Shareholding ratio for company registration in Cameroon are generally flexible and determined by the founders, with no legal minimum restrictions in accordance with the OHADA Law. However, some other laws have specified some particular shareholding structure and share capital amount for Cameroonians in the Articles of Association of some specific sectors in Cameroon.
What are Company Shares in Cameroon?
Company shares in Cameroon constitute units of ownership in a corporate entity. Upon the division of a company's capital into shares, each share represents a proportional claim on the company's assets and earnings. Investors who acquire shares referred to as shareholders are ordinarily entitled to receive dividends when declared and may be accorded the right to vote on corporate decisions.
LEGAL REGIME OF SHAREHOLDING RATIO FOR COMPANY REGISTRATION IN CAMEROON
Under the OHADA Uniform Act on Commercial Companies and Economic Interest Groups, control is defined principally by reference to voting rights and capital ownership, which directly determine a shareholder's capacity to influence and drive corporate decision-making at General Meetings.
- Voting and Decision-Making Thresholds by Shareholding Ratio in Cameroon Companies
Shareholding ratios are determinative of decision-making power within a company. Under the OHADA framework, the standard principle is one share, one vote. The primary voting thresholds applicable under this framework include the following:
Simple Majority (>50%): An ordinary majority is required for the passage of ordinary resolutions, including those pertaining to the approval of financial statements, the declaration of dividends, and the appointment or removal of directors.
Two-Thirds Majority (66.66%): A special majority is required for the passage of special resolutions in a Société Anonyme (SA), including resolutions concerning amendments to the articles of association or significant structural changes to the company.
Three-Quarters Majority (75%): Typically, the standard required for special resolutions in a Société à Responsabilité Limitée (SARL) such as the resolution to amend the company Articles of Association.
- Concepts of Company Control by Shareholding Ratio in Cameroon
The OHADA legal framework recognizes and provides for various levels of control that may be exercised over a company.
Absolute Control: The holding of more than 50% of the voting rights of a company generally constitutes absolute legal control over its decision-making processes.
Significant Influence: Under the provisions of the Uniform Act, a shareholder is presumed to exercise significant influence where they hold, directly or indirectly, at least 20% that is, one-fifth of the voting rights of the company.
Joint Control: Joint control arises where control of a company is shared among a limited number of partners, such that strategic and financial decisions necessitate the mutual agreement of those parties.
- Minority Shareholder Protection
In order to prevent the absolute control exercised by a majority shareholder from becoming oppressive to the interests of other shareholders, OHADA law provides specific protective mechanisms for minority shareholders that is, those holding less than 50% of the company's equity including the following:
Right to Information: Minority shareholders are afforded legal protection through the mandatory provision of access to corporate records, financial statements, and management reports prior to the convening of company meetings.
Derivative Actions: Shareholders whether acting individually or collectively are entitled to institute legal proceedings on behalf of the company against directors or managers in respect of misconduct that has caused financial loss to the company.
Right to Oppose: Specific thresholds allow minorities to demand an extraordinary general meeting, request the appointment of a special auditor, or oppose certain share transfers in Cameroon companies.
D. Contractual Flexibility
In addition to the provisions of statutory law, OHADA expressly recognizes the validity of Shareholders' Agreements, which are frequently employed in modern corporate vehicles such as the Société par Actions Simplifiée (SAS). Such agreements afford shareholders the ability to structure control on a contractual basis by establishing voting pools, share transfer restrictions including pre-emption and approval clauses and veto rights that take precedence over the baseline statutory ratios.
Mandatory Shareholding Ratio for Cameroonians
- Mining Companies – 51% for Cameroon Nationals
- Health Companies – Qualified Health Professional Must be part of the shareholding structure with any number of shares as agreed commensurate to the value of the license.
- Forestry Companies – 70% Shareholding in favour of Cameroonian Nationals.
Mandatory Share Capital for Cameroon Companies
- Credit Information Bureau: 500,000,000 Fcfa by virtue of Article 2 of Instuction No. 002/2020 by BEAC.
- Bank: 25,000,000,000 Fcfa
- Bureau De Change (Currency Exchange Office): 50,000,000 Fcfa
- Private Limited Companies by Private Treaty: 100,000 Fcfa Minimum Share Capital
- Private Limited Companies by Notarial Deed: 1,000,000 Fcfa Minimum Share Capital
- Public Limited Companies: 10,000,000 Fcfa Minimum Share Capital
- Insurance Companies: 1,000,000,000 Fcfa Share Capital
- Ship Consignee Company: 50,000,000 Fcfa
- Stevedore Company: 150,000,000 Fcfa Cat A & 5,000,000 Fcfa Cat B.
- Maritime Transport Agent: 150,000,000 Fcfa
- Shipping Agent: 25,000,000 Fcfa
- Freight Forwarding Agent: 25,000,000 Fcfa
- Ocean Carrier: 200,000,000 Fcfa
Financial Guarantee for Cameroon Companies
- Bureau De Change (Currency Exchange) Agent: 2,000,000 Fcfa
- Payment Service Companies: 500,000,000 Fcfa
- Online Gaming: 200,000,000 Fcfa
- Betting Companies
- Type A Concession: 100,000,000 Fcfa
- Type B Concession: 50,000,000 Fcfa
- Casinos
- 1st Category: 250,000,000 Fcfa
- 2nd Category: 100,000,000 Fcfa
- 3rd Category: 50,000,000 Fcfa
- 4th Category: 25,000,000 Fcfa
- Public Lottery: 50,000,000 Fcfa
- Insurance Broker: 10,000,000,000 Fcfa
DIFFERENCE BETWEEN COMPANY SHARE CAPITAL AND OPERATING CAPITAL IN CAMEROON
Share capital constitutes the permanent funds raised by a company through the issuance of shares to investors. Operating capital also referred to as working capital by contrast, represents the fluid, short-term financial resources utilized to fund the company's day-to-day operations, including the settlement of amounts owed to vendors and the meeting of payroll obligations.
LINK BETWEEN COMPANY SHAREHOLDING AND LIABILITY IN CAMEROON
In limited liability companies (LLCs) and corporations, shareholding establishes a strict boundary for personal financial risk. Shareholders are generally insulated from corporate debts and obligations, meaning their financial exposure is strictly capped at the amount they have invested or committed to invest in the company's shares.
1. Core Link: Extent of Liability
Fully Paid Shares: Once shares are fully paid, additional financial liability is completely eliminated. The maximum potential loss is strictly capped at the initial investment amount.
Partly Paid Shares: If shares are only partially paid, you remain liable to the company for the unpaid balance share.
Percentage of Ownership: While your ownership percentage determines your level of internal influence and voting power, it has no bearing on your personal financial liability to outside creditors.
2. Key Exceptions in Circumstances where the corporate veil is Lifted in Cameroon
While separation of personal assets from business assets is the standard rule, courts may pierce the corporate veil or assign personal liability under specific circumstances:
Personal Guarantees: If a shareholder personally guarantees a bank loan or business debt, they assume liability outside their shareholding.
Fraud or Misconduct: Deliberate wrongdoing or misrepresentation can strip away liability protection.
Commingling of Assets: Failing to maintain a separation between personal and business finances can negate the corporate shield.
Unpaid Capital Contributions: If an entity is formed with unpaid shares, creditors can demand the unpaid portion during insolvency.