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

Second, there is dissolution by consent of the board of directors. This means that a corporation that has no obligations, no property and no shareholders may be dissolved by consent of the board of directors49(*). The resolution of the board of directors must designate a director or an officer of the corporation to sign the declaration of dissolution.

The corporation must send the declaration of dissolution to the registrar of companies indicating that, at the time of the consent to the dissolution, the corporation had no property, no obligations and no shareholders. The corporation must enclose the certified copy of the resolution of the board of directors with the declaration.

Third and last there is what is called Dissolution by declaration of the sole shareholder. With this form of dissolution, the shareholder who holds all of the shares issued by the corporation may request the dissolution of a corporation. That shareholder must file a declaration of dissolution indicating that the corporation's rights and obligations become those of its sole shareholder and that the sole shareholder is able to pay the liabilities of the corporation as they become due50(*)

I.3.3.3.Dissolution of companies and its liquidation in Kenya

First of all in Kenya, the company law is provided as a rule s that regulates corporations formed are formed under the Kenyan companies Act.^51(*) It defines a company as a business organization which earns income by the production or sale of goods or services.^52(*)Under Kenyan law, the dissolution and liquidation of companies is governed by the company Act cap.486of the Kenyan Laws.It owes its origins to the English company law. It came into force on 1^st of January 1962^53(*). It provides the legal framework for the regulation of companies in Kenya. It was adopted in order to provide the legal incorporation of companies and lays down rules for their constitution, management and winding up. The Kenyan law in deciding cases related to company also bases on case laws^54(*). It is advantageous to use the case and the companies practice because it has developed rules which are useful and fills the gaps which have been provided by the company Act.

The Companies Act cap.486 does not define the term winding up or liquidation, but it interchanges them as if they were synonyms^55(*). Winding up is a process of making dissolution of a company. As a result is removed from the register and become free of all obligations.. Its assets are collected and its debts are paid off from the assets of the company or from contributions by its members or shareholders. The surplus which is left is distributed among the shareholders basing on their respective rights.

I.3.3.3.1.Modes of winding up

Under Kenyan law, there are four modes of Winding up:

· Compulsory winding up by the court

· Voluntary winding up this can be done by members' voluntary winding up or by creditors' voluntary winding up

· Winding up under the supervision of the court.

· Subject to supervision in court.

In order to make a voluntary winding up, the Kenyan law requires it to be a result of the special resolution of Board of the Company,to ensure that the company file is up to date which means that all returns filed, all debentures, page chattels and mortgages settles. An official communication to registrar, Gazette Notification, deregistration.

Comparing with Kenya and Canada, Rwanda still has the long way to go. May be it is because the 1994 genocide against the Tutsi that destroyed our country but taking an example of Kenya, it is really more advanced than us and we are still have long way to go. Kenya reached the level where they combine case laws with Company laws, and as we are with them in the EAC, we can pursue their example because we still have gaps in our laws. In order to fill those gaps, we should learn from other countries and once the laws are clear it will also attract investors. For Kenya, they are already benefiting from these laws, because it is the first country in EAC which exports its national products. With the new Law Reform Commission, Rwanda should reinforce and clarify company law as well as the law which settle problems which may arise from insolvency.

* ⁴⁹Idem, p. 560.

* ⁵⁰ Canadian Corporation Act, chapt 27 of the revised Statutes of Canada 1927.

* ⁵¹ Kenyan Companies Act, chapt 486.

* ⁵² Kenyan Companies Act, 2012 edition, chap. 486.

* ⁵³ Kenyan Companies Act, 2012 edition, chap. 486.

* ⁵⁴Ibid.

* ⁵⁵ Kenya Law Resource Center, «Winding up of companies», available at Kenyanlawresourcecenter.blogspot.com/2011/07/winding-up-of-companies.html?m=1/ last accessed on 7/6/2014.