What type of company should I choose for my start-up?

You had the idea of the century, a revolutionary idea that could change or transform a very specific environment. After careful study, you are finally ready to take the big step, but there is still one question on your mind:

"What legal form should I choose for my company? PLC, Limited Partnership or Limited Company"?

For those who wish to embark on the adventure, it is important to choose the corporate form that offers the best advantages. And to make the best decision, you need to have the right information, i.e. know the advantages and disadvantages of each status. Are you ready to discover them? Let’s go!

What is the most suitable legal status for a start-up?

In accordance with the OHADA Uniform Act, the choice of the legal form to be adopted for a start-up is at the discretion of its promoter. Each legal form imposes more or less restrictive conditions. It may be a PLC (Private Limited Company), a SLP (Simplified Limited Partnership), or a LC ( Limited Company). We will not talk here about the limited company because it requires the mobilisation of at least ten million Francs CFA to build up the share capital, which is difficult for a young entrepreneur to afford.

Each legal status has its own mode of organisation, but the one that offers the most room for manoeuvre to entrepreneurs is that of the SLP, the Société par Actions Simplifiée (Simplified Joint Stock Company). Let’s see why.

1- Simplified Limited Partnership, the ideal legal status for a start-up company

LC is a simplified form of Limited Company. This status offers all the advantages of a Limited Company without the constraints of minimum share capital and governance. Amongst others, we can mention the following points:

👉🏾 Flexibility of the statutes

Procedures for the creation, liquidation and dissolution of an SLP are similar to those of an SA. The nature of the functions of those who will be in charge and the procedures for collective decision-making are determined by the company’s partners. Decision-making times are therefore shorter and all the formalism of other legal forms is avoided.

👉🏾 The possibility of going it alone

If there is a single founder, we will then speak of SASU: Société par Actions Simplifiée Unipersonnelle. There is nothing to prevent a promoter from being the sole shareholder of his company.

It is important to choose the social form with the best assets.

👉🏾 Partners are protected by the drafting of their articles of association

 The drafting of the articles of association is entirely done by the partners. Be careful, you should still obtain information on the basis of existing model articles of association or, if possible, seek advice from experts if you are considering bringing potential investors into your capital. This is the time to protect oneself so as not to be quickly diluted by the entry of new shareholders.

👉🏾 Easy transfer of shares

  For a business developer, the most complicated thing is to sell his shares to foreigners, people who did not take part in the construction of the project. It is a very difficult phase that has to be managed objectively. A brilliant mind said that it is better to have 1% of something than 100% of nothing at all. If you want to deploy your vision, you will have to welcome people who will help you move forward. SLP allows you to organise your governance in a more personalised way.

To date, it is not possible to create a SLP in a Business Creation Formalities Centre (CFCE). You will therefore have to call in a notary who will help you with all the legal formalities. The minimum capital for a SLP is set at one million Francs CFA to which must be added the notary fees of about 200 000 Francs CFA, i.e. a total budget of 1 200 000 Francs CFA. This is a large sum to be paid out for a young entrepreneur but if you have the possibility of obtaining this sum, this legal form will enable you to grow your business serenely.  If this sum is not available from the outset, don’t panic, you can opt for the PLC.

2 – The Private Limited Company

For this legal form, formalities have been made more flexible in our country thanks to the creation of the Centres for Business Creation Formalities. To do this, you can go to the CFCE website where you will find an example of the statutes of a limited liability company that you can customise.

Once you have drawn up your articles of association, you will need to collect all the documents requested, mainly your identification documents. The official cost of this procedure is about 60 000 FCFA but you will have to add the stamp fees which are about 20 000 FCFA. In total, you will have to pay less than 100 000 FCFA. Depending on the period, you will have to wait at least a week to get your official documents back. 

atuts, vous devrez collecter tous les documents demandés, il s’agit principalement de vos documents d’identification. Le coût officiel de cette procédure est d’environ 60 000 F CFA mais vous devrez y ajouter les frais de timbre qui sont d’environ 20 000 F CFA. Au total, vous devrez débourser moins de 100 000 F CFA. Dépendamment de la période, vous devrez patienter au moins une semaine pour récupérer vos documents officiels. 

If you wish to deploy your vision, you will be obliged
to welcome people who will help you move forward
.

Warning: Your company’s share capital must be deposited with a bank. Once this step has been completed, your notary will provide you with a DSV (Subscription and Payment Declaration). This document must be kept in a safe place, as you will be asked for it when you plan to carry out your capital increase operations.

Did this article help you? Do not hesitate to share it with others. And see you soon for another article on entrepreneurship! 

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