Starting a business is an exciting adventure, but before you get started, you need to make a crucial decision: what legal form is best suited to your project? The choice of legal structure is an essential step in setting up your business, as it determines your liability, how you will be taxed, and how you will manage your day-to-day operations.

The OHADA Uniform Code provides a solid, harmonized legal framework for businesses in its member states, and offers several legal forms from which to choose. Our aim is to provide you with all the information you need to make an informed decision. Whether you're a budding entrepreneur or a seasoned business owner looking to restructure, you'll find essential information here to help you understand the advantages and disadvantages of each legal form.

Limited liability company (SARL)

A SARL, or Société à Responsabilité Limitée, is a legal form of business widely used in many countries, including those of OHADA (Organisation pour l'Harmonisation en Afrique du Droit des Affaires). A SARL is characterized by several key features:

1. Limited liability: One of the major advantages of a SARL is that partners' liability is limited to the amount of their capital contribution to the company. In other words, the partners' personal assets are not committed to cover the company's debts or obligations, except in cases of gross negligence or irregularities.
2. Partners: A SARL can be set up with one or more partners, depending on the legislation in force in the country. Partners may be natural or legal persons, offering flexibility in terms of ownership structure.
3. Share capital: A SARL has a share capital, made up of the partners' contributions. This capital is generally divided into shares held by the partners.
4. Governance: SARL governance rules are often set out in a partnership agreement. Management may be carried out by a manager or a management board, depending on the legal provisions and the partners' agreements.
5. Operating rules : SARLs are subject to operating rules, such as keeping accounts, publishing annual financial statements and complying with tax requirements.
6. Life Span: A SARL can have a limited life span, set out in the articles of association, or it can be created for an indefinite period.

LLCs are commonly used for a wide variety of business activities, from small family businesses to medium-sized enterprises. They offer entrepreneurs a balance between simplicity of management and protection of personal liability.

Société Anonyme (SA)

A Société Anonyme (SA) is a legal form of company that is widely used in many countries, including those of OHADA (Organisation pour l'Harmonisation en Afrique du Droit des Affaires). A SA is characterized by several key elements:

Share capital: A public limited company has share capital, which is divided into shares. The shares represent ownership of the company and are held by the shareholders (shareholders of the company). Shareholders can buy, sell or transfer their shares according to the rules defined in the company's articles of association.

1. Limited liability: One of the main advantages of a public limited company is the limited liability of its shareholders. This means that shareholders' liability is limited to the amount of their investment in the company, and their personal assets are not committed to cover the company's debts or obligations.
2. Board of Directors: PLCs are generally managed by a board of directors. The Board makes important decisions for the company and oversees its management.
3. Accounting and transparency: SAs are often subject to strict rules on accounting, publication of annual accounts and compliance with disclosure requirements. This ensures financial transparency.
4. Raising capital: Public limited companies are often used to raise large amounts of capital, as they can be listed on the stock exchange, raise funds from public and private investors, and issue shares to raise funds.
5. Shareholders: The shareholders of a public limited company may be natural or legal persons, offering great flexibility in terms of ownership structure. Shareholders hold shares representing their stake in the company.
6. Life span: A public limited company may have an unlimited life span, unless it is dissolved in accordance with current legislation.

SAs are commonly used for large-scale ventures, including listed companies, large multinationals and businesses that need to raise significant capital. However, they are subject to complex governance, accounting and disclosure regulations, making them generally more appropriate for larger companies.

Simplified joint-stock company (SAS)

The Société par Actions Simplifiée (SAS) is a legal form of company that offers a high degree of flexibility in terms of governance and operation. The SAS is commonly used in many countries, including those of OHADA (Organisation pour l'Harmonisation en Afrique du Droit des Affaires), because of its advantages. Here are the key features of an SAS:

1. Share capital: An SAS has a share capital divided into shares, just like a Société Anonyme (SA). The shares represent the company's property and are held by the shareholders (called "associés" in an SAS). The procedures for holding and transferring shares are defined in the company's articles of association.
2. Limited liability: Partners in an SAS have limited liability, which means that their liability is limited to the amount of their investment in the company. Their personal assets are not committed to cover the company's debts or obligations.
3. Governance: One of the key features of an SAS is its governance flexibility. Partners have considerable control to customize the company's operating rules, including the appointment of the Chairman, decision-making procedures and voting rights.
4. Accounting and transparency: SASs are generally required to comply with accounting and disclosure rules, ensuring a degree of financial transparency.
5. Life Span: An SAS can have a limited life span, set out in the Articles of Association, or it can be created for an indefinite period.
6. Partners : SAS partners can be individuals or legal entities, offering great flexibility in terms of ownership structure.

The SAS is often used for medium-sized to large companies, in particular for companies where the partners wish to customize the rules of governance and operation in a more flexible way than is generally allowed in a traditional SA. It is also common for start-ups, as it enables the founders to retain a high degree of control over their company.

Economic Interest Grouping (EIG)

A Groupement d'Intérêt Économique (GIE) is a form of legal structure that enables several companies or entities to cooperate to achieve common economic objectives, while maintaining their legal independence. The key features of an EIG are as follows:

1. Partners: An EIG is generally made up of two or more entities, such as companies, entrepreneurs, traders, professionals or other organizations. The partners come together to carry out a joint project or activity.
2. Economic objectives: EIGs are primarily set up to pursue economic or commercial objectives. This may include activities such as production, distribution, research, or the provision of services.
3. Legal independence: The member entities of an EIG retain their legal independence. This means that they remain distinct entities and do not merge into a single legal entity.
4. EIG contract: The creation of an EIG is governed by an EIG contract, which defines the group's operating procedures, including the allocation of responsibilities, costs, profits and other aspects.
5. Liability: EIG partners are jointly and severally liable for the group's commitments, but their liability is limited to the EIG's assets. This means that partners' personal assets are not committed to cover EIG debts.
6. Registration: An EIG must generally be registered in accordance with the legislation in force in the country in which it operates.

EIGs are often used to carry out specific projects requiring the collaboration of several entities. For example, several transport companies may set up an EIG to share the cost of maintaining a fleet of vehicles. EIGs are also used in the research and development sector, where several companies collaborate on innovative projects.

The main advantage of an EIG is that companies can collaborate without merging their legal structures.

Limited partnership (SCS)

The Société en Commandite Simple (SCS) is a form of legal structure used for business and partnership purposes. It is generally set up to enable two types of partners to cooperate: general partners (responsible for managing the business) and limited partners (who provide funds but have no active role in management).

Here are the main features of a SCS:

1. General partners: General partners are responsible for managing the company. They have unlimited personal liability for the company's debts and obligations, which means that their personal assets can be committed to cover the company's debts.
2. Limited partners: Limited partners are not involved in the day-to-day running of the company. Their liability is limited to their investment in the company. They are generally not personally liable for the company's debts beyond their capital contribution.
3. Sharing profits and losses: Profits and losses are generally shared between general and limited partners in accordance with the terms specified in the partnership agreement.
4. Management: Management of the SCS is entrusted to the general partners, who are authorized to make decisions on behalf of the company.

SCSs are common in certain businesses, notably investment management, investment funds and certain family businesses. This structure offers a degree of flexibility in terms of management and profit-sharing, while allowing limited partners to avoid direct involvement in operational management.

Société Commune Professionnelle (SCP)

The Société Commune Professionnelle (SCP) is a form of legal structure often used by professionals such as lawyers, doctors, chartered accountants and other self-employed practitioners. An SCP enables these professionals to collaborate as partners within the same entity to practice their profession.

Here are a few key features of an MLP:

1. Professional partners : The members of an SCP are generally professionals in the same field. For example, several lawyers may form an SCP d'avocats.
2. Personal liability: SCP partners have unlimited personal liability for the company's debts and obligations. This means that their personal assets can be used to cover the company's debts.
3. Collaboration: An SCP enables professionals to work closely together, sharing operating costs, resources and revenues generated by their joint activity.
4. Management: MLP partners generally have a degree of flexibility in defining the company's governance, including profit distribution and decision-making.

An MLP is often a popular choice for professionals who wish to collaborate while retaining a degree of independence and flexibility in the management of their business.

General partnership (SNC)

The Société en Nom Collectif (SNC) is a form of corporate legal structure that involves the participation of partners, generally to carry on a commercial activity. Here are the key features of an SNC:

1. Partners: An SNC is formed by two or more partners. Unlike other legal forms, where shareholders may be legal entities, all partners in an SNC are generally natural persons. Each partner participates in the management and decision-making of the company.
2. Personal liability: One of the main features of an SNC is the unlimited personal liability of the partners. This means that the partners' personal assets are committed to cover the company's debts and obligations. Partners are collectively and individually liable for the company's affairs.
3. Active management: SNC partners actively participate in the management of the company. They have the power to make decisions and participate in the management of the company.
4. Sharing profits and losses: The company's profits and losses are generally shared between the partners according to the agreement set out in the partnership contract.
5. Partnership agreement: An SNC is generally governed by a partnership agreement, which sets out the company's operating procedures, including the distribution of profits, and the rights and responsibilities of the partners.
6. Registration: As with any company, an SNC must be registered in accordance with the legislation in force in the country where it operates.

SNCs are commonly used in small and medium-sized businesses, often in family structures or companies where partners want to be directly involved in day-to-day management. However, it is essential to note that unlimited personal liability is one of the major disadvantages of an SNC, as it can jeopardize the partners' personal assets in the event of the company's financial problems. It is therefore important to consider this legal form carefully, and to consult legal experts to understand the legal and financial implications.

Non-trading property company (SCI)

Société Civile Immobilière (SCI) is a legal form of company often used to manage and own real estate, particularly in France and other countries. It is primarily designed to facilitate the management, ownership and transfer of real estate assets. Here are the key features of an SCI:

1. Real estate object: An SCI is created to own, manage or develop real estate assets, such as land, buildings, commercial premises or housing. An SCI's corporate purpose is generally limited to real estate activities.
2. Partners: An SCI can be made up of several partners, called "co-partners" in the context of an SCI. Co-partners may be natural or legal persons, and management of the SCI may be shared between the partners or entrusted to a manager.
3. Limited liability: One of the advantages of SCI is that the partners have limited liability, which means that their liability is limited to their investment in the SCI. Their personal assets are not committed to cover the SCI's debts.
4. Management: The SCI may be managed by the partners themselves or by a designated manager. Management procedures are generally defined in the SCI's articles of association.
5. Registration: An SCI must be registered in accordance with the laws of the country in which it operates. It must comply with the rules governing accounting and disclosure of information relating to its real estate assets.
6. Transfer of shares: SCI shares may be freely assigned or transferred to other partners or third parties, subject to the provisions of the articles of association and applicable regulations.
7. Ease of transfer: The SCI is often used to facilitate the transfer of real estate assets from one generation to the next, as SCI shares can be passed on to heirs or beneficiaries relatively easily.

SCIs are widely used to manage real estate assets, particularly in the context of succession and estate planning. They offer great flexibility in terms of property management and transfer.