Shares negotiability
According to article 759 of the OHADA Law of 2014, shares shall be negotiable only after the registration of the company with the registry of commerce and securities or of registration of the amendment statement following a capital increase.
The negotiation on a promise of shares is prohibited unless it concerns shares to be issued during a capital increase of a company whose old shares are already listed on the official list of a stock exchange of one or more States parties. In this case, the negotiation shall only be valid if it is carried out under the condition precedent of the realization of the capital increase. Absent an express statement, such condition is presumed.
Shares issued for cash shall be negotiable only after they have been fully paid up.
Shares remain negotiable after the dissolution of the company and until the close of the liquidation.
The cancelation of the company or of issuance of shares doesn’t entail the invalidity of negotiations that took place prior to the cancellation decision where the instruments are in order as of to their form. However, the buyer can make a warranty claim against the seller.
Shares, when they are not negotiable by virtue of articles 759 and 761 of same law, shall remain transferable.
The transfer must be evidenced in writing. It shall be enforceable against the company only after the completion of one of the following formalities:
1) Notification of the transfer to the company through a deed of a bailiff or notification by any means capable to prove actual receipt by the recipient;
2) Acceptance of the transfer by the company recorded in an authentic deed;
3) Delivery of an original transfer deed at the headquarters against a certificate of deposit issued by the chief financial officer, general manager or the general director.
The transfer shall be enforceable against third parties only after the completion of one of the above formalities and publication in the registry of commerce and securities.
Transfer of shares
According to article 764 of the OHADA LAW of 2014, shares are freely transferable in principle.
Restrictions on transfer of shares
Notwithstanding the principle of the free transferability stated in article 764 of the law, the articles of association or the agreements referred to in article 2-1 above may contain certain restrictions on shares transfer under the conditions provided for in articles 765-1 to 771-3 of same law.
Restrictions on shares transfer may not apply in the event of succession, liquidation of community property between spouses, or transfer either to a spouse or an ascendant or a descendant.
Inalienability clauses that affect shares shall be valid only where they set a prohibition of a period shorter or equal to ten (10) years and they are justified by a serious and legitimate reason.
Where an inalienability provision is stipulated in the articles of association, any shares transfer carried out in violation of such provision shall be null.
Where an inalienability provision is stipulated in the agreements referred to in this law (OHADA Law of 2014), any shares transfer carried out in violation of such provision shall be null once it is established that one of the transferees had knowledge of the clause or could not ignore its existence.
In a company whose shares are not admitted to trading on a stock exchange, the articles of association may stipulate that shares transfer to a third-party outside the company, whether free of charge or against payment, shall be subject to the approval of the board of directors or the ordinary general meeting of shareholders.
Where the approval is granted by the meeting, the transferor shall not take part in the vote and his shares shall be deducted for the calculation of quorum and majority. The same shall apply if the transferor is a director when the approval is granted by the board of directors. Any decision taken in violation of this article shall be null.
Where an approval provision is contained in the articles of association, the transferor shall attach to his request for approval addressed to the company by delivered hand-delivered letter against receipt or by registered mail with request for acknowledgement of receipt, or by fax, the last and first names, title and address of the potential transferee, the proposed number of shares to be transferred and the price offered.
The approval is given by a notice, or stems from the lack of a response within a period of three (3) months from the date of the request.
Where the company does not approve the proposed transferee, the board of directors or the general director, as the case may be, are required, within a period of three (3) months from the date of notification of refusal, to have one or more shareholder (s), a third party or the company, acquire the shares.
Failing agreement between the parties, the transfer price shall be fixed by an expert designated either by the parties or, failing agreement between them, by the competent court at the request of the earliest petitioner.
Where, at the expiration of the period of three (3) months from the date of refusal of approval, the purchase is not completed, the approval shall be deemed granted. However, in the event that an expert has been appointed to set the price, the deadline may be extended to a period which may not exceed three (3) months, by the parties or the court which designated the expert.
The transferor may, at any time, renounce the transfer of his shares.
However, shareholders, third parties or the company that expressed their desire to purchase may not retract where they advised the transferor to resort to expertise procedure and if he agreed.
Any shares transfer carried out in violation of an approval clause shall be null.
The articles of association or the agreements as mentioned above may stipulate that the shareholder that intends to sell all or part of his shares is required to notify one or more other shareholders, that may inform the transferor that they exercise a pre-emptive right under the prices and conditions which were notified to him.
Where a preemption clause is stipulated in the articles of association, any transfer of shares carried out in violation of the pre-emptive right shall be null.
Where a preemption clause is stipulated in the conventions as mentioned above, any transfer of shares carried out in violation of the preemption right shall be null whenever it is proven that one of the beneficiaries had knowledge of it, or could not ignore its existence.