Mouhamadou Bassirou Baldé recently shared his expertise on Senegalese case law related to corporate shares. The full article can be found our LinkedIn page here. An excerpt is below.

"Does the transfer of corporate securities result in an automatic transmission of the partner's current account to the purchaser of said securities?The Dakar Court of Appeal answered this question through its judgment n493 of July 25, 2014 (Attorney: Ste Essarts Participations SA c/Frank Andre Henri SPORRER).

It appears from the facts of this case that a shareholder had transferred all of his shares while providing in the said agreement that the transfer entails the transfer of ownership thereof with all the advantages and obligations attached thereto. Having previously granted advances to the partner's current account, the transferor, upon conclusion of the transfer, requested reimbursement of his current account from the company issuing the securities.

Having heard this case, the Dakar Court of Appeal necessarily had to answer the question posed above. The court issued its decision on July 25, 2014. The court explained the shareholder’s rights in relation to the share transfer and stated that in default, the shareholder having transferred his shares may demand reimbursement of the funds held in his name in the current account associate.
 

The Court also stated that even if the transfer of shares provides that the transferee acquires the associated current account, the provisions on the transfer of debt provided for by article 241 of the Code of Civil and Commercial Obligations (COCC) must apply in particular with respect to the conditions of enforceability of the transfer namely the meaning of the transfer of the current account or debtor transfers (the issuing company).

In light of this decision, it is up to all professionals, in particular the drafters of deeds to provide, in the transfer of social securities, the fate of the transferee's current account as long as the latter is the holder.

Of course, the incorporation of the current account in the transfer of corporate securities will be analyzed as an element of the transfer price; which will be taken into account in the calculation of registration fees and the capital gain on transfer."