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(Mar 14, 2014) The Council of Ministers of the Organization for Business Law Harmonization in Africa (Organisation pour l'Harmonisation en Afrique du Droit des Affaires, OHADA) adopted a "significantly revised" Uniform Act on Commercial Companies and Economic Interest Groups on January 30, 2014; the original Act was adopted on April 17, 1997. The new Act was published in OHADA's Journal official on February 4 and enters into force on May 5. (The Organization for the Harmonization of Business Law in Africa (OHADA) Revises Its Corporate Law [in French], OHADA website (Mar. 4, 2018); Acte Uniforme Révis Relatif au Droit des Socit Commerciales et du Groupement d'Intrêt Économique (Jan. 30, 2014) [text of the revised Uniform Act], OHADA website http://www.ohada.com/actes-uniformes-revises/1299/acte-uniforme-revise-relatif-au-droit-des-societes-commerciales-et-du-groupement-d-interet-economique.html.)
Highlights of the revised Act include:
OHADA, which was created by the Treaty on the Harmonization of Business Law in Africa (Treaty of Port-Louis) on October 17, 1993, seeks to further legal integration among its member countries in regard to corporate law and practices. There are currently 17 OHADA Member States: Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Comoros, Congo, the Democratic Republic of the Congo, Equatorial Guinea, Gabon, Guinea, Guinea Bissau, Ivory Coast, Mali, Niger, Senegal, and Togo. (About OHADA [in French], OHADA website (last visited Mar. 7, 2014 [click on "Learn more"]; Treaty of Port Louis (Mauritius, Oct. 17, 1993), OHADA website & Treaty Related to the Revisions to the Treaty on the Harmonisation of Business Law in Africa (Quebec, Canada, Oct. 17, 2008), OHADA website.)
- introduction of a new corporate form, the simplified joint-stock company (société par actions simplifiée), without a legally required minimum of share capital;
- simplification of the rules for the creation and functioning of companies, in particular the rules on drafting by-laws, payment terms and amount of share capital, and filings and publications (in anticipation of digitalized registry systems and digitalized financial information);
- establishment of new provisions on securities, making possible the issuance of hybrid securities, preferred shares, or free shares and also making it possible for non-listed public limited-liability companies (sociétés anonymes) and simplified limited-liability companies to provide for variable share capital;
- clarification of the legal framework for non-OHADA companies' activities in the region. For example, if a company branch registered by a foreign person resident outside the OHADA area has not been affiliated, within two years from its creation, with a company incorporated under the law of an OHADA member state, the branch would be removed from the Trade and Personal Property Credit Register (Registre du Commerce et du Crédit Mobilier – RCCM);
- reinforcement of corporate governance rules to make the OHADA region up-to-date with current business law practices, resulting in a clarification of the powers of boards of directors both for listed and non-listed companies. Specifically, directors must play a more active role; in large public limited-liability companies, specialized committees can be created to assist them. Other new provisions regulate compensation and dismissal of corporate officers; and
- reform of the conditions for holding general shareholders' meetings and other corporate meetings, so that, e.g., if certain conditions are not met, shareholders and directors may remotely take part in statutory general meetings and board meetings, through videoconferencing or any other similar telecommunications technology. (The Organization for the Harmonization of Business Law in Africa (OHADA) Revises Its Corporate Law, supra; Albert Atangana, OHADA: Reform of OHADA Uniform Act on Commercial Companies Law Enacted, TAX NEWS SERVICE (Mar. 5, 2014), International Bureau of Fiscal Documentation online subscription database.)
|Author:||Wendy Zeldin More by this author|
|Topic:||Business investment and capital More on this topic|
|Corporations More on this topic|
|Corporations and associations More on this topic|
|Jurisdiction:||OHADA More about this jurisdiction|
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Last updated: 03/14/2014