Commercial companies are governed in Burkina Faso by the Uniform Act on the Law of Commercial Companies and Economic Interest Groups (AUSCGIE).

According to this Act, the following companies are distinguished:

• Limited Liability Company (SARL);
• Public Limited Company (SA);
• Simplified Joint Stock Company (SAS);
• General Partnership (SNC);
• Limited Partnership (SCS);
• Joint Venture Company (SP);
• Economic Interest Group (GIE).

Among these commercial companies, the most common are:

• Limited Liability Company (SARL) which is a company in which the partners are only liable for corporate debts up to the amount of their contributions and whose rights are represented by shares (article 309 of the AUSCGIE);
• The Public Limited Company (SA) which is a company in which the shareholders are only liable for corporate debts up to the amount of their contributions and whose shareholders’ rights are represented by shares (Article 385 of the AUSCGIE);
• The Simplified Joint Stock Company (SAS) which is a company in which the partners are only liable for corporate debts up to the amount of their contributions and whose rights are represented by shares (Article 853-1 of the AUSCGIE).

The main structural differences between these companies lie in their share capital and their management method.

1.1. Share capital

Article 311 of the AUSCGIE sets the minimum capital of the SARL at one million (1,000,000) CFA francs, unless national provisions provide otherwise. In Burkina Faso, under the terms of Article 3 of Decree No. 2016-314/PRES/PM/ MJDHPC/MINEFID/MCIA amending Decree No. 2014-462/PRES of 26 May 2014 establishing the national provisions applicable to the form of statutes and share capital for limited liability companies, the minimum amount of the share capital of the SARL is set at five thousand (5,000) CFA francs. This share capital is divided into shares.

The share capital of the Public Limited Company is a minimum of ten million (10,000,000) CFA francs. It is divided into shares whose nominal amount is freely set by the statutes. (Article 387 of the AUSCGIE).

With regard to the SAS, no minimum share capital is required. The determination of the share capital as well as the nominal value of the shares are freely set by the statutes. (Article 853-5 of the AUSCGIE).

1.2. The management method

The SARL is managed by one or more managers who may be one or more natural persons associated or not.

The SA is managed according to the wishes of the shareholders who can choose between:

• An SA with a board of directors;
• An SA with a general director;

When the number of shareholders is equal to or less than three (03), the SA may be managed by a general director without being obliged to set up a board of directors. (Article 494 of the AUSCGIE).

The Simplified Joint Stock Company is characterized by flexibility in its management. The statutes freely define the management bodies (Article 853-1 of the AUSCGIE).

The transparency of beneficial owners is a priority in the fight against corruption, money laundering and the financing of terrorism. According to decree no. 2022-0234/PRES-TRANS/PM/MATDS/MJDHRI/MEFP on the obligation to declare and keep a register of beneficial owners of legal entities and legal arrangements of 31/05/2022, companies must now keep registers of beneficial owners, i.e. natural persons who directly or indirectly own or control a company incorporated in Burkina Faso.

This measure aims to strengthen transparency and prevent illicit activities.

Under Law no. 017-2024/ALT of 18 July 2024 on local content in the mining sector in Burkina Faso, companies operating in the country are required to give preference to local suppliers in their supply chains and to invest in the development of local skills.

3.1. The SARL

In the SARL, the key people involved in management are:

• The partners: these may be natural persons or legal entities. They are the owners of the company and have the right to vote on collective decisions and the power to appoint or dismiss the company manager (articles 321 and 326 of the AUSCGIE). The shareholders form the general meeting, which is the SARL’s main decision-making body;
• The Executive Chairman: Where his powers have not been defined in advance in the Articles of Association, the managing partner may carry out all acts of management in the interests of the company. He executes the collective decisions of the partners and reports to them at the general meetings;
• The statutory auditor: In principle, the appointment of a statutory auditor is optional for SARLs. However, SARLs ‘that meet two of the following conditions at the end of the financial year:
  • Balance sheet total in excess of 125,000,000 CFA francs;
  • Annual turnover in excess of 250,000,000 CFA francs;
  • They must appoint at least one statutory auditor” (article 376 of the AUSCGIE).

The auditor ensures that the annual financial statements are true and fair and certifies the annual financial statements. He informs the partners of any irregularities noted in the financial management.

• The SA

In the Articles of Association, the shareholders of a public limited company determine how the company is to be managed, which may be a public limited company with a Board of Directors or a public limited company with a Managing Director.

3.2.1. Public limited companies with a Board of Directors

A public limited company with a Board of Directors is managed either by a Chairman and Chief Executive Officer, or by a Chairman of the Board of Directors and a Chief Executive Officer.

3.2.1.1. Key persons involved in the management of a public limited company with a Board of Directors headed by a Chairman and Chief Executive Officer

• The shareholders who make up the general meeting: the shareholders are the owners of the public limited company. They are the contributors of the company’s share capital. They exercise voting rights and are entitled to share in the profits;
• The directors form the Board of Directors. The Board of Directors is made up of a minimum of three and a maximum of twelve members, who may or may not be shareholders (article 416 of the AUSCGIE). The Board of Directors determines the company’s policy and oversees its implementation. It appoints and dismisses the Chairman and Chief Executive Officer of the SA;
• The Chairman and Chief Executive Officer is appointed from among the members of the Board of Directors. He chairs the Board of Directors and General Meetings. He manages the company and represents it in dealings with third parties;
• The Deputy Chief Executive Officer, who is responsible for assisting the Chairman and Chief Executive Officer on the latter’s recommendation and having received a mandate from the Board of Directors.

3.2.1.2. Key persons involved in the management of a public limited company with a Board of Directors headed by a Chairman of the Board of Directors

• The Chairman of the Board of Directors must be a natural person appointed from among the members of the Board of Directors. He chairs meetings of the Board of Directors and General Meetings. Together with the Board of Directors, he oversees the management of the Chief Executive Officer;
• The Managing Director, who may or may not be a member of the Board of Directors. He may have deputies and is appointed on the recommendation of the Chairman of the Board of Directors;
• The Statutory Auditor, who is responsible for auditing the accounts.

3.2.2. Public limited company with a managing director

• The shareholders are the owners of the company and have the option of not constituting a Board of Directors when their number is equal to or less than three (03). They form the general meeting of shareholders;
• The Managing Director is appointed either in the Articles of Association or during the life of the company by an AGM. He may or may not be a shareholder (article 495 of the AUSCGIE). The managing director is responsible for the administration and management of the company he represents (article 498 of the AUSCGIE);
• The deputy managing director is a natural person who is appointed by the general meeting of shareholders on the proposal of the managing director. The General Meeting of shareholders determines the powers delegated to him (article 512 of the AUSCGIE).

3.3. The SAS

• The shareholders are the owners of the simplified joint stock company and form the general meeting which takes decisions and appoints the company’s officers;
• The Chairman is a natural or legal person who represents and administers the SAS.

The key people involved in the management of other types of commercial companies (SNC, SCS) are the manager, who implements the collective decisions of the partners, and the partners themselves, who form the partners’ general meetings.

4.1. The SARL

• The manager is the person responsible for the day-to-day management of the company and is accountable to the partners and to third parties.
• The partners are the economic owners of the company and, as such, take important decisions at a general meeting, such as approving the accounts, amending the Articles of Association and appointing the manager.

4.2. The SA

• The Board of Directors is the body that holds the power of management and decides on the direction of the company’s activities and their implementation. Its decisions bind the company with respect to third parties. It is the Board of Directors that appoints the Chairman and Chief Executive Officer or the Chairman of the Board of Directors, depending on whether the company is a public limited company with a Board of Directors managed by a Chairman and Chief Executive Officer, or by a Chairman of the Board of Directors and a Chief Executive Officer.
• The Chief Executive Officer is responsible for day-to-day management, under the supervision of the Board of Directors or the Chairman of the Board of Directors.
• Shareholders are the economic owners of the company. They take part in major decisions at general meetings, approve accounts, appoint directors and can make changes to the articles of association.

Decision-making and approvals

Decisions or approvals by economic owners (shareholders or associates) are generally taken at General Meetings (AG).

According to the AUSCGIE, these meetings may be held in such a way as to facilitate the participation of all shareholders or members, even if they are far away. Decisions may also be taken in writing through the minutes of general meetings. A distinction is made between

• The Ordinary General Meeting (OGM): this is held at least once a year within six months of the end of the financial year (article 548 of the AUSCGIE) to approve the accounts, appoint directors or managers, and decide on the distribution of profits (article 546 of the AUSCGIE);
• The Extraordinary General Meeting (EGM) is convened for exceptional decisions, in particular amendments to the Articles of Association, capital increases or mergers (article 551 of the AUSCGIE);
• The Special General Meeting (AS): According to article 555 of the AUSCGIE, the AS brings together holders of shares of a given class. The special meeting approves or disapproves the decisions of general meetings when these decisions affect the rights of its members.

The OHADA Uniform Acts generally govern various areas of business law, including corporate governance.

All commercial companies having their registered office in Burkina Faso or in a State party to the Uniform Act relating to the Law on Commercial Companies and Economic Interest Groupings (AUSCGIE) must comply with the mandatory rules of AUSCGIE.

The constitution and allocation of responsibilities within the management bodies vary according to the type of company.

6.1. The SARL

• The manager(s): is/are responsible for the day-to-day management of the company. There may be several managers, depending on the company’s articles of association;
• The General Meeting of shareholders is the supreme decision-making body for taking important decisions.

The SA

• Board of Directors: This is the SA’s main management body. It is made up of a minimum of 3 directors and a maximum of 12, elected by the Ordinary General Meeting (OGM). They may be natural persons or legal entities, the latter of which must appoint a permanent representative who is a natural person;
• Chief Executive Officer: is appointed by the Board of Directors and is responsible for the day-to-day management of the company;
• Statutory Auditor: responsible for auditing the accounts and ensuring financial compliance.

Allocation of responsibility for day-to-day management and supervision

The day-to-day management of the company is the responsibility of the Managing Director (SA) or the General Manager (SARL, SNC, SCS) or the Chairman in the case of a SAS. These individuals are responsible for implementing the decisions of the General Meetings and for managing the company.

Control and supervision are exercised by the Board of Directors (SA) or the General Meeting of shareholders (SARL, SNC, SCS) or shareholders (SA). These bodies supervise day-to-day management, approve the annual accounts and take major strategic decisions.

Multiple management bodies

The SA may have several management bodies, in particular a Board of Directors with a Chairman and Chief Executive Officer or a Board of Directors with a Chairman of the Board of Directors.

Other types of company generally have a single main management body (the manager or the partners).

These AUSCGIE legal requirements allow for balanced and effective governance that ensures efficient management and control of the company.

Appointment of members of the board of directors of a public limited company

The first directors are appointed by the articles of association or by the constituent general meeting (article 419 of the AUSCGIE).

Directors appointed during the life of the company are appointed by the Ordinary General Meeting of shareholders (article 419 paragraph 2 of the AUSCGIE).

The term of office of directors is set by the articles of association, but may not exceed six years in the case of appointment during the life of the company and two years in the case of appointment by the articles of association or the constituent general meeting (article 420 of the AUSCGIE).

Removal of members of the Board of Directors of a public limited company

Directors may be removed from office at any time by the AGM (article 433 of the AUSCGIE).

The Chairman of the Board of Directors may be dismissed by the Board of Directors itself, in accordance with article 484 of the AUSCGIE.

Influence of the company’s owners (shareholders)

The economic owners (shareholders or partners) exercise influence over the appointment and dismissal of members of the Board of Directors through the Ordinary General Meeting (AGO), which is a decision-making body for the appointment and dismissal of directors. Decisions are taken in the manner prescribed by the AUSCGIE.

Shareholders can remove directors from office at any time at an AGM, thereby enabling them to monitor the composition of the Board of Directors and ensure that the company is being properly managed.

Composition of the board of directors of a public limited company

The Board of Directors must be composed of between three (03) and twelve (12) members, who may or may not be shareholders (article 416 of the AUSCGIE). They are called directors.

Directors may be natural persons or legal entities. If a legal entity is appointed, it must appoint a permanent representative in accordance with article 421 of the AUSCGIE.

The articles of association may require each director to own a certain number of shares in the company.

Requirements and qualifications of board members

The AUSCGIE does not contain any specific qualifications or requirements regarding the independence of directors. Nor are there any specific diversity quotas (gender, age, origin, etc.).

Directors may be re-elected at the end of their term of office unless otherwise stipulated in the Articles of Association (article 424 of the AUSCGIE).

The company’s articles of association may provide for succession mechanisms to ensure continuity in the administration of the company.

In the event of a director’s vacancy (death, resignation), the Board of Directors may appoint a new director, subject to ratification by the next General Meeting (article 429 paragraph 6 of the AUSCGIE).

The Board of Directors plays an essential role in defining and modifying the company’s strategy.

The Board of Directors is responsible for defining and implementing the company’s main policies. It carries out the controls and verifications it deems appropriate in accordance with article 435 of the AUSCGIE.

The Board of Directors has the power to review or adjust the company’s strategy.

To this end, major changes, such as mergers, acquisitions or diversifications, must be approved by the Board of Directors. These decisions are often taken at special meetings or general meetings.

The remuneration of board members depends on the legal framework and internal rules of the company or organization concerned.

Article 431 of the AUSCGIE provides that: “The ordinary general meeting may allocate to directors, in remuneration for their activities, as a function allowance, a fixed annual sum which it determines sovereignly.

Directors who are shareholders may take part in the vote of the meeting and their shares are taken into account for the calculation of the quorum and the majority.

Unless otherwise provided in the statutes, the board of directors freely distributes the functional allowances among its members.

The board of directors may allocate to directors who are members of the committees provided for in Article 437 below a share greater than that of the other directors”.

It follows from this provision that the director, in his capacity as a member of the Board of Directors, may receive a function allowance. The latter is a remuneration received in return for his activities during the exercise of his mandate, within a board of directors. The function allowance was formerly called “attendance fees”. It is sovereignly fixed during the ordinary general meeting.

They may also be bound to the company by employment contracts.

Articles 740 and 741 of the AUSCGIE provide respectively that: “The directors or the general director, as the case may be, are individually or jointly liable to the company or to third parties, either for breaches of the legislative or regulatory provisions applicable to public limited companies, or for violations of the provisions of the statutes, or for faults committed in their management.

If several administrators have cooperated in the same facts, the competent jurisdiction determines the contributory share of each in the compensation of the damage”.

” In addition to the action for compensation for the damage suffered personally, the shareholders may, either individually or as a group, bring a social action for liability against the directors. ”

It is apparent from these provisions that board members have fiduciary duties and special responsibilities to several stakeholders, primarily the company itself, its shareholders and, in some cases, its employees, creditors and other stakeholders.

In the event of failure to comply with these obligations, they may be sued for compensation for the damage caused or even for social liability.

In addition, Article 891 of the AUSCGIE provides for criminal sanctions against directors in these terms: “The manager of the limited liability company, the directors, the chairman and CEO, the CEO, the deputy CEO, the chairman of the simplified joint-stock company, the general administrator or the deputy general administrator who, in bad faith, make use of the company’s assets or credit, which they know to be contrary to its interests, for personal, material or moral purposes, or to favor another legal person in which they are interested, directly or indirectly, shall be liable to criminal sanctions.”

Yes, indemnities and insurance to cover the personal liability of board members are permitted in many countries, including the OHADA area, of which Burkina Faso is a member. These protections are intended to ensure that directors are not personally ruined for misconduct committed in the exercise of their functions, except in cases of fraud or serious misconduct. But they do not cover fraudulent or illegal acts and this must be provided in the company’s statutes.

Article 419 of the AUSCGIE provides that: “The first directors are appointed by the statutes or, where applicable, by the constitutive general meeting.

During the life of the company, the directors are appointed by the ordinary general meeting.

However, in the event of a merger, the extraordinary general meeting may proceed to the appointment of new directors.

Any appointment made in violation of the provisions of this article is null and void”.

It follows from this provision that the members of the board of directors are generally supervised by the general meeting of shareholders of the company which appoints them.

The evaluation criteria for members of the board of directors are not expressly mentioned in the uniform act, which means that these evaluation criteria are left to the discretion of each company.

Articles 458 and 459-1 of the AUSCGIE provide respectively that: “The deliberations of the board of directors are recorded in minutes drawn up in a special register kept at the registered office, numbered and initialed by the judge of the competent jurisdiction.

However, the minutes may be drawn up on loose sheets numbered without discontinuity, initialled under the conditions provided for in the preceding paragraph and bearing the seal of the authority which initialled them.

As soon as a sheet has been completed, even partially, it must be attached to those previously used.

Any addition, deletion, substitution or inversion of sheets is prohibited.

The minutes shall state the date and place of the board meeting and indicate the names of the directors present, represented or absent but not represented.

They also record the presence or absence of persons summoned to the meeting of the board of directors under a legal provision, and the presence of any other person who attended all or part of the meeting.

In the event of participation in the board of directors by videoconference or other means of telecommunication, mention shall be made in the minutes of any technical incidents which may have occurred during the meeting and which have disrupted its progress”.

“The chairman of the board of directors ensures that the minutes of the board of directors are delivered to the directors in person or sent to them by letter to the bearer against receipt, registered letter with acknowledgement of receipt, fax or e-mail as soon as possible and at the latest when the next board of directors meeting is convened.”

It follows from this provision that the board of directors is required to engage actively in dialogue with the company’s shareholders. The board of directors submits reports on which the general meeting may make observations. It adopts the financial statements which are approved by the general meeting.

The board of directors reports on its deliberations by means of minutes drawn up in a special register kept at the head office. social of the company which he is required to communicate to the members of the board of directors as soon as possible and at the latest when the next board of directors meeting is convened.

In Burkina Faso, the legislation on capital structures is mainly governed by the Organization for the Harmonization of Business Law in Africa (OHADA), of which the country is a member. OHADA corporate law allows companies to issue different classes of shares with varying rights, such as ordinary shares, preferred shares or shares with multiple voting rights. Thus, multiple-class capital structures are permitted in Burkina Faso.

However, in practice, these structures remain relatively rare in the country. The majority of Burkinabe companies, particularly small and medium-sized enterprises (SMEs), adopt simpler capital structures, with a single class of shares. Multi-class structures are generally used by larger companies or those seeking to attract investors while retaining decision-making control.

Article 269 of the AUSCGIE provides that: “Commercial companies are required to file with the trade and personal property register of the State party of the registered office, within one month following their approval by the competent body, the summary financial statements, namely the balance sheet, the income statement, the financial table of resources and uses and the attached statement for the past financial year.

In the event of refusal to approve these documents, a copy of the decision of the competent body shall be filed within the same period.

The above-mentioned financial statements may be filed electronically with the registry of the competent court or competent body in the State Party.

At the request of any interested party, the competent court may, ruling promptly, order, subject to a penalty payment, the manager of any commercial company to file the documents listed in the first paragraph, provided that the applicant’s amicable request to the company has remained unsuccessful for thirty (30) days”.

Article 427 “The appointment of administrators must be published in the trade and personal property register.

The appointment of the permanent representative is subject to the same publicity formalities as if he were an administrator in his own name”.

It follows from these provisions that an entity must publish information financial including financial statements, management reports, audit and not financial such as major changes in the management of the company. Disclosure is made through statements and publications.

Article 516 of the AUSCGIE provides that: “The shareholders’ meeting is convened by the board of directors or by the general administrator, as the case may be.

Failing this, it may be summoned:

1°) by the auditor, after the latter has unsuccessfully requested the convening of the board of directors or the general administrator, as the case may be, by letter to the bearer against receipt or by registered letter with acknowledgement of receipt. When the auditor proceeds with this convening, he sets the agenda and may, for compelling reasons, choose a meeting place other than that possibly provided for in the statutes. He sets out the reasons for the convening in a report read to the meeting;

2°) by a representative appointed by the competent court, ruling promptly, at the request either of any interested party in the event of an emergency, or of one or more shareholders representing at least one tenth of the share capital if it is a general meeting or one tenth of the shares of the category concerned if it is a special meeting;

3°) by the liquidator”.

From this provision, it follows that one or more shareholders representing at least one tenth of the capital may convene an extraordinary meeting. However, this convening is done by a procedure at short notice which refers the matter to the competent court. The latter rules on the request by appointing a representative to convene said meeting.

Investors have several rights and remedies to take enforcement action against an entity or its directors for mismanagement, abuse or breach of governance rules. These rights vary by jurisdiction and corporate structure, but the main mechanisms are:

• Voting and revocation at the general meeting;
• Civil and criminal liability actions;
• Reporting to regulators and requesting audit;
• Legal remedies for dissolution or appointment of a provisional administrator.

Shareholder activism refers to the determination shown by shareholders to influence the overall management of a company. In fact, it seems useful to note that this is a common practice in company law, notably through a preferential right held by certain shareholders.

This influence is manifested in a variety of ways, but is essentially anchored in article 778-1 of the AUSCGIE.  This article states that “When a company is incorporated or during its existence, preferred shares may be created, with or without voting rights, and with special rights of all kinds. (…)”.

Under OHADA law, there are three types of shareholder meeting. These are the Ordinary General Meeting, the Extraordinary General Meeting and the Special General Meeting.

In principle, the Annual General Meeting must be held each year within six months of the end of the financial year, i.e. December 31. If shareholders are unable to meet this deadline, the Ordinary General Meeting can only be held if an extension has been granted by court order.

The legislator has made no provision for penalties in the event of non-compliance with this obligation. However, there is a tendency to annul deliberations taken at such meetings convened out of time without the authorization of the judge.

With regard to the information presented to the general meeting, article 347 of the AUSCGIE constitutes the normative seat. It stipulates that “Ordinary collective decisions are those whose purpose is to approve the summary financial statements for the year just ended, to authorize the managing partners to carry out transactions subject to the prior approval of the shareholders, to appoint and replace the managing partners and, where applicable, the statutory auditor, to approve agreements entered into between the company and one of its managing partners or shareholders and, more generally, to rule on all matters that do not entail amendment of the bylaws”.

As for the AGE, it is empowered under article 357 of the AUSCGIE to decide on amendments to the Articles of Association.

With regard to the AGE, it essentially approves or disapproves, according to article 555 of the AUSCGIE in the following terms: “the decisions of the general meeting when they modify the rights of its members”.

In principle, according to article 125 of the AUSCGIE: “unless otherwise provided for in this uniform act, all partners have the right to take part in collective decisions”. This provision therefore confers exclusive voting rights on associates.

There are, however, organizations that operate as financial institutions, but whose governing provisions do not come under banking regulations. They are known as management and intermediary companies, and are licensed by the West African Economic and Monetary Union.

Other stakeholders don’t seem to play much of a role in the running or governance of a company. However, it should be noted that their actions could have an impact on the very existence of the company.

These interests are taken into account as part of the company’s overall operations. Indeed, the company must respect its commitments to its stakeholders. This should be reflected in the decisions of the company’s governing body, failing which the company could be held liable.

Private companies attach crucial importance to environmental, social and governance criteria. Very often, they are taken into account in the internal policies of their companies.

In essence, they refer from the outset to the imperative of environmental protection in the territorial area in which investors intend to implement their investment projects.

Likewise, the promotion and protection of human rights in the area in question are also taken into account, corroborating the company’s internal ethic of good governance and contributing to the sustainable development of the local population.

Thanks to the internationalization of investment law, companies are subject to two main legal obligations with regard to environmental, social and governance criteria.

Firstly, there are national and international contractual obligations. Secondly, there are national and international normative obligations.

Investors have a wide range of responsibilities in terms of management, information and other aspects of corporate governance. These include, in particular, the obligation to declare beneficial owners, as set out in Decree N°2022-0234/ PRES/TRANS/PM/MATDS/MJDHRI/MEFP on the obligation to declare and keep a register of beneficial owners of legal entities and structures, dated May 31, 2022.

In addition, investors are required to set up a company under national law, with a share of the capital allocated to national investors set by regulation, for subcontracting in the mining sector. In addition to this crucial responsibility, other related obligations are set out in Decree No. 2024-0878/PRES promulgating Law No. 017-2024 of July 18, 2024 on local content in the mining sector in Burkina Faso.

In short, it is not insignificant to specify the responsibilities of investors in the fight against money laundering and the financing of terrorism, particularly with regard to financial information.

The outlook in this area is based on the investment facilities offered by the State through major legislative texts. These include, in particular, Law N°016-2024/ALT on the Mining Code of Burkina Faso and Law N°042-2024/ALT on the Finance Law for the State Budget, Fiscal Year 2025.