I have been talking a lot about limited liability companies and sole proprietorship. Though these are the most common business types you can find in Cameroon, they are not the only types. We also have partnerships (limited and general partnerships), non-profit organizations, etc.
Today, let’s talk about partnerships and what the Foundation for a United Business Law in Africa (French acronym, OHADA) has to say about it. There are two types of partnerships in Cameroon – general and limited partnerships. I will start with general partnerships for today.
According to OHADA, it’s a business entity where all partners are merchant and are jointly, indefinitely and severally liable for the debts of the business. This means all partners are liable for the debts or damages of the business indefinitely (the debt continues forever until it is paid).
Simply put, it is a business whereby two or more people agree to share in the investment, financial, profits and legal liabilities of the business. Just like a sole-proprietorship which has unlimited liability, partners in a general partnership agree to unlimited liability.
They contrast with limited companies where the liability of the owners are limited to the amount they have invested in the business. This means the business entity is separate from the owners.
Every business has to provide a name during incorporation for administrative purposes, as well as to let people know the business. A general partnership is incorporated in the name of one or more partners. The chosen partnership name should be followed by the word “partnership” or abbreviated “P” in very clear characters.
In some countries, oral partnership agreement is valid. However in Cameroon, the law requires that there be a written agreement between the partners who want to form a partnership. This is done with the unanimous consent of all partners involved.
The stated capital of a general partnership is divided into partnership interests. With same nominal value, the partnership interests are assigned only with the unanimous consent of all partners, without which, it is considered null. The assignment of the partnership interests must be put formally in writing.
Let’s take a break here for today. Tomorrow, I will tell you more on general partnership management and dissolution. From there, we will check on limited partnerships.
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