Problematic of liquidation and dissolution of companies under rwandan law: case study of Rwandatel

DECLARATION

I, NUMUKOBWA Ernestine hereby declare that this research was compiled out of my effort as a partial fulfillment of the bachelor's degree in the School of Law, department of Law. I declare that this is my original work and has never been exposed anywhere in any academic field.

Signature ..............................

Date......................................

DEDICATION

To:

God Almighty,

My parents for their love, encouragement, support in my entire life, confidence they have in me and for always inspiring me,

My supervisor Prof. NGAGI M. Alphonse who helped me during the whole period of my research, my sincere gratitude goes to him because I wouldn't have completed this dissertation without his help,

My sister Stella, my brotherGashema, my friends and colleagues for your constant support, love and friendship.

ACKNOWLEDGEMENT

My acknowledgement values all those who advocated me both financially and materially throughout my research. This research would not have been complete without the supportiveness of my family and the University of Rwanda, School of Law.

Special thanks underlie to my supervisor, Professor NGAGI M. Alphonse, who guided me and motivated me to complete my research, he did it regardless my endless queries, and he deserves all my appreciation. My sincere gratitude goes also to Mrs MUKANGABO Beatha, the head of RURA Legal Affairs Directorate and to the staff of Nyarugenge Commercial Court for their help in giving me all information that I needed.

My wholly heartfelt goes to my family and friends who showed me total support during and over this period that I was doing my research.

May god bless you all abundantly!

NUMUKOBWA Ernestine

LIST OF ABBREVIATIONS AND ACRONYMS

Art : article

BCBS : Basel Committee for Banking Supervision

CAPEX: Capital Expenditure

CEO : Chief Executive Officer

CIC : Community Interest Companies

CIO : Charitable Incorporated Organizations

Gov : Government of Rwanda

GSM : Global System for Mobile communications

Ibid : Ibidem

Ltd : Limited

Me : Maître

NBR : National Bank of Rwanda

No : number

RURA: Rwanda Utilities and Regulation Authority

RWF: Rwandan Francs

QoS: Quality of Sevices

ORG: Office of the Registrar General

RDB: Rwanda Development Board

OG: Official Gazette

OL: Organic Law

Op. cit: Opere citato

P : page

SA: Société Anonyme

SIM: Subscriber Identification Module

UK: United Kingdom

USD: United Nations Dollar

WWW: World Wide Web

TABLE OF CONTENT

DECLARATION Erreur ! Signet non défini.

DEDICATION ii

LIST OF ABBREVIATIONS AND ACRONYMS iv

GENERAL INTRODUCTION 1

I. PRESENTATION OF THE SUBJECT 1

II. CHOICE AND INTEREST 2

IV. OBJECTIVE 3

V. METHODOLOGY OF REASEARCH 3

VI. SCOPE OF THE STUDY 4

VII. SUBDIVISION OF THE STUDY 4

CHAPTER ONE: PRESENTATION OF THE TOPIC AND OVERVIEW ON DISSOLUTION AND LIQUIDATION OF COMPANIES UNDER RWANDAN LAW 5

I.1.2 Company dissolution 7

I.1.3 Company liquidation 7

I.2 Categories and types of companies 7

I.2.1 Categories of companies 7

I.2.1.1 Private Companies 8

I.2.1.2 Public Companies 8

I.2.2. Types of companies 9

I.2.2.1. Types of companies under Rwandan Law 9

I.2.2.1.1 Limited Liability Company 9

I.2.2.2. Other types of companies 10

I.2.2.2.2 .Property management companies 11

I.2.2.2.3. Companies limited by guarantee 11

I.2.2.2.4. Unlimited companies 12

I.2.2.2.5. Community interest companies 12

I.3. Company dissolution and its liquidation in general 13

I.3.1.1. PROCEDURE OF COMPANY DISSOLUTION 13

I.3.2. Company liquidation 15

I.3.3.1. Company dissolution and its liquidation in Rwanda 17

I.3.3.2. Dissolution of companies and its liquidation in Canada 18

I.3.3.3.1. Modes of winding up 21

I.4. The legal framework of dissolution and liquidation of a company 22

I.4.1. Legal instruments 22

I.4.1.1. Laws 22

I.4.1.1.1. Law N°07/2009 of /2009 relating to companies 23

I.4.1.1.2. Law N°12/2009 of 26/05/2009 relating to commercial recovery and settling of issues arising from insolvency. 25

I.4.1.1.2.1. The ratio legis of the Law N°12/2009 of 26/05/2009 relating to commercial recovery and settling of issues arising from insolvency 25

I.4.1.1.2.2. Provisions on dissolution and liquidation of companies 26

I.4.1.1.3. other laws 28

I.4.1.2. REGULATIONS 30

CHAPTER TWO. ANALYSIS OF PROBLEMS RELATED TO DISSOLUTION AND LIQUIDATION OF COMPANIES IN RWANDA 31

II.1.1. National Bank of Rwanda 32

II.1.2. Rwanda Utilities and Regulatory Authority 33

II.1.3 Rwanda Development Board 34

II.2 THE ROLE OF COMMERCIAL COURT 35

II. 3 DISSOLUTION AND LIQUIDATION OF RWANDATEL 36

II.3.1 Cause of dissolution and liquidation of Rwandatel 36

II.3.2. Cause of Rwandatel's insolvency 37

II.3.3. Revocation of Rwandatel's mobile license 38

II.3.3.1. Objective of the audit 38

II.3.3.2. Historical background of the revocation of Rwandatel SA mobile license 39

II.3.3.3. Causes of Rwandatel's mobile license revocation 40

II. 3.3.4. Legal framework of the revocation of Rwandatel mobile license 42

II.4.JUDGEMENT OF RWANDATEL 46

II.4.1 Facts 46

II.4.2. Analysis of the case 49

II.4.3. Court decision 50

II.4.4. Analysis of the verdict on the judgement of Rwandatel 52

II. 5. Consequences of companies' dissolution in Rwanda 52

II.5.1. Consequences Rwandan economy 53

II.5.2. Consequences to the dissolved companies' staff 53

II.5.3. Consequences to customers 53

GENERAL CONCLUSION 54

BIBLIOGRAPHY 57

ABSTRACT

The University of Rwanda as other universities at the end of the fourth year students have to submit a complete research on topic of their choice, where they give contribution to the society by applying their knowledge to finding a solution to a given phenomena in the society. It is in this sense that I have undertaken this research and my topic is «The problematic of dissolution and liquidation of companies under Rwandan law: case study of Rwandatel».

Due to the limited time of research, the researcher tried to coordinate her activities according to the time she had, and tried to interact with all people and sources linked to the above said topic , interviewing them, analyzing the Rwandan laws and their provisions on company dissolution and liquidation, reading what different authors and scholars wrote about the topic, comparing Rwandan laws with foreigner laws, analyzing the judgment of Rwandatel and the consequences its dissolution had on Rwanda as a country.

Methodologies such as, documentary technique, where legal texts, books, dissertations and online sources were used to gather information on how the dissolution and liquidation of companies is done under Rwandan law. That helped me complete my research on the problematic of dissolution and liquidation of companies under Rwandan law because everything than has to refer to the provisions of the law.

In this research,the researcher with the help of methodologies of research adopted she got to know problems that are in our laws like the lack of provisions about the dissolution of companies and this leaves a question mark on which law the court based its decision that ordered the dissolution of Rwandatel Ltd.

Finally following observations made by the researcher,certain recommendations including how the Rwandan legislator should review the Rwandan company law to adopt provision relating to the dissolution of companies in order to remove a gap which is in Rwandan laws.