The Liquidation of Companies under Ohada Uniform Act on Commercial Companies and Economic Interest Group’s: A Legal Appraisal of the Case of Cameroon

Abstract

The liquidation of companies in the global, continental and the national context has become a major aspect which needs to be address. The uniform Act on commercial companies and economic interest groups (Uacceig’s) was created to harmonize laws in Africa and to assist countries to attain economic development that is why it made provisions for types of companies, their formation and operation. Companies regulated by Ohada are categorized as registered and unregistered companies. As the name
implies, registered companies are companies that have been created in accordance with the provisions of the UACCEIG. These companies include private limited liability companies, public limited liability companies, and general and limited liability companies. Whereas unregistered companies are not created following the formal procedure preview by Uacceig’s, but are recognized in terms of practice of law. These companies, either registered or unregistered companies may not last for the expected period due to liquidation. Liquidation is the permanent closing of the business since all its assets are sold and the company is stroke of it legal existence. This could be voluntary when members willingly decide to liquidate their companies due to the attainment of their objective, resignation of members and the expiration of the term of the company. Liquidation compulsory when the company is forced to be liquidated by a court order, due to request from its creditors who request the payment of their debts. This is a complex situation and Uacceig’s has made provisions for liquidating a company thus encouraging liquidation. The presumption in creating procedures for liquidation is to help companies who may want to extinct their business operations. However, no benefit can outweigh the disadvantages of the permanent closing of a business, this situation does not only are affect its members but third parties are equally affected. Uacceig’s is considered not 100% effective in preventing liquidation for
when companies are facing financial difficulties and consider liquidation as end goal since the act has not made any other initiative to strengthen the operation of the company and to bring it back on its feet. This study is important as it takes into consideration the formation of companies, the type of companies, liquidation and the effects of liquidation. This work is based on secondary data collected via books, journals, articles, and the internet sources. Our work will be divided into parts that is part one will examines the formation, the types of companies and the causes and the modes of liquidation. While part two will deals with the liquidation proceedings, the role of the liquidator and the effects of liquidation.