Brief: There is a minimum authorized capital in Cameroon for private limited liability companies. Authorized capital is also known as share capital, authorized share capital, registered capital, stated capital or nominal capital.
The authorized capital or registered capital is the maximum amount of share capital that a company can issue to its shareholders. This amount is usually mentioned in the Articles of Association under the “Capital” clause.
The authorized share capital is decided upon before a company is incorporated. It can also be increased at any time with the approval of the shareholders. This entails following specific steps that have been put in place by the law.
Many people are confused when it comes to authorized and paid-up capital. Most often, part of the authorized capital remains unissued. The part that has been issued to shareholders is what is referred to as issued share capital.
When shareholders pay their issued capital, it is then summed up and put under paid-up capital. The paid-up capital can be less than or equal to the authorized share capital at any point in time. This means the company cannot issue shares above the authorized capital.
The authorized capital is used to control or limit the ability of company executives to issue new shares. Some countries have abolished the act of setting a basic authorized capital. However, authorities in Cameroon as well as member states of OHADA have put in place minimum authorized capital for limited liability companies.
Both types of limited liability companies (private and public) in Cameroon have their minimum authorized capital.
The minimum authorized capital for a private limited liability company in Cameroon is one million (1,000,000) francs CFA at least as per OHADA (foundation for a unified business law in Africa).
However, the law also provides for specific member nations to have specific legislation to change this minimum amount. With this possibility, a December 14, 2016 Presidential Act was put in place by the President of Cameroon, Paul Biya, bringing down the minimum registered capital to one hundred thousand (100,000) francs CFA.
The Act, just like OHADA, set five thousand (5000) francs CFA as the minimum nominal value per share. This means the set authorized capital must be divided into equal equity interests with a minimum of 5000 francs CFA nominal value.
The minimum authorized capital for a public limited liability company in Cameroon is ten million (10,000,000) francs CFA. This amount shall be divided into shares whose nominal value (whole numbers) is freely set in the company’s articles of association.
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