10 tips on business registration in Cameroon. There are different forms a business organisation can take in Cameroon depending on the preferences of the individual(s) intending to set up the same. Regardless of the differences, certain requirements pervade all of them. Requirements that need to be obtained before one can proceed to form such a business following the law. This article will give a brief guide of the requirements for setting up a business including those that need to be obtained upon due registration of the business.
Understanding the Private Limited Company Structure
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- The Uniform Act on Commercial Companies and Economic Interest Groups, the Uniform Act Relating to General Commercial Law, and Law No. 2015/ 018 on Commercial activities in Cameroon are the basic applicable legal instruments governing the registration of cooperate bodies in Cameroon.
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- Per the Uniform Act on Commercial Companies and Economic Interest Groups, there exist four (4) forms of companies: the Private Company, the Sleeping Partnership, the Private Limited Company and the Public Limited Company.
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- The Private Company and the Sleeping Partnership do not possess separate legal personalities from its shareholders and in addition the shareholders do not have limited liabilities for the company’s debts of the company. As such are very people scarcely opted for, because generally people do not find it convenient that in the event of the company becomes insolvent, their personal property should be the resort.
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- The Private Limited Company and the Public Limited Companies are the principal forms that investors and promoters usually opt for. This is especially due to the fact that under any of these two (2) forms or categories the liabilities of each shareholder is limited to their respective contributions to the company’s capital. This is advantageous as the personal property of each shareholder shall not at any point in time be a resort for for the clearance of any debts which they company might contract.The popularity of these two (2) types is due to the fact that shareholders have limited liability. It is however important to lay down the distinguishing characteristics of both types. We shall commence with the characteristics of the Private Limited Company, and thereafter we shall proceed with the Public Limited Company.
The Private Limited Company as mentioned supra is the form whereby the members are liable for the company’s debts up to the limit of their contributions. The rights of shareholders are are represented by company shares. It can be created by a single natural person or corporate body, it can as well be created or constituted by two (2) or more natural or corporate bodies. With this type the company’s name is always immediately preceded by the words “private limited company” or the abbreviation “Ltd” written in bold characters (Sarl. or Société à responsabilité limité in French language). The minimum capital required the registration of this type is one hundred thousand (100 000) CFA francs (154 Euros).
With the Public Limited Company, the shareholders have limited liability as well. It may have a single shareholder, which can either be a natural or moral person. It may as well be constituted by two or more shareholders. The fundamental difference of this kind is that the company has the right to issue shares to the public or call for capital from the public. Also, it is also worth noting still with regard to differences that the company name is always immediately followed by the words: “Public Limited Company” or the abbreviation: “PLC” (or Société Anonyme or S.A in French language). Furthermore, the method of administration, the Public Limited Company is administered either by a board of director or by a managing director(s). However, Public Limited Liability companies having less than four (4) shareholders may not have a board of directors.
The minimum authorized capital for the creation of a Public Limited Company is ten million (10,000,000) CFA francs (that is 15,384 Euros).It is worth indicating that during the process of creation of both any of these type, the Shareholders or founders must immediately deposit the said minimum required amount, against a receipt, in a bank account opened in the name of the company, or alternatively the capital shall be deposited before a Notary Public, who shall issue a notarized statement of subscription and payment of shares, this shall indicate the list of subscribers (shareholders) with their full names and as well as their respective addresses for service for natural persons, however for corporate bodies the company name, and its registered office shall be stated. The said funds shall remain unavailable until the company is fully created by the Registrar of companies (Trade and Personal Property Rights Register), that is until the Certificate of Registration or Matriculation is issued.
5. It is worth pointing out at this juncture that the Articles of Association is of paramount importance during the creation of any company. This is the document through which some vital information concerning the company shall be provided to the Registry of Companies notably: the elected form that the company is going to adopt (either LTD or PLC etc); the companies name ( and its acronym or logo if applicable); the nature and field of the activity or activities that the corporate entity projects to engage in; the companies site or the geographical location where the company shall have its registered office or headquarter; the projected lifespan of the company; the identity of the shareholder(s); the registered capital of the entity; as well as the names of the pioneer manager(s);
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- The company shall be required to provide the identification document or passport copy of the shareholder for natural persons, in the case where a shareholder is a corporate body the Certificate of Registration of the said company shall be required, plus a resolution taken by the company to the effect that the company intends to be a shareholder of the company to be formed or that the company has decided to form a subsidiary company in Cameroon; the same company shall also provide its articles of association.
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- the company shall also be required to provide the identification documents of the manager(s) as well as copies of Police Clearance Reports issued by the competent authorities. In case the manager(s) is a foreigner he shall be required to obtain the said document from his country of origin and from the Cameroonian authorities.
6. Once the registration certificate is issued the company is fully formed, however the newly formed entity must be Published within a month, failing which penalties shall be levied on her.
7. Once the company is fully formed and published, the next step is for the fully formed entity to be registered at the Tax Offices, which results into obtaining the Tax payer’s Card.
8. The newly corporate entity is also required to register before the Labor Inspectorate as well as at the National Social Insurance Fund.
9. It is worth noting also that foreign nationals must obtain prior authorization from the Minister of Trade before they engage in commercial activities in Cameroon pursuant to the 2015 Law governing Commercial Activities.
10. It is also worth further noting that, depending on the nature and the scope of activities constituting the object of the entity, it may be required that the company should obtain some authorization, this is typical of the mining, forestry, petroleum, real estate, advertisement, education, telecommunication sectors.
Article by CHUO ANGABUA JUNIOR
‘’The content of this article is intended to provide a general guide to the subject matter. We insist specialist advice be sought depending on your specific circumstance’’
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