A branch company (succursales) is defined as a commercial, industrial or service establishment belonging to a company or individual and having a certain degree of management autonomy, without having a legal personality independent from that of its owner. The rights and obligations arising out of the activity or existence of a branch appertain to the owner of the branch whilst a subsidiary company is a separate and autonomous company with their own legal personality and share capital which although they are held by a parent company, must be registered with the RCCM in their own name and have their own rights and obligations.
The uniform act makes a distinction between two types branches;
- Branches of companies registered in a member state; and
- Branches of foreign companies not registered in one of the member states.
Branches of companies that are already registered in one of the member states must be registered in one of the member states must be registered with the RCCM in the member state in which they are established, within one month of their establishment.
A branch registered by a company which is not registered in member state is subject to the laws of the member state in which it is established in the absence of any international agreement or laws to the contrary. It must be registered with the RCCM within one month of its establishment.
Where the branch/subsidiary company is owned by a foreigner, it shall be attached to a company in existence or to be created, governed by the laws of one of the contracting states not later than two years, after the branch is set up unless this obligation is waived by order of the Minister in Charge of trade in the contracting state in which the branch is located.