REMOVAL FROM REGISTRAR COMPANIES
Before speaking of actual removal from register, the law distinguishes a companies based on whether or not they have passed the solvency test. It is however difficult to establish.
SOLVENCY AND COMPANY’S INABILITY TO PAY
According to the wording of article 352, a company shall satisfy the solvency test where:
- the company is able to pay its debts as they become due in the normal course of business;
- the value of the company’s income is greater than the sum of the value of its liabilities and the company’s share capital.
A company shall be considered to be unable to pay its debts where:
- a creditor to whom the company is indebted in a sum exceeding twenty thousand Rwanda francs (20,000 Rwf), has served at the registered office a demand under his/her hand or under the hand of his/her Lawfully authorized agent requiring the company to pay the sum due, and the company has for three weeks thereafter neglected to pay the sum or to secure it to the reasonable satisfaction of the creditor;
- execution or other process issued on a judgment or order of any Court in favor of a creditor of the company is returned unsatisfied;
- it is proved to the satisfaction of the Court that the company is unable to pay its debts, having regard to its existing, contingent and prospective liabilities.
PERTINENT PROVISIONS IN RELATION TO THE REMOVAL FROM THE REGISTER OF COMPANIES
A company shall be removed from the register of companies when a notice, signed by the Registrar General states that the company is removed from the register (art. 354).
Concerning reasons for removal from the register of companies article 355 specifies that The Registrar General shall remove a company from the register of companies where :
- the company is an amalgamating company, other than an amalgamated company, on the day on which the Registrar General issues a certificate of amalgamation;
- the Registrar General is satisfied that the company has ceased to carry on business.
However article 357 provides for possible objections in the following manner:
Where a notice is given of an intention to remove a company from the register, any person may deliver to the Registrar General, not later than the date specified in the notice, an objection to the removal on grounds that :
- the company is still carrying on business or there is other reason for it to continue in existence;
- the company is a party to legal proceedings;
- the company is in receivership or liquidation, or both;
- a person is a creditor or a shareholder, or a person who has an undischarged claim against the company;
- the person believes that there exists, and intends to pursue, a right of action against the company;
- for any other reason, it would not be just and equitable to remove the company from the register.
The proceeding of removal of a company from the register by the Registrar General are subject to prior assessment of objections as put by article 358, the Registrar General shall not proceed with the removal unless he/ she is satisfied that :
- the objection has been withdrawn;
- any facts on which the objection is based are not, or are no longer, correct;
- the objection is frivolous or vexatious. The Registrar General shall give notice to the person objecting that his/her objection is receivable or not and provide grounds therefor.
The property of a company which is removed from the register includes leasehold rights and all other rights vested in or held on behalf of or on trust for the company prior to its removal but does not include property held by the former company on trust for any other person (art. 359).
Finally article 360 states that the removal of a company from the register of companies shall not affect the liability of any former director or shareholder of the company or any other person in respect of any act or omission that took place before the company was removed from the register and that liability continues and may be enforced as if the company had not been removed from the register.
Articles 361 to 376 give a whole range of the penal provisions mainly consisting in fine up to 10 millions Rwandan Francs, notwithstanding the existing penal Code provisions.
Those penalties are applied notably in the following cases:
- where a company fails to comply with the Law as to getting registered in the relevant
- register of companies is concerned (art. 361);
- where a company fails to keep the books required (art. 362);
- where a company fails or delays to provide the Registrar General with the documents that are required (art. 363);
- recidivism (art. 364);
- false or misleading notice (art. 365);
- deliberate submission of false document (art. 366);
- fraudulent us and destruction of company’s property (art. 367);
- falsification of the records (art. 368);
- use of a fraudulent document (art.369);
- fraudulent exercise of the commercial activities (art. 370);
- fraudulent acts (art. 371);