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Legal System


Guinea's legal system reflects its heritage as a French colony, and is based on the French system. Even though it is not a member of UEMOA, Guinea has adopted the Organisation for the Harmonisation of Commercial Law (OHADA) treaty, which is aimed at deepening regional integration between the 16 countries of Francophone Africa. The full text of this new legislation can be accessed either in French or in English on the OHADA website.

    Dispute resolution

    The OHADA treaty provides an arbitration procedure. Disputes relating to the general uniform acts, or indeed any other business dispute, can be submitted to the OHADA arbitration procedure. All national legislation has been superseded by the uniform act on arbitration. Any national court that is faced with a dispute in which the parties have agreed to use arbitration, must declare that it has no jurisdiction over the case. Awards decided on by this process are binding on all member states and can be enforced by the court. The arbitrators are nominated by the CCJA and the arbitrators must get clearance form the court regarding its decision, before it is handed down to the parties. This process, although ensuring consistency, slows down the process considerably and the decisions risk undergoing significant changes.

Company Law

All companies that were formed prior to the passing of OHADA law had two years (to 1 January 2000) to align themselves with the new legislation and member states had the option of repealing and aligning legislation regarding articles of association. A number of different forms of business entity are permitted under the harmonised act on company law, including branches, privately limited companies, publicly limited companies, subsidiaries and partnerships.

  • A Public Limited Company (societe anonyme): A public limited company can have just one shareholder, but it must have a minimum registered capital of CFA10m (provided that there is no public call for capital) and a minimum registered capital of CFA100m (if there is a public call). The minimum face value per share is CFA10,000. The company can be managed by either a Managing Director, or a board of directors, however, if there is a public call for capital, there must be a board of directors in place.
  • A Private Limited Company: The liability of the partners is limited to the contributions and all rights are represented by shares. The minimum share capital is CFA1m, which are divided into shares with a face value of at least CFA5,000. The private limited company is extremely flexible, but the transfer of shares is extremely restricted.
  • A Branch: A branch is not a separate legal entity from its parent company, but does have a degree of autonomy. Generally speaking the branch is governed by the law's of the State where it is located. The branch must be registered on the TPPCR. A branch of a foreign company must be attached to a company that is registered in another contracting state, either already in existence, or to be set up within two years. The Trade Minister of the state in question can waive this requirement though.
  • A Subsidiary: The parent company, or companies must hold more than half the capital of the subsidiary. Subsidiaries are covered by the legislation relating to domestic founded companies.
  • A Partnership: All the partners are considered traders and have unlimited liability. There are no minimum capital requirements and shares are divided so that each has the same face value. Shares can only be transferred with unanimous consent of all the partners.
  • A Sleeping Partnership: This mechanism allows some partners - the active ones - to have joint and unlimited liability whilst the sleeping partners enjoy limited liability. Unless provided otherwise in the articles of association, shares can only be transferred with the consent of all the partners. No sleeping partner can act as a manager of the company.
  • A Joint Venture (JV): The JV does not have to be registered on the TPPCR and is not considered a legal entity. Partners are personally liable, unless they contract specifically in their capacity as representatives of the JV, in which case all partners are jointly liable.

All business entities should be registered with the Trade and Personal Property Credit Register (TPPCR), with the exception of the Joint Venture, because it is not considered a company. Anyone who is registered on the TPPCR must comply with regulations relating to accounting obligations, amongst other things.

Commercial Law

The general act on commercial law includes definitions of traders, establishes the register of commerce and personal property transactions as well as dealing with the use of intermediaries and commercial leases. This piece of legislation is extremely important for businesses wanting to establish themselves in an OHADA country.
A Register of Commerce and Personal Property Transactions is held by certain qualified courts in each member state and they are used to register all natural and legal persons.
Commercial leases can only be granted to companies or traders if they meet certain conditions including being registered on the TPPR for at least two years. Commercial leases can be for a specified or unspecified duration.
There are three types of middlemen; commission agents, brokers and commercial agents. The rules governing agency agreements are still firmly entrenched in domestic legislation, however.

Expropriation

Foreign investors are protected by the Investment Code against expropriation or nationalisation.

Insolvency

OHADA has introduced a uniform general act for insolvency, which has replaced all domestic legislation in member states. The act has established three different categories of insolvency and the regulatory framework for dealing with each of them:

  • Voluntary agreements: These are used for businesses with temporary difficulties and the mechanism allows them to trade out of the situation.
  • Administration: Businesses that are experiencing more severe problems can opt to go into administration, some will succeed in turning the business around, whilst others will pass into the next stage - liquidation. The situation will be monitored by the court, which will lay out how the debts are to be repaid.
  • Liquidation: Where companies find themselves in an impossible situation, which requires them to sell their assets to cover debts, they will be put into liquidation.

Intellectual Property

OHADA does not currently have a general uniform act on intellectual property. The need to adopt such legislation has been identified, but it is unclear when it will be forthcoming. Some have queried the necessity of such legislation given that African Organisation for Intellectual Property (OAPI) already exists and that the majority of OHADA members are included within its membership, including Benin.
OAPI was preceded by the African and Malagasy Registrar for Industrial Property (OAMPI), which was created by the Libreville agreement in 1962. However, when the agreement was updated by the Bangui Agreement in 1977, the institution was changed and became OAPI, which now protects the main forms of intellectual property in the OHADA states, with the exception of Mauritania and Comoros.
In addition to the Bangui Agreement, which forms the main body of law, there are also appendices on patents, registered patterns, trademarks, industrial designs, models, trade names, captions and copyrights. The Bangui Agreement has recently been amended to bring it into line with the TRIPS requirements. The new version took effect on 28 February 2002. Applications to protect intellectual property should be made to the office in the member state, or directly to OAPI.

  • Patents: Patents must be registered, which requires a number of documents to be lodged with the office describing the invention, as well as payment of the registration fee and a registration request. Once the patent has been granted, the invention cannot be manufactured or sold without permission from the patent holder for a period of twenty years (as of 28 February 2002) from the date of application.

  • Trademarks: As with patents, a series of documents have to be lodged with the office, together with the relevant form and the required fees. Once all the requirements have been fulfilled, the trademark is registered and published. Protection is guaranteed for ten years, renewable for further periods of ten years. The trademark owner has exclusive rights over the design itself, and any others that are deemed to be so similar as to cause confusion. A trademark can be cancelled if it has not been used for the five years preceding the date of the commencement of the cancellation action.

Investment Restrictions and Incentives

Although incentives exist to encourage foreign companies to establish in certain sectors, restrictions exist in others. There are exchange controls in place, and authorisation for foreign currency transactions must be obtained from the central bank. The government also reserves the right to operate certain utilities (such as electricity and the import of petroleum) and to exploit natural resources, including minerals. However, in order to stimulate the development of the mining industry, the government introduced a new Mining Code in June 1996 and also set up a national agency for the development of mining infrastructure (Agence Nationale d'Amenagement des Infrastructures Minieres, ANAIM) in the same year.




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