EXPLORING BUSINESS STRUCTURES IN GUINEA - YOUR COMPLETE GUIDE TO INCORPORATION
INTRODUCTION
One of the most frequently asked questions by businesses and investors looking to set up a company in Guinea is about the types of legal entities available, their key features, advantages, and disadvantages. This article provides an overview of the main business structures under the OHADA framework and their suitability for different business needs.
In Guinea, businesses are regulated by the OHADA Uniform Act on Commercial Companies. The primary legal entities available include :
- Partnership (Société en Nom Collectif - SNC),
- Limited Partnership (Société en Commandite Simple - SCS),
- Private Limited Company (Société à Responsabilité Limitée - SARL),
- Public Limited Company (Société Anonyme - SA),
- Simplified Joint Stock Company (Société par Actions Simplifiées - SAS),
- Joint Venture (Economic Interest Grouping - GIE), and
- Branch of a Foreign Company.
1. PARTNERSHIP (SOCIÉTÉ EN NOM COLLECTIF - SNC)
A partnership (SNC) is a business structure where all partners are considered merchants and are jointly and severally liable for the company's debts.
Key Features:
All partners hold merchant status. Unlimited and joint liability. No minimum capital requirement. Managed by one or more partners. Shares transferable only with unanimous partner consent.
Advantages & Disadvantages:
Simple structure and operation. Personal liability of partners.
2. LIMITED PARTNERSHIP (SOCIÉTÉ EN COMMANDITE SIMPLE - SCS)
This structure consists of two types of partners: general partners with unlimited liability and limited partners whose liability is restricted to their contributions.
Key Features:
General partners are merchants, limited partners are not. No minimum capital requirement. Managed by general partners.
Advantages & Disadvantages:
Attracts investors seeking limited liability. Unlimited liability for general partners.
3. PRIVATE LIMITED COMPANY (SOCIÉTÉ À RESPONSABILITÉ LIMITÉE - SARL)
A SARL is a popular choice for small and medium-sized businesses due to its operational flexibility and limited liability for partners.
Key Features:
Partners’ liability limited to contributions. No legally required minimum capital, but commonly set at 10 million GNF. Shares transferable only with partner approval (three-quarters of share capital).
Advantages & Disadvantages:
Protection of personal assets. Restrictions on external share transfers.
4. PUBLIC LIMITED COMPANY (SOCIÉTÉ ANONYME - SA)
An SA is suitable for large enterprises needing substantial capital investment.
Key Features:
Shareholders’ liability limited to contributions. Minimum legal capital of 10 million FCFA (often set at 100 million GNF in practice). Managed by a Board of Directors or a General Director.
Advantages & Disadvantages:
Ability to attract investment. Complex formation process.
5. SIMPLIFIED JOINT STOCK COMPANY (SOCIÉTÉ PAR ACTIONS SIMPLIFIÉES - SAS)
Introduced by OHADA in 2014, the SAS offers significant contractual flexibility.
Key Features:
No minimum capital requirement. Mandatory appointment of a President. Share transfers subject to statutory conditions.
Advantages & Disadvantages:
Highly adaptable business model. Requires detailed statutory drafting.
6. JOINT VENTURE (ECONOMIC INTEREST GROUPING - GIE)
A GIE is a collaborative entity that enables businesses to pool resources while retaining legal independence.
Key Features:
No minimum capital requirement. Members retain legal independence.
Advantages & Disadvantages:
Encourages resource sharing. Unlimited liability for members.
7. BRANCH OF A FOREIGN COMPANY
A branch allows foreign companies to operate in Guinea without forming a separate legal entity.
Key Features:
Operates as an extension of the parent company. Must convert into a subsidiary within two years (extendable by two more years).
Advantages & Disadvantages:
Easy to establish. Limited operational duration.
CONCLUSION
Choosing the right legal entity in Guinea depends on multiple factors, including liability, governance structure, and operational flexibility. Businesses should carefully assess their options under OHADA law to make informed decisions.