Incorporating in the OHADA Zone: A Strategic Guide for the Modern Lawyer
On
23/08/2024Reading time:
12 min
Summary:
For clients looking to expand their footprint in Africa, advising them on where and how to establish a business is a core value-add. The Organization for the Harmonization of Business Law in Africa (OHADA) offers a compelling proposition: the ability to incorporate a company under a single, modern legal framework that is valid across 17 member states, from Senegal to the DRC, and from Cameroon to Congo-Brazzaville. For the smart lawyer, understanding this process and its profound advantages is essential for providing top-tier, strategic counsel to international investors. This article breaks down the "how" and the "why" of OHADA incorporation.
The OHADA Advantage: Why Recommend It?
Before diving into the process, it's crucial to articulate the strategic benefits to your client. Incorporating under an OHADA Uniform Act offers unparalleled advantages:
Legal Certainty and Uniformity: This is the cornerstone. The OHADA treaties ensure that the core rules of commercial life are identical and uniformly interpreted across all member states. A company incorporated in Benin enjoys the same legal recognition in Gabon. This eliminates the need to navigate 17 different corporate legal systems, drastically reducing legal complexity and risk.
Modern and Robust Legal Framework: The OHADA Uniform Acts are inspired by international best practices (e.g., French and Belgian law) and are regularly updated. They provide clear rules on corporate governance, shareholder rights, director liabilities, and mergers & acquisitions, which are crucial for attracting foreign investment.
Enhanced Creditor Protection: The OHADA system features a centralized Registry of Commerce and Movable Credit (RCCM). Registering a company and its security interests (like pledges on inventory or receivables) here provides a powerful and transparent mechanism to secure debt, making lenders more confident.
Efficient Dispute Resolution: The OHADA framework includes a modern Uniform Act on Arbitration and the Common Court of Justice and Arbitration (CCJA). This provides a reliable, neutral forum for resolving cross-border commercial disputes, a significant advantage over potentially overburdened national courts.
A Platform for Regional Expansion: An OHADA company is inherently structured for growth. Using a single corporate vehicle, your client can seamlessly expand operations into any other member state without needing to incorporate a new, foreign entity, simplifying management and compliance.
How to Create a Company in the OHADA Zone: A Step-by-Step Guide
The process of incorporation is standardized by the Uniform Act on Commercial Company Law and Economic Interest Grouping (AUSCGE). While the Act is uniform, the practical implementation is handled at the national level, typically through a One-Stop Shop (Guichet Unique).
Here is the streamlined process you will guide your client through:
Step 1: Choose the Appropriate Corporate Form The AUSCGE provides for several types of companies. The most common for foreign investors are:
The Société Anonyme (SA): Similar to a public limited company. Ideal for large projects, it requires a minimum of three shareholders and a board of directors. It is the only form that can offer shares to the public.
The Société à Responsabilité Limitée (SARL): Similar to a private limited liability company. The most popular choice for SMEs, requiring a minimum of one shareholder and a manager (gérant). Liability is limited to the amount of capital contribution.
Step 2: Draft the Articles of Association (Statuts) This is where precise legal counsel is critical. The Statuts must be meticulously drafted in French and include:
Company name, legal form, and duration.
Exact registered office address (must be within an OHADA member state).
Precise corporate object and activities.
Amount of share capital and distribution of shares (equity).
Rules governing the administration, management, and decision-making processes.
Step 3: Capital Deposit Before registration, the share capital must be deposited into a blocked account at a local bank or with a public notary. The bank or notary will provide a certificate of deposit, which is a mandatory prerequisite for registration.
Step 4: Register with the One-Stop Shop (Guichet Unique) The company’s legal existence begins upon registration at the Guichet Unique. This single office consolidates the procedures for:
Registry of Commerce and Movable Credit (RCCM): The company receives its unique RCCM number, granting it legal personality.
Tax Authorities: Registration for corporate income tax, VAT, and other taxes.
Social Security Registry: Registration of the company as an employer.
Labour Inspectorate: Notification of the company’s establishment.
The Guichet Unique will issue a formal registration certificate, often called the Extrait RCCM, which serves as the company's birth certificate.
Step 5: Fulfill Post-Registration Obligations Your role continues after registration. Key next steps include:
Publishing a notice of incorporation in a journal of legal announcements.
Conducting the formal unblocking of the capital with the bank.
Registering with the Chamber of Commerce.
Ensuring ongoing compliance with accounting and audit requirements as stipulated by the Uniform Act on Commercial Law (obligation to keep formal ledgers) and the Uniform Act on Accounting Law.
Strategic Considerations for Legal Practitioners
Local Presence is Key: While the law is uniform, practice can vary by country. Partnering with a trusted local counsel in the specific member state of incorporation is indispensable for navigating the Guichet Unique, understanding local tax nuances, and ensuring smooth operations.
Arbitration Clause is Non-Negotiable: Always include a clause in the company’s Statuts and all major contracts referring disputes to OHADA arbitration (administered by the CCJA). This is a primary advantage of the system.
Advise on Corporate Governance: Use the clarity of the AUSCGE to your client’s advantage. Draft robust Statuts that clearly define the powers of managers, the thresholds for shareholder decisions, and mechanisms for resolving deadlocks.
Conclusion
Incorporating a company in the OHADA zone is more than just an administrative task; it is a strategic legal decision. By leveraging this harmonized system, you can offer your clients a gateway to a market of over 250 million people with a predictable, secure, and modern legal foundation.
Your expertise in guiding them through this process—from selecting the right corporate vehicle to embedding a best-practice dispute resolution mechanism—adds immense value, transforming legal counsel from a compliance function into a genuine strategic advantage.
Subscribe to our newsletter
Subscribe our newsletter to get weekly updates.