The legal framework in Rwanda provides for the formation of several forms of business entities including general partnerships, limited partnerships, limited liability partnerships and companies to support investments.

The Law n° 007/2021 of 05/02/2021 governing companies (the Companies Law) provides the framework and requirements for the incorporation of either limited liability private or public companies or unlimited liability companies as well as for the registration of branches of foreign companies for those businesses looking to establish a place of business in Rwanda. The Companies Law does not prescribe minimum local shareholding/participation requirements and foreigners can generally hold 100% of the shares in a company.

The Law nº 008/2021 of 16/02/2021 governing partnerships (the Partnerships Law) provides the framework and requirements for the registration of partnerships and LLPs respectively.
Limited liability companies (LLC)

As is common with other jurisdictions, investors normally opt to incorporate either private or public limited liability companies for purposes of investments. The new Companies Law provides for two categories of companies: private companies (Ltd); and public companies (PLC).The law further groups these categories into five types: a company limited by shares; a company limited by guarantee; a company limited by shares and guarantee; an unlimited company; and a protected cell company. Any of these listed companies may be a limited life company. Individual cells of a protected cell company may also be established for a limited period of time.

A company limited by shares and by guarantee may be public or private. However, a company limited by guarantee or an unlimited company cannot be a public company. The requirements for incorporating a company include having a name, having one or more shareholders, in the case of a company limited by shares, having one or more shares, having one or more directors, at least one of whom must be ordinarily resident in Rwanda. Where two or more persons jointly hold one or more shares, such persons are treated as a single shareholder. A private company is incorporated if it fulfils the following essential requirements: having a name, ending with the words “Private limited company” or the letters “Ltd”; having one or more shares with restricted rights of transfer; having one or more shareholders with unlimited or limited liability; having one or more directors of whom at least one must be ordinarily resident in Rwanda; and having incorporation documents.

The Companies Law permits both private and public companies to be incorporated by one (1 ) shareholder. However private companies are restricted to a maximum of one hundred (100) shareholders but excluding persons employed or formerly employed by the company. In terms of directors, private and public companies may opt to have one or more directors. In both instances, however, at least one must be ordinarily resident in Rwanda.
It is mandatory to submit the memorandum of association of the company when applying for incorporation. However, a company may or may not have articles of association.
The registration and filing process of companies is undertaken online via the Rwanda Development Board website.
The timeline for registration is approximately within 48 hours.

The Companies Law places certain continuing reporting and filing obligations on private and public companies, including a requirement to file annual accounting records and financial statements, annual returns as well as the maintenance of statutory books. Where the directors, in a determined period, do not deliver to the Registrar General a copy of signed and approved annual accounts, a copy of the auditor’s report on those accounts, a copy of the directors’ report relating to the same accounting period as those annual accounts, commit a fault, each of the directors is liable to a fine of one million Rwandan francs (FRW 1,000,000) to ten million Rwandan francs (FRW 10,000,000).

Partnerships
The Republic of Rwanda has for the first time enacted the Partnerships Law. The legal framework set out three forms of partnerships in Rwanda: general partnerships; limited partnerships; and limited liability partnerships.
Under general partnership, all partners have unlimited liability. Limited partnership has one or more partners each with unlimited liability and one or more partners each with limited liability for the debts of the partnership and in Limited liability partnership, the liability of the partners for the debts of the partnership is limited to their capital contribution.

The Partnerships Law also covers foreign partnerships defined as partnerships formed in a foreign country and registered and carrying on business in or from Rwanda.
However, a partnership formed in a member state of the East African Community and partnerships from countries having relevant agreements with Rwanda are accorded national treatment.

With regard to the legal status of a partnership, a limited liability partnership is an entity with a legal personality unlike general and limited partnerships.

The Partnerships Law state that every partnership is registered in accordance with this Law. An application to register a partnership is submitted in the form prescribed by the Registrar General. The application for registration to the Registrar General should generally contain a consent form as prescribed by the Registrar General signed by each partner or the partner’s lawfully authorized agent, proof by the competent organ that each general partner has not been convicted of any economic crime, type of partnership, name of the partnership, names and address of partners, the value of the capital contribution paid by a partner to the partnership, the registered office and address of the partnership, partnership agreement and any other condition as required by the Registrar General.

Partners of a registered general partnership must be individuals. General partners are agents of each other for the purpose of the partnership business. In addition, a general partner is not allowed to be an employee of his or her general partnership. At least of one the general partners must reside in Rwanda or appoints agent in Rwanda. The partnership may enter into agreement with third parties, own or acquire property for the purpose of the partnership business. All general partners are entitled to share equally in the capital contribution unless the partnership agreement provides otherwise. Subject to the partnership agreement, a general partnership may apply to the Registrar General for conversion to the limited partnership upon approval by all partners of the general partnership. This conversion becomes effective from the time of the registration of limited partnership.

A Limited Partnership must consist of at least two partners of which at least one is a general partner resident in Rwanda or who has an appointed agent in Rwanda and at least one limited partner. A partner in a limited partnership may be an individual or a body corporate.

A limited liability partnership is a body corporate with legal personality established based on agreement between partners or between a limited liability partnership and partners which is registered in accordance with the law. It is a body corporate with legal personalities separate from the partners, has the capacity to own assets different from those of the partners and registered in its name, the liability of the partners is limited to their contribution to the capital of the limited liability partnership and the rights and responsibilities of the partners in the partnership are determined by the partnership agreement or by the Partnership law.
A foreign general partnership, a foreign limited partnership and foreign limited liability partnership are allowed to operate in Rwanda. A foreign partnership does not carry on business in Rwanda as a partnership before being registered in accordance with the Partnerships Law.

The limited partnership has been the vehicle of choice for fund managers across private equity to aggregate and put to work the capital of their investors. The Partnerships Law will ensure a steady streamlining of P.E operations in Rwanda.
The limited partnership structure offers a great deal of organizational flexibility so that the specific requirements of individual investors can be accommodated. Unlike in a private company (where shareholders of the same class have to be treated equally), the partners can set the rules on matters such as how the profits are shared, how interests in the partnership are transferred and how the business is to be conducted. The relationship between the Limited Partner (L.P) and the General Partner (G.P) mainly relies on explicit contractual measures, which are entered into at the outset of the partnership.