Share capital, shareholders and shares: no minimum capital, no-par shares and the 2023 ban on bearer, par value and call shares, share classes, allotment and pre-emption, transfers, registers, resolutions and minority remedies

No minimum capital, but capital still matters

No article of Law N° 007/2021 of 05/02/2021 governing companies, as amended by Law N° 019/2023 of 30/03/2023, sets a minimum share capital for an ordinary company, and founders choose the capital stated in the memorandum (FAQ 13). A company limited by shares must simply have one or more shares (Article 6). Minimum capital is instead a matter for the sector regulators: the National Bank of Rwanda (BNR) for banks, insurers and microfinance institutions, the Capital Market Authority (CMA) for licensed market intermediaries and fund managers, and other regulators for their sectors. Those requirements are set in the sector instruments and are not repeated here.

Capital nevertheless deserves thought. It is the cushion that the directors must keep in view under the solvency duty in Article 150, which forbids them to let the company enter a transaction that involves an unreasonable risk of failing the solvency test. It is what banks and landlords look at. And for a foreign investor it is the money that must later be repatriated: the Investment Code guarantees the transfer abroad of capital and profits after tax (Article 12 of Law N° 006/2021), but the investor must be able to show how the money came in, so capital should arrive through the banking system and be documented (Repatriating profits and capital). Many investors combine modest share capital with shareholder loans; the tax limits on interest are covered in Transfer pricing and international tax.

What a share is, and the classes a company may issue

Shares in a Rwandan company are personal property, not immovable property; they can be allotted; they confer the rights set out in the Law and in the incorporation documents; and they are transferable subject to any restrictions or limitations in those documents (Article 52). Subject to the incorporation documents, different classes may be issued. Shares may be ordinary; redeemable; confer preferential rights to distributions of capital or income; confer special, limited or conditional voting rights; or confer no voting rights at all (Article 53). A company must keep a stated capital account for each class of shares it issues, recording the names and addresses of the shareholders and the number, type and class of shares each holds (Article 54).

This flexibility allows the usual investment structures: preference shares for a financial investor, non-voting shares for employees, or a class with enhanced voting rights for a founder. The rights of each class must be written into the incorporation documents or the allotment resolution, because Article 58 requires the resolution to specify the rights, privileges, limitations and conditions attached to each share to be allotted and its transferability.

Shares a company may not issue: the 2023 restatement of Article 57

Article 57, as replaced by Article 3 of Law N° 019/2023, provides that a company is not allowed to allot (1) a bearer share; (2) a nominal or par value share; (3) a share which is subject to calls; or (4) a redeemable share at a time when there are no allotted shares of the company which are not redeemable. Every Rwandan share is therefore a registered, no-par, fully paid share. The amendment also says what happens if a company tries: a share purportedly allotted with a nominal or par value is deemed to be a share of no par value allotted at its actual allotment price, including any purported premium; a share purportedly allotted subject to calls is deemed to be fully paid; and a share purportedly allotted as redeemable is deemed not to be redeemable.

The practical consequences are significant for foreign groups used to other systems. There is no nominal capital to authorise and no distinction in law between nominal value and premium on new shares, so the price of each issue is simply a commercial decision recorded in the allotment resolution. An investor cannot subscribe for shares now and pay for them later on a call: if money is to come in instalments, it must be structured as successive allotments, or as a loan that converts, rather than as partly paid shares. And because bearer shares are prohibited, every holder is on the register and, at 25% or more, disclosed as a beneficial owner (Beneficial ownership and transparency).

Issuing new shares: authority, pre-emption and filing

Subject to the incorporation documents and to any options of the shareholders, a company may allot shares from time to time as decided by the shareholders by ordinary resolution or, in a public company, by the Board of Directors, specifying the rights and conditions attached to the shares and their transferability, the maximum number to be allotted, and the date, if any, on which the authority expires (Article 58). The allotment resolution must be submitted to the Registrar General within 15 days of its adoption. Subject to the incorporation documents, the statutory pre-emption rule does not apply to a public company.

In a private company, Article 59 gives existing shareholders a pre-emption right to acquire newly issued shares pro rata to their holdings, at a price no less favourable than that offered to other persons, and on terms that preserve their relative voting and distribution rights. The company must give each shareholder advance notice stating at least the number of shares, the price or method of fixing it, and the period and procedure for exercising the right; unless the incorporation documents say otherwise, the offer stays open for three months, and the rules must be uniform for all holders. Shares not taken up may be issued to anyone within three months after the offer at the same price; an allotment at a lower price during or after that period remains subject to the existing shareholders' rights. The incorporation documents may negate, limit or modify these rights. There is no statutory pre-emption on transfers of existing shares: rights of first refusal, tag-along and drag-along rights must come from the articles or a shareholders' agreement.

Issuing new shares in a private company

1. Check the constitution and agreementsRead the articles and any shareholders' agreement for reserved matters, modified pre-emption rules or consent rights, and any sector regulator's approval requirement for a change in shareholding.
2. Pass the allotment resolutionShareholders pass an ordinary resolution (or a written resolution signed by holders of at least 75% of the votes) specifying the rights attached, the maximum number of shares and any expiry date (Article 58).
3. Offer the shares pro rataUnless the articles disapply it, send each shareholder the Article 59 notice with the number, price and procedure; keep the offer open for three months or the period the articles set.
4. Place any shares not taken upWithin three months after the offer, issue unaccepted shares to others at the same price as offered to shareholders.
5. Receive the consideration and allotShares must be fully paid on allotment (Article 57); record the allotment and any stated capital account entry (Article 54).
6. Update the registersEnter the allotment in the register of shares within 7 days and the shareholder index within 14 days (Articles 114 and 115, as amended).
7. File with the Registrar GeneralSubmit the allotment resolution within 15 days of its adoption (Article 58) and file any change in beneficial ownership within 14 days (Article 116, as amended).

Transferring shares

Subject to the incorporation documents, shares are transferred by entering the transferee's name in the register of shareholders (Article 75). The company must receive a share transfer form signed by the transferor and the transferee, together with the share certificate if one was issued (or evidence of its loss and any indemnity the directors require); no form is needed where the shares pass by operation of law, for example on death, but evidence of the transmission is. On receipt the company must enter the transferee in the register unless, within 30 working days, the Board of Directors resolves to refuse or delay registration and sets out its reasons in full, the resolution and reasons are sent to both parties within 5 working days, and the Law or the incorporation documents expressly allow the board to refuse or delay for those reasons. Subject to the documents, the board may also refuse to register a transfer of shares on which money is owed to the company.

A private company must restrict the transfer of its shares (Articles 7 and 8), so its articles should state the restriction precisely: a requirement of board or shareholder consent, a right of first refusal, or both. The transfer then triggers a chain of filings and taxes. The register must be updated within 7 days and the index within 14 days, a new beneficial owner must be disclosed within 14 days, and the annual return must report details of every transfer (Article 143, as amended). A sale of shares is subject to capital gains tax at 10%, which since Law Nº 014/2025 of 27/05/2025 must be withheld or declared by the resident company whose shareholding changed within 15 days after the end of the month (Capital gains, property and other taxes). An acquisition of control may also need clearance under Law n° 011/2026 relating to competition and consumer protection or from a sector regulator (FAQ 98; Merger control and competition law).

Registers and records: what must be kept, where and for how long

Article 111, as amended in 2023, requires the company to keep at its registered office, or elsewhere in Rwanda, for at least ten years from the end of the year to which they relate: its incorporation documents; the register of shares and debentures; the index of shareholders; its accounting records; the register of directors' interests; minutes and resolutions of shareholders, directors and board committees; directors' certificates; annual accounts and the auditors' and directors' reports; the internal register of beneficial owners; and copies of written communications to shareholders. A change in the place where records are kept must be notified to the Registrar General within 15 days, and when a company ceases to exist its secretary, directors or liquidator must file copies of the records with the Registrar General within 30 days.

The register of shares and debentures records the shares and debentures issued; the names and latest addresses of current holders and of anyone who was a holder in the last ten years; the number of shares held by each, distinguished by number and class; the dates of allotments and changes of ownership over ten years; and any restrictions on transfer. The directors and the company secretary must ensure it is properly kept, an agent may be appointed to maintain it, and it must be updated within seven days of a change (Article 114, as amended). Unless the register itself serves as an index, the company keeps an alphabetical index of shareholders and debenture holders in the same place and updates it within 14 days (Article 115, as amended). Compliance has been weak: according to the OECD Global Forum's 2024 review, only 25% of 2,794 companies that self-assessed kept an adequate shareholder index, and 159 of 232 companies inspected were found non-compliant. A company that fails to keep or update its records is liable to an administrative fine of FRW 500,000 to FRW 2,000,000 (Article 326, as amended), and a member or shareholder who discloses false or deceitful information on shareholding or beneficial ownership commits an offence punishable by three to five years' imprisonment and a fine of FRW 5,000,000 to FRW 10,000,000 (Article 352, as amended).

Meetings and resolutions

The Board of Directors calls an annual general meeting once a year, not later than 15 months after the previous one and not later than six months after the date of approval of the company's balance sheet; a newly incorporated company may hold its first meeting within 18 months of incorporation (Article 100). Notice must be sent to all shareholders at least 21 days before the meeting and state at least the agenda and information about directors to be elected, including biographies, business experience and other directorships. Shareholders must be given a reasonable opportunity to discuss the management of the company and may pass resolutions making recommendations to the board (Article 101).

A private company need not hold an annual general meeting if everything required to be done at it is done by written resolution signed by shareholders holding at least 75% of the votes (Article 105), which suits a wholly owned subsidiary. A private company may also, by unanimous resolution, opt out of several statutory requirements listed in Article 209, such as the directors' certificate for distributions, but it cannot opt out of the requirement to make and disclose a directors' report to shareholders or of the requirement for a shareholders' annual meeting, which is why the annual decisions should still be taken and minuted each year even where no meeting is physically held.

Protecting minorities: statutory remedies and shareholders' agreements

The Law gives minority shareholders several tools. Directors must not act, or agree to the company acting, in a way that unfairly prejudices or unfairly discriminates against any existing shareholder (Article 148). A shareholder who considers that the company's affairs are being conducted in a manner that is unfairly prejudicial may apply to the court, which may order the purchase of the applicant's shares, compensation, regulation of the company's affairs, the appointment of a receiver or liquidation (Article 230); the application may also be made by a beneficial owner or a director. Article 230 expressly treats a failure to comply with, among others, Articles 58 and 59 on allotment and pre-emption and Articles 167 and 168 on directors' interests as unfairly prejudicial conduct. A shareholder or director may also apply to the court for authorisation to bring a derivative action in the company's name where the company fails to act (Articles 231 to 234), and shareholders holding 10% or more of the capital may inspect the relevant transaction documents before suing. A shareholder who voted against certain special resolutions may require the company to buy his or her shares (Articles 106 and 240 to 246). Disputes over these rights go to the commercial courts or, where the articles or an agreement provide, to arbitration (The court system and choice of forum).

The Law does not regulate shareholders' agreements, but nothing prevents them, and the Office of the Registrar General accepts a shareholders' agreement as evidence of voting rights when beneficial ownership is filed. Because the agreement binds only its parties while the articles bind the company and every future shareholder, provisions the investors need the company to respect, such as board composition, transfer restrictions, pre-emption and reserved matters, should be mirrored in the articles. Joint venture agreements and exit mechanisms are discussed in Joint ventures, shareholder agreements and exit rights.