Cameroon is a suitable ground in Africa for businesses to thrive given its richness in natural resources and a readily available market and workforce with a population of over 24 million people. Being an emerging economy, the country attracts attention from the international business community. While the business environment is regarded as challenging by most entrepreneurs bargaining to have a share of the market, a business has to be compliant by registering into the Trade and Personal Property Credit Register (RCCM) as required by OHADA (Organization for the Harmonization of Business Law in Africa) in order to take advantage of the economic opportunities. However, In Cameroon, Over 70% 0f entrepreneurs do not own registered businesses and that is largely because they are either not aware of the advantages of doing so and the repercussions of failing to register one or they just don’t know how to go about it.
You may have started or are about to start a business or company and of course, the next thing to do would be to have it registered.
In this article, we will provide you with the steps business owners in Cameroon are required to take in order to create and register their businesses from scratch. But first, let’s start by telling you why it is important to register your business in the first place.
The importance of having your business registered
It gives you a unique identity and protects it
When you register a business, it becomes a real thing because it exists legally and not just in your head. The business has the sole right to the chosen Brand name and no other business anyway in Cameroon can operate with that name. Imagine that you are operating a very popular business, say Dez Fashion in Douala and you have several customers patronizing it but you have not registered that business name. If someone else goes and get Dez Fashion registered as a business name, they will be allowed to operate with that name and you won’t. This means you would lose your brand name and eventually, your customers to the person who got the name registered.
It makes you look serious and attracts more customers
Most customers these days, especially corporate customers would consider a registered business as a sign of seriousness and responsibility.
It is easier to obtain bank loans and investment from investors
Most banks, especially reputable banks in Cameroon would lend you money to buy a land, house or car but they won’t lend you money to fund a business that is not registered. To qualify for a business loan, you must first and foremost have your business registered. It’s the same thing with investors. Think about it, which investor will trust you with their money if you don’t even have your business registered?
It ensures continuity
In Cameroon we have several businesses that have existed for several years like the Kadji Group and Fotso Group whose founders are dead but these businesses have continued to operate because they are registered and though their founders are no more, the brand name stays on.
Now that you know why it is important to register a business in Cameroon, the only thing stopping you now should be how to go about it and this brings us to the steps on how to register your business in Cameroon.
There are different forms of businesses in Cameroon. In this article, we will focus on the most prevalent ones; Sole Proprietorship, General Partnerships and Limited Companies.
How to Register a Sole Proprietorship in Cameroon
A Sole Proprietorship (also known as a sole trader or simply a proprietorship) is a type of business entity that is owned and operated by one person alone.
This type of business does not enjoy the benefits of limited liability and legally, the owner and the business are considered as one and the same. Sole proprietorships are the simplest of all business entities. They are cheap and easy to set up and require little capital.
To register your sole proprietorship, go to the competent court where your business is operating or the Enterprise Creation Formality Centres (ECFC) located in Yaoundé, Douala, Bafoussam and Bamenda with the following information:
Name of the business
Pick a unique name for your business and ensure that no other registered business is operating with the name. You can consult the ECFC to find out if the name is available.
Proof of identity
You will have to show proof of your identity with the following documents:
- Birth certificate
- National identity card
- Passport or any other administrative document that shows proof of your identity
- A 4×4 passport-size photograph
Marriage certificate If Necessary
Where necessary, the marriage certificate is needed to know the marriage regime of the person; whether the couple operates a joint or separate account. In case of any liability, the authorities will know the persons to go after as sole-proprietorship has unlimited liability.
You have to provide a copy of the tenancy agreement or title deed of the principal place of business and its subsidiaries, if you have any. If you don’t have this, you can register and get an attestation of location after declaring your annual rent at the tax office where your business is located. This document will also help you in the obtaining your business license.
If you are changing the ownership of a business which you purchased, you will have to show proof by providing a copy of the sales certificate or the management lease deed.
Criminal record extract
You have to provide a Certificate of Non-conviction which is issued by the court registrar of your division of birth. In the case where the document is not available, any other document similar to such can be used.
License, authorization or permit
For some specific activities, you may have to provide a license, authorization or permit to carry them out.
Registration into the Trade and Personal Property Credit Register (RCCM) is 41,500 FCFA. Minimum startup capital is not required.
How to Register a General partnership
A partnership is a formal arrangement by two or more parties to manage and operate a business and share its profits. In a general partnership, partners have unlimited liability and liable to debts of the business to the extent of their personal assets.
For partnerships, the same registration procedures for a sole proprietorship will apply. In addition, the partners have to do the following:
- 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 clearly followed by the word “partnership” or abbreviated “P”
- The business must have at least two partners. All the partners must have unlimited liability – that is, they must agree to be jointly and severally liable to any liability incurred by the partnership.
- A partnership must have a formal written partnership agreement
- Partnerships in Cameroon are required by law to have a written agreement between the partners who want to form a partnership. This must be done with the unanimous consent of all partners involved.
- The assignment of the partnership interests must be put formally in writing.
The stated capital of a partnership is divided into partnership interests. With same nominal value, the partnership interests are assigned only with the unanimous consent of all partners.
Registration into the Trade and Personal Property Credit Register (RCCM) is 51,500 FCFA. Minimum startup capital is not required.
How to register a Private Limited Liability Company (LTD) or Public Limited Liability Company (PLC) in Cameroon
To register a company in Cameroon, the founders must identify the type of company (private or public limited company). The owners of private limited company enjoy limited liability. As a result, the name of this type of entity usually ends with ‘Ltd’, ‘Limited’ in English or “SARL” in French. The owners of a Public Limited Company a limited liability and the name of such an entity ends with “PLC” in English or “SA” in French.
A Limited Liability Company is seen by the law as a legal human and these companies can own property, borrow and lend money, sue and be sued. What they are and own are totally separate from the assets of its owners. A Public Limited Company has the same characteristics of an LTD. The only difference is that the shares of a PLC are traded publicly and the startup capital is much higher, compared to an LTD.
In setting up a company in Cameroon, the minimum share capital is 100,000 FCFA for and LTD and 1,000,000 FCA for a PLC. Shares are the unit of holding or right of ownership by an investor in a company. In Cameroon, a limited company can be set up by person(s) age 18 years and above who are not bankrupt, insane or convicted of a crime.
To register a limited Company, the owners are required to visit the Enterprise Creation Formality Centre (ECFC) located in Yaoundé, Douala, Bafoussam and Bamenda with the following information:
- Name of Company ( Private or Public ) limited company
- Objectives of the company
- Copy of shareholder(s) national identity card, passport or residence permit for foreigners and birth certificate for minors.
- Non-conviction or non-crime certificate
- Proficiency certificate (where applicable)
- Company registered address
- Company startup share capital.
Documents to be prepared by the Commercial Attorney:
- Memorandum & Article of Association of the company. The articles of association are the statutes of the company which lay down the formal rules decided by the shareholder.
- Notarized statement of subscription and payment of shares
- The certified list of managers, directors, officers or associates held unlimited liability or having the power to bind the company or corporation.
- Declaration of regularity and OHADA conformity
- Notarized list of company shareholder & company manager
- Location & localization sketch of business premises
Upon completion of registration, the following documents will be provided to the company owners.
- Certificate of incorporation
- Certificate of business registration
- Article /memorandum of association duly stamp
- Notarize statement of subscription
- Taxpayers card
- Certificate of non-indebtedness (shareholders must adhere to the Cameroon General Tax code 2017 to ensure the company is issued with a taxpayer’s card and a certificate of non- indebtedness).
- Duly signed notarization sketch
Registration into the Trade and Personal Property Credit Register (RCCM) is 51,500 FCFA.
According to the Cameroon Chamber of Commerce, Industry, Mines and Crafts, it is possible to create a business of any form within 72 hours in the Enterprise Creation Formality Centres (ECFC) located in Yaoundé, Douala, Bafoussam and Bamenda. So, now that you know the procedure, visit the ECFC and have your business registered.