According to article 744 of the OHADA Law of 2014, Public limited companies issue securities as well as other financial instruments.
Within the meaning of the uniform Act, securities issued by public limited companies include:
- Capital securities;
- Debt securities are other than money-market securities.
The form, schedule, and characteristics of money-market securities shall be defined by the competent authority of each State party.
Securities shall confer identical rights by category and give access directly or indirectly to a portion of the capital of the issuing company, or a right to a general claim on its assets. They are indivisible concerning the issuing company.
The issuance of profit shares or founder’s shares is prohibited.
Public limited companies may also enter into financial agreements, also referred to as “future contracts”, where applicable, under the conditions set forth by the competent authority of each State party.
Securities, whatever their form, must be recorded as an account in the name of their owner. They are transmitted by transfer from one account to another.
The transfer of ownership of securities results from the registration of the securities in the securities account of the purchaser.
In the event of the transfer of securities admitted to the operations of a central depository or delivered in a payment and delivery system approved by the competent authority of each State party, such registration is done on the date and under the conditions prescribed by the competent market authority.
In other cases, such registration is made on the date fixed/ by the agreement between the parties and notified to the issuing company.
Forms of securities
Securities shall take the form of the bearer or nominative instruments whether issued against cash or in-kind contributions. However, provisions of this uniform Act or the articles of association may impose exclusively the nominative form.
The owner of instruments which are part of an issuance comprising bearer instruments has the option, notwithstanding any provision to the contrary, to convert his bearer instruments into nominative instruments and vice versa.
Each company or a person authorized to that effect shall establish registers of nominative instruments issued by this company.
The registers shall contain entries relating to transfer, conversion, pledge, and sequestration transactions, and:
1) The date of the transaction;
2) The last and first names and domicile of the former and the new owner of the instruments, in case of transfer;
3) The last and first names and domicile of the owner of the instruments, in case of conversion of bearer instruments into nominative instruments;
4) The nominal value and the number of instruments transferred or converted. However, when these instruments are shares, the stated capital and the number of instruments represented by all the shares of the same class may be mentioned instead of their nominal value;
5) Where appropriate, where the company has issued shares of different classes, and if a single register of nominative shares is held, the class and characteristics of the shares transferred or converted;
6) A serial number assigned to the transaction.
In the case of transfer, the name of the former owner of the instruments may be replaced by a serial number enabling one to find that name in the registers.
All entries in the registers must be signed by the legal representative of the company or his delegate.
The company shall maintain up-to-date of registers of nominative securities. The auditor’s report submitted to the annual ordinary general meeting shall record the existence of the registers and give his opinion on their compliance with record-keeping requirements. A statement of company management certifying the register’s complaint shall be attached to the auditor’s report.
Pledge of securities
Subject to the provisions of articles 772 and 773 of the OHADA Law of 2014, the pledge of securities recorded in an account shall be instituted by the provisions of the uniform Act on security interests.
The enforcement of the pledge of the financial instruments account shall be carried out, for securities other than financial instruments admitted to trading on a regulated stock exchange, by the provisions of articles 104 and 105 of the Uniform Act on security interests.
During the issuance of securities representing claims on the issuing company, or giving the right to subscribe for or acquire security, it may be stipulated that these securities shall only be reimbursed after other creditors’ claims have been paid.
In these types of securities, an order of priority of payments may also be set.