INVEST IN RWANDA WITH THE STABIT ADVOCATES GUIDE; A BRIEF OF WHAT YOU MAY NEED TO KNOW ABOUT A COMMUNITY BENEFIT COMPANY (CBC);
INVEST IN RWANDA
- THE STABIT ADVOCATES GUIDE ON WHAT YOU NEED TO KNOW ABOUT A COMMUNITY BENEFIT COMPANY (CBC);
The Rwandan Company law of 2021 established a Community Benefit Company (CBC). A CBC is defined under the Company law as that company with primary social objectives whose surpluses are re-invested, for that purpose, in the business or in the community rather than being driven by the need to maximize profit for its shareholders or owners. In simple terms, a CBC is that company which is incorporated when its owners/shareholders are not profit oriented since the profits are reinvested in the company to achieve its social objectives.
One might think that a CBC is similar to a Non-Governmental-Organization (NGO), nevertheless the simple difference between the two is that an NGO does not make profits and mostly depends on grants and donations to achieve its objectives whereas a CBC conducts business and makes profits like any other ordinary company, only that its profits are reinvested in the company instead of being shared by the company shareholders in form of dividends.
One of the purposes of every community benefit company is to have a positive impact on society and the environment, taken as a whole that is proportionate to the size and nature of the business of the company operated.
- Social objectives of a Community Benefit Company;
Pursuant to the Rwandan company law, the social objectives of a community benefit company include the following;
- Providing low-income or underserved individuals or communities with beneficial products or services
- Promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business.
- Conserving and promoting the environment.
- Improving human health
- Promoting the arts, sciences and advancement of knowledge
- Conferring any other particular benefit on society or the environment.
According to the Company Law, a private company or a public company also has the status of a Community Benefit Company if its incorporation documents include a statement that the company is a Community Benefit Company.
- Essential Requirements for incorporation of a Community Benefit Company;
– A Company name ending with the words “Community Benefit Company” or the abbreviation “CBC”
-A certified true copy of Articles of Association laying out the company’s objectives including the social objective it intends to use its profits to achieve.
– A Notarized Shareholders’ Resolution including a statement that the company be registered as a Community Benefit Company
- Benefits accruing to a Community Benefit Company;
The Company Law stipulates that an Order of the Minister determines the benefits accruing to the Community Benefit Company’s shareholders and requirements to be eligible to such benefits. This Ministerial Order is not yet out meaning that as long as the said Ministerial Order is not yet out, then a CBC shall not be accorded special treatment but shall be looked at as any other ordinary company.
At Stabit Advocates who still aspire to be the Best Law Firm in Rwanda and Top Lawyers in Rwanda, we have a team of professionals who are ready to assist you 24/7 with setting up your Community Benefit Company in Rwanda and as well facilitate you in drafting all necessary documents of incorporation of the CBC. Feel free to contact us using the contact details below.
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