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Fundamentals of Commercial Companies Law
Commercial companies are the backbone of modern trade in the OHADA (Organisation for the Harmonisation of Business Law in Africa) zone. This course breaks down the fundamental concepts…
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In a Société en Nom Collectif (SNC), what is the legal effect of a partner's death if the statutes do not provide for continuation?
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A foreign investor who holds 55% of the capital of a commercial company must first obtain which of the following before the company can be constituted?
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Which clause can a company of capital introduce to restrict the free transfer of its shares, while still being valid under OHADA law?
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During an Assemblée Générale Ordinaire (AGO), which of the following decisions requires a simple majority of votes?
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A SARL must have a minimum capital of:
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Which of the following statements about the liability of partners in a Société en Commandite Simple (SCS) is correct?
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If a SARL's capital is divided into parts of 5,000 FCFA each, what is the maximum number of parts that can be issued without violating the minimum share value rule?
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During the formation of a company, which of the following is NOT a condition of form required by the OHADA Act?
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A company decides to issue a new class of shares that carry voting rights only for certain decisions. Which type of share does this correspond to under OHADA law?
Understanding Commercial Companies under OHADA Law
Commercial companies are the backbone of modern trade in the OHADA (Organisation for the Harmonisation of Business Law in Africa) zone. This course breaks down the fundamental concepts tested in a typical quiz, offering clear explanations, practical examples, and SEO‑friendly language to help you master the subject.
1. Defining a Commercial Company
According to the Act Uniforme sur le droit des sociétés commerciales et du groupement d’intérêt économique, a commercial company is a contract between two or more persons to share profits from a commercial activity. This definition distinguishes a company from:
- A sole proprietorship (single‑person business).
- A public institution (provides services to the community, not profit‑oriented).
- An association (non‑profit distribution of surplus).
Key takeaway: the essence of a commercial company lies in the joint pursuit of profit through a legally binding agreement.
2. The Société en Nom Collectif (SNC) and Partner Death
An SNC is a partnership where all partners are jointly and severally liable for the company’s obligations. When a partner dies, the default rule—if the statutes do not provide otherwise—is that the society must be dissolved. This reflects the principle that the personal bond among partners is essential for the SNC’s existence.
Practical tip: To avoid automatic dissolution, partners often include a clause in the statutes allowing continuation or specifying a succession mechanism.
3. Foreign Investment and the Requirement of Agrément
When a foreign investor intends to hold a majority stake (more than 50 %) in a commercial company, OHADA law mandates an agrément—an official approval from the competent authorities—before the company can be constituted. This safeguard ensures that foreign control aligns with national economic policies.
Other documents such as a notarized deed of incorporation, tax identification number, or RCCM registration are necessary later, but the agrément is the first hurdle for majority foreign ownership.
4. Restricting Share Transfer in Companies of Capital
Companies of capital (e.g., SARL, SA) may embed a clause d'agrément in their statutes. This clause requires that any share transfer receive prior approval from the company or its shareholders, thereby limiting free transfer while remaining valid under OHADA law. Such a clause balances the need for liquidity with the protection of existing shareholders.
Invalid examples include absolute prohibitions on transfer or clauses that force simultaneous sale of all shares—these would contravene the principle of free circulation of capital.
5. Decision‑Making at the Assemblée Générale Ordinaire (AGO)
During an AGO, certain decisions are reserved for a simple majority of votes. The most common example is the approval of the financial statements of the past fiscal year. Other matters—such as appointing a new administrator in a SA with a council, amending statutes to increase capital, or dissolving the company—require a qualified majority or special procedures.
6. Minimum Capital Requirements for a SARL
Under the OHADA Act, a Société à Responsabilité Limitée (SARL) must have a minimum capital of 1,000,000 FCFA. Some member states, like Cameroon, may set a lower threshold (e.g., 100,000 FCFA), but the uniform act establishes the 1 million FCFA floor.
Understanding this requirement is crucial for entrepreneurs planning to launch a SARL, as insufficient capital can invalidate the company’s registration.
7. Liability in a Société en Commandite Simple (SCS)
An SCS combines two categories of partners:
- Commandités (general partners) – they have joint and several liability, meaning each can be held responsible for the entire debt of the company.
- Commanditaires (limited partners) – their liability is limited to the amount of their contributions.
This dual structure allows investors to limit risk while still benefiting from the management role of the commandités.
8. Share Value and the Number of Parts in a SARL
When a SARL’s capital is divided into parts of 5,000 FCFA each, the law only requires that each part respects the minimum share value. There is no statutory limit on the number of parts, provided the total capital meets the minimum requirement. Therefore, any number of parts can be issued as long as each part equals 5,000 FCFA and the aggregate capital reaches at least 1,000,000 FCFA.
9. Summary of Key Concepts
- Commercial company definition: profit‑sharing contract between two or more persons.
- SNC dissolution: partner death triggers dissolution unless statutes provide continuity.
- Foreign majority ownership: requires agrément before incorporation.
- Share transfer restriction: a valid clause d'agrément can limit transfers.
- AGO simple majority: approval of annual financial statements.
- SARL minimum capital: 1,000,000 FCFA (uniform OHADA rule).
- SCS liability: commandités unlimited, commanditaires limited to contributions.
- Share parts: any number allowed if each part meets the 5,000 FCFA minimum.
10. Frequently Asked Questions (FAQ)
Can a foreign investor hold 100 % of a commercial company’s capital?
Yes, but they must first obtain the required agrément from the authorities. The agrément process varies by country but generally involves a review of the investor’s background and the intended activity.
Is it possible to amend the statutes of a SARL without a qualified majority?
Statutory amendments—such as increasing capital—typically require a qualified majority (often two‑thirds). Simple majority decisions are limited to routine matters like approving accounts.
What happens to the shares of a deceased partner in an SNC?
Unless the statutes provide a mechanism for succession, the partnership is dissolved, and the deceased partner’s estate participates in the liquidation process.
Are there any restrictions on the number of shareholders in a SARL?
OHADA does not impose a strict ceiling on the number of shareholders, but the company must maintain the minimum capital and respect the minimum share value of 5,000 FCFA per part.
By mastering these concepts, you will be well‑prepared for both academic assessments and real‑world applications in the field of commercial law within the OHADA jurisdiction.
