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

I.2.2.1. Types of companies under Rwandan Law

By now the companies Act recognizes four types of companies that can be formed but most of the time only the first two are used:

- Limited liability company;

- Public limited company;

- Limited partnership;

- Commercial partnership;

I.2.2.1.1 Limited Liability Company

It is a company which is formed by physical or moral persons who are limited to their shares. The minimum initial share capital which is required is of RWF 500 000.^18(*) It cannot have less than 2 shareholders or more than 50. Private companies cannot engage in the business of banking, insurance, finance and leasing. In order to participate in the said sectors, the investors have to set up public companies^19(*).

I.2.2.1.2.Public limited liability

It is formed by moral or physical persons who are limited to their shares. The minimum amount of initial share capital which is required is Hundred million Rwandan francs (Rwf 100 000 00) ^20(*). It can engage in any type of business without any limitation. Shareholders have to be not less than 7.

I.2.2.1.3.Limited partnership

It is formed by an association of two or more individuals who have the intention of doing business together. Even if the individuals operate collectively under the name of a partnership, each remains individually liable for debts of the partnership^21(*). All of their property and not only the property of the partnership are accessible to their creditors in case of partnership default to perform its obligations.^22(*)

I.2.2.1.4.Commercial partnership

It has two categories of partners. The first is essentially comparable to that of a limited partner. The second is an investor who does not actively participate in the affairs of a partnership^23(*). He/she is not liable for the debts of partnership beyond the amount of his/her investment^24(*)

I.2.2.2.Other types of companies

Companies are classified according to liability, size and where they are listed. Here below we will discuss the common types of companies which are:

· Private companies limited by shares

· Property management companies

· Companies Limited by guarantee

· Unlimited companies

· Community Interest Companies

· Charitable Incorporated Organization

It is better t make a look on each type of company in order to understand the difference which is among them.

I.2.2.2.1.Private Companieslimited by shares

The big majority of trading companies are private companies limited by shares. A private company limited by shares is symbolized by the word `limited' at the end of its brand name. It is advantageous because liabilities are limited.

Taking example of United Kingdom, many companies are very small and there is no minimum capital requirement for a private company and it is commonly less that £100. Approximately 90% of private companies are small or medium sized company, which means that they can file modified accounts at company house, rather than full companies^25(*).

I.2.2.2.2.Property management companies

It is a type of private limited company. It will be set up in order to hold an interest in property which is divided into units, and each unit is owned separately. Most property management companies are private companies limited by shares with appropriate articles of association, though some are limited by guarantee.^26(*)

* ¹⁸ RDB, «Registering Business in Rwanda», www.rwandahc.org/trade-and-investment/registering-a-business-in-rwanda/last accessed 2/4/2014

* ¹⁹Ibid

* ²⁰ RDB, op. cit.

* ²¹ lawN°07/2009 of /2009 relating to companies , art. 8, OG N. 17 bis of 27/04/2009.

* ²²Ibid.

* ²³ RDB, «investing in Rwanda», www.rdb.rw/departments/investment/business-registration.html/, last accessed 6/5/2014

* ²⁴Ibid.

* ²⁵ UK Companies Act 2006,chapter 3.

* ²⁶ D. Smith, Company Law, Butterworth- Heinemann, 1999, p.156.