In Cameroon, there is no statutory provision that prohibits a minor (children under 18 years) from owning shares in a limited liability company. This means, in Cameroon, minor child shareholders are allowed in private limited companies in particular.
However, a minor child shareholder can be only through a parent or a guardian since they cannot actively buy shares in a company. The parent or guardian is the one to safeguard and manage the shares of the minor.
Steps should be put in place to protect the interest of the minor child shareholder. This can be done by transferring the beneficial ownership to the child and leaving the legal ownership to the parent or guardian. The shares can be held by a trustee with terms of the trust put in place for the benefit of the child.
It’s also common to find children indirectly having shares in a company in cases where shares pass to children when the previous owner dies. This is very common in family owned companies where shares are given to children as part of an inheritance plan.
A child below the age of 18 in Cameroon can own shares in a company but may not have the ability to vote his shares or manage it effectively. This becomes a problem in cases where the minor’s vote will play a great role in decision making.
Shares in a company have voting rights attached to them. The vote of majority shareholders is what is used to solve disputes amongst shareholders, select managers or directors for the board as well as when major decisions have to be made.
You should also have it in mind that holders of the shares (trustees), may be able to block certain resolutions since they have legal ownership. With this in mind, useful provisions should be put in place as to how the trustee will deal with the shares.
NB: Minors are not required to provide a certificate of non-conviction or criminal record when compiling documents for the incorporation. For minors of Cameroonian nationality, only the birth certificate and the presence of a guardian is required.
Start, run and grow your business with OpenHub Digital!
You can get in touch now!
Email: email@example.com | Tel: +237 699 421 947 | WhatsApp | Telegram
This content has been prepared for information purposes only. It is not intended to provide, and should not be relied on for, tax, accounting or legal advice. You need to consult your own tax, accounting or legal advisors before engaging in any transaction.