SETTING UP A COMPANY IN CAMEROON
Setting up a company in Cameroon is an important venture for businessmen and entrepreneurs with a view to seize the opportunities presented by the Cameroon economy. With the strategic position Cameroon holds in the CEMAC region, coupled with vast natural resources presently under exploited in the country, local and foreign investors are presented with the opportunities to invest. Nevertheless, navigating the 3-phase process of company registration in Cameroon is not quite direct. Research, planning and a mastery of the regulatory framework put in place by the government needs to be engaged with caution. This is aimed at avoiding pitfalls in the process of setting up a company in Cameroon. Also, there are circumstances under which the company setup process in Cameroon can be composed of mistakes which can be rectified as well as also contain elements which can cause the application to set up a company in Cameroon to be denied.
When setting up a company in Cameroon, promoters and founders can choose from several legal company structures to wit:
- Private Limited Company: This structure of setting up a company in Cameroon which falls within the category of small and medium size enterprises in Cameroon is one of the most sought-after structure as it limits the liability of shareholders to their shares hence protecting their individual assets.
- Public Limited Company: This structure in the procedure to incorporate a company in Cameroon falls within the category of large businesses. This is especially the case where the company seeks to make a call for capital from the public.
- Private Company: A private company shall be a company in which all the members are traders and have unlimited liability, for the company’s debts. This structure is suitable for traders desirous to consolidate themselves into a company in Cameroon.
- Subsidiary Company: A subsidiary company is a company in which another company called a parent company owns over 50% of its shares. The liability of this company is also limited by shares
- Branch Company: A branch shall be a commercial, industrial or service-providing establishment which belongs to a company or a natural person and which has been granted a certain degree of autonomy in its management. Hence this type of company set up structure
When setting up a business in Cameroon, promoters and founders can choose from several legal business structures to wit:
- Sole Proprietorship: This business setup is usually preferred by small business owners, freelancers and consultants because it allows ownership and operation by an individual. As much as this business structure allows for direct relationship between owners and their customers, it has as demerit the total liability on the part of the business owner.
- Partnership: There are two types of business setup under a Partnership to wit:
- General Partnership: The general partnership is a company in which all partners are merchants and are indefinitely, jointly and severally liable for the company debts, and
- Sleeping Partnership: A sleeping partnership is one in which the capital is made up of shares and in which one or more partners, known as “active partners”, whose liability for the company’s debts is unlimited, joint and several coexist with one or more partners known as “sleeping partners” who are liable for the company’s debts is limited by shares.
Cooperatives: A cooperative is an autonomous group of individuals who willingly join together to fulfill their aspirations and meet their common economic, social, and cultural needs so as to form a corporate body whose ownership and management are collective and where power is exercised democratically and according to the cooperative basis. The OHADA Law on Cooperatives has distinguished between two forms of cooperatives to wit: the Simplified Cooperative Society with the denomination “SCOOP” and the Cooperative Society with a Board of Directors with the denomination “COOP-CA”.
UNDERTAKINGS PRIOR TO SETTING UP A COMPANY IN CAMEROON
Between the date of the formation of the company in Cameroon and its registration with the registry of commerce and securities, relations between members shall be governed by the articles of association and the general rules of the law governing agreements and obligations.
- Undertakings before Setting up a Company in Cameroon
- Undertakings with an Organizing Meeting: Such acts and undertakings are described in a document entitled “statement of acts and undertakings on behalf of the company under formation” with indications of, for each of them, the nature and scope of the company underlying obligations should it decides to take them over.
- Undertakings without an organizing Meeting: for companies formed without an organizing meeting, the statement of acts and undertakings shall be annexed to the articles of association.
2. Undertakings after Company Setup but before company registration in Cameroon
- Within the scope of the Power of Attorney: Members may, in the articles of association, or in a separate document or, where applicable, during the general organization meeting, grant powers to one or more company managers, depending on the case, to make commitments on behalf of a setup company, but not yet registered with the registry of commerce and securities. Provided that such commitments are defined and their scope specified power of attorney, the registration with the company in the registry of commerce and securities is a ratification by the company of such undertakings.
- Exceeding the scope of the Power of Attorney: Acts exceeding the powers conferred to them in such power of attorney, or unrelated to them may be ratified by the company provided they have been approved by the ordinary general meeting under the conditions set forth in the uniform Act for each form of company, unless otherwise provided for in the articles of association.
WHAT IS THE LEGAL REGIME OF AN UNREGISTERED COMPANY IN CAMEROON?
In conformity with Article 114 of the OHADA Uniform Act of 2014, where members decide not to register the company, the company shall be referred to as a “Consortium”. It shall not have a legal personality.
WHO ARE THE FIRST MEMBERS OF A COMPANY SETUP IN CAMEROON?
The first members of a company setup in Cameroon will vary on the type of company being setup. They are as follows;
1. Public Limited Company (Société Anonyme – SA)
– Shareholder(s),
– Directors(s), and
– Auditors
2. Limited Liability Company (Société à Responsabilité Limitée – SARL)
– Shareholder(s), and
– Manager(s)
3. Private Company
– Trader(s) and
– Manager(s)
4. Branch Company of a Public Limited Company
– Director(s)
5. Branch company of a Private Limited Company
– Manager(s)
6. Subsidiary company (Share capital below 10,000,000 XAF)
– Shareholder(s)
– Manager(s)
7. Subsidiary company (Share capital above 10,000,000 XAF)
– Shareholder(s)
– Director(s)
– Auditor(s)
KEY LEGAL REQUIREMENTS FOR SETTING UP A COMPANY IN CAMEROON (PRE-COMPANY SETUP PROCESS IN CAMEROON)
The key legal requirements for company registration in Cameroon as illustrated by the OHADA Law (Organisation pour l’Harmonisation en Afrique du Droit des Affaires) Uniform Act on Commercial Companies and Economic Interest Groups is illustrated through the 3-phase process of pre-Company setup, Company setup and post-Company setup in Cameroon.
Legal Requirements for the Pre-Company Setup Phase in Cameroon
This phase of the process of setting up a company in Cameroon entails the promoter or founders to engage the following:
Information Requirements
- Reserve the Business Name: This is done at the Centre for enterprise creation in Cameroon (CFCE – Centre de Formalites de Creation d’Entreprises)
- Select the Company Type: This could either be a Private Limited Company or a Public Limited Company.
- Select the Company Personnel: These could be Manager(s), Director(s) and Auditor(s) as per the type of company selected.
- Select the Company Share Capital: the minimum share capital to setup a Private Limited Company in Cameroon is 1,000,000 Fcfa (One Million Francs CFA) and the minimum share capital to setup a Public Limited Company in Cameroon is 10,000,000 Fcfa (Ten Million Francs CFA).
- Select the Shareholding Ratio: In the process of setting up a company in Cameroon, the promoters have to decide on the share allocation quota among the company shareholders in proportion to the company shares.
- Choose the company duration: Most promoters usually choose the duration of 99 years renewable for the existence of the company in Cameroon.
- Select the Company account opening method: The founders have to decide on the person to open the company account and the signatories to the account. In most cases, the managers are tasked with the duty to setup the company account at an accredited bank in Cameroon.
- Decide on the recognition of pre-company setup contracts: The prospective company shareholders have to decide on which pre-company setup contracts will be incorporated in the company articles of association.
Documentation Requirements
- Shareholder(s): Passport or Iidentity Card copy where the shareholder is a physical person.
Where the shareholder is a corporate person, the company resolution authorizing the entity to own shares in the new company alongside its incorporation documents must be provided. The company resolution will authorize a physical person to represent the company as shareholder in the new company in Cameroon. The procedure to register a company in Cameroon cannot be accomplished without the mentioned documents.
- Manager(s)/Director(s): One of the key requirements to be respected as regards the key steps to register a company in Cameroon is for the manager/director to provide a copy of their Identity Card or Passport, residence and work permit if an expatriate, a non-crime certificate and particular qualifying license if a specialist-oriented company is to be registered.
- Auditor(s): The procedure to register a public limited company in Cameroon must take into consideration the qualifying documents and information of the principal and alternate auditors.
CAMEROON COMPANY SETUP PROCESS
One of the stages in setting up a company in Cameroon is the setup process which is composed of documentation established by a legal professional in the capacity of a Notary and the payment of fees for the process. It is important to know the offices and authorities responsible for the company registration process in Cameroon.
Offices In charge to Setup a Company in Cameroon
The offices in charge of the company set process in Cameroon are as follows;
- The Office of the Notary,
- The Court of First Instance,
- The Company Registration Office, and
- The Tax Office
Documents Established by the Notary
The Notary must establish the following documents;
- Memorandum and Articles of Association of the company
- Notarized statement of subscription and payment of shares
- Notarized certificate of appointment of company manager
- Declaration of regularity and conformity with the OHADA Law
- Notarized list of company shareholder(s) and company manager
- Localization sketch of business premises.
- A Notarized Lease contract or agreement
Documents Delivered as proof of the completion of the Company Setup Process in Cameroon
In addition to the documents established by the Notary above, the following documents will be established by the respective offices in charge of setting up a company in Cameroon to wit:
- The Court of First Instance: This office is in charge of establishing a Certificate of Incorporation (MO Form)
- Company Registration Office: This office is in charge of establishing an Attestation of Business Creation.
- Tax Office: This office is in charge of establishing an Attestation of tax payers’ registration, a certificate of non-indebtedness and a business license
POST-COMPANY SETUP PROCESS IN CAMEROON
The post company setup process in Cameroon are engaged after the completion of the registration phase of the company incorporation process.
This phase permits the registered company to get into operation in Cameroon and can start business. This phase is as follows;
- Registration for Tax Declarations: This phase of the tax process is different from that at the incorporation level as it entails the setting up of the company in view to have tax declarations registered at the competent tax bureau in Cameroon. During this phase of setting up a company in Cameroon, the company is issued a certificate of conformity and a Business License or exoneration thereof.
- Company Setup Process before the National Social Insurance Fund (CNPS): This phase of setting up a company in Cameroon is aimed at ensuring that both the company and the workers are insured at the national social insurance program. By virtue of this registration, the issues of industrial accidents and occupational disease are covered by the insurance program.
- Publication: This phase of the company setup process in Cameroon is aimed at ensuring that the registration of the company is made known to the public of Cameroon.
MISTAKES NOT TO BE MADE DURING THE PROCESS OF SETTING UP A COMPANY IN CAMEROON
The are certain mistakes which should not be made in the process of setting up a company in Cameroon. Some of these mistakes can be rectified whilst others are fatal to the company setup process in Cameroon. They are illustrated below as follows;
- Mistakes which can be remedied
- Grammatical Errors
- Mistake of the type or form of company
- Mistake on the place of address of the company head office etc.
2. Mistakes which cannot be remedied
- Putting illegal objectives for the company
- Shareholder(s) not having the appropriate license to operate for companies which need such license to be registered
How can mistakes in setting up a company in Cameroon be remedied?
The mistakes made in the process to setup a company in Cameroon which can be rectified in the following ways;
- Through correction of the company documents if the Articles of Association are not yet registered.
- If the Articles of Association of the company is already registered, then the Notary has to engage the process to amend the Articles of Association of the Company.
Under what circumstances can the process to setup a company in Cameroon be denied?
The process to set up a company in Cameroon can be denied in circumstances in which the company objectives are illegal in Cameroon.
COST OF SETTING UP A COMPANY IN CAMEROON
The cost to setup a company in Cameroon depends on several factors as follows;
- Type or category of company
- Type and cost of the commercial lease
- The share capital
- Nationality of the shareholders etc.
The fee structure for the setting up of a company in Cameroon is as follows;
- Notary Fees
- Legal Drafting Fees
- Procedural Fees
- Tax Office
- Tax Payers Registration Attestation
- Certificate of Non-Indebtedness
- Company Registration Office
- Court of First Instance
4. Publication Fees
Cost of Setting Up a Company in Cameroon
The approximate cost to setup a company in Cameroon for Cameroonian Promoters is as follows;
Procedural Cost
- Reservation of Business Name: 10,000 XAF – 25,000 XAF
- Attestation of Tax Payers Registration: 30,000XAF
- Certificate of Non-Indebtedness: varies according to commercial lease rate
- Trade and Personal Property Credit Register (RCCM): 50,000XAF – 200,000XAF
- Publication: 50,000XAF
Notarization of Articles of Association: XAF 50,000 – XAF 150,000 (depending on complexity)
Legal Drafting: 100,000XAFPublication: 50,000XAF
PROOF THAT A COMPANY SETUP IN CAMEROON CAN GO OPERATIONAL
The following documents are proof that a company setup in Cameroon can go operational;
- A certificate of Incorporation (MO Form)
- A Tax Payer’s Registration Number ( www.impots.cm )
- A business License
- A notarized lease agreement
- A localization plan
- A Certificate of non-indebtedness ( www.impots.cm )
- An attestation of Bank account creation
- A physical office location
- A matriculation number from the National Social Insurance Fund for the newly registered company in Cameroonhttps://www.cnps.cm/index.php/en/cnps/missions
- A matriculation number per staff/worker from the National Social Insurance Fund etc. https://www.cnps.cm/index.php/en/cnps/missions
MANDATORY INFORMATION ON THE COMPANY SETUP CERTIFICATES IN CAMEROON
The certificates issued after the company setup process in Cameroon is completed shall have the following mandatory information;
- Certificate of Incorporation (MO Form)
The certificate of incorporation is composed of the following mandatory information below;
– The name of the company;
– The contact address of the company;
– The registered office of the company;
– The registration number of the company from the Trade and Personal Property Rights Register; and
– The date of registration of the company.
2. Company Registration Certificate in Cameroon
The registration certificate of the company setup in Cameroon shall be composed of the following mandatory information below;
a. Information relating to the Corporate Body
- Declaration of the type of entity being set up (corporate body or branch)
- Name of company, trade name, sign and acronym
- Address of company headquarters
- Address of the firm opened
- Juristic form (Legal Status)
- Registered Capital
- Duration (Lifespan)
- Information relating to the business and to the firms (Establishments)
b. Business
- Main business
- Date of commencement
- Number of wage earners
- Information on the main establishment or branch
c. Address
- Origin
- Previous operator
- Address of previous operator
- Loan creditor
- Secondary branch (Besides the one floated)
- Information on Partners Jointly and Severally Liable
d. Names
- Date and place of birth
- Address
- Information relating to managers (directors)
e. Names
- Date and place of birth
- Address
- Duty
- Name of Agent etc.
3. Attestation of Taxpayers’ Registration of a Company in Cameroon
The attestation of taxpayer’s registration for a company in Cameroon is composed of the following mandatory information;
- Reference number in digits
- Business name of the company
- Immatriculation Number from the company registration document;
- Unique Identification Number of the company;
- Tax center;
- Tax system;
- The notification of the penalty for tax fraud;
- The legal provision on a fixed fine
- The notification that the attestation has been generated by the information system of the Directorate General of Taxation at a precise date and time.
4. Attestation of Business Creation in Cameroon
- The reference number of the document
- The name of the company
- The business registration number of the company
- The taxpayer’s registration number of the company
- The address of the company
- The contact number of the company
- The main activities of the company etc.
You can consult our firm in view to engage the practical professional exercise to setup your company in Cameroon.
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