termination of Independent Contractor Agreement basically serves as a written notice to terminate the Independent Contractor Agreement and frees you from the contract. 

### Letter of Demand for Unpaid Invoices 

Unfortunately, in business there will always be some clients who do not pay on time. In any business and even more so when you are a freelancer, you need all your invoices paid. A demand letter is an important first-step in a proceeding for debt recovery before legal action. A demand letter, or overdue payment letter, states how much is owed, what for and when the invoice needs to be paid. It may also include a warning that you will consider legal action if the debt is not paid by a certain date.

A letter of demand for money owed to you is an important step to attempt to resolve your debt recovery matter without investing your limited time and expense into commercial litigation or alternative dispute resolution.

### Acknowledgment of Debt 

If you’ve gotten to this stage where your clients/ customers have still not paid you after several attempts to get them to pay up, you can ask them to sign an Acknowledgment of Debt.

An acknowledgement of debt is a document which contains an explicit admission of liability by the debtor. In the Acknowledgment of Debt, the debtor acknowledges that they owe a particular sum of money to you and undertakes to repay what is owing. It is legally valid and binding on the debtor. 

This is important for you to ensure that you recover all your debts. Every cent counts!

### Non-disclosure Agreement 

A non-disclosure agreement (NDA) is a contract between you and your client that outlines confidential material, knowledge, or information that you and your clients wish to share with one another for certain purposes but wish to restrict access to.

In this agreement you and your client agree not to disclose information covered by the agreement. The NDA creates a confidential relationship between you and the other party, typically to protect any type of confidential and/or proprietary information or trade secrets. The NDA protects non-public business information.

If you are considering doing business and need to understand the processes used in your and or the other party’s business for the purpose of evaluating the potential business relationship you may enter into an NDA before even starting business with your client or customer.

Once you’ve entered an NDA, you may share sensitive information without fear that it will end up in the hands of your competitors and if it does, you will have a right to recourse.

As a freelancer, your position in business may be weaker than that of other businesses that are bigger and more established and thus, is it important that your confidential information is protected to avoid putting yourself at a competitive disadvantage.

If you find yourself in a situation where the information you have to share with your client is confidential and the disclosure of that information would cripple you and your business, then you should consider entering a One-Sided NDA. If your client will also be sharing confidential information, then a Mutual NDA is advisable. However, if you feel like it is not necessary for you to enter an NDA with your clients, your information will still be protected because most agreements still include a confidentiality clause for your protection.

### Copyright Assignment Agreement 

A copyright is a collection of rights that vest in someone who creates original work. Copyright may subsist over work such as literary works, blog articles, code, movies or software. A copyright allows you the right to reproduce the work, to distribute copies, to prepare derivative works and to perform and display the work publicly.

As a copyright owner, you can transfer or assign your rights to your clients. Copyright assignment allows your client to take ownership of the copyright. In order for the assignment to be valid, by law, it needs to be reduced to writing in what is known as a Copyright Assignment Agreement. 

### Website Privacy Policy 

A privacy policy is a statement contained on a website that details how the operators of the site will collect, store, protect, and utilize personal data provided by its users.

In addition to outlining how you will use the information, the policy includes how it will meet its legal obligations, and how those sharing their data can seek recourse should the company fail to meet those responsibilities.

If you have a website and you gather any data about your users, even if it’s just through tracking their location then you are required by law to have a Website Privacy Policy. Whether your website tracks users' behaviour through cookies, or just send out occasional newsletters, the policy is required. 

There are strict penalties for not having a privacy policy in place and so if you have a website and collect personal data, you should consider it a matter of urgency to have a Privacy Policy in place. You wouldn’t want to go through the costly and reputation ruining route of non-compliance. 

### Website Terms and Conditions 

Website Terms and Conditions govern the use of a website by visitors, it’s about how the website should be used.

As a freelancer you may think that Website Terms and Conditions are for big organisations, but the reality is that any business with an online presence, even those which are not actually selling goods or services on their website should set out the terms of use for their website.

While it is not a requirement by law for you to have Website Terms and Conditions, ensuring that your users understand the limitations of how they can use any website content, including text, images, videos and music, helps to secure your intellectual property.

Providing your website visitors with clear and detailed Terms and Conditions helps the visitors trust you and puts them at ease when using your website. 

### Equipment Rental Agreement 

A Moveable Rental/Lease Agreement is a document that outlines the arrangement between the lessor, someone who lends items and someone else that is willing to pay rent while using the items, known as lessee. It’s a document that allows you to use moveable property for a period of time in exchange for periodic rent.

If you will be leasing any equipment like cameras, musical equipment, furniture etc, then it is important that you have a good Equipment Rental Agreement with your lessor. 

It is important to have this agreement in place no matter how small the item you are renting may be. Aim to reduce all your business and dealings to writing to avoid unnecessary and costly problems for your business.  

### BBBEEE Exemption Affidavit 

If you ever want to conduct business with government or state-owned enterprises, it is mandatory for you to have BEEE Affidavit. Even if you won’t be getting into business with the government, any other person or organisation you supply will benefit from you being BEEE compliant.

From 2011 a business cannot conduct business with municipalities, government departments and any state-owned entities without a valid BEEE-rating certificate.

A BEEE-rating certificate is a document that indicates a company's level of BEEE compliance. A level one contributor is the highest achievable status and the lowest level of BEEE compliance is level eight. The higher the BEEE status level, the stronger the business is in relation to its competition.

The certificate is valid for a year and renewed annually based on evidence submitted for BEEE implementation during the period under measurement.

Fortunately for you, Hello Contract can help ensure that you have all the contracts you need.

It’s as simple as this; When you start the questionnaire, you will be guided through the questions with the help of information and explanation. Based on your answers, the contracts will be tailor-made by our system. If you log in or create an account, you can also save the progress of the questionnaire and come back later.


Starting your business, Contracts

**The power of an eCommerce store & the legal documents required to run yours**

According to research by Euromonitor International, our online sales as a country will grow almost three times as fast as in-store sales over the period 2018–2023. 

Exacerbated by the global pandemic and closure of traditional brick-and-mortar stores, it is safe to say that eCommerce in South Africa is on the up and that retailers need to be rethinking their digital strategies and attempting to stay relevant to demanding consumers.

If you have the privilege of being in the business of selling goods and services that can be offered online, it is advisable that you set up a webshop sooner rather than later. 

We know from other developing economies, such as China and India, that once momentum begins and consumers get a taste for online shopping, eCommerce sales rise at an accelerating rate. Brick-and-mortar retail stores that were not ready and did not invest in their online future when the exponential growth hit, were generally unable to keep up in the novel digital market.

So, investing in eCommerce sooner rather than later is important if you have the products and means to do so. 

You may have heard, however, that starting a webshop in South Africa is easy and all you have to worry about is logistics, website development and getting a payment gateway setup. While this is somewhat true, it is very important that you do not neglect the legal aspects of setting up your webshop and mitigate your legal risk wherever possible. 

As you do with any physical retail store, you need to have legal documents and policies in place to protect your eCommerce business and ensure that consumers are aware of your business’s terms and your conditions.



**Here are the legal documents that are essential when setting up your web shop:**

1.  **Terms and Conditions;**

2.  **Cookie Statement;**

3.  **Warranty Statement;**

4.  **Returns Policy; and**

5.  **Delivery Policy. **



1.  # **Terms and Conditions**

What is?

You need a document that sets out the terms and conditions of your web shop. Your basic Terms and Conditions (T\&Cs) should be one of the first legal documents you have in place when you start your web shop. 

Terms and Conditions are not mandatory by law; however, it is strongly recommended that have them in place whether you have a website or an App. It’s a simple document that benefits your business tremendously.  

It usually outlines how your web shop is intended to be used and explains the rights you have to all your published content. 

T\&Cs are valuable because they provide legal inevitability and build trust between you and your clients. 

They also allow you to use payment gateways with credit card operators. It is extremely important for your customers and clients to know how to use your web shop and also what is accepted and not acceptable in the use of your webshop. 

If you would like to learn more about eCommerce Terms and Conditions, we have written a complete guide which can be found here {insent final link}.

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1.  # **Privacy policy**

What is?

Unlike the Ts & Cs, you can’t avoid a privacy policy for as long as you collect personal information from your customers and clients. A privacy policy applies to a web shop operator and its users. It determines how you will use, collect, keep, share, and protect the data that the user shares with the website/App.

Because a privacy policy is required by law, it means you will need to be compliant with the regulations in the countries in which your customers and clients reside. If your clients and customers are from South Africa, it is important that you privacy policy is compliant with the Protection of Personal Information Act. 

One of the benefits of having a privacy policy in place is that your customers and clients feel secure. If your business has a good privacy policy, customers and clients are provided with a clear picture of how their data is processed. This will keep them feeling assured and build a level of trust that is crucial to the development of your web shop. This is especially important in this data theft age we live in. 

For more information on privacy policies click here(insert link to other blog)

{image}

1.  # **Cookie Statement**

What is?

Most web shops are required to ask for permission to place cookies on your device, and in return users can choose whether or not to give it.

Cookies appear on your browser in the form of small text files, kept in a data folder. Cookies are used to:

*   Retain login details and remember users’ custom preferences

*   Enable users to use a shopping cart or make use of e-billing services.

*   Recognise and count the number of visitors.

*   Recognise users when they return to the Site.

Web shops using a cookie policy attract a greater number of users. Many users have said it improves their shopping experience. Having a cookie policy is simple but it has many positive impacts on the customer journey on your web shop. 

{image}

1.  # **Warranty Statement**

What is?

A warranty is a form of product insurance, through which a certain guarantee (with specific terms) is given to your customers in written form.

This policy outlines any default warranties that are included in the sale of your products, as well as any particular terms relating to warranties that your customers can purchase.

This policy is important because customers want to be sure that the products they are buying are of the good quality and are fit for the intended purpose. It also helps protect you in certain instances where your business clearly provides that there are no warrants on certain things such as a product bought from a third party. 

Setting up these documents will not take too much from you but will instead benefit you and your business. It’ll save you time and money to just have these documents. 

These essential legal documents should be drafted properly in order to ensure they are most effective.

{image}

1.  # **Delivery & Returns Policy**

What is?

It is normal for people to want to return items. Sometimes your customers will want to return items for a valid reason and sometimes no reason at all. Other customers will return items in bad conditions. 

This is why it is important to have a Returns Policy in place. A Returns Policy provides for how your shop deals with returns; what you will accept and what you will not accept, when and how. 

It is common that when customers are shopping and they are not sure about the size, quality or any aspect of the product, they want to know if they can return the item should it not be what they are looking for. This influences whether a customer will be or not. 

You need to ensure that your policy is as clear and detailed as possible and is also fair to your customers. 

{image}

What is?

eCommerce Website Delivery Policy includes:

*   Estimated Delivery time frames;

*   Indemnities if you do not meet delivery time frames;

*   The method chosen for delivery;

*   Whether a recipient is required to sign for receipt;

*   Circumstances if no recipient is available for delivery;

*   Recipients requirement to inspect the delivery before acceptance;

*   Specification of delivery areas;

*   How delivery fees are calculated; and

*   Whether and in what circumstances free delivery is permitted.

{image}

# **Your next steps**

1.


//Working text

With the implementation of lockdowns as a means to try and curb the spread of COVID-19 having everyone stuck at home, it is almost an unspoken rule that you need a webshop to sell your products. 

If you have the privilege of being in the business of selling goods and services that can be offered online, it is advisable that you set up a webshop sooner rather than later.

{inserts a picture about people stuck at home on lockdown but needing something}

You may have heard that starting a web shop is easy and all you have to worry about is the logistics and getting a payment gateway. While that is true, it is also important that you do not neglect the legal aspects of setting up your web shop. 

You need to protect your business legally when setting up your ecommerce store.

Your eCommerce Store

## Non- Disclosure Agreements 

If you’ve done any work for bigger organisations you may be familiar with Non-Disclosure Agreements, or NDAs as we commonly know them. Contrary to many opinions, NDAs are not only initiated by big organisations. As a business you can, and you should initiate an NDA with a client who you will be sharing your confidential information with. When you are sharing your technology or other proprietary information with a potential strategic or commercial client, you will want to ensure that the information is kept secret and not being used for an unauthorized purpose.  This is where a non-disclosure agreement (NDA) is relevant. For example, if you are a baker and will be sharing your secret recipe with one of your clients, you’ll definitely want to enter an NDA. 

## Here’s all you need to know about NDAs.

A non-disclosure agreement (NDA), also known as a confidentiality agreement (CA), confidential disclosure agreement (CDA), proprietary information agreement (PIA) or secrecy agreement (SA), is a legal contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wish to restrict access to

An NDA is a legally binding document that sets out the obligations of the person receiving confidential, non-public information to the person disclosing it.  An NDA may be one-way (in other words, it only obligates the receiving party to protect the confidential information of the disclosing party) or it may be mutual (it obligates each party to protect the other party’s confidential information).  NDAs are meant to provide assurance that a defined universe of information that is shared between parties will be confidential and not used for any purpose other than the purposes permitted in the NDA.  

The mutual NDA is when both parties are restricted in their use of the materials provided, or they can restrict the use of material by a single party. A single sided NDA is when only one party is restricted in the use of the information shared with them.

In this agreement you and your client/customer agree not to disclose information covered by the agreement. The NDA creates a confidential relationship between you and the other party, typically to protect any type of confidential and/or proprietary information or trade secrets. The NDA protects non-public business information. This is important to remember. You cannot publicise information and expect to have it protected by an NDA and so it is important that you also ensure that you keep your own confidential information confidential. 

If you are considering doing business and need to understand the processes used in your and or the other party’s business for the purpose of evaluating the potential business relationship you may enter into an NDA before even starting business with you client or customer. This should be one of the first agreements you enter into with your clients even before sharing ideas. 

It is important to limit the receiving party’s disclosure of your confidential information to only those who are necessary with a “need to know” and that are themselves obligated to maintain the confidentiality of your information. As a freelancer, you cannot afford to lose your competitive advantage by having your confidential information shared publicly or exploited by another business and so it is essential that you ensure that you have an NDA in place.

Once you’ve entered an NDA, you may share sensitive information without fear that it will end up in the hands of your competitors and if it does, you will have a right to recourse. 

Here are some of the key concepts you want to ensure are included in your NDA:

### Identification of the parties

There should be a clear and straightforward description of who the parties who will be disclosing information.

### Definition of what is deemed to be confidential

It is important that the agreement states whether it will be all information relating to the businesses that will be confidential or whether only the information that is marked confidential will be considered confidential. As the party disclosing confidential information, review the definition closely to make sure it really covers everything you need to keep confidential. If you anticipate disclosing potentially patentable inventions, make sure they are covered by the NDA.  Any disclosure you make that is not covered by an NDA could prejudice your rights in any patent application.

### The purpose of sharing the confidential information

Stating the purpose of signing the NDA will provide a direction to the relationship you wish to have with your client and will ensure that the receiving party does not use your information in ways that may be detrimental.  Any use beyond the stated purpose should require the disclosing party’s consent.

### The exclusions from confidential treatment

This is intended to address situations where it would be unfair or too burdensome for the other side to keep the information confidential should be included, such as information that is already public or when compelled by law to disclose the information. For example, it is not practical to expect your client to keep your information confidential when you have posted it publicly on social media. 

### Duration of NDA

Your NDA may state that this obligation survives in perpetuity (that is, with no fixed termination date), but the mark-up you receive caps the period to the term of the agreement, or to several years after disclosure of the information.  Before you insist on perpetual secrecy, think about whether what the information you are sharing will become publicly available in the future.  For example, if you are sharing the fact that you have an exclusive supply agreement, the terms of which are confidential, but you intend to reveal this partnership on your website within a few months after your fundraising round, there would be no reason to negotiate hard for a perpetual term.  On the other hand, if you are disclosing information that you believe to be trade secrets, such as that precious recipe, you may need to insist on a perpetual secrecy term since trade secret protection extends for as long as the information remains a trade secret.  Remember that the “term” of an NDA can refer to either the duration of the confidentiality obligations or the duration of your information-sharing relationship with the counterparty.  Ensure that these two different timelines are separate and keep them in mind when you are negotiating your NDA.

### “Residuals” 

This clause allows the receiving party to use, without restriction, some “residual” information that is received during the course of the relationship between the parties, usually covering information that a party’s personnel recollects from its “unaided memory.” This clause allows your client to use any ‘left over’ information of yours in the future. A “residuals” clause can raise concerns for the disclosing party, since it potentially allows the receiving party to use confidential information for any purpose without violating the NDA.  If there is a residuals clause, and you are a disclosing party, consider including a provision making clear that the NDA does not grant the other party a license to your intellectual property rights. You need to watch out for these clauses in the NDAs if your client initiates an NDA. It is usually advisable to refuse a residuals clause in your NDA unless it benefits you. 

### Non-Solicitation

An undertaking by parties that they will not use the confidential information they know for their own benefit, by means that include but are not limited to, poaching clients and suppliers. Your client will naturally get to know more about you and who you work with. It is important that you ensure that your clients do not use the information they know against you. It is advisable to have a breach penalty for clients who breach the terms of the NDA and use your confidential information against you. 

As a freelancer, your position in business may sometimes be weaker than that of other businesses that are bigger and more established and thus is it important that your confidential information is protected to avoid putting yourself at a competitive disadvantage.

NDAs are not limited a specific freelancer, any freelancer who is sharing confidential information with their clients should consider entering one. If you find yourself in situation where the information you have to share with your client is confidential and the disclosure of that information would cripple you and your business, then you should consider entering a One-Sided NDA. If your client will also be sharing confidential information, then a Mutual NDA is advisable. However, if you feel like it is not necessary for you enter an NDA with your clients, your information will be still be protected because most agreements still include a confidentiality clause for your protection.  

Not sure how to draft an NDA? Not to worry, at Hello Contract we’ve made it easier for you. You can create your own customised NDA within minutes here.


Contracts - Your NDA

The section subtitle

## How to handle clients that do not pay

When you are running a small business, you often depend on the payment of each invoice for the survival of your business. You expect to be paid for your labour, product or services. Unfortunately, that is not always the case. More often than you’d like, you deal with clients who do not pay for one reason or another. 

Prevention is always better than cure. It is best that you try and avoid your clients not paying to begin with. The time, money and energy you will spend on chasing a non-paying client is so much that you want to avoid it at all costs. It is a messy process that you want to avoid the issue altogether by entering into an airtight agreement with your clients. 

Even if you are entering into an agreement with the most trusted people you know or even your friends you should always have a written contract in place that aims to ensure your clients pay by all means possible.  

Asking for a deposit is a good idea because it ensures that you get a portion of your invoice before you start rendering services to your client. If you ask for a portion of the payment upfront, you're already at an advantage. Asking for a deposit or retainer is common for freelancers when negotiating with clients and will help cover the expenses or time that you already put into a project.

Your contracts should include a clear payment schedule that clearly describes when and how much your client will pay you. Having that clarity prevents your client from innocently ‘forgetting’ to pay you and makes it easier should your client not pay you and claim that they are not in breach. Your payment deadlines should very clear and you should include a late payment policy that stipulates how much interest will be charged on late payments.

> For instance, if your client is aware they owe you payment for an unpaid invoice, they'll be less likely to flake – and if they do, they'll be forced to pay interest. This is a guarantee that is only put in place by a good contract. 

If you do end up in the dreaded position where your clients still have not paid up your invoices despite all attempts to try and prevent this. Here are some of the things you need to do. 

Firstly, you need to follow up on your payments. Don't hesitate to send out an email if the invoice has not been paid by the agreed-upon date. There's always a possibility that the invoice was lost or misplaced. Maybe the client was on vacation or had a family emergency. You shouldn't instantly assume that the client is intentionally avoiding paying you. Send them a friendly yet firm email reminding them that the invoice is past due and you'd like to resolve the issue as soon as possible. Also ask if they have any concerns with the product or service that you provided, or if they need assistance with the payment process.

> If this does not work after many attempts, you should consider drafting an Acknowledgement of Debt. 

An acknowledgement of debt (AOD) is when a debtor acknowledges his/her debt obligations. In this case your client becomes the debtor. The client admits that he/she owes a sum of money to the creditor and undertakes to repay the amount on terms agreed upon between the parties involved.

An AOD is of great value should the debtor still default on their payments and a summons is required.

An AOD requires the following in order to be valid and enforceable: 

*   Client’s name and ID number eg.  I, the undersigned, Name Surname- ID:123456789 …

*   Client’s name and details, as well as the amount owing.

*   An agreement that clearly states when, where and how the Client will be paying for the amount outstanding, as well as an appropriate interest rate.

*   The banking details and a reference number will be provided in the document.

*   The debtor then needs to fill in their latest address in case a summons needs to be issued in the future.

*   Terms and consequences are noted and explained.

*   The client will be made aware of Section 109 (1) of the Magistrate’s Court Act No 32 of 1944 which provides that the client must notify of any change of the work or home address within fourteen (14) days of such change, failing which the client can be liable for imprisonment for thirty (30) days, or periodic imprisonment of 720 hours.

*   This agreement supersedes any other arrangements that may have been entered into or concluded between you and your client in connection with the outstanding amount.

*   The client then signs that they agree to everything laid out in the letter.

An AOD requires no more than the signed document for it to be legally valid and binding on the client.  

Apart from the frustration of dealing with an unpaid debt that perpetuates for months on end, there’s a bigger problem you may face which is Prescription.

Prescription is when outstanding debts are no longer due after the passing of prescribed time periods. Ordinarily, a claim prescribes, or expires, after three years. (There are a few exceptions to this rule, eg. mortgage bonds are longer.) Once the three years is up you no longer have a valid claim and your client can raise prescription, which will stop your case in its tracks. 

> A signed Acknowledgement of Debt helps push back prescription and continuous communication with your client regarding the debt, in the form of notices, reminders etc will also renew the prescription period. 

At Hello Contract, we have taken into account all of the above considerations when drafting all your contracts to prevent non-paying clients. You can create your own contract that is perfectly suited to your needs as a freelancer. We also have a great and affordable Acknowledgement of Debt ready for you, should you require one. All that you need to do is select the appropriate document that you would like to generate, answer a few questions, and our document generation software will automatically compile your documents for you here.(insert link)






How to handle Clients who won't pay

Read on in our featured series:

Starting a business is an exciting adventure, but it can be an extremely daunting and stressful task if you do not know how to address the many legal aspects your business will face. In this guide we will briefly evaluate the decision you need to make from a legal perspective. The first important decision to make, is decide on the structure of your business

> When looking to start a business, the first important decision to make is the structure of your business. 

## The structure of your business

There are few business structures which you may choose from, the common ones of which include:

1.  Sole proprietorship;

2.  Partnership; or

3.  Company.

When selecting a business structure, some of the important factors to consider in this decision are the following:

*   Do you want bear personal liability for business activities?;

*   Would you like the business to continue even when there is a change in the ownership/ control?;

*   Management structures and control;

*   Legal formalities / registration formalities / administrative formalities;

*   Growth and expansion;

*   Tax liability. 

Below we have set out descriptions of some of the salient features comprising the different business entity types. 

### Sole proprietorship

This is the simplest form of business structure. There are no registration formalities to start a business as a sole proprietor, as the business structure is an informal one. The business is headed by a single person, the sole proprietor. 

This form of business structure is common if you are a freelancer as you naturally work alone, like a photographer or a social media influencer. 

Advantages of choosing the sole proprietor structure include the following:

*   Sole ownership and sole right to profits- you get to enjoy your profits on your own and do not need to share ownership and control with anyone else. 

*   No registration requirements – as a sole proprietor, you are not required to register the business, which makes it easy to start. 

*   Very few formalities and costs – starting the business is inexpensive.

One the other hand, disadvantages of choosing the sole proprietor structure include the following:

*   High personal risk – the debts and liabilities of the business become your personal debts and liabilities. This means that creditors of the business can go after your personal assets such as your home or car in order to satisfy debts owing to them from your business.

*   Risk – you bear all the risks of starting and operating capital alone. 

*   Tax – you will be personally subject to income tax on a sliding scale up to over 45%.

*   No perpetual succession- should anything happen to you, your business dies with you. 

The sole proprietor business structure is only advisable (if ever) should you be starting a small business, to test the waters of your business and its potential success, prior to converting into another, more formal, business structure at a later stage, once the business has proven itself. 

### Partnership 

A partnership structure is much like a sole proprietor, except it involves more than one person. A partnership is an structure in which all partners normally participate in the management and in sharing profits and losses of the business. 

The advantages of a partnership structure include:

*   No requirement for registration- While is it in the best interests of partners to enter a Partnership Agreement, there is no formal requirement that the partnership be registered. 

*   No restriction on the number of partners you may have. 

*   Partners share risk of liabilities and losses. 

*   Partners can benefit from the skills or capital of other partners for business purposes. 

The disadvantages of a partnership structure include:

*   There is no perpetual succession- If partners change or die, then the partnership is dissolved.

*   No separate legal personality from its owners- The debts and liabilities of the business become the partners personal debts and liabilities. This means that creditors of the business can go after each partners personal assets in order to satisfy debts owing to them from the partnership.

*   There is high personal risk- Related to the above, partners are ultimately liable for the debts of the business. If one partner makes a reckless decision, then all partners could ultimately be liable.

*   Tax– Partners will be liable for personal income tax on a sliding scale of up to 45%.

A partnership can be a decent structure as the business benefits from the skills and capital of more than one person. For example, say you are an excellent photographer but you edit or shoot videos, you can form a partnership with a videographer and start a partnership that benefits from both your skills and resources.   

Much like a sole proprietor business structure, partnerships are only advisable should you be starting a small business, to test the waters of your business and its potential success, prior to converting into another, more formal, business structure at a later stage, once the business has proven itself.

### Company

A company is a legal entity registered in terms of the Companies Act with the CIPC having its own ‘legal personality’ and which is formed for the operation of a business. 

There are many advantages of starting your business as a company, some of which include: 

*   A company has a separate legal personality, which means that you will generally not be personally liable for the debts of the company. Further, assets of the business are owned by the company and not to the shareholders.

*   Related to the above, there is low personal risk, as shareholders have limited liability.

*   There is the benefit of the Companies Act to fall back on which provides a great base level of protection for the directors, shareholders and the company itself.

*   Profits of the company belong to the company itself and not the shareholders until and only if a dividend is declared.

*   There is perpetual succession- Should something happen to a shareholder or should a shareholders leave the business, provided that there are other shareholders, the business may continue without you.

*   It is often easier to raise capital for the business, because the company can sell shares of the company. 

*   There is a split between ownership and management of the company. The Board of Directors control the business while the Shareholders own the business. 

*   Tax is charged at a flat rate of 28%. 

There are some disadvantages of electing to form a company, which include:

*   The Companies Act imposes strict registration requirements which may be tedious, costly and time consuming. 

*   There are many legal formalities imposed by the Companies Act that need be complied with.

*   Company documents are open to public scrutiny. For example, the Companies Memorandum of Incorporation is publicly available, and an audit of financial statements may be required in certain instances. 

We recommend that when starting a business, a company should always be the default go to as the appropriate structure. 

#### Types of companies

There are two broad categories of companies namely non-profit making and for profit making. The difference between the two, other than the profit-making goal is that profit companies have shares while a non-profit company does not have shares. Instead of shareholders a non-profit has members and/or directors. 

These are the types of profit companies:

##### 1. **Private company – (Pty) Ltd**

This structure is by far the most common company structure utilised, and unless there are compelling reasons otherwise, this type of company structure should be pursued. 

A private company is owned by its shareholders, and run by the board of directors. Often, especially in smaller businesses, the shareholders and directors may be the same persons.

Private companies are constituted by a Memorandum of Incorporation along with, very often, a Shareholders Agreement which, when read with the Companies Act, set out the governing relationship between the shareholders, directors and company.

##### 2. Personal liability company - (Inc)

This form of company is often only required in instances of a governing body which requires its professional members to form such a company. This is the case for both attorneys and doctors.

In this instance, the shareholders are required to take personal liability for the debts of the company, much like a sole proprietor or partnerships, allows the company to benefit from perpetual succession should shareholders die or leave the company. 

##### 3. Public Company

In a public company shares may be offered to the public; and /or shares are freely transferable. 

Due to the public nature of the company, the company has increased accountability requirements. 

The following are some of the requirements of a public company:

*   Auditor;

*   Audit committee;

*   Company secretary;

*   Social and ethics committee;

*   Financial statements must be auditeds.

Most public companies started as private companies that, after meeting all regulatory requirements, opted to become public to raise capital. It is very uncommon that you would elect this structure when starting a business. Examples of public companies include Google, Vodacom and Glencore. 

##### Non-Profit company

A non-profit company is a company with public benefit object, or object relating to cultural/social activities or communal / group interests. 

Even though a company might be an NPC, it can still make profits, but the profits, cannot be distributed to its members, directors offices or other persons.

If you are starting a business to retain profit for yourself then this is not the structure for you. This company structure is only advisable for businesses that are for public benefit or other have as its object cultural or social activities, or communal or group interest. This might be, for example, a church, or wildlife research and conservation. 

#### Registration of a Company 

Once you’ve decided which business structure is best suited for your business, you need to think about registering the business. As stated above, the sole proprietor and partnership structures do not require you to register your business. 

##### Company Registration at the CIPC

If your chosen business is a company, registration with the CIPC is required. It is a short process which normally takes a maximum of a week.

Company registration are done through the Companies and Intellectuals Property Commission (CIPC), at the following link: <https://eservices.cipc.co.za/>.

In terms of the Companies Act, 2008, a company may be registered with or without a company name. When a company is registered without a reserved name, its registration number automatically becomes the company name. This is the quickest way to register a company.

You may apply for between 1 and 4 options as names during each application process, whilst only one will be reserved. Each name reservation application costs R50. A company registration may vary between R125 and R475 (R125 for a private company, R475 for a non-profit company).

Here are some of the documents you may be required to submit to the CIPC in the process of registration:

*   Certified identity copy of applicant;

*   Certified copies of the Identity Documents of the Directors and Incorporators;

*   Certified passport copies are only accepted as proof of identity for non-residents of South Africa. For South African residents a green bar-coded/ smart  ID copy must be lodged (certified).

*   The name confirmation certificate if applicable;

*   Power of attorney (if applicable) if someone is registering the company on your behalf.

#### BBBEE Certificate or Affidavit

Broad-based Black Economic Empowerment (BBBEE) is an integration programme launched by the South African government to reconcile South Africans and redress the inequalities caused by Apartheid. It encourages businesses to integrate black persons and other persons of colour into their business. 

If you’re just starting out, you probably need a B-BBEE Affidavit rather than a B-BBEE Certificate. Businesses which earn less than R10 million in turnover (sales) per year may depose to a B-BBEE Affidavit which is a simple and quick alternative to the process of obtaining a certificate.

What is a B-BBEE Affidavit and how is it different to a B-BBEE Certificate?

An Affidavit is a form of self-declaration or deposition made under oath. A B-BBEE Affidavit is a self-declaration of your business’s Black Economic Empowerment status which needs to be stamped by a Commissioner of Oaths. After it has been stamped (commissioned), it will serve as your legal B-BBEE document for that year.

Where can I get a B-BBEE Affidavit or a B-BBEE Certificate?

You can order a B-BBEE Certificate on the CIPC’s ePortal. 

##### Employer Tax Registration at SARS

When your business employs someone, you need to register as an employer at SARS within 21 days. 

How do you register as an employer?

You can visit the SARS website for guidance on the process of employer registration.

##### COID Registration (and a Letter of Good Standing) at the Department of Labour

The Compensation Fund helps your business cover certain medical or remuneration costs in the case of any work-related harm or injury to your employees. In order to get this financial support, you need to contribute a small fee each month to the fund. This sum is determined as a percentage of your employees’ salaries. If any of these fees are outstanding none of your employees will be covered. 

How do you do COID Registration?

You can register for COID directly with the Department of Labour. 


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