THE
ENTREPRENEUR’S
GUIDE

Révision: 04/09/2013

Printing : 27/11/13

THE
ENTREPRENEUR’SGUIDEI. SELECTION OF THE LEGAL ENTITY TYPE
Senegal has, since 18 September 1995, been member of the Organization for the Harmonizationof Business Law in Africa (OHADA), which now groups the 14 countries of the CFA zone inaddition to Comoros and Guinea Conakry.
OHADA mainly seeks, on the one hand, to harmonize the economic law in the member states andremedy the legal and judicial insecurity, on the other.
The legal status of a company determines, to a large extent, its life, and even influences the life ofthe associates.
It is therefore important to opt for a status that corresponds most to:ooPartners’ motivations and objectives;
The country’s socio-economic and legal context.

The legal entity types in force in Senegal are governed by the OHADA uniform act relative to therights of trading companies and Economic Interest Groups. These entity types are:ooooooSingle proprietorship;
Economic Interest Groups (GIE);
Limited Companies (SARL)Business corporations (SA)Co-partnership (SNC)
Limited partnership (SCS)

Each corporate form has its administrative, tax, social and financial characteristics. The
comparative chart below presents the different corporate types.

GUIDE OF THE ENTREPRENEUR

2COMPARATIVE CHART FOR LEGAL ENTITY TYPE SELECTION
Legal Status

Single proprietorship

Limited Companies (SARL)

Economic InterestGroups (GIE)Business corporation (SA)Minimum number ofpartners

01

01

01

02

Minimum startup
capital01,000,000 CFA francs minimum to bepaid up in full at incorporation

10,000,000 CFA francs minimum; ¼ of thecapital to be paid up at incorporation, thebalance within three(3) years

0Credibility with thirdparties

Very low

Important

Very important

Low

Partner’s liability

Unlimited (extended to theentrepreneur’s personalproperties)

Limited to the contributions

Limited to the contributions

Unlimited and joint andseveral (unlessotherwise agreed withthird parties)

Eligibility to CI orEFE
Registered auditors

YES

YES

YES

YES

None

mandatory

None

Management

Entrepreneur

Not mandatory*
Manager (partner or not) appointed
by the associates

General Manager or Managing Director

ChairmanTaxation on profits

Unique Global Contribution tothe tune of 50 millions of CA
for services and traded goods

Corporate Income Tax (IS)
30% of the net profit

Corporate Income Tax (IS)
30% of the net profit

Between 500,000 and 1,000,000 CFAfrancs (depending on the turnover)

Between 500,000 and 1,000,000 CFA francs(depending on the turnover)IS (corporate income tax) on
optionMinimum flat tax(IMF)0
IMF : minimum tax payable incase of loss-making results

Unique Global
Contribution to the tuneof 50 millions of CA for
services and tradedgoods(or IS on option)0(*) If the capital exceeds 10,000,000 CFAF or if the turnover exceeds 250 million CFA, or in case the staff exceeds 50 workers

GUIDE OF THE ENTREPRENEUR

3

ADVANTAGES – DRAWBACKS CHART
Legal statusSingle
proprietorship

LimitedCompanies (SARL)

Advantages••••

No minimum capital required for start up;
Rapid and simplified incorporation formalities ;Low incorporation costs ;Flat tax regime, incentive and very flexible.

••

•
•
•

Minimum capital required not very high (1,000,000 CFAF)
Limited liability: associates are liable to the tune of theircontributions;
Associates have the possibility of exerting a close control on
new partner’s access to the company’s capital ;The company will still exist in case of the demise of one of thepartners or the manager (unless otherwise stipulated in theArticles).
Very credible with third parties;
Great funds mobilization capacity (One S.A can call for publicsavings);
Limited risks to contributions ;Possibility of only paying up one quarter of the capital;
Possibility for partners to freely transfer their shares.

••••

Possibility of creating a GIE without a startup capital ;Flexible incorporation formalities ;Flexible organization and operation ;Flat tax regime, incentive and very flexible••••Businesscorporation (SA)

Economic InterestGroups (GIE)

Drawbacks•••••

Unlimited liability of the entrepreneur. In case of bankruptcy, theentrepreneur’s liability is engaged;
Low credibility vis-à-vis third parties: banks, suppliers, clients …
Uneasy access to credit.

••

The minimum capital required blocks certain initiatives ;Obligation to refer to a notary for the deeds of incorporation(statutes, statement of compliance...);High incorporation charges (over 40 percent of the minimum capital)
Associates cannot freely transfer their shares.

•••

High corporate capital ;High incorporation charges ;Heavy management system (Board, auditors…) for new companies•GIE members are supposed to have an activity. The GIE itself is notmeant to have a goal of seeking and sharing profits, but it is rather
aimed at « putting in place all the means likely to facilitate anddevelop the economic activity of its members, and improving or
raising the wherewithals of this activity;»
Law credibility vis-à-vis third parties, mainly banks ;GIE members are jointly and severally liable for the group’s debts.

••

GUIDE OF THE ENTREPRENEUR

4

Legal Status

Sales Agency

Advantages•••••

Branch••S.A.R.L••

Subsidiary

••
S.A.

••
•

Flexibility
Contracts are signed and executed bythe parent store

Flexible as opposed to the subsidiary
Commercial structure
Strong ties with the parent store

Rather credible with third parties;
Minimum capital required not very high(1,000,000 CFAF) ;Limited liability: Associates are only
liable to the tune of their contributions;
Possibility for associates to exert aclose control of new partners’ accessto the capital;

Drawbacks••••Long recognition procedure
Impossibility to carry out
commercial operations
Difficult recruitment of the support
staff
A life time of maximum 2 years at
the end of which the company isobliged to change its status orstop operating•

Legal independence between theparent store and the subsidiary.

•On the operational front, nothing
precludes the subsidiary fromcollaborating with the parent store
in the execution of the contracts

Procedure

Headquarter agreement with
the Foreign Ministry

Two stages :• Statutes established bythe Notary (provide themanager’s policeclearance)• Company recorded andregistered by BCE

Two stages:• Statutes established bythe Notary (provide themanager’s policeclearance)• Company recorded andregistered by BCE

Taxation
Since the agency is notsupposed to undertake
commercial operations in
Senegal, it is therefore notunder a fiscal regime

30 percent of the net profit

30 percent of the net profit

Very credible with third parties ;Great funds mobilization capacity (S.A
can call for public savings) ;Risk limited to contributions ;Possibility of only paying up one
quarter of the capital;
Possibility for associates to freelytransfer their shares.

GUIDE OF THE ENTREPRENEUR

5II. INCORPORATION FORMALITIES IN SENEGAL
A. mandatory formalities
There are eight (8) mandatory incorporation formalities in Senegal:oooooooo

Presentation of the police clearance (for the Manager); foreigners must, in addition to that,
present the police records of the country of origin or any other equivalent document;
Establishment of notarial documents (for companies) ;Capital build-up with the Notary or the Bank (for companies)
Registration of the Statutes (for companies and GIES) ;Trade Register and Chattel Loan (RCCM) registration;
NINEA registration;
Incorporation Statement;
Public notice (for companies).

It is currently possible to obtain the police record in a maximum of 24 hours thanks to the circularletter n° 1006 MJ/ACS of 14 March 2007 issued by the Ministry of Justice.
Apart from the delivery of the police record, the establishment of notarial acts and thecapital build-up, all the other incorporation formalities can be done in 24 hours at theIncorporation Support Office (BCE) within APIX.
B. Single proprietorship
The documents required are the following:•••••••

02 copies of the National ID card or the passport (for foreigners)
02 copies of the consular card;
Police clearance of less then 3 months;
The police record of the country of origin for foreigners of less then 3 months ;Certificate of residence;
Marriage Certificate (if any)
Two revenue stamps of 2000 CFAF (for the Trade Register and the NINEA)

The incorporation charges are:10,000 CFAF worth of registry fees for single proprietorship without trade name;20,000 CFAF for single proprietorship with trade name, broken down as follows:oo

10,000 CFA for the registration of the trade name with the African Intellectual Property
Organization (AIPO) ;10,000 CFAF for the registry fees.

C. Limited Companies (SARL) & Business Corporation (SA)The incorporated company establishment procedure is divided in two stages:••

The establishment of the Statutes at a Notary and the deposit of the capital (within 24hours). The Statutes must be signed by all the founding associates or their duly
represented proxies;
The recording of the deeds of incorporation and the registration of the company at theIncorporation Support Office (BCE) of APIX.

The public notices related to incorporation and company modifications are made either online on
the web site of the Ministry of Economy and Finance by BCE, or by the notary in the authorizednewspaper.
The documents required for the creation of a Limited Company (SARL) or a Business Corporation(SA) are the following:
••
••
•
•

The Manager’s police clearance of less then 3 months ;The police record of the country of origin (for foreigners) of less than 3 months;
The photocopy of partners’ ID card;
The Statutes;
Minutes of the incorporation;
The Statement of compliance.

The statutes, the minutes of the incorporation and the statement of compliance are established bythe notary.
It should be noted that the assessment of the contributions in kind for SARL and SA is done by anauditor selected on a list of comptrollers. For the SA, the resort to the comptroller for theassessment of the contributions in kind is mandatory whatever their value, while for the SARL, only
the contributions amounting to more than five (5) million CFAF must undergo assessment by anauditor.
The capital must compulsorily be deposited with a notary or in a bank account titled “account of acompany being set up.” The account is unfrozen immediately after the company is registered at theRCCM.
The incorporation charges are essentially composed of:Registration fees:
25,000 CFAF for a Capital ranging from 1,000,000 to 10,000,000 CFAF;
1 percent of the Capital if the latter is above 10,000,000 CFAF;
NB: In case of contribution in real estate, there is a tax surcharge worth 3 percent of thecontribution value for the registration fees.
Notary charges:
For SARL, the charges stand at about 400,000 CFAF;

For SA, they stand at about 700,000 CFAF.
D. Economic Interest Groups (GIE)The Economic Interest Group (GIE), like a Single proprietorship, can be created at theIncorporation Support Office (BCE) of APIX.
The Statutes, by-laws and minutes of the constituent General Assembly are drafted by thefounders, but must necessarily be registered at the “Impôts et Domaines” (Tax and State-owned
Land Department). Standard forms of Statutes, By-laws and Minutes are available at BCE.
Following are the documents required for the creation of a GIE:••••

03 copies of the Statutes, By-laws and Minutes of the constituent General Assembly;
01 copy of members’ ID card ;The Chairman’s police clearance of less then 3 months ;11 revenue stamps of 2,000 CFAF : 9 of them to be affixed on each page of the Statutes,
the by-laws and the minutes for registration and 2 for the Trade Register and the NINEA

The costs are broken down as follows:••

Registration fees amounting to 35,000 CFAF;
Incorporation fees worth 30,000 CFAF divided as follows:o 20,000 CFAF for the trade name protection at AIPO;o 10,000 CFAF for the registry fees.

NB: There are other types of company, less known, but envisaged under the OHADA uniform act
on trade companies and GIEs and by the Civil and Trade Obligations Code (COCC) of Senegal.
These are:•••The Co-partnership (SNC): it is a company in which the associates have an undefined andjoint and several liabilities. The associates, unlike partners of incorporated companies, havethe capacity of traders. Due to its high level of risk, this type of company is almost nonexistent;
The Limited Partnership (SCS): it is a new form of company planned under AUSCG. There
are two categories of associates In a SCS: the ”General Partners” that are indefinitely andjointly and severally liable for the company’s debts, and the ”Limited Partner” who are liable
for the partnership debt to the extent of their contributions;
The Professional Civil Society (SCP): this type of company is envisaged under COCC.