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1. LAW PART
B Y : K A B A N A D A N A E r n e s t
MODULE CODE: PGCS - 1
MODULE TITLE: LAW AND
CORPORATE GOVERNANCE

2. GENERAL INTRODUCTION
 Like in almost all areas of life, law dictates
and is concern with the dos and don'ts.
 To corporations, it regulates the formation
and the activities of corporations.
 It regulates the balancing of interests among
a business's different stakeholders.
 It shapes what businesses do and how they
do it.

3. CHAPTER ONE: ELEMENTS OF LEGAL
SYSTEMS AND SOURCES OF LAW
 Law as a set of principles, rules, and standards of
conduct must have a general application in the
society, i.e. all traders, customers have to be
treated equal as provided for by the law.
 Business or commercial laws must be developed
by an authority, i.e. a manager/director in
corporate should not invent his/her wheel.
 And any violation of the law sanctions must be
imposed.

4.  Purposes and functions of law
 Order
 Justice
 Facilitates planning
 Promoting social justice
 Asgn: Assess each purpose depending on your
area of expertise.

5. Law and justice
Kinds of sanctions
Are;
civil sanctions,
criminal sanctions
and disciplinary sanctions.
Asgn: Considering your area give examples on each.

6.  Law and related disciplines
 Criminology: Criminology is a scientific study of
criminal behavior and law enforcement. And how
society responds to crimes.
 Criminalistics: Criminalistics is the scientific study
and evaluation of physical evidence.
 Legal philosophy: Legal philosophy looks at law
from a philosophical perspective.

7.  Comparative law (legal comparison): Legal
comparison is the study of foreign systems.
 Legal history: Legal history is important in a legal
system.

8. Major legal systems
 The modern national legal systems are generally
based on one of four basic systems:
 The Common law tradition,
 the Civil law or Romano- Germanic tradition,
 the Socialist law tradition,
 Muslim law tradition.

9. Systems of courts and sources of law
 The systems of courts that interpret and apply the
laws is the judiciary.
 The practical authority given to the court is known as
its jurisdiction.
 A court is constituted by a minimum of three parties:
plaintiff,
 defendant,
 judicial power,

10. Sources
 Formal sources: obligatory and Auxiliary
Obligatory: from legislative/executive powers e.g.
- Constitution
- Organic laws
- Ordinary laws
- Decree laws
- Orders
- Instructions

11.  Auxiliary sources:
 Custom
 Jurisprudence
 Legal doctrine
 General principles of law

12.  Examples of general principles of law;
1. The principle of legality of infractions and
penalties;
2. Presumption of innocence;
3. Ignorance of the law is no excuse
4. Presumption of doubt
5. Prohibition of double punishment
6. The principle that criminal responsibility is
personal.

13. CHAPTER TWO: COURT STRUCTURE
AND CONSTITUTIONAL RIGHTS
 A court is an institution that authorises and
adjudicates legal disputes.
 A constitutional right are privileges/freedoms to
individuals rights in that if laws that contradict it are
considered unconstitutional and invalid.

14.  As par the Rwandan case, The constitution of the
republic of Rwanda of 2003 revised in 2015,
provides for different rights among others;
 Article 12: Right to life
 Article 13: Inviolability of a human being
 Article 15: Equality before the law
 Article 16: Protection from discrimination
 Article 20: Right to education
 Article 21: Right to good health
 ……..

15.  Court structures in Rwanda
 In terms of Article 38 of the Law nº012/2018 of
04/04/2018 determining the organization
and functioning of the judiciary
 Ordinary courts are the following:
 1° the Supreme Court;
 2° the Court of Appeal;
 3° the High Court;
 4° the Intermediate Courts;
 5° the Primary Courts

16.  Article 38 of the same law provides that specialised
courts are:
 1° the Commercial High Court;
 2° the Commercial Court;
 3° the Military High Court;
 4° the Military Tribunal

17.  Law N°30/2018 of 02/06/2018 determining
the jurisdiction of courts provides for the
structures, Subject matter and territorial
jurisdiction;

18.  A. Primary courts
 Jurisdiction of Primary Courts in civil
matters ( art.27)
 Primary Courts try at first instance:
 1° disputes between physical and non-governmental
entities or corporations whose monetary value does
not exceed twenty million Rwandan francs (FRW20,
000,000);

19.  2° cases relating to movable property of more than
three million Rwandan francs (FRW 3,000,000), but
which does not exceed twenty million Rwandan
francs (FRW20,000,000) and those relating to
succession in respect thereof,

20.  3° all commercial matters involving amounts of not
more than five million Rwandan francs (FRW
5,000,000);
 4° cases relating to the status of persons and family

21.  B. Intermediate courts:
 Jurisdiction of Intermediate Courts in civil
matters (art.31)
 Intermediate Courts hear civil actions relating to
road traffic accident insurance disputes.

22.  3. Jurisdiction of specialized chambers at the
Intermediate Court level
 Chamber for minors and family
 The specialised chamber for minors and family tries
at the first instance the following offences:
 1°any offence committed by a minor at the time of
commission of such an offence, his/her co-
perpetrators and accomplices.

23.  2° domestic violence
 3° abortion;
 4° infanticide ;
 5° parricide ;
 6° spousal homicide

24.  Additionally, can also hear cases relating to:
 1° the status of persons and family;
 2° the petition to establish paternity;
 3° the distribution of marital property and change of
matrimonial property regime;
 4° management of marital property;
 5° succession to property, the value of which exceeds
three million Rwandan francs (FRW 3,000,000)

25.  Chamber for labour and administrative cases
 Jurisdiction in labour cases
 At first instance, all labour and social security cases
as well as cases pertaining to the following:
 1° individual or collective disputes arising out of
employment between private employers and their
employees;
 2° employment contracts, apprenticeship contracts,
collective agreements or alternative administrative
decisions;

26.  3° disputes between social security organisations,
between social security organisations and insured,
and between employers and employees in regard to
the application of social security laws;
 4° claims for damages arising out of the breach of
labour laws….

27.  Jurisdiction in administrative cases
 The specialized chambers of Intermediate Courts for
labour and administrative cases, have jurisdiction to
try at first instance the following cases:
 1° all claims relating to disputes arising from
elections of administrative leaders except those who
are tried in other courts;
 2° all claims for damages arising from extra-
contractual liability as a result of the actions of the
government employees and its institutions;

28.  3° applications for revocation of decisions taken by
administrative authorities on grounds of the breach
of substantive and procedural rules, those of being
taken by incompetent authorities or by those acting
ultra vires;
 4° applications for revocation of administrative
decisions that are non-compliant with laws
governing public service;
 5° all claims relating to civil liability if the damage
arises from public works;

29.  Chamber for Economic crimes
 The chamber for economic crimes hears at first
instance the following offences:
 1° corruption and related offences;
 2° misuse of public property;
 3° money laundering;
 4° embezzlement or destruction of public property

30.  5° tax evasion;
 6° fraudulent bankruptcy and related offences;
 7° illegal award of public tenders;
 8° award of unjustified advantages during the
execution of public tenders;
 9° counterfeiting, using or putting into circulation
objects which can be mistaken for money or
negotiable instruments;
 10° putting counterfeit money into circulation;

31.  11° counterfeit, falsification or alteration of money;
 12° other offences related to the embezzlement of
public property provided for by law.

32.  C. The High Court
 At the first level of appeal, the High Court has
jurisdiction to hear at the cases tried at first instance
by Intermediate Courts.
 At the second level of appeal, the High Court hears
cases heard at the first level of appeal by
Intermediate Courts if such cases: e.g.
 1° are determined based on a non-existing law or
rendered by an incompetent court;

33.  2° have ordered penalties which are not provided by
law;
 3° are decided based on a non-existing law, refer to
repealed legal provisions or are tried by a court
lacking jurisdiction;
 4° are decided based on evidence, a document or
submissions that were presented after the conclusion
of the hearing without any reopening of the hearing;
 5° are decided by a bench with no required minimum
number of judges provided by law;

34.  6° were pronounced by a judge other than the one
having heard them;
 7° are not tried in public while no in-camera hearing
is ordered;

35.  2. Jurisdiction of the High Court in
administrative cases
 The High Court has ordinary jurisdiction for the
following applications:
 1° applications seeking the annulment of
administrative decisions taken in the last instance by
the President of the Republic, President of the
Senate, Speaker of the Chamber of Deputies, Prime
Minister…
 which decisions are illegally taken, taken by
incompetent authorities or authorities who act ultra
vires;

36.  D. The Court of Appeal
 The Court of Appeal has jurisdiction to hear appeal
cases tried at first instance by the High Court, the
Commercial High Court and the Military High Court.
 It has also jurisdiction to try at the second level of
appeal cases tried by the High Court, the Commercial
High Court and Military High Court, if such cases:
 1° have an impact on national security;

37.  2° have ordered the award of damages of at least
seventy-five million Rwandan francs (FRW
75,000,000);
 3° involve a term of imprisonment of at least fifteen
(15) years. (for more see High Court jurisdiction
above)

38.  However, the appeal at second instance cannot be
admissible if:
 A party admitted charges
 or a party has lost his/her case in both courts for the
same reasons.

39.  E. Supreme Court
 The Supreme Court is the highest court in the
Country,
 The Supreme Court has exclusive jurisdiction to try
in criminal cases, in the first and last instances, the
President of the Republic, the President of the
Senate, the Speaker of the Chamber of
Deputies, the President of the Supreme Court
and the Prime Minister.
 The Supreme Court also has jurisdiction to try their
co-offenders or accomplices.

40.  The Supreme Court has jurisdiction over
applications for review of judgements rendered
at last instance on grounds of injustice upon
approval by the President of the Supreme Court.
 However, the President of the Supreme Court may
designate another court higher than the one that
heard the case at the last instance.

41. CHAPTER THREE: OBLIGATIONS’ LAW
AND FORMATION OF CONTRACTS
 The law of obligations is one branch of private
law.
 It is the body of rules that organizes and regulates
the rights and duties arising between individuals.
 An obligation is a legal bond by which one or more
parties are bound to act or refrain from acting.

42.  According to the Rwandan law governing contracts,
 Law N°45/2011 of 25/11/2011 governing
contracts;
 A “contract”: is a promise or a set of promises the
performance of which the Law recognizes as
obligation and the breach of which the Law provides
a remedy;
 Contracts made in accordance with the law shall be
binding between parties.
 it is the fundamental principle of the autonomy of
the will.

43. Section one: Conditions, Classification
and content of Contracts
 Conditions of validity of
contracts:
 Four mandatory conditions are required for a
contract to be validly concluded:
 the consent of contracting parties,
 their capacity to contract,
 a determined object of the contract
 and a legal purpose.

44.  A contract may be said be bilateral
(reciprocal) or unilateral
 A bilateral;
 It requires each party to execute a commitment in
favour of another. E.g. employment contract.

45.  A unilateral;
 The contract binds one or several persons to
execute an obligation in favour of one or several
other persons.
 E.g. voluntary deposit by which the debtor
undertakes to return something to the creditor.
 This is a unilateral contract because the creditor
has no obligation.

46.  A contract may be onerous or gratuitous
 An onerous;
 contract requires both parties to give or to do
something.
 A gratuitous;
 contract does not require such equivalence.
 One of the parties receives an advantage at no cost
or exchange. E.g. a gift or donation

47.  A contract is commutative or aleatory
 Commutative;
 Each party does or gives something that is equivalent
and each is certain of about the gain.
 Aleatory;
 Is based on the concurrence of an uncertain event.
 The insurer does not have to pay the insured until an
event, such as a fire, results in property loss.
 Under this contract, the parties are not sure whether
the contract will ever be fulfilled as planed.
 Example: the purchase of a lottery contract,
insurance policies...

48.  Contracts of adhesion
 It is a contract between two unequal
bargaining partners and does not allow for
negotiation.
 It can be thought of as take it or leave it kind of
contract where one party is tied down to accept
whatever terms of conditions are put forth by
the other powerful party.
 It heavily restricts one party while leaving the other
free (as some standard form printed contracts);
implies inequality in bargaining power e.g.
Loan Contracts.

49. Classification of obligations:
 Obligation of means
 and obligation of result
 E.g.:
 a case of a doctor to a patient.
 A lecturer to a students.
Of result;
 E.g.;
 a contractor to the owner of a house.
 a driver to a passenger.

50.  Offer and Acceptance:
 The offer
 The offer is an expression of willingness to contract.
The offer may be made in writing, by words or
conduct.
 Duration and termination of offer;
 An offer continues in existence, capable of
acceptance until it is brought to an end.

51.  Termination has different ways in which it
can occur;
 Revocation
 The offer may be revoked by the offeror at any time
up until it is accepted.
 The revocation of the offer must be communicated to
the offeree.

52.  Rejection by the offeree
 Lapse of time
 Occurrence of a terminating condition
 Death
 Counter-offer

53.  Acceptance
 An acceptance is a final term of an offer.
 Just as an offer may be made by conduct, so may an
acceptance

54.  Extinction of a contract:
 Payment
 Novation;
 It may take three forms;
 a. change of the object of the debt,
 b. change of the debtor,
 c. change of the creditor.
 Compensation
 Nullity
 Release
 Loss of the object;
 Prescription

55. Section two: Breach of contract and
consequences
 Remedies for breach of contract
 It occurs when the parties have failed to perform
their contractual duties in the manner they have
promised to perform them.

56.  Failure to respect an obligation entitles the creditors;
 to demand forced execution,
the contract rescinded (annulled).
 Such cancellation may be either;
 with or without a claim for damages,

57. Damages to be awarded:
 must have been suffered;
 Damage must be imputable to the defendant;

58. CHAPTER FOUR: LAW OF TORTS AND
PROFESSIONAL NEGLIGENCE
 A tort, in common law jurisdiction, is a civil
wrong (other than breach of contract) that causes a
claimant to suffer loss or harm resulting from a
tortious act.
 It can include intentional infliction of emotional
distress, negligence, financial losses, injuries,
invasion of privacy….
 The person who commits the act is called
a tortfeasor to an injured party.

59.  Note that, a Tort (a wrong/fault) can be civil or
criminal
 There are three types of torts:
 Intentional Torts
 Negligence Torts
 Strict Liability Torts

60.  There are five elements necessary to prove a
negligence case:
1. Defendant owed a duty of reasonable care.
2. Defendant did not demonstrate care.
3. Plaintiff suffered an injuries.
4. The injury caused actual damages.
5. Defendant's actions or inactions were the cause of
injury (Proximate cause).

61.  Characteristics of reparable damage:
 Must be actual
 Must be legally protected
 Must be direct
 Must be personal

62.  Professional negligence
 This is where the defendant is in breach of that
duty.
 The standard test of breach is whether the
defendant has matched the abilities of a reasonable
person. Parties must therefore respect duties like:
 a duty to undertake the tasks specified by the terms
of the contract.
 a duty to discharge duties with care, and with
skills.
 not to accept any new obligations that are
inconsistent with one’s main duties.

63. CHAPTER FIVE: EMPLOYMENT LAW-
CONTRACT OF EMPLOYMENT
 An employment contract or contract of
employment is a kind of contract used
in labour law to attribute rights and
responsibilities between parties.
 The contract is between an "employee" and
an "employer".

64.  Labour law arose in parallel with the Industrial
Revolution.
 Labor law arose due to the demands for workers for
better conditions.
 Labor law is a product of, and a struggles between
different interests.
 Workers sought better conditions, employers
sought less costly workforce.

65.  On the international level, labour matters are a
concern of international labour
organization (ILO).
 ILO's primary role has been to coordinate
international labour law by issuing Conventions.
 ILO members can voluntarily adopt and ratify the
Conventions.
 Note: Read more on the different
conventions of ILO

66.  Labour law in Rwanda is governed by Law N°
66/2018 of 30/08/2018 regulating labour in
Rwanda.
 While having other laws in form of statutes to
specific services and professions, like; Law N°
017/2020 of 07/10/2020 establishing the
general statute governing public servants.

67.  Fundamental rights under labour law;
 Prohibited work for children
 Prohibition of forced works
 Prohibition of Gender based violence
 Prohibition of discrimination in work matters
 Resignation in case of violence, that is;
 The resignation of a worker who is victim of violence
by his/her supervisor is considered as an unfair
dismissal

68.  Conclusion and execution of the contract of
employment
Conclusion of an employment contract
 A contract of employment shall be concluded basing
upon the worker's and employer's mutual consent
 employee is to put his/her professional activity at
the service and under the authority of the employer
 Employer to pay to the worker the salary agreed
upon.
 Concluding life contracts of employment is not
acceptable

69. Forms of an employment contract
 The contract of employment can be oral or written.
 It can be a fixed term contract or open-ended
contract.
 Fixed-term contract can be renewed as many times
as agreed on by the parties.

70. Probation employment contract
 With this contract, the employer examines the
quality of the worker’s services and output,
 while the worker looks at the conditions of work,
living, pay, health and security at work as well as the
social climate among the institution workers.

71. Suspension of a contract of employment
 Suspension of contract of employment is not
termination but the two parties agree to have part or
whole of their obligations suspended.
Reasons for the suspension of a contract of
employment
1. due to a disease confirmed by a recognized medical
doctor;
2. due to a work accident or a professional disease;
3. during maternity leave of a woman;
4. During the strike or lock-out
5. absence authorized by the employer

72. 6. during the worker’s lay-off;
7. worker's detention for a period not exceeding six (6)
months;
8.during the training of the worker
9. Suspension due to technical reasons;
10. In case of force majeure

73. Termination of the contract of employment
Notice period
 termination of a contract of employment requires
prior notice
1. fifteen (15) days, if the worker has worked for less
than a year;
2. one month, if the worker has worked for a period of
one year or more
 During the period the worker has a right to one
absence per week
 No notice period shall apply to a person on a
probation period

74. Damages
 Damages paid to the unlawfully dismissed worker
cannot go below his/her three months salary
 but they cannot exceed the six (6) - months salary.
 This does preclude the payment of indemnities and
other benefits to which the worker is entitled.

75.  Pre- training for work includes;
 Apprenticeship
 and Internship contracts

76. Obligations of the employer
 The employer has the following main obligations:
1. To give to the worker the agreed work and this,
under those conditions, at the time and place as agreed
2. To ensure the responsibility of implementing the
work contract signed on his/her behalf
3. To supervise the worker and make sure the work is
done in suitable conditions, as far as security, health
and dignity of the worker are concerned

77. 4. To pay the worker the agreed remuneration
regularly and in due time
5. To avoid whatever may hamper the company’s
functioning, its workers and the environment
6. To affiliate workers to the social security scheme
7. To make those workers with dependents enjoy the
rights that are provided for by the law
8. To enter into a performance contract with the
worker based on collective negotiation within the
establishment

78. Obligations of the worker
 The worker has the following principal obligations:
1. To personally carry out his/her work or service in
the time, place and conditions as agreed upon
2. To respect the employer’s or his/her representative’s
orders when given so as to have the work done
3. To abstain from all that might threaten his/her
security or that of his/her companions or third party
4. To respect rules prescribed by the establishment
5. To keep in good conditions tools given to him/her
and give them back to the employer at the time the
work is completed

79.  Kinds of leave;
 Annual leave
 Sick leave
 Maternity leave
 Study leave
 ….
Incidental leaves
 The worker has the right to an incidental leave in
case of good events; Birth, marriage….
 or unfortunate events; Death…
 Note: Read more on incidental leaves
including days given.

80.  Health and safety at workplace
Declaration of occupational risks
 The employer declares to the social security organ
and to the Labour Inspector of his/her jurisdiction,
within four (4) working days occupational risks or
occupational diseases noted
 Where the employer fails, the person who is the
victim or his/her legitimate representatives may
declare within a period not exceeding two (2) years
from the date of the occurrence of the accident or
disease.

81.  employers’ and workers’ professional
organisations;
 Employers’ organisations
 Trade unions
 Note: Read more on the above organisations.
 Labour disputes and hierarchy in settlement
 workers’ delegate should settle it amicably,
 refer the matter to the Labour Inspector.
 Note: When all the steps referred to above have not
gone through, the court may declare the claim
inadmissible.

82. More authorities related to labour law
 Official Gazette n° Special of 19/03/2020
 Nº 001/19.20 of 17/03/2020
 Ministerial Order relating to labour
inspection…………………………………………….......
 N° 002/19.20 of 17/03/2020
 Ministerial Order establishing the list of gross
misconduct………………………………......
 N° 003/19.20 of 17/03/2020
 Ministerial Order relating to employees’
representatives…………………………………......

83.  N° 004/03 of 24/02/2022 Prime Minister’s Order
removing from office a public servant…………………
 Nº 004/19.20 of 17/03/2020
 Ministerial Order determining essential services that
should not be interrupted during strike or lock-
out...........................
 Nº 006/19.20 of 17/03/2020
 Ministerial Order determining modalities for
training of employees………………

84.  Nº 007/19.20 of 17/03/2020 Ministerial Order
determining core elements of a written employment
contract…………...
 N° 008/19.20 of 17/03/2020Ministerial Order
determining the nature of apprenticeship and
internship contracts……....
 N° 009/19.20 of 17/03/2020 Ministerial Order
determining funeral expenses and death allowances
for an employee.

85.  N. 01/MIFOTRA/22 of 30/08/2022 Ministerial
Order on public servants governed by an
employment contract and weekly working hours for
public servants.
 N° 02/MIFOTRA/22 of 30/08/2022 Ministerial
Order on occupational safety, employees’ and
employers’ organizations, child employment,
employment of a foreigner, the child and
circumstantial leave.

86. CHAPTER SIX: COMPANY
FORMATION, MANAGEMENT AND
WINDING UP
 Company formation is the incorporation of a
business.
 Capital and the financing of companies
 Financial capital is internally generated by the
entity or funds provided by lenders or the state.
 Management, administration and regulation
of companies or commercial enterprise is the
overseeing and supervising of business operations.

87.  The five functions of management are;
 Planning.
 Organizing.
 Commanding.
 Coordinating.
 Controlling
 Activity: Research more on each function.

88. Section one: Incorporation of companies
 Under Rwandan law companies are governed by
Law N° 007/2021 of 05/02/2021 governing
companies
 Incorporation
 One or more persons may form a company by
pooling together resources or services for business
purposes.

89.  Essential requirements for incorporation of a company
 A company is incorporated if it fulfils the following
essential requirements:
 1° having a name;
 2° having one or more shareholders;
 3° in the case of a company limited by shares, having
one or more shares;
 4° having one or more directors, at least one of
whom must be ordinarily resident in Rwanda.

90.  The following is submitted to the Registrar General
when applying for incorporation:
 1° incorporation documents signed by every
shareholder
 2° consent signed by each of the persons named as
the company’s directors and secretary in the
incorporation documents;

91.  3° consent in the prescribed form signed by each
member or shareholder
 4° the memorandum of association of the company;
 5° where the company has articles of association, a
copy of the articles of association;

92. Section two: Nature and allotment of
shares
 Characteristics of shares
 1° are personal property;
 2° are not in the nature of immovable property;
 3° can be allotted;
 4° confer to shareholders the rights
 5° are transferable subject to any restrictions or
limitations set out in the company’s incorporation
documents.

93.  Shares confer the following rights:
 1° the right to share in the distribution of the
dividends of the company;
 2° the right to share in the distribution of the surplus
assets of the company upon its liquidation;
 3° the right to vote on shareholders' resolutions
includes:
 a. appointing or removing an auditor or director;

94.  b. approving a major transaction;
 c. adopting or altering articles of association;
 d. dissolving the company;
 e. approving an amalgamation.

95. Section three: Company record keeping
 Company records to be kept:
 The company must keep at its registered office, or at
any other place in Rwanda, each of the following
records:
 1° its incorporation documents;
 2° the share register;

96.  4° the accounting records;
 5° a register of interests of directors;
 6° minutes of all general meetings and resolutions of
shareholders for at least the last ten (10) years;
 7° minutes of all meetings and resolutions of
directors and board committees for at least the last
ten (10) years;
 …….

97.  Fundamental duty of a director
 The fundamental duty of a director, when exercising
powers or performing duties as a director,
 is to act in good faith in a manner in the best
interests of the company,
 and use reasonable diligence in the discharge of the
duties of his or her office.

98.  Company secretary
 Duties of a company secretary
 A company secretary has the following duties:
 1° advise directors on their responsibilities and
powers;
 2° inform directors about all the necessary
regulations or those which

99.  may affect the meetings of shareholders and of the
Board of Directors, reports thereof and submission
of all company documents required by the law to
relevant organs as well as consequences due to the
failure to comply with such regulations;
 3° ensure that minutes of the meetings of
shareholders or the Board of Directors are well
prepared and that registers provided for by the
incorporation documents are accurately kept;

100.  4° ensure that annual balance sheet and other
required documents are submitted to the Registrar
General as provided for by this Law;
 5° ensure that copies of annual balance sheet and
activity reports are transmitted to relevant
destinations in accordance with this Law and to any
person as provided by the Law;

101. Section four: Winding up of a company
 The term ‘winding up’ of a company are proceedings by
which a company is dissolved (i.e. the life of a company is
put to an end). See Law N° 075/2021 of 06/12/2021
relating to insolvency
 During this process, the assets of the company are disposed
of, the debts of the company are paid off, and if any surplus
is left, it is distributed among the members in proportion to
their shareholders.

102. • The winding up of the company is also called the
‘liquidation’ of the company.
• The process of winding up begins in two ways:
1. After the Court passes the order for winding up
 2. A resolution is passed for voluntary winding up.
 Thus, the company is dissolved after completion of the
winding up proceedings and on the dissolution, the
company ceases to exist.
 So, the legal procedure by which the existence of an
incorporated company is brought to an end is known as
winding up

103. General Causes
There are four general causes:
1. A commercial company established for a certain period
of time dissolves at the end of that period in the absence
of a resolution extending its life
 2.A decision taken by the shareholders to dissolve the
company under conditions provided for by the Articles of
Association:
 3. Loss of the object or impossibility of performance
 4. Upon a decision of a court

104.  Liquidation of a company is the process whereby its life is
ended and its property administered for the benefit of its
creditors and members.
 Upon liquidation of a company, a insolvency practitioner is
appointed and he takes control of the company.

105.  The duties of insolvency practitioner include:
a. To realize the property of the company;
b. To Determine the cause of the Company’s failure.
c. Sell the Company’s assets;
d. To pay its debts, and to distribute the surplus (if any)
among the members.
e. To pay dividends to shareholders if any
f. To report to creditors
Note that, after the whole process a company is
deregistered unless otherwise.

106.  Also see:
 LAW N° 0082021 OF 16/02/2021 GOVERNING
PARTNERSHIPS

107. ASSIGNMENT
Legally analyse the role of law in
corporate governance.

108.  End.