Companies Recognized by OHADA LAW Flashcards
What are the types of companies provided for by OHADA?
Registered and Unregistered Companies
If you were asked in an exam to talk about the type of companies recognized by OHADA what would your format be?
Introduction: OHADA classifies companies as registered and unregistered companies these companies are provided for the OHADA Uniform Act on Commercial Companies and Economic Interest groups
Body:
* Registered Companies
* Unregistered Companies
Conclusion: OHADA provides for 4 registered companies: (name them) companies and 2 unregistered companies: (name them).
What are the types of registered companies provided by OHADA?
-> Ordinary Partnership
-> Limited Partnership
-> Private Limited Company
-> Public Limited Company
What is an Ordinary Partnership?
An ordinary partnership is a type of company provided for by section 270 of the OHADA Uniform Act on Commercial Companies and Economic Interest Groups, which defines it as a company with members/partners who are traders with unlimited liability towards the debts of the business. This type of company is formed through a contract entered into by two or more individuals, it has no fixed minimum capital requirement, nor a maximum number of members requirement, but with this type of company, every member is liable for the full extent of the business debts.
What is a Limited partnership?
A Limited partnership is a type of partnership with two types of members. The first is the active partners who handle the day-to-day management of the organization and have unlimited liability toward the debts of the business, and the Sleeping partners, whose liability is limited to their investment in the company.
What is a private limited company?
A private limited company or SARL(abbreviated in French) is a type of company provided for under section 309 of the OHADA Uniform Act on Commercial Companies and Economic Interest Groups, it is a type of company made up of shareholders whose liability is limited to their shares in the company, these same shares also dictate their rights within the company, the face value of shared in a private limited company is 5000 frs CFA, shares in this type of company can only transferred through the unanimous agreement of shareholders. This type of company can be formed by a single individual provided he/she has the required minimum capital of 1 million frs CFA, and the company can have up to 50 shareholders.
What is a public limited company?
A public limited company (abbreviated in French SA) is a company provided under section 385(1) of the OHADA Uniform Act on Commercial Companies and Economic Interest Groups. It is a company made up of shareholders whose liability is limited to their shares in the company, these same shares dictate their rights in the company, and have a share face value of 10,000 frs CFA, these same shares can also be freely transferred among shareholders. A single individual can form this type of company provided he can raise the minimum capital of 100 million frs CFA, and the company can have a maximum of 100 shareholders.
Both private and public limited companies are limited liability companies but what makes them different?
Introduction:
Private and public limited liability companies are both companies provided for by the OHADA Uniform Act on Commercial Companies and Economic Interest Groups, these two types of companies share certain similarities and differences that will be discussed below:
Body:
The first similarly is the fact that they are limited liability companies meaning the shareholders in both companies’ liability are limited to their shares in the company, these same shares also define their rights in the company
Another similarity is the fact that both companies can be started by a single individual provided said individual has the minimum required capital for either of the companies.
Conversely, these companies also have differences, the first being their abbreviations in French, private limited liability companies are abbreviated as SARL while public limited liability companies are abbreviated as SA.
Secondly, even though both companies are provided by the OHADA Uniform Act on Commercial Companies and Economic Interest Groups, private limited liability companies are provided for by section 309, while public limited liability companies are provided for by section 285.
Thirdly, Private limited liability companies, have a share value of 5000 frs CFA, while public limited liability companies have a share value of 10,000 frs CFA.
Fourthly, Private limited liability companies can have a maximum of 50 shareholders, while public limited liability companies can have up to 100 shareholders
Fifthly, the shares in private limited liability companies can only be transferred through the unanimous consent of all shareholders, while in public limited liability companies shares can be transferred freely between shareholders
Sixthly, private limited liability companies usually have a single manager or a single board of directors, whereas public limited liability companies have a board of directors plus a separate management team.
Seventhly, private limited liability companies are not required to publicly disclose the holding of annual general meetings or financial statements, while private limited liability companies are required to do so
Conclusion:
To conclude, even though both companies are limited liability companies they differ in many ways, making them two distinct companies.
What are the forms of unregistered companies recognized by OHADA?
-> Defacto Companies
-> Joint venture
What is a Joint venture?
A joint venture is a type of company where multiple individuals or companies come together to realize a project that they can’t otherwise realize on their own. During the course of the project, all companies retain their separate legal entities, and at the end, they go their separate ways, every company is solely liable for 3rd parties.
What is a defacto company?
A defacto company is an uncompleted registered company under OHADA, meaning its founders have not completed the requirements for the company to gain a legal personality.
