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

I.3.3.1. Company dissolution and its liquidation in Rwanda

Under Rwandan law, dissolution and liquidation of companies are provided by the law N°12/2009 of 26/05/2009relating to commercial recovery and settling of issues arising from insolvency and the law N°07/2009 of /2009 relating to companies that abrogated the law No. 6/1988 of February 12,1988 relating to organization of Commercial Establishments. The law has been adopted in order to help businesses that cannot pay creditors to apply and declare them insolvent and bankruptcy. Basing on the above said insolvency law; the administrator takes over responsibility of the insolvent company's total assets that can be sold off in order to reimburse creditors^42(*).

After settling creditor's claims, the company is removed from the registrar's records and those of Rwanda Revenue Authority so that it became relieved of the tax obligations. But the company may keep its name when its members or shareholders have the intention of returning to business after re-organization. But also, it can be totally removed from the register and from all official agencies. This is necessary for the registrar's records because it ensure how many companies are active and how many are not.

In order to protect creditors, the Rwandan government has set up supervisory bodies of companies in order to protect the interest for policy holders and pensioners by ensuring that these institutions are financially stable so that in case a company goes bankruptcy or become insolvency, the creditors do not become victims in being failed to be reimbursed. That is why the central bank (National Bank of Rwanda) in its structure has a department in charge of supervising banks, Non-Bank Financial Institutions which are mainly insurance and pension sectors^43(*) and it conducts day by day monitoring of these institutions by carrying out the on/off site inspections of supervised institutions^44(*). The rest of companies are supervised by RURA (Rwanda Utility and Regulatory Authority) in overseeing the regulatory and standardization aspects to be observed by both consumers and network/service providers.^45(*) As an example RURA revoked RWANDATEL mobile license in April 2011. The researcher will explore this in the second chapter of this work.

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

Taking an example of Canada, there different means of dissolution of a company. Here below they are enumerated.

First, there is dissolution by consent of shareholders. Here, it means that corporation governed by the business corporationmay be dissolvedby consent of its shareholders. That is, Shareholders consent to dissolve a company by special resolution^46(*). Under the BCA, «special resolution» which means that it requires at least two thirds of the votes cast at a shareholders meeting by the shareholders entitled to vote on the resolution, or a resolution that requires the signature of all such shareholders. The resolution must also designate the director or officer of the corporation authorized to sign the declaration of dissolution.

If the corporation has no property and no obligations, it must send to the Registrar of enterprises^47(*) the declaration of dissolution indicating that, at the time of the consent to the dissolution, it had no property and no obligations. The corporation must enclose the certified copy of the special resolution of the shareholders with the declaration.

If the corporation has property or obligations and is not subject to liquidation, it must file a declaration of dissolution indicating that the corporation's board of directors has performed the obligations of the corporation, obtained forgiveness of those obligations or otherwise made provision for them, and, where applicable, that the remainder of the property has been apportioned^48(*). The corporation must enclose the certified copy of the shareholders' special resolution with the declaration by sole consent of the directors or by a declaration of dissolution filed by its sole shareholder.

* ⁴² A. Ukwishaka, «The rationale and impact of Banques Populaires transformation from a cooperative to a commercial bank», available at www.memoireonline.com/06/10/3610/m_The_rationale-and-impact-of-Banques-Populaire-transformation-from-a-cooperative-to-a-commercial-ban11.html/last accessed 6/5/2014.

* ⁴³ Law No. 55/2007 of 30/11/2007 governing the Central Bank of Rwanda, art 53.

* ⁴⁴ A.Ukwibishaka,»The rationale and impact of Banques populaires transformation from a cooperative to a commercial bank», published 2010.

* ⁴⁵ RURA, «Communication and Media», available at www.rura.rw/index.php?id=4, last accessed at 1/5/2014.

* ⁴⁶ Susan Ward, «Closing Your Business», available at www.sbinfocanada.about.com/o/closingyourbusiness/a/closingbusiness.htm/ last accessed 1/5/2014.

* ⁴⁷Ibid.

* ⁴⁸ R. W. Emerson, Company Law, Barron's Educational series, 2004, p. 500.