Corporate Governance in Cameroon Under OHADA: What Every Investor Needs to Know
Over my years advising both local and foreign investors across the OHADA zone, one thing has become clear: the difference between a well-run company and a dysfunctional one rarely comes down to business strategy alone. More often, it comes down to corporate governance.
The Uniform Act on Commercial Companies and Economic Interest is the backbone of corporate governance in Cameroon as well as across all 17 OHADA member states. Understanding it is not optional for any serious investor or business leader operating in this region.
What follows is a practical breakdown of the rules that matter most — the ones that shape how companies are structured, how decisions get made, and where liability falls when things go wrong.
I. When a Manager Acts Beyond Their Authority — and Why It Still Binds the Company | Corporate Governance in Cameroon
One of the most consequential features of OHADA company law is its handling of the ultra vires problem: what happens when a company representative enters into a contract or makes a commitment that falls outside the company’s stated purpose?
Under Articles 122, 436, 465 and 498 of the Uniform Act on Commercial Companies and Economic Interest Groups, the answer is unambiguous — the company is still bound. Even if the act clearly exceeds the articles of association, third parties dealing in good faith are protected. The company cannot simply point to its published articles and claim ignorance was impossible. That argument has been explicitly rejected by the legislature.
There is only one narrow exception: if the company can affirmatively demonstrate that the other party knew the act was improper — not just that they could have found out, but that they actually knew — the company may escape liability.
What this means in practice: Companies need far more than published articles to manage unauthorized conduct. Internal authorisation matrices, approval thresholds, and escalation protocols become essential safeguards. At the same time, managers who exceed their mandate face serious personal liability exposure — a reality that is often underestimated until a dispute arises.
II. The Architecture of Management: Different Companies, Different Rules| Corporate Governance in Cameroon
OHADA does not impose a single management model on all companies. The structure required — and permitted — depends on the type of entity. Here is how the Act approaches each form:
1. General Partnership
Management can be entrusted to one or more persons, whether or not they are partners. Where the articles say nothing about this, every partner is presumed to have the authority to manage1. This default rule can create unexpected complexity, which is why clear drafting of the articles matters enormously.
2. Limited Partnership
General partners manage the company by default. The articles may designate specific managers, but limited partners are excluded from management — a restriction that carries serious legal consequences if breached2.
3. Private Limited Company (LTD/SARL)
The Private Limited Company (SARL) under corporate governance in Cameroon is managed by one or more persons, who may be members or outsiders. They are appointed either through the articles themselves or by a decision of the majority of members holding more than half of the capital3. This structure is commonly chosen by small to medium enterprises for its administrative simplicity.
4. Simplified Joint Stock Company (SAS)
The SAS is the most flexible structure available under OHADA. Its management model is largely contractual. The articles can define roles, decision-making processes, and governance mechanisms with considerable freedom4. Sophisticated investors often favour this form precisely because of that flexibility.
5. Public Limited Company (PLC/SA)
The Public limited company under corporate governance in Cameroon presents a choice between two distinct governance models: a Board of Directors structure or a Managing Director structure. This is a foundational decision that must be made at incorporation and embedded in the articles5. Changing it later requires a formal modification of the articles — a process that is neither quick nor inexpensive.
5.1 The Public Limited Company with a Board of Directors: How Power Is Distributed
For larger companies or those expecting multiple investors, the Board-led Public Limited Company is the more common choice6. The board consists of between 3 and 12 members — a ceiling that can stretch to 24 following a merger7.
Here is what the governance calendar looks like in practice:
Initial directors are named in the articles of association. All subsequent appointments go through the Ordinary General Meeting. Initial directors serve terms capped at 2 years; all others may serve up to 6 years.
The Board appoints a Chief Executive Officer from among its own members. This person chairs both board meetings and Ordinary General Meetings (Article 462). The board of directors shall appoint the chairman of the board of directors(Article 477)
The Board shall appoint a General Manager to handle day-to-day operations and represent the company externally (Article 485).
Both the CEO and the Chairman of the board of directors serve entirely at the Board’s discretion and can be removed at any time, with or without cause (Articles 469, 484). As for the general manager, he may be removed at any time by the board of directors, but if the removal is decided without just cause, he may be awarded damages8.
That last point deserves emphasis. The absence of cause-based removal protections for senior executives is a feature, not an oversight — it keeps ultimate authority firmly with the board and, by extension, the shareholders it represents.
5.2. Public Limited Company with a Managing Director: A Learner Option for Corporate Governance in Cameroon
Not every Public Limited Company needs the full architecture of a board. Where there are fewer than three shareholders, the law offers a streamlined alternative: the Managing Director model9.
In this structure, a single Managing Director holds broad authority — administration, management, and external representation all fall within their remit (Article 498). Their appointment follows a similar pattern to the board model: initially through the articles, and thereafter by the Ordinary General Meeting. Mandates run for 6 years (or just 2 if appointed at incorporation) and are renewable (Articles 495 and 496).
But the law imposes meaningful checks on this concentrated authority:
Certain contracts between the Managing Director and the company, particularly those that could represent a conflict of interest, require prior Ordinary General Meeting approval before they can take effect (Article 502).
The Managing Director, along with close relatives, is prohibited from obtaining loans, credit lines, or overdrafts from the company. This restriction is categorical and non-waivable (Article 507).
Despite the authority they wield, the Managing Director can be dismissed by the Ordinary General Meeting at any time; he may seek damages if the dismissal was without cause (Article 509).
The Managing Director model works well for closely held companies where ownership and management overlap. It comes apart when governance is weak — which is exactly why the statutory protections around conflicts of interest and related-party transactions exist.
Final Thoughts: The Law Is Only As Good As Its Implementation
The OHADA framework is genuinely well-designed. It provides predictability, clear lines of authority, and protection for both investors and third parties. But the gap between what the law says and what actually happens inside a company is where problems breed.
Selecting the wrong structure at the outset, drafting ambiguous articles, failing to maintain proper governance records, or misunderstanding the rules on liability, these are not minor oversights. They can invalidate decisions, trigger personal liability, and unravel corporate structures that took years to build.
We work with companies at every stage, from initial structuring and registration through ongoing compliance and governance advisory. If you are establishing a presence in Cameroon or elsewhere in the OHADA zone, or if you are dealing with a governance issue in an existing entity, we are ready and available to assist.
Expert legal guidance at the start is almost always cheaper than expert legal representation after something has gone wrong.
Article by B. Amabo Fuh, ESQ
This article on Corporate Governance in Cameroon should not be taken as financial or legal advice; it is intended as a general guide for informational purposes only. Specialist advice should be sought
Contact us today for a confidential consultation on your business-related matters in Cameroon
Note: This information is for educational purposes only and should not be construed as legal advice. Consult our specialists or a specialist for advice specific to your situation.
About the Author
B Amabo Fuh, ESQ, is a Cameroonian legal practitioner specialised in business law, investment structuring, and regulatory compliance. He advises both local and international clients on building secure and profitable ventures in Cameroon.
Table of Contents
- Article 276 of the Uniform Act on Commercial Companies and Economic Interest Groups ↩︎
- Article 298 of the Uniform Act on Commercial Companies and Economic Interest Groups ↩︎
- Article 323 of the Uniform Act on Commercial Companies and Economic Interest Groups ↩︎
- Article 853-7 of the Uniform Act on Commercial Companies and Economic Interest Groups ↩︎
- Article 414 of the Uniform Act on Commercial Companies and Economic Interest Groups ↩︎
- Article 415 of the Uniform Act on Commercial Companies and Economic Interest Groups ↩︎
- Article 416&418 of the Uniform Act on Commercial Companies and Economic Interest Groups ↩︎
- Article 492 of the Uniform Act on Commercial Companies and Economic Interest Groups ↩︎
- Article 494 of the Uniform Act on Commercial Companies and Economic Interest Groups ↩︎