Restructuring of companies in accordance with the ohada law is the corporate management term for the act of reorganising the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable or better organized for its present needs. Generally, corporate restructuring happens when a corporate entity is experiencing significant problems and is in financial jeopardy. Restructuring may take place between companies of different types and in principle this does not raise many difficulties. More complicated problems may arise if the nationalities of the companies are different. The ohada law has made reference to three categories of restructuring as follows;
Restructuring Involving Companies of Different types: The ohada Uniform Act provides that unless provided to the contrary elsewhere in the Uniform Act, restructuring may involve companies of different types. Such restructuring will not involve “Société en Participation” which although they are referred to as companies, have no corporate personality and no assets and liabilities in their own name, or “Société de Fait” which have not been properly incorporated. Therefore, restructuring may involve companies of any other type referred to in the Uniform Act such as Public Limited Companies, Private Limited Companies, Société en nom collectif or SNC, Société en commandite simple or SCS.
Restructuring Involving Companies in Liquidation: Companies in the process of being liquidated maybe involved in a merger. However, such companies may only be the absorbed company and never the absorbing company. There is no similar provision for Spin-Offs and Partial Business Transfers involving such companies.
Restructuring Involving Companies of Different Nationalities: As regards companies created in different ohada member states, the cross-border nature of the ohada law will regulate the restructuring procedure. However, for companies incorporated out of the ohada region, and engaged with another company in the ohada region, the restructuring procedure will operate in accordance with the ohada law subject to any contrary mandatory provision in the laws of the third party state.