Shareholders’ Rights & Shareholder Activism 2022 Comparisons

In Cameroon, companies can be public, private or mixed economy, regardless of their legal form:

• a company is said to be public when all its capital is held by the State or one of its branches;
• companies are said to be private when all the capital is held by private individuals (of Cameroonian or foreign nationality); and
• mixed economy companies are those in which the capital is held by the State and by private persons as well.

Public enterprises in Cameroon are classified into five categories, according to the average turnover in the last three fiscal years, as follows:

• the first category: average turnover of more than XAF100 billion;
• the second category: less than or equal to XAF100 billion;
• the third category: more than XAF50 billion;
• the fourth category: more than XAF10 billion and less than or equal to XAF50 billion; and
• the fifth category: more than XAF5 billion and less than or equal to XAF10 billion.

As a general rule, all shareholders of companies under Cameroonian law, whether individuals or legal entities, may be residents or domiciled abroad. Certain sectors require specific government authorisation, such as financial institutions, mining and exploration of mineral and energy resources, the oil sector and the news media.

Shareholders of Cameroonian companies can either be Cameroonians or foreigners and a company can be 100% owned by foreigners, although certain sectors will require specific government authorisation for foreign ownership.

The most common forms of company used for doing business in Cameroon are provided for by the OHADA Uniform Act on Commercial Companies and Economic Interest Groupings, as follows.

• Limited liability company (SARL): the SARL is the most common legal entity used by entrepreneurs to set up small and medium sized enterprises in Cameroon. It must have at least one director and a shareholder of any nationality. The shareholder can be an individual or a body corporate.
• Public limited company (SA): foreign multinational companies most commonly establish public limited companies because of their wide coverage and scope of business. These companies usually have a managing director with a board of directors to manage the activities of the company.
• Cameroon Branch (Succursale): foreign companies may open branches of their foreign legal entities in Cameroon.

Companies issue shares in return for member’s contributions. These shares represent the members' rights and shall constitute the personal property of the members. The rights and obligations of members shall be proportional to the amount of the contributions made.

Company stocks (public limited companies) are transferable, while company shares (private limited companies) are negotiable or transferable.

Under the provisions of the OHADA Uniform Act on Commercial Companies and Economic Interest Groupings, companies may issue either ordinary shares or preference shares. As a general rule, an ordinary share entitles its owner to one vote at any shareholders' meeting.

Preference shares are instituted by Articles 755 and following of the Uniform Act on General Commercial Law, which specifies that preference shares may be created at the time of incorporation of the company or during its existence, and entitle the holder to enjoy particular advantages over all other shares, such as:

• more voting rights than ordinary shareholders;
• more dividends than ordinary shareholders; and
• being paid first in the event of a winding-up, before ordinary shareholders.

According to the OHADA Uniform Act on Commercial Companies and Economic Interest Groupings, once a shareholder has paid up their contributions in a company as stated in the articles of association, they are entitled to a certain number of rights and benefits, as follows:

• a right to a share of the company’s profits, whenever they are distributed – the distribution of dividends shall be in accordance with the articles of association, subject to the mandatory requirements of the Uniform Act common to all companies;
• a right to the company’s net assets when shared following the dissolution of the company or where the company’s share capital is reduced;
• the right to participate in meetings and vote on the collective decision of members – prior to the holding of general meetings, shareholders have the right to be served with company documents at least 15 days before the meeting;
• the right to be continuously informed of the affairs of the company; and
• the right to call a shareholders' meeting.

The minimum share capital requirements for each type of company are as follows:

• limited liability company (SARL): XAF100,000, which shall be divided into equal shares whose face value may not be less than XAF5,000;
• public limited company (SA): XAF10 million; and
• simplified limited liability company (Societe par Action simplifiée – SAS):no minimum required share capital, but in practice it is XAF10 million.

The minimum number of shareholders for both a limited liability company and a public limited company is one.

Shareholders’ agreements and joint venture agreements are enforceable if they do not contravene the provisions of the OHADA Uniform Act on Commercial Companies and Economic Interest Groupings, and it is common practice for shareholders to enter into such arrangements. These agreements outline the rights and obligations of the parties in business operations. They have the force of law and are designed to guide the parties in the conduct of business.

Shareholders' agreements are binding on the shareholders and on the company, and any violation thereof entitles the innocent party to enforce the agreement in court (specific performance). The chair of the meeting is authorised to disregard votes cast in violation of the shareholders' agreements, and to establish that the prejudiced party makes use of the votes of the absent directors or of those who abstained from voting.

Shareholders’ agreements are made public to all the shareholders by virtue of the articles of association. See 1.7 Shareholders' Agreements/Joint Venture Agreements.

The ordinary general meeting of shareholders shall be held at least once a year within six months following the close of the fiscal year, subject to the extension of this deadline by a court decision.

The meeting of shareholders may be convened by the board of directors or the managing director, as the case may be.

Shareholders shall receive or be informed of the AGM no later than 15 days before the date of the meeting in the case of a first invitation and, where necessary, no later than six days before the date of the meeting for subsequent invitations.

Where the meeting is convened by an agent appointed by the court, the judge may fix a different deadline.

The AGM of shareholders shall take all decisions apart from those that are expressly reserved by Article 551 of the OHADA Uniform Act on Commercial Companies and Economic Interest Groupings for an extraordinary general meeting of shareholders and by Article 555 of the same Uniform Act for special meetings of shareholders.

The AGM shall discuss and approve the following in particular:

• adjudication on the summary financial statements of the fiscal year;
• decisions on the allocation of income – under penalty of any decision to the contrary being declared null and void, an allowance equal to at least one-tenth of the fiscal year’s profits after deduction of previous losses, where necessary, shall be allocated for the formation of a reserve fund referred to as “legal reserve”. Such allowance shall no longer be compulsory where the reserve fund amounts to one-fifth of the company’s registered capital;
• appointment of the members of the board of directors or the managing director and, where necessary, the assistant managing director, as well as the auditor;
• approval or refusal to approve agreements concluded between the company’s managers and the company;
• the issuance of bonds; and
• approval of the auditor’s report provided for by Article 547 of this Uniform Act.

An extraordinary shareholders’ meeting may be held at any time during the year.

Shareholders shall receive or be informed of such meeting no later than 15 days before the date of the meeting.

The meeting of shareholders shall be convened by the board of directors or by the managing director, as the case may be. Failing this, it may be convened as follows:

• by the auditor, after they have, in vain, requested the board of directors or the managing director, as the case may be, by hand-delivered letter with acknowledgement of receipt or by registered letter with notification of reception to convene the meeting. Where the auditor convenes a meeting, they shall determine the agenda and may, for vital reasons, choose a venue for the meeting other than the one, if any, provided for by the articles of association. They shall state the reasons for the invitation in a report read to the meeting;
• by an agent appointed by the president of the competent court in a summary judgment, at the request of any party concerned in the case of an emergency, or of one or more shareholders representing at least one-tenth of the company’s capital in the case of a general meeting, or one-tenth of the shares of the category concerned in the case of a special meeting; or
• by the liquidator.

Subject to the provisions of the Uniform Act, the articles of association shall lay down the rules for convening meetings of shareholders.

Meetings shall be called by a convening notice, which shall be displayed in a newspaper empowered to publish legal notices. Where all the shares are registered, such publication may be replaced by an invitation, at the expense of the company, by hand-delivered letter with acknowledgement of receipt or by registered letter with notification of reception. The invitation shall include the agenda of the meeting.

Shareholders have rights to the following information:

• the inventory, summary financial statement and the list of directors of the company where a board of directors has been put in place;
• reports of the auditor and of the board of directors or the managing director submitted to the meeting;
• where necessary, the explanatory statement of resolutions proposed, as well as information concerning candidates for the board of directors or for the post of managing director;
• the list of shareholders; and
• the sum total, certified by the auditor, of remuneration paid to the ten or five best remunerated managers and workers, depending on whether or not the company employs more than 200 workers.

Shareholders' meetings can be held either in person or virtually, but the format must be stated on the letter of invitation convening the meeting.

As a general rule, the shareholders at ordinary general meetings can only validly deliberate on first call if the shareholders present or represented own at least one quarter of the shares with voting rights. On second call, no quorum is required.

For the calculation of the quorum, it is necessary to take into account the shareholders physically present, those represented and finally those voting by correspondence if this method of exercising voting rights is allowed.

An extraordinary general meeting can only deliberate validly if the shareholders present or represented hold at least half of the shares with voting rights on the first call and one quarter of the shares with voting rights on the second call.

There are different types of resolutions, depending on the meeting.

Resolutions that do not affect the form of the company can be taken during the general meeting, such as presentation of the financial statement and the auditor’s report.

Resolutions that can affect the form of the company can only be taken during the extraordinary general meeting, such as a resolution to:

• increase or reduce the share capital;
• amend the constitution;
• appoint or dismiss members of the board of directors; or
• merge or demerge the company.

The OHADA Uniform Act on Commercial Companies and Economic Interest Groupings provides the various types of resolutions to be passed and the specific meetings.

The articles of associations could also specify what resolutions may be passed at each meeting.

The shareholders' meeting (general meeting) is required to be held at least once a year following the close of the fiscal year, according to the OHADA Uniform Act on Commercial Companies and Economic Interest Groupings.

Decisions at the ordinary general meeting are by a majority of votes cast; in the case of voting, blank votes are not taken into account. Shareholders participate in collective decisions through their voting rights. Shareholders can participate and vote in meetings either physically or by proxy.

An extraordinary shareholders’ meeting may be held at any time during the year. In this meeting, the following can be deliberated upon:

• an amendment of the company’s constitution;
• the election and dismissal of members of the board of directors;
• the approval of management accounts and audited financial statements on an annual basis;
• the suspension of the exercise of a shareholder’s rights in the event of non-compliance with the regulations in place; and
• approval of any transaction involving the dissolution or liquidation of the company, the appointment and dismissal of the respective liquidator and the official review of the reports prepared by it.

See 2.6 Quorum, Voting Requirements and Proposal of Resolutions.

A shareholder can attend a meeting by proxy and can vote by proxy.

The modalities of voting could be included in the articles of association, or will be determined at the meeting. A shareholder can also vote electronically if such is permitted by the articles of association.

Shareholders can request for specific issues to be considered or resolutions put forward at a meeting. The agenda is sent to all shareholders before the meeting, and adopted at the meeting.

A shareholder has a right to vote for any resolution tabled at the shareholders' meeting. To challenge any resolution, the shareholder can decide not to vote for said resolution.

A shareholder can challenge a resolution but the resolution may still go through if there is a majority vote.       

No information provided.

One or more members holding at least one-fifth of the company’s authorised capital may, individually or as a group formed in any manner, petition the president of the competent court of the registered office of the company to designate one or more experts to make a report on one or more management operations.

Where such a request is granted, the judge shall determine the scope of the mission and the extent of the powers of the experts. The experts’ fees shall be borne by the company. The report shall be forwarded to the applicant and to the management, supervisory and administrative structures of the company.

Without prejudice to the subsequent liability of the company, each company executive shall be individually liable to third parties for torts committed in the performance of their duties.

Where several company executives are involved in the commission of the tort, they shall be jointly and severally liable to third parties. However, as concerns the relations among the executives, the commercial court shall determine the share to be borne by each of them in apportioning damages to be paid.

Once it is established that the directors or managing directors took decisions in bad faith or acted beyond their capacity to the detriment of the company and caused damages to the company, derivative actions can be filed against them (see 3.1 Rights to Appoint and Remove Directors).

The actions are usually decided upon by the shareholders in a meeting.

The auditor is appointed for a term of three fiscal years by one or several members controlling more than half of the registered capital. Where this majority is not obtained and unless otherwise stipulated by the articles of association, the auditor shall be chosen by a majority vote, regardless of the share capital.

The auditor shall be liable to the company and also to third parties for any actionable wrongs they commit in the course of their duties. However, the auditor shall not be liable for information given or disclosures made by them in the course of their duties, in accordance with the provisions of Article 153 of the OHADA Uniform Act on Commercial Companies and Economic Interest Groupings.

The auditor is not liable for any damage resulting from offences committed by the members of the board of directors or by the managing director, as the case may be, except where they had knowledge of such offences and failed to mention them in their report to the general meeting.

One or more shareholders representing at least 10% of the company’s capital, the board of directors or the managing director, as the case may be, the ordinary general meeting or the legal department may bring an action before the court for the dismissal of the auditor if there is misconduct on the auditor's part or where they are unable to perform their duties.

The action for recusal or dismissal of the auditor shall be brought before the competent court, which shall give a summary judgment.

The transfer of company shares shall be evidenced by a written document.

Such transfer may be binding on the company only after compliance with one of the following formalities:

• notification of the transfer to the company by extra-judicial act;
• acceptance of the transfer by the company in a notarial deed; or
• deposit of an original copy of the transfer agreement at the company’s registered office against an attestation of deposit issued by the manager.

The transfer shall be binding on third parties only after compliance with one of the above formalities, amendment of the articles of association and publication in the Trade and Personal Property Rights Register.

Shareholders are free to pledge their shares on the condition that they inform the company and obtain its approval. A plan to pledge shares shall not be binding on the company unless it was approved by the organ designated for that purpose by the articles of association to approve the transfer of shares (Article 773 of the OHADA Uniform Act on Commercial Companies and Economic Interest Groupings).

Shares are the private property of the shareholders. Shareholders in a private company have a pre-emptive right over shares – ie, they have the right to first acquire any shares that are to be sold before they are offered to the public. This is not the case with public companies that are listed on the stock exchange market, in which anyone can buy and sell shares at will without any prior notice.

Generally, shares are freely transferable, but the articles of association or shareholders' agreement can stipulate certain limitations on the transfer of shares, as provided by Article 765 of the OHADA Uniform Act on Commercial Companies and Economic Interest Groupings. As a result, in companies where the shares are not listed in the stock market, it can be stipulated either in the articles of association or in the shareholders' agreement that the transfer of shares to a third party outside the company, whether free of charge or against payment, must be subject to the approval of the board of directors or of the ordinary general meeting of shareholders.

Conditions for the payment of dividends shall be laid down by the general meeting. The general meeting may delegate such power to the manager, the chair and managing director, the general manager or the managing director, as the case may be.

Notwithstanding the above provision, the payment of dividends shall be done within a maximum period of nine months following the end of the fiscal year. This deadline may be extended by the president of the competent court.

The articles of association may allow the allotment of a first dividend to be paid on company stocks where the general meeting establishes the existence of distributable profits, provided that such profits are sufficient to cover such payments. Dividend shall be calculated as interest on the amount of paid-up shares.

Liquidation can be at the request of either the shareholders or the court. A company is said to be under liquidation once it is dissolved for any reason whatsoever. The company shall continue to exist as a corporate person for the purpose of liquidation until publication of completion of the liquidation process.

Where the liquidation is requested by the members, one or more liquidators shall be appointed. The liquidator may be chosen from among the members or a third party, and might be a corporate person. Where the members are unable to designate a liquidator, the court may designate one at the request of an interested party, as provided for in Articles 226 and 227 of the OHADA Uniform Act on Commercial Companies and Economic Interest Groupings, as follows:

• in the case of a private company – unanimously by the members;
• in the case of sleeping partnerships – unanimously by the general partners and by the majority capital of the active partners;
• in the case of limited liability companies – by the majority required for the amendment of the articles of association; and
• in the case of a public limited company, under the quorum and majority conditions provided for extraordinary general meetings.

Directors and officers of a company are not personally liable for acts committed as a result of carrying out their functions under the company. The company is vicariously liable for the acts of its directors.

Ordinary acts carried out by the directors and within the bounds of the law and the articles of association are considered to be acts of the company.

However, the company is not liable for illegal acts committed by its directors and managers; see 3.1 Rights to Appoint and Remove Directors regarding the liability for those acts.

Whenever an interested party is aggrieved by any company act, the person is free to seek refuge in the courts of the competent jurisdiction in a civil claim against the company.

See 3.1 Rights to Appoint and Remove Directors.

See 3.2 Challenging a Decision Taken by the Directors.

There are no special regulations for shareholder activism under the OHADA regulations. However, there are provisions of the law that are intended to protect minority shareholders – notably the right to information and the right to participate in making decisions of the company – and, as such, these rights can be used for shareholder activism. The right to information is broken down into a right of permanent communication of company information (Article 526 of the OHADA Uniform Act on Commercial Companies and Economic Interest Groupings) and a right to punctual communication prior to the holding of general meetings (Article 525 of the OHADA Uniform Act on Commercial Companies and Economic Interest Groupings).

Under the OHADA Uniform Act on Commercial Companies and Economic Interest Groupings, any shareholder may consult and obtain copies of the following documents on a permanent basis:

• the inventory, the summary financial statements and the list of directors when a board of directors has been constituted;
• the reports of the auditor and of the board of directors or of the general manager which are submitted to the meeting;
• the minutes and attendance sheets for the corresponding financial years for both the board of directors and the general meetings;
• regulated agreements entered into by the company; and
• all other documents, provided that the articles of association so provide.

It should be remembered that this right of communication may be exercised at any time by the shareholder.

This is not applicable in Cameroon.

This is not applicable in Cameroon.

This is not applicable in Cameroon.

This is not applicable in Cameroon.

This is not applicable in Cameroon.

No information is available on typical strategies a company might consider in responding to an activist shareholder.