What are the characteristics of a private company?
If you are planning to register a private limited company in Cameroon, it is necessary for you to know some features of such a business entity.
A private limited company is a business entity with private ownership. It is owned by shareholders whose liability to debts are proportionate to their shares (what they contributed).
To understand more, below are some characteristics of a private company:
The liability to the company’s debt is limited only to the number of shares held by the owners. This means the personal assets of the members cannot be used to pay off the business loss. See 9 benefits of a private limited company.
A private company can be set up by an individual as well as a legal entity or by two or more individuals or legal entities. This means you or another business can own 100% share of a private company as well as two or more people or business entities can own shares.
Unlike public limited companies, shares of a private company are not traded in public, hence, there is a restriction on shares transferability. Shareholders need to discuss and agree before shares can be transferred. Check out the differences between a private and public limited company.
Private companies are created by law and have a separate legal entity from its owners. Before the law, they are considered an artificial person. It uses its own name to carry out business, owns property and own seal. Check out why you should choose a private limited company for your business.
Private companies are required to have a minimum capital for starting its business. In Cameroon, the minimum capital requirements for a private limited company is XAF100,000 (one hundred thousand CFA francs). The amount is divided in equal equity interest with a nominal value not less than XAF5000 (five thousand CFA francs).
The life of a private company is not dependent on the life of its members. It enjoys perpetual succession. It can continue forever as it is created by law and only the law can dissolve it.
In Cameroon, a private limited company has a lifespan of 99 years renewable. The death, bankruptcy or insolvency of any of its members does not affect the life of the business.
After reading the above characteristics of a private company, you can now start to incorporate your company in Cameroon with us. Check out other services we offer to those who want to start, run and grow their businesses in Cameroon.
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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.