The Republic of Sudan is a country located in Northeast Africa, its neighboring countries are the Central African Republic to the southwest, Egypt to the north, Chad to the west, Eritrea to the northeast, Ethiopia to the southeast, Libya at the northwest, the Red Sea and South Sudan to the south. The country used to be Africa’s largest country by area before the secession of South Sudan in 2011. Its capital is Khartoum and its most populated city is Omdurman.
Sudan’s major economic profit is from the oil sector, though during the secession of South Sudan, the state of Sudan entered a state of stagflation because the majority of Sudan’s oilfield was in the South.
Company structure in Sudan
In Sudan, limited liability companies with share capital are incorporated either as private limited liability companies or public limited liability companies.
Limited Liability Company
The Companies Act of 1925 is amended timely to incorporate companies. The Act creates a distinction between a private limited liability company and the public limited liability company.
Private Limited Liability Company
There is a distinction set by the Act between public and private limited liability companies. The private limited liability company cannot trade its shares at the Khartoum stock exchange market, but its shares can be obtained after consulting other shareholders; this also makes the private limited liability company unfit to issue share certificates, though shareholders’ registration is recorded in the shareholders’ register.
There are certain sectors a private limited liability company cannot engage in, in Sudan, such as banking, and insurance, and they are not obliged to hold an annual general meeting. They enjoy not being at the risk of bankruptcy, as an advantage of incorporation and there is no requirement that private limited liability companies are to abide by stringent accounting rules as compared to the public liability company.
Public Limited Liability Company
The Act for forming public limited liability companies in Sudan requires that they have a minimum capital available before starting. Shares are not issued to the public for sale except if the certificate to commence business has been obtained.
The memorandum of association must state the number of shares sold, alongside subscribers that own the shares and the number they own each. There has been a trend of public liability companies springing up in Sudan, this is because the government plans to privatize state own enterprises. There are advantages to owning a public limited liability company such as:
- Investors gain confidence when its share have a public price;
- The investors are provided with opportunities to develop wealth by using their shares as collateral for loans or selling a few shares of their holdings;
- There is specialized management to easily seek and secure corporate governance. Stock prices are essentially used to test the management;
- There is accountability to attain corporate economic efficiency, this is because the control mechanism helps the board directors employ necessary guidelines, policies, and procedures.
- Fundamentally, the importance of public limited liability companies is that it offers available alternatives to raise capital with opportunities of mergers and acquisitions by potential investors which are conducible to increasing the stock value and may answer the need for diversification by holding subsidiaries in other lines of business.
