A COMPREHENSIVE GUIDE ON THE INCORPORATION OF BUSINESSES IN CAMEROON – REQUIREMENTS AND TIMELINES
Introduction:
Business incorporation in Cameroon is governed by four main legislations:
- OHADA Uniform Act on General Commercial Law;
- OHADA Uniform Act on Commercial Companies and Economic Interest Groups;
- Law No. 2015/018 of the December 21, 2015 Regulating Commercial Activities in Cameroon;
- Decree No. 2017/0877/PM of February 28, 2017 establishing the modalities for the authentication of the Articles of Association of the Limited Liability Company established under private signature in the Business Creation Formalities Centers in Cameroon;
In the course of this guide, we shall look at the two types of companies that operate within the laws of Cameroon, then go further to examine the requirements and timelines for each type of company.
Furthermore, we shall discuss the exceptional case of companies which fall under the regime of the Business Creation Formalities Centers in Cameroon.
Lastly, we shall provide additional information on the preconditional and consequential issues involved in business registration in Cameroon.
Types of Companies in Cameroon:
There exist two main types of companies in Cameroon. These are the Private Limited Company and the Public Limited Company.
A Private Limited Company shall be a company in which the members are liable for the company’s debts up to the limit of their contributions and their rights are represented by company shares.
It may be formed by a natural or corporate person, or by two or more natural or corporate persons.
It shall be referred to by a company name which must be immediately preceded or followed by the words “Private Limited Company” or the abbreviation “Ltd” written in bold characters.
The registered capital of a private limited company shall be at least one million (1 000 000) CFA francs. It shall be divided into equal shares whose face value may not be less than five thousand (5 000) CFA francs.
Private Limited Companies are managed by appointed managers who may be a single manager or more than one manager.
A Public Limited Company shall be a company in which the liability of each shareholder for the debts of the company is limited to the amount of shares he has taken and his rights are represented by shares.
A public limited company may have only a single shareholder.
A public limited company shall be known by a company name which shall immediately be preceded or followed in legible characters by the words: “public limited company” or the abbreviation: “PLC”.
The minimum authorized capital shall be fixed at ten million (10,000,000) CFA francs. It shall be divided into shares of a face value of not less than ten thousand (10,000) CFA francs.
Public Limited Companies are managed in two ways:
There is the management through a Board of Directors headed by a President of the Board of Directors.
Secondly, there is the management through a President and Director-General, in which there is no Board.
The Case of the Private Limited Company
- Requirements for incorporation:
The requirements for incorporation of a Private Limited Company shall both be informatory and documentary requirements.
The documentary requirements shall be as follows:
- Articles of Association: this shall be prepared by the lawyer and it shall be notarized at the office of a notary public;
- Copies of national identity cards (for Cameroonian nationals) and copies of International Passports (for non-Cameroonian nationals) of all the shareholders;
- A copy of the national identity card (for a Cameroonian national) and of the (international passport for non-national) of the manager of the company
- Copies of criminal record of each shareholder;
- A notarized statement of subscription and payment of shares: this is a document to indicate that each which shareholder has subscribed for what amount of shares and that he/she has paid up for the shares;
- A sketch map indicating the location of the company’s head office: where the company has not had a physical location yet, then the company may use the address of the law office;
- A postal address of the company: generally, this is optional;
- An authorization to carry out a commercial activity in Cameroon, issued by the Cameroon Minister of Trade: this is required when the non-Cameroonian shareholders own over (fifty percent) 50% of the shareholding.
The informatory requirements shall be s follows:
- The full name of the company: i.e. the company’s official name that shall be used on all official company documents;
- The trade name of the company: i.e. the business name of the company which could be used informally;
- The objectives of the company: i.e. the activities that shall be carried out by the company;
- The address (town, neighborhood and building) of the registered office (headquarters) of the business;
- Full names of all the shareholder(s)
- The percentage of share contribution held by each shareholder;
- Shall there be any contributions made other than cash such as building, materials, equipment etc.? If so, what are the contributions and which shareholder is making which contribution? Equipment to be bought after company creation;
- The name of the manager of the company.
- Timeline of incorporation:
Generally, the entire process of incorporating a business in Cameroon would be between 72 hours and 1 month, depending on various surrounding circumstances.
However, it is preferable to go by the median of about 2 weeks.
This shall be in the case where there shall not be the need for obtaining authorization from the Minister of Trade.
Where the authorization is necessary, then an additional 2 weeks shall be considered, setting the median duration at 1 month.
The timeline shall be broken down as follows:
- Application for authorization from Minister: 10 (ten) days;
- Compiling documents required for incorporation: 2 (two) days;
- Business registration with the Trade and Personal Property Credit Registry of the Court of competent jurisdiction: 02 (two) weeks.
The case of the Public Limited Company
Generally, the procedure for the requirements and timeline for the incorporation of a Public Limited Company is similar to that of the Private Limited Company. However, there will be differences in the costs.
A Public Limited Company as earlier mentioned has a minimum share capital of XAF 10,000,000 (ten million francs). This means that the costs shall be higher than that of the Private Limited Company, especially where the share capital of the Private Limited Company does not amount up to XAF 10,000,000 (ten million francs).
From the breakdown of costs as outlined in the Private Limited Company, it is obvious that the minimum cost for the registration of a Public Limited Company shall be XAF 1,700,000 (one million seven hundred thousand francs).
Companies of Exceptional regime
In Cameroon, there are certain companies that are considered to be of an exceptional regime. Such companies are exempted from going through certain procedures and providing certain requirements in the process of their business registration.
Under this regime, only a Private Limited Company would be considered.
Also, the conditions to be classified under this regime are as follows:
- The company has a share capital of not more than XAF 1,000,000 (one million francs) and not more than one (01) share holder; or
- The company has a share capital of not up to XAF 1,000,000 (one million francs), regardless of the number of shareholders it has.
- Requirements for incorporation:
The requirements for incorporation of a Private Limited Company under this exceptional regime shall be similar to that under general regime. There shall be slight differences however.
The documentary requirements shall be as follows:
- Articles of Association: this shall be prepared by the lawyer and it shall not be notarized at the office of a notary public;
- Copies of national identity cards (for Cameroonian nationals) and copies of International Passports (for non-Cameroonian nationals) of all the shareholders;
- A copy of the national identity card (for a Cameroonian national) and of the (international passport for non-national) of the manager of the company
- A sketch map indicating the location of the company’s head office: where the company has not had a physical location yet, then the company may use the address of the law office;
- An authorization to carry out a commercial activity in Cameroon, issued by the Cameroon Minister of Trade: this is required when the non-Cameroonian shareholders own over (fifty percent) 50% of the shareholding.
The informatory requirements shall be s follows:
- The full name of the company: i.e. the company’s official name that shall be used on all official company documents;
- The trade name of the company: i.e. the business name of the company which could be used informally;
- The objectives of the company: i.e. the activities that shall be carried out by the company;
- The address (town, neighborhood and building) of the registered office (headquarters) of the business;
- Full names of all the shareholder(s)
- The percentage of share contribution held by each shareholder;
- Shall there be any contributions made other than cash such as building, materials, equipment etc.? If so, what are the contributions and which shareholder is making which contribution? Equipment to be bought after company creation;
- The name of the manager of the company.
Precondition for incorporation – the case where non-Cameroonians own over 50% of shareholding
As we mentioned earlier, where over 50% of the shareholding of the company shall be owned by non-Cameroonians, there shall be the need to obtain an authorization to carry out a commercial activity in Cameroon by the Minister of Trade.
In this regard, the shareholder(s) will need to prepare an application and submit to the minister with the following documents attached:
- A Power of attorney (where they are not making the application in person);
- A coy of the national identity card of their attorney;
- Copy of passport of the shareholder;
- A commitment of honour from the shareholder;
- Copy of criminal record of the shareholder;
- Articles of Association of the Company;
- Statement of subscription and payment of shares;
- Business plan of the Company;
- Sketch map location of the company address in Cameroon;
- Tenancy Agreement between the company and landlord.
Generally, this procedure has no costs, except for the cost of fiscal stamps which amounts to XAF 1,000 (one thousand francs). Where the services of a legal consultant are used, his/her legal fees shall be paid.
Consequential requirement after business registration
So as indicated earlier, we thought it wise to touch on certain consequential requirements upon the incorporation of a business in Cameroon.
Generally, these includes tax registration (which is obligatory) and obtaining a business license (where the company operates in a regulate sector) as well as registration with the National Social Insurance Fund (where the company has employees)
For tax registration, the documents required are as follows:
- Minute of articles of association (original + single copy);
- Minute of the capital subscription and payment declaration (original + single copy);
- Fiscal stamp – XAF 1,500 (2 originals)
The total duration for the tax registration is averagely 48 hours.
As for the Social Insurance, the National Social Insurance Fund (NSIF) is the main body responsible for managing social protection. Voluntary insurance services can also be taken out with private providers, whether you are an employer, employee or self-employed.
If you have employees, you are legally obliged to register your company with a social security scheme.
Employees must themselves be registered in order to receive benefits. Payment of social security contributions remains the responsibility of the employer.
The requirements shall include the following:
- Location map of employee residence;
- Form – copy of birth certificate of employee;
- Copy of marriage certificate form;
- Birth certificate of employee;
- Application for NSIF company registration;
- Application for NSIF registration of the insured person;
- Head office location map;
- Taxpayer card;
- Title of Patent;
- Attestation of business registration;
- Copy of national identity card of employee;
- Staff list;
- Employee hiring notice;
Concerning obtaining a license (permit) to operate, this shall vary from sector to sector. It could be in the domain of communication, transport & logistics, finance, water & energy, forestry, mining, etc.
Generally, it is required that the company prepares and deposits an application for authorization at the concerned ministry.
The requirements will generally include the following:
- Articles of Association of the company;
- Certificate of incorporation;
- Business insurance license;
- Tax payer’s card;
- Certificate of tax clearance (non-indebtedness);
- Copy of identity card of the manager;
- Proof of bank account.
Conclusion
From this document, we have tried to first of all outline the various laws that are involved in business registration in Cameroon. Then we have gone ahead to state and distinguish the different types of companies that can be registered in Cameroon. We have also looked at the details of requirements and timelines involved in each situation. Finally, we have examined exceptional situations in business incorporation as well as pre and post incorporation situations.
We trust that this was helpful.