Distribution of Profits and Allocation of Losses under OHADA Law: Towards a more balanced Governance?

Private Law

The allocation of company results, whether profits or losses, is a critical aspect of corporate governance under OHADA law. The Uniform Act on Commercial Companies and Economic Interest Groups prescribes several mandatory provisions for this process, including account approval, prohibition of unfair clauses better still, the obligation to publish practical realities exposes a great deal of imbalance. This article examines the legal framework governing the distribution of company profits, focusing on partners' entitlement to profits, the proportional distribution of losses, and the statutory procedures established for these purposes. It also explores the regulatory mechanisms in place, highlighting the roles of the general assembly, the statutory auditor, and associates’ rights to information. The study identifies common issues related to financial opacity, misuse of majority voting rights, and weak internal controls. In response, the author outlines several recommendations to enhance both the legal and institutional framework, with the aim of strengthening transparency, promoting contractual fairness, and ensuring an equitable balance among stakeholders. These proposals are intended to support more democratic and sustainable governance practices within commercial companies under the OHADA Law.

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