Problematic of liquidation and dissolution of companies under rwandan law: case study of Rwandatel

I.2.2.2.3.Companies limited by guarantee

They are companies private companies and are similar to private companies limited by shares, but they do not have a share capital. It is widely used for charities, clubs, community enterprises and some cooperatives. The vast majority of such companies are non-profit but it is not a must. A company limited by guarantee is registered in the registrar and has articles of association, and all requirements of a company. There are no shares no shareholders as well, but has members, who meet and control the company through general meetings. Directors are called a management committee. A company limited by guarantee confers limited liability like a company limited by shares does.

I.2.2.2.4.Unlimited companies

The sole trader's business of a partnership is sometimes referred as an unlimited company but they are not really companies. It may be registered as a company in the registrar but only when the members accept complete liabilities of company's debts. When the company has a debt and that money is needed to reimburse it. A call is made to each of the shareholders to contribute a fixed amount on each share held by them. Its advantage is that it is not required to register annually. It is suitable for a business where the risk of insolvency is lower compared to other types of companies.

I.2.2.2.5.Community interest companies

They are only registered for objects which are for the good of the community. This type of company is mostly found in United Kingdom where it was introduced in 2005^27(*). And it is provided in the companies' Act 2004. Apart from having objectives that are beneficial to the community, the CICs have two main features which make a distinction between them and normal companies are the assets lock and the Community statement report provisions. There must be permanently retained within the CIC, and used solely for community benefit, or transferred to another organization which itself has an asset lock, such as charity, or another CIC. They can be limited by shares or by guarantee.

I.2.2.2.6.Charitable Incorporated Organizations

This is a new type of company and it is mostly found in England and Wales. Its registration dates from December 10, 2012. It was established by the Charities Act 2006.They have limited liability and they are registered as company limited by guarantee and as charity^28(*). It is advantageous because it is easy to incorporate and run because it is registered with just one body and only has to submit one annual return and one set of accounts per year.

All the above mentioned types of companies can depend on the countries and operates according to the countries' company law. Each of them can make a conversion from a type to another. As an example, a private company limited by shares can be converted into a public company and vice versa or to an unlimited company^29(*)

Existing companies can convert themselves into CICs but such conversions require the approval of the CIC Regulator. In order to convert a company into a CIC, it requires the permission of a charity commission for changing the name.

* ²⁷ Company Law Solutions Limited, «Types of Companies», Companylawclub.co.uk/topics/types_of_companies.shtml/, last accessed 6/5/2014

* ²⁸ Company Law solutions, Op.cit.30.

* ²⁹ Company Law Solutions Limited, «Types of Companies», Companylawclub.co.uk/topics/types_of_companies.shtml/, last accessed 6/5/2014