A new company law re-organizing business entities is enforced in Côte d'Ivoire since the application of the Treaty for the Harmonization of business law in Francophone Africa, known as OHADA.
This law is also currently in effect in the other member states: Benin, Burkina Faso, Cameroon, Central Africa Republic, Comores, Congo, Côte d'Ivoire Gabon, Equatorial Guinea, Mali, Niger, Senegal, Tchad and Togo
We shall underline some of the new rules.
The two most frequent corporate forms used in Côte d'Ivoire, SA (Société Anonyme) or SARL (Société à responsabilité limitée) can now be owned by a single shareholder under the new regulation.
Branches generally used by foreign investors to conduct temporary activity may be established for a maximum period of 2 years, unless a special order by the Minister of Commerce granting a longer period is issued. At the end of this 2 years period, a branch must be changed into an incorporated business entity.
SAs, SARLs and branches are subject to the same income and value-added tax systems.
All acts performed by a corporation are commercial and therefore the commercial division of the court of justice has jurisdiction.
With respect to formation procedures, we shall note that articles of incorporation are required.
These articles of incorporation are registered and must be filed with the competent authority.
Subscription of the registered capital shall be authenticated by a notary and the forming of the company shall be subject to a publication in a legal gazette.
The corporation acquires a legal personality only if it is registered and gets a registration number with the Commercial Register.
All incorporation documents and any subsequent modifications thereof must be filed with the Commercial Register.
Term of a corporation is stipulated in the articles of incorporation.
Further to its registration, a corporation must give notification of its formation to the labor authorities (social security agency, labor agency) and the tax authorities.
The minimum legal share capital to incorporate a SA is CFA F10.000.00 F CFA. The minimum legal value of a share is CFAF 10.000 at incorporation only one quarter of the share capital in cash must be paid in, while kind contributions must be fully transferred. The paid up cash must be deposited with a notary with a list of subscribers. The deposit may not be withdrawn until the SA has received its commercial register number the remaining 75% of the value of share capital must be paid within a maximum period of three years from the definitive formation of the corporation.
Where shares are issued for in kind contributions, an independent appraiser) is required.
There are common and preferred shares. Preferred shares may grant preferential rights in respect of dividends and/or liquidation surplus. There are also registered and bearer shares. Articles of incorporation may however require registered shares only.
The transfer of shares between existing shareholders may not be restricted. If a formal approval is not required the shares are freely transferable to third parties.
Capital of a corporation may be increased by additional cash or in-kind contributions or capitalization of retained earnings by a decision of an extraordinary shareholders meeting. Capital increases are made by the issuance of new shares or by an increase in the par value of existing shares.
As for the management of the Société Anonyme (SA), the law provides that such corporation is managed either by a general director (SA with fewer than three shareholders) appointed by the shareholders, either by a general manager or a chief executive officer in case of the SA with a board of directors.
The general director has the same powers as those of the chief executive officer or the general manager of a SA with a board of directors. The general director is responsible for the operational management and represents the company in relations with third parties. A general director can not be general director in more than three corporations in Côte d'Ivoire.
Agreements between corporation and general director are subject to authorization. It must be submitted to the annual ordinary shareholder's meeting for its approval, except the arm's -length agreements entered into in the normal course of business.
Board of directors shall be constituted of a minimum of three and a maximum of 12 directors. These directors may be Ivoirian or foreign individuals or legal entities, except for the President who must be an individual. Legal entities must appoint an individual as their permanent representative. A director cannot be director in more than five boards in Côte d'Ivoire.
The President of the board must not be necessarily a shareholder of the corporation, provided that the number of non-shareholder directors does not exceed one-third of the number of board numbers.
Directors are appointed for a maximum of 6 years by the shareholders and are re-eligible, with the exception of the initial directors appointed by the article of incorporation or the first shareholders meeting, who are appointed for a maximum of two years. Directors may be removed by the shareholders at any time.
The board has all powers to manage the corporation, limited only by the corporate purpose and the powers vested by law in the shareholders.
Articles of incorporation may provide for a specific majority, decisions are approved by a majority of members present.
Quorum necessary is one half of the total number of members present at the meetings.
A president of the board is elected from and by members of the board. The president may be either a chief executive officer also in charge of the management of the corporation. He may be assisted by one or more assistant officer(s) appointed by the board). The president may also be a chairman of the board with no management powers (in this case, the management is vested in a general manager) appointed by the board. An individual cannot be president in more than three boards of directors in Côte d'Ivoire.
The general manager is not necessarily a director.
For further information, please contact:
SCPA Konate, Moise-Bazie, Koyo et Associés 30, BOULEVARD CARDE RESIDENCE LES HARMONIES ABIDJAN, COTE D'IVOIRE Telephone: +(225) 22 77 53, (225) 22 75 02 Fax: +(225) 21 32 02 Email: Click Contact Link
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
