Do You Plan To Sell Your Business in Cameroon?
There comes a time when as a business owner, you will want to sell or dispose of your business. I know it requires a lot of forethought to take such a decision. Just like you planned before starting the business, you’ll need a plan to sell it out.
A business is not just sold like groundnuts is sold by buyam-sellems at the entrance of the market. To sell your business, you need to strategize, make a plan which you will have to carefully implement. In my opinion, selling a business maybe a little more complicated than starting one.
There’s just one way to start a business and three ways to leave it. This includes selling, merging or closing the business.
I may not know why you are selling your business, but one thing is sure – you have a reason for doing that. Some of the common things that can make one sell a business include but not limited to:
Whatever your reason, if you want to sell your business in Cameroon, you will need to know what the law provides. Cameroon is a signatory of the Organization for the Harmonization of Business Law in Africa (OHADA) Uniform Act, so it is guided by it. Download the OHADA Uniform Act Relating to General Commercial Law – English Version.
If you think that selling your business is the best idea, you can wait until when you see that sales are climbing to take advantage and sell at a good price. However, if your business has been thriving, you can sell as soon as possible to avoid trouble.
You can decide to sell your business alone or with the help of a professional business broker or a trained advisor in the legal, accounting or tax fields. However, I will advise you go for a broker because it helps protect your confidentiality. You know your leadership role maybe compromised if your workers know you want to sell your business.
Transferring or selling a business in Cameroon is not just done as if you are selling or buying a product. There are guidelines that have been put in place on how to carry on such transactions. There are specific procedures that have been put in place by OHADA in it’s Uniform Act Relating to General Commercial Law.
According to the OHADA Uniform Act, the transfer or sale of a business needs to comply with general sale rules which are subject to specific conditions and provisions. This also works for all the member states that are signatories of the OHADA Treaty. Read for more information about the OHADA treaty that was signed on October 17, 1993 in Port Louis and revised in Quebec on October 17, 2008 exactly 5 years after.
To sell a business in Cameroon, you need to take into consideration goodwill. Goodwill as defined in the OHADA Uniform Act is automatically considered as part of the business’ assets. It is comprised of the customers and the sign or trade name. In addition to goodwill, you may also have to take into consideration the following:
When selling your business in Cameroon, the law provides for specific contents to be recorded be it privately or legally. These include:
1. Buyer and seller’s civil status – this includes
– their full names
– the name of the business and its legal form
– address of the registered office
2. The business’ registration number in the Trade and Personal Property Credit Register
3. Turnover of the previous three years of activities. In the case where the business has not carried out operations for over three years, the seller needs to provide turnover since the business was acquired
4. If there is a lease, the seller needs to provide the lease contract, the date, duration, name and address of the lessor and seller where applicable. In addition to this, the seller has to provide the commercial profits that the business made during the same period.
5. The elements of the business that has to be sold, where it is located and the price agreed by the seller and buyer. Where applicable, the seller will have to provide the origin of the property belonging to the previous seller
6. The name and address of the designated trustee bank in the case where sales is done by a private document.
7. Provide the statement of preferential rights, pledges and entries that concerns the business
In case of inaccuracy or omission of any of the above, the sale of the business could be nullified. This happens if the buyer requests or proves that the inaccuracy or omission has affected the business sold, especially in the case where it has suffered damage.
Do not hesitate to get in touch with us if you have a business in Cameroon and have plans to sell it. We offer advise on how to go about it legally as well as could help you find buyers.
There are certain things you need to know when you are preparing to transfer or sell your business in Cameroon. It may take you over a year to put all that in place, but it is very necessary.
If you have a business in Cameroon that you think it’s time to sell make sure you:
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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.