Evaluating the Forms and Stages of Financial Disclosure of Company Life under OHADA Law
Keywords:
Financial Disclosure, Companies, OHADA LawAbstract
The general rule that commercial companies are required to make public their financial situation to the shareholders and other stakeholders such as investors has been established. However, this is not always the case as companies in Cameroon have devised certain means to escape this responsibility or make improper and untrue disclosures. They exploit the loopholes of legal and institutional mechanisms for financial disclosure. An analytical approach of the various legislations related to financial disclosure of commercial companies under the Organization for the Harmonization of Business Law in Africa (OHADA) through the doctrinal research method along relevant texts on financial disclosure within companies in Cameroon is therefore examined. This study has as its principal objective to examine the different stages of financial disclosure of commercial companies under OHADA Law. The achievement of this objective was guided by the Doctrinal research methodology consisting of primary and secondary data. Primary data consist principally of the OHADA Uniform Acts and other relevant legislations. Secondary data used is from textbooks, journals, internet and other. Our research outcome is to the effect that, despite the effective mechanism put in place by OHADA to encourage financial disclosure of companies, there is still need for more in relation of creating a sound atmosphere for financial disclosure as well as sanctions related to concealment or fraudulent disclosures. Recommendations are made to the effect that, a more explicit and unambiguous provisions be made by OHADA in the domain of Accounting Law and the OHADA legislature should provide a harmonised criminal law punishing disclosure ills rather than leaving member states the powers to do so.
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24. Ibid. Article 41 and 45.
25. Ibid. Article 49.
26. Ibid. Article 51.
27. Ibid. Article 400.
28. This is financial disclosure done by a notarized statement of subscription and payment.
29. Article 393 UACCEIG.
30. Ibid. Article 389.
31. The Notary in the SA is required to state in the notarial statement of subscription and payment that the amount of subscriptions declared corresponds to the amount appearing on the allotment letters and that the amount paid corresponds to the total sums of money deposited in his chambers or, where necessary, appearing on the certificate referred to above.
32. Articles 311 and 387 UACCEIG.
33. Ibid. Article 64 UACCEIG.
34. Ibid. Article 311.
35. Ibid. Article 387.
36. Ibid. Article 66. Where, after being formed, the company’s capital drops to an amount below the minimum fixed by this UACCEIG for that form of company, the company shall be dissolved, unless the capital is raised to an amount at least equal to the fixed minimum amount, under the conditions stipulated by the UACCEIG
37. Ibid. Article 388.
38. Article 548 UACCEIG for SAs.
39. Ibid. Article 140.
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41. Article 1 UAAL.
42. Ibid. Article 19.
43. Martor, B., et al., (2002) “Business Law in Africa: OHADA and the Harmonization Process ”, op. cit. at P. 99.
44. Article 67 UACCEIG.
45. Ibid. Articles 68 and 69.
46. If it does, the company’s form should be changed, or else the company may not be validly formed.
47. Article 39 UACCEIG.
48. Ibid. Article 44.
49. Hanak v. Green. (1976) 1 BLR 1.
50. Article 562 UACCEIG.
51. Ibid. Article 563.
52. Article 591 UACCEIG.
53. Ibid. Article 610.
54. Ibid. Article 614.
55. Ibid. Article 627.
56. UEMOA covers the West African States and CEMAC covers the central African states.
57. Article 81 UACCEIG.
58. Ibid. Article 828.
59. The regional council was created by a convention dated 3 July 1996 adopted by the Council of Ministers of the then UMOA now UAMOA. Its powers are further defined by a regulation of the Council of Ministers of UMOA relating to the organization and functioning of the regional stock exchange market of UMOA. This regulation provides that the Regional Council will be in charge of organizing public offerings, authorizing and monitoring the market entities and traders and finally, monitoring the legality of transactions on the stock exchange.
60. The Douala stock exchange is a spot market, and the quotation will be made by a single entity. There are two divisions, the first reserved for companies with a registered capital of at least 500 million FCFA that have achieved a minimum net margin of 3 percent over the last three financial years and the second for companies with a registered capital of at least 200 million FCFA.
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63. They include the income tax schedule, the establishments which provide financial backing to the issuer in that State Party, and the manner of publication of notices intended for investors.
64. Article 87 UACCEIG.
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66. Articles 832,833 and 835 UACCEIG.
67. Ibid. Article 824.
68. Ibid. Article 905.
69. Article 189 UACCEIG.
70. Ibid. Article 190.
71. Ibid. Article 195.
72. In the case of a merger or division, there is the dissolution (winding-up) without liquidation of the disappearing companies, and the universal transfer to the beneficiary companies of their assets in the state in which they are on the date of wrapping up of the operation.
73. Article 191 UACCEIG.
74. Ibid. Article 191.
75. Ibid. Articles 382, 672 and 684.
76. However, no transfer may take place where the shares of the absorbed companies are held by the absorbing company or by the absorbed company herself.
77. Article 42 (1)(2) of Law No 92/007 of 14 August 1992 on the Labour Code of Cameroon.
78. This is the document prepared during a merger, division or a partial business transfer.
79. These elements include, the form, name and registered office of all the participating companies, the reasons and terms of the merger or division, a description and an evaluation of the assets and liabilities to be transferred to the acquiring or new companies, the terms of transfer of the shares or stocks and the date from which such shares or stocks give entitlement to profits, as well as any special conditions relating to such entitlement, and the date from which the operations of the acquired or split company shall be considered completed from the accounting standpoint by the companies receiving the contributions, the dates on which the accounts of the companies concerned which were used to establish the terms of the operation were adopted, the report on the exchange of company entitlements and, where necessary, the amount of the cash adjustment, the projected amount of the merger or division bonus, the rights other than shares, the rights granted to members having special rights, as well as special benefits, where necessary.
80. Article 204 UACCEIG.
81. Ibid. Article 320.
82. Ibid. Article 232.
83. Ibid. Article 213.
84. Ibid. Article 214.
85. Ibid. Article 215.
86. Ibid. Article 218.
