According to article 37 of the OHADA Law of 2014, each member shall contribute to the company.
Each member shall be liable to the company for every contribution he has pledged to bring in either in cash, in kind, or through services.
In return for their contributions, members shall receive instruments issued by the company, as defined in article 51 hereinafter.
The provisions of this chapter shall apply to contributions made during the life of the company in connection with a capital increase.
Types of contributions
Each member may contribute to the company:
- money, as a cash contribution;
- rights on assets in-kind, movable or immovable, tangible or intangible property, as contribution in kind;
- technical or professional knowledge or services, as the contribution of services;
Any other contribution is prohibited.
Payment of cash contributions
Cash contributions are paid by transfer to the company of ownership of the amount of money that the members have pledged to contribute.
Unless otherwise provided for in this uniform Act, cash contributions shall be paid in full during the company formation.
The only cash contributions considered as fully paid up are sums over which the company has acquired ownership and which are fully and definitively collected.
In the event of delay in payment, outstanding sums due to the company shall automatically bear interest at the legal rate from the day the payment was to be made without prejudice to any damages, where applicable.
Unless forbidden by the articles of association, cash contributions made in connection with an increase of the capital of the company may be paid through offset against a claim against the company that is certain, of a fixed amount and due.
Payment of contributions in kind
Contributions in kind shall be paid by transferring real or individual rights on assets contributed and by making effectively available to the company assets to which those rights are attached.
Contribution in kind shall be fully paid at the company formation.
Where the contribution is in the form of property, the contributor shall be a guarantor to the company as a vendor to the buyer.
Where the contribution consists of the enjoyment of property, the contributor shall be a guarantor for the company as a lessor for the lessee. However, when the contribution consists of fungible goods or all other assets meant to be renewed during the company’s existence, the contract shall transfer ownership of the assets contributed to the company on condition that it gives an equal quantity, quality and value in return. In this case, the contributor shall be a guarantor for the company under the conditions laid down in the preceding article.
The contribution of an asset or a right subject to publicity for its enforceability against third parties may be published before the registration of the company. Such formality only has a retroactive effect to the date it was accomplished only from the date of the company registration.
Members shall assess contributions in kind.
In cases provided for by this uniform Act, such assessment shall be monitored by a contributions auditor.
The articles of association shall contain provisions for assessment of contribution in kind under the conditions laid down in this uniform Act.
Payment of contributions of services
Contributions of services shall be paid through the effective provision of technical or professional knowledge or services to the company.
Contributions of services are prohibited in public limited companies.
The contributor of services shall render the services she pledged to contribute and shall disclose all profits made through the activity that is the subject of her contribution.
The articles of association shall describe the services contributed and determine the terms of its payment, including the length of services to be provided by the contributor, the number of securities allocated in compensation of such services, and rights attached to these securities in connection with the distribution of profits and net assets. Furthermore, the articles of association shall prescribe the procedures for liquidating those securities, should the contributor of services ceases to carry out the activity subject to her contribution.
Contributions of service shall not be counted in the constitution of the stated capital, but they shall entail the allocation of company securities giving voting right, share of profits, and net assets, provided that the contributor share liability for losses.
However, voting rights attached to securities allocated for contributions of services shall not exceed twenty-five percent (25%) of aggregate voting rights.
The total share attached to such securities may not exceed twenty-five percent (25%) of the company profits, net assets, and losses.
Securities allocated for contributions of services shall be neither transferable nor assignable. They have no nominal value.