The Democratic Republic of Congo (DRC) finalised its demand to join the OHADA in July 2012, becoming the 17th African State in which OHADA law is applicable.
The changes brought by the OHADA rules consist in the standardisation of all business laws aligning them with most of West and Central African States, especially corporate law, commercial law, securities and recognition and enforcement of foreign arbitral awards.
Under the OHADA Uniform Act on Companies and Economic Interest Group, one of the most remarkable innovations is the possibility to incorporate a company with a single shareholder (art. 60).
The Uniform Act also introduces new corporate forms: the “Société Anonyme” (SA) and the “Société à Responsabilité Limitée” (SARL) which, in comparison to the previous Congolese corporate law, is a considerable improvement.
Further, joining the OHADA has forced the DRC to implement one of the most significant improvements in terms of recognition and enforcement of foreign arbitral awards. This change is of particular importance as the DRC is not a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This change will therefore be welcomed by foreign investors, who could not previously benefit from this effective protection.
The implementation of the new OHADA rules will also bring many changes to the Congolese business legal framework.
A collateral effect of the implementation of the new OHADA rules is the coexistence of two separate sets of laws during the next two years: the pre-existing Congolese rules and the new OHADA rules. This coexistence shall last until the end of the two year transition period in accordance with the new OHADA rules. Under these rules, the existing Congolese law remain applicable to companies registered before the implementation date of the OHADA rules until the end of the two year period, whereas other companies, created after 12th September 2012, must comply with the OHADA rules.
Furthermore, the implementation process has created some confusion over particular corporate forms, particularly between the Congolese SARL and the OHADA SARL. It can be noted that following the first month of application of the harmonised business law, most companies are choosing to be incorporated as an OHADA SARL as they believe that this is the most beneficial corporate form.
During this two year transition period, most of the foreign companies who have local subsidiaries in DRC may face reorganizations in order to adapt their bylaws and corporate structure to the new legal system.