The transformation of a company is the operation whereby a company changes legal form by the decision of the members.
The regular transformation of a company does not entail the creation of a new legal entity. It is only an amendment of the articles of association and is subject to the same conditions and time limits thereof.
However, the transformation of a company in which the members’ liability is limited to their contributions into a company in which their liability is unlimited shall be decided unanimously by the members. Resolutions passed in violation of the provisions of this paragraph shall be void.
The transformation shall take effect from the day the decision to record it is taken. However, it becomes enforceable against third parties only after further the completion of publicity formalities provided for in article 265 of the OHADA Law of 2014.
The transformation shall have no retroactive effect.
The transformation of a company does not entail the closing of accounts if it occurs during the fiscal year unless otherwise decided by the members.
The summary financial statements of the fiscal year during which the transformation occurred shall be adopted and approved according to rules governing the new legal form of the company. The same shall apply to the distribution of profits.
The decision to transform a company shall put an end to the powers of the board or the management body of the company.
The members of these bodies may claim damages by the transformation or cancelation thereof only where such action was decided with the sole purpose of infringing their rights.
The management report shall be prepared by the former and the new management body, each for its management period.
The rights and obligations contracted by the company under its former form shall remain valid under the new form. The same shall apply to security interests unless otherwise provided in the instrument instituting the said security interests.
In the event of the transformation of a company in which members’ liability is unlimited into a form of the company where partners’ liability is limited to their contributions, creditors whose claims date before the transformation shall retain their rights against the company and the members.
The transformation of the company shall not terminate the mission of the auditor if the new form of the company requires his appointment.
However, where such an appointment is not required, the auditor’s mission ends with the transformation, unless members decide otherwise.
The auditor whose mission has ended by the second paragraph of this article shall nevertheless report on his activities undertaken between the beginning of the fiscal year and the date of the end of his mission to the meeting called to review the accounts for the fiscal year during which the transformation occurred.
When a company that does not have an auditor is transformed into a share company, one or more transformation auditors, tasked with the appraisal, under their professional responsibility, the value of goods that make up the company’s assets and special benefits shall be appointed, unless members decide unanimously otherwise, by a decision of the competent court at the request of the company management or of one of them.
The transformation auditors may be tasked to prepare the report provided for in article 375 same law. In such a case, a single report shall be drafted. These auditors shall be subjected to incompatibilities outlined in article 378 of the OHADA Law. The report shall be put at the disposal of the members.
The members shall examine the appraisal of assets and the granting of special benefits. They can reduce it only by a unanimous decision.
Failing an express approval of the members, referred to in the minutes, the transformation shall be null.
If following its transformation, the company no longer has any of the legal forms provided for in this uniform Act, it loses its legal personality if it engages in any commercial activity.