The number of business owners in Rwanda is dramatically increasing every hour, this is because of the attracting business incentives and the existing eased mechanisms put in place to enable anyone in Rwanda and around the world to easily establish business. For instance, within hours anyone can duly register a company and commence his or her business objectives in Rwanda. Hence, becoming a business owner within hours. IMAGINE!

Today, we look at the rights and responsibilities of a business owner in Rwanda as enshrined under the laws in Rwanda.

Who is A business owner in Rwanda?

A business owner in Rwanda can refer to a shareholder in a company, OR a partner in a partnership OR a member in an organization (this can be a proprietor, shareholder, founder, partner and among other terms as per the incorporation documents). In other words, anyone or an entity that establishes or owns business in Rwanda is considered as business owner.

Rwandan law defines a shareholder as an individual or corporation whose name is entered in the shareholders’ register and that owns at least one share of a company’s stock, whereas a partner is an individual or a legal entity that provided a capital contribution to a partnership.

What are the rights and responsibilities of a business owner in Rwanda?

• The right to vote

This is a very crucial right to any business owner in Rwanda. This right enables the business owner to directly participate in the daily affairs of the business whether for company or partnership or organization. While exercising the right to vote, the business owner will participate in the decision making to select the management structure of the business, make or backup proposals, and also participate in the process when the business is merging with other businesses or acquiring other business or when the business winding up. Hence, the right to vote enables the business owner to: appointing or removing an auditor or director in the business; approving a business major transaction; adopting or altering the business incorporation documents like articles of association; dissolving the business; approving a business amalgamation.

• Right to access and analyze the business accounting records (financial statements/records)

Every business owner has the right to reasonably access the business accounting records. The management of the business must ensure that the business accounting records are in written form and available for inspection by the business owners. Hence, any business in Rwanda is required by law to prepare, file and keep accounting records at all times that give true and fair view of the business’s financial position and that explain the business’s transactions and comply with accepted accounting standards, i.e. the company law requires companies in Rwanda to keep accounting records at their registered offices.

• Right to institute a suit or on behalf of the entity for any wrongful acts

Owning business in Rwanda gives the business owner the right to institute a suit against any party that has infringed his or her rights or interests as a business owner. This right also extends to circumstances when there is infringement of interests of the business entity, the business owner has the right to initiate a suit on behalf of the entity. Normally these suits are against the management wrongful acts like misuse of the business funds, causing unnecessary conflict of interests and etc

• Right to attend the business meetings

A business owner has the right to attend all business meetings, he/she must be notified earlier about the time, date and venue of the business meetings. It is during the business meetings that the affairs of the business are thoroughly discussed between the management and the business owners. Issues discussed are but not limited to:  the future of the business, appointment of the management officers, presentation of the accounting records and among other things as highlighted on the given agenda of the meeting.

• The right to share dividends and surplus assets of the business.

Establishing business confers to the business owner the right to share in the distribution of the dividends of the business, and the right to share in the distribution of the surplus assets of the business upon its liquidation.

• Right to transfer his/her ownership

Business owners in Rwanda have the right to transfer their ownership. However, this is subject to the law and incorporation documents of the business that may stipulate a specific process for transferring ownership depending on the nature of business carried out.  

Incorporation documents

Despite the fact that business owners in Rwanda have different rights and responsibilities. It must be noted and appreciated that these rights and responsibilities are always subject to laws of Rwanda and incorporation documents like the business statutes and agreements which are executed at the initial phases of business incorporation in Rwanda. Normally the incorporation documents may stipulate more rights and responsibilities, OR limit the rights and responsibilities of the business owners in Rwanda.

Hence, it is always prudent to understand your rights as a business owner before establishing business in Rwanda. Always endeavor to consult a legal expert in Rwanda to guide you accordingly.

Legal Basis

–  Law N° 007/2021 of 05/02/2021 governing companies in Rwanda

– Law Nº 008/2021 of 16/02/2021 governing partnerships in Rwanda