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

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

A legal framework is a set of rules, principles, laws, agreements and ideas that are used while forming decisions and judgments^56(*).The provisions of the company law concerning liquidation are applied unless the company's memorandum of articles of association provide a specific procedure of its liquidation, upon resolving the company's dissolution an agreement is reached between the partners as to its liquidation procedure. That is, upon dissolution of a company, it is considered to be in the liquidation stage. It means that during the liquidation procedures the company will retain its legal capacity for the implementation of its liquidation. It is a must to affix the term «in liquidation» to the company name.

As an outcome of a company liquidation, its managers' or board of directors' authority ends. They should continue to manage the company but as far as third parties are concerned, they are concerned as liquidators until the official one is appointed.This section will be composed by two parts. The first is regulations and the second laws.

I.4.1. Legal instruments

Legal instruments are laws and regulations andregulationsestablishedina community bysomeauthorityandapplicabletoitspeople,whetherintheformoflegislationorofcustomandpoliciesrecognizedandenforcedbyjudicial decision. They are designed to control or govern conduct. In commercial law, it is a set of rules and regulations that establish the way a company operates in business

I.4.1.1. Laws

In Rwanda, Previously companies were regulated by the Law No. 6/1988 of February 12, 1988 relating to organization of commercial Establishments but this law has been abrogated and replaced by the Law N°07/2009 of /2009 relating to companies. In addition to this, there is Law No. 3/2009 of 26/05/2009 relating to commercial recovery and settling of issues arising from insolvency.

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

In Rwanda, mostof things related to companies are provided into. The said law does not go into deep in clarifying the dissolution and liquidation of companies. It is the main reason which made the researcher chooses this topic because as it is the law regulating companies, it should contain provisions which explain everything related to companies in order to contribute resolving all matters that the company may meet. There are some articles which mention in which cases liquidation and dissolution should be but for dissolution, it is only provides thatof foreign companies.

From the article 341up to article 345, it is provided about the liquidation of a foreign company. The research lists the contents of those articles here below so that she shows where is the problematic of not providing the article regarding nationals' companies.

The article 341 provides thenotice with regard to liquidation or dissolution at the company's place of incorporation.^57(*)Where a foreign company goes into liquidation or is dissolved in its place of incorporation or origin have so many responsibilities to inform about the situation of the company. First, an authorized agent in Rwanda shall, upon commencement of the liquidation, file with the Registrar General a notice to that effect. Second,the liquidator of a dissolved company shall have the powers of a liquidator for Rwanda.

From the researcher's point of view, the legislator provided these articles in order to avoid the problems that the Rwandan nationals may face when are creditors of a foreign company. It is like in the interests of Rwandans in protecting them from problems which may arise from the companies which are incorporated abroad.

Article 342 states about the procedures that shall be applied by the liquidator. That is, a liquidator of a foreign company appointed by the Court or a person exercising the powers and functions of such a liquidator shall:

1°before any distribution of the foreign company's assets is made, by advertisement in a newspaper circulating generally in each country where the foreign company had been carrying on business and where no liquidator has been appointed , invite all creditors to make their claims against the foreign company within a reasonable time before the distribution^58(*);

2° not, without leave of the Court, pay out any creditor to the exclusion of any other creditor.^59(*)

As we saw it above in the definition of liquidation, in order to start companyliquidation someone neutral has to be appointed its liquidator. And of course the announcement has to be passed in the popular news paper that can be read in the whole country so that after the end of period of liquidation no one comes and claims that he/she was among the creditors and that she/he delayed because he/she was not aware of the company's liquidation. In addition, to this, the researcher finds that the announced should also be passed on all possible means of information like local radio and television stations in order to avoid any claim in the future.

Article 343 states that there must be an application to the Court for directions as to the disposal of the net amount recovered.Where a foreign company has been wound up so far as its assets in Rwanda are concerned and there is no liquidator for the place of its incorporation or origin, the liquidator may apply to the Court for directions as to the disposal of the net amount recovered^60(*)

In article 344, it provides about the removal of the name of a foreign company from the registry. It states that on receipt of a notice from an authorized agent in charge of liquidation or dissolution of the company, the Registrar General shall remove the name of the company from the register. Where the Registrar General has reasonable cause to believe that a foreign company has ceased to carry on business in Rwanda, he/she shall remove it from the register of companies in accordance with this Law.^61(*)

After reading all these above provisions, the researcher finds that, the legislator focused on foreign companies and wonders why the latter did not provide the articles that govern the Rwandan companies. The company law should contain provisions relating to all companies whether be national or foreigner as it is considered as the main law which regulates the business law in Rwanda. The lack of those provisions may be considered as the failure of the legislator who drafted the law and as consequence it may cause unjust an iniquitous procedures of liquidation of national companies as we know that there is a legal principal which states that «no crime no punishment without law»

* ⁵⁶ H. Campbell, A Law Dictionary, New Jersey, the Law book Exchange Ltd, 1995, p.a56.

* ⁵⁷Law N°07/2009 of 27/04/2009relating to companies, art.341, OG N. 17 bis of 27/04/2009.

* ⁵⁸ Art. 342 of the same law.

* ⁵⁹Ibid.

* ⁶⁰ Law N°07/2009 of 27/04/2009relating to companies,art.343, OG N. 17 bis of 27/04/2009.

* ⁶¹Ibid.