CHAPTER II : ESTABLISHING A COMMERCIAL PRESENCE
IN CAMEROON
Any company which has commercial
activities in Cameroon must have a registered
office in the country. However, this rule
does not apply to research companies and transnational
companies in which the government is a shareholder,
and to companies contracted for a specified
object and duration. To fulfill this requirement
the foreign company should establish a distinct
entity under Domestic Law.
Therefore the
foreign company must choose a business vehicle
among those defined by the law. The Cameroonian
business entities which have a legal existence
are classified into two categories: "Société
de personnes" and "Société
de capitaux". The "Société
de personnes" is similar to the Anglo-American
concept of partnership and the "Société
de capitaux" to corporations: they limit
liability to a stated level of capitalization.
I. CORPORATION-LIKE COMPANIES
Two business entities in Cameroon
are characterized by the limited liability
of their members: the Société
anonyme (corporation) and the Société
à Responsabilité Limitée
(SARL).
A) THE SOCIETÉ ANONYME
(SA)
The Cameroonian legal form which
comes closest to a corporation is the Société
Anonyme. No minimum capitalization is required.
Each share must have a minimum face value
of 10000 CFA Francs. (500 FCFA = 1 US$)
The capital must be held by at
least seven shareholders who meet at least
once a year to approve financial statements
and to decide how to allocate profits.
In a Société Anonyme,
day-to-day management is delegated to a board
of directors "Conseil d'administration".
The Conseil d'administration,
composed of shareholders, elects a president
who is the company's executive officer. As
the law does not stipulate the number of directors,
it is possible to have only one director instead
of a full board of directors.
The president's or the director's
powers are determined by Statutory Law as
well as by the by-laws. Any decision taken
in violation of these provisions can be contested
by shareholders. Third parties should not
rely only on the statutory powers as they
are bound as well by all additional limitations
of the by-laws.
During annual shareholders' meetings,
simple majority voting rules apply. If a major
decision has to be made, such as one concerning
a merger or a modification in articles of
association, an "extraordinary"
shareholders' meeting must be convened. For
"extraordinary" meetings, a qualified
majority of two-thirds plus one vote is required.
It should be noted about Cameroonian
corporation Law that shareholders must sign
by-laws, as well as modify any article, before
a Notaire (a civil law public officer who
keeps official records of authentic documents).
B) THE SOCIÉTÉ
A RESPONSABILITÉ LIMITÉE (SARL)
The Société à
responsabilité limitée is a
simplified form of corporation:
it does not have a board of directors but
merely one manager (gérant)
the minimum capitalization is of 500000 CFA
Francs
only two shareholders are required
the qualified majority shareholder voting
rule is three-quarters plus one
Due to its simple form of organisation
and management the SARL is the most commonly
incorporated company
II. PARTNERSHIP-LIKE ENTITIES:
SOCIÉTÉS DE PERSONNES
The essential characteristics
of a partnership are the great flexibility
and the unlimited liability of partners in
relation to third parties. In most of the
below-described entities, the partners can
be either individual persons or companies.
A) THE SOCIETÉ EN NOM
COLLECTIF (General Partnership)
This is the most basic, and from
a North American perspective, the most recognizable
form of Cameroonian partnership: shareholders
are jointly liable for all debts and obligations
incurred. No minimum capitalization is required.
B) THE SOCIÉTÉ
EN COMMANDITE (Limited Partnership)
As in a limited partnership in
North America, the limited partners of a société
en commandite, called commanditaires, contribute
assets to the partnership but play no part
in its direction. The limited partners incur
no liability for obligations beyond their
capital contributions. General partners are
jointly liable for all obligations incurred
by the partnership.
When the limited partners' interests
of a société en Commandite are
offered in the form of stock certificates,
the company is qualified as a Société
en Commandite par Actions.
The tax liability of a limited
partnership is similar to that of a stock
corporation.
C) THE SOCIÉTÉ
EN PARTICIPATION (Undisclosed Partnership)
The relationship between the partners
of a société en participation
might be described in Anglo-American law terms
as a multilateral undisclosed agency. The
terms, and even the very existence of this
partnership do not have to be disclosed to
third parties. This arrangement can be advantageous
in certain situations where a company or individual
prefers to keep its identity (and often its
"deep pockets") left unknown when
negotiating contracts. In exchange for its
anonymity, the dealings with third parties
on behalf of the société en
participation incur unlimited personal liability.
D) THE SOCIÉTÉ
CIVILE (Civil Partnership)
The société civile
is the basic and oldest instrument of French
corporate law adopted by Cameroon and much
of its usefulness has been depleted over the
years by the newer, above-described forms
of corporation and partnership-like entities.
Independent professionals, such
as lawyers, architects and doctors, may create
a civil professional corporation.
Partners in a civil partnership
are jointly liable, without limitation, for
the debts incurred by their company.
III. THE ECONOMIC INTEREST GROUP
(GIE)
The GIE, created by a December
22, 1993 Statute, is best understood as a
platform for cooperative economic development.
a GIE must be formed in view of further economic
development
if a GIE generates profits, these profits
must be distributed to the GIE's principals
the GIE is vested with a formal, corporation-like
organizational structure
it is tax-transparent
the GIE's principals are jointly liable vis-à-vis
contractors
Forming a GIE may make sense for
the foreigner who seeks to join forces with
an existing Cameroonian company to create
or expand a market, promote sales or jointly
embark upon research and development.
