Decree No. 2007-012 Establishing the Legal Forms of Microfinance Institutions and Their Registration Procedures with the Trade and Companies Register

DECRET N° 2007-012
Establishing the Legal Forms of Microfinance Institutions and Their Registration Procedures with the Trade and Companies Register

LE PREMIER MINISTRE, CHEF DU GOUVERNEMENT,
Having regard to the Constitution,
Having regard to Law No. 95-030 of February 22, 1996 on the activity and supervision of credit institutions, as amended, Having regard to Law No. 2005-016 of September 29, 2005 on the activity and supervision of microfinance institutions, Having regard to Decree No. 2003-007 of January 12, 2003 appointing the First Minister, Head of Government, Having regard to Decree No. 2003-008 of January 16, 2003, amended by Decrees No. 2004-001 of January 5, 2004, No. 2004-680 of July 5, 2004, No. 2004-1076 of December 7, 2004, No. 2005-144 of March 17, 2005, No. 2005-700 of October 19, 2005, No. 2005-827 of November 28, 2005 and No. 2006-738 of October 4, 2006 appointing members of the Government, After opinion of the Banking and Financial Supervision Commission (CSBF), in application of Articles 19, 21, 22 and 45 of Law No. 95-030 of February 22, 1996, On proposal of the Minister of Economy, Finance and Budget, In Council of Government, DECREE,

Article 1 - In application of Articles 18 and 20 of Law No. 2005-016 of September 29, 2005, this Decree aims to establish the legal forms of microfinance institutions and their registration procedures with the Trade and Companies Register.

Chapter I - LEGAL FORMS OF MICROFINANCE INSTITUTIONS
Section 1: MUTUALIST MICROFINANCE INSTITUTIONS
Article 2 - Without prejudice to the respect of general mutualism principles and in application of Article 86 of Law No. 2005-016 of September 29, 2005 which amended Law No. 99-004 of April 21, 1999 on cooperatives, basic mutualist microfinance institutions of levels 1, 2 and 3 are established under the legal form of Cooperative Company.
Article 3 - Level 1 mutualist MFIs are not authorized to form a network as defined in Article 8 of Law No. 2005-016 of September 29, 2005.
Unions and federations of level 2 and 3 mutualist MFIs are established either under the form of Cooperative Company or under the form of Joint Stock Company with fixed capital and multiple shareholders as provided by Articles 407 et seq. of Law No. 2003-036 of December 10, 2003 on commercial companies. Where representativeness rules based on the number of members of each institution within a union or federation are established in the statutes in accordance with Article 40 of Law No. 2005-016 of September 29, 2005, unions and federations are authorized to set rules for distributing operational surplus in favor of member MFIs proportionally to their participation in the social capital of the union or federation.

Section 2: NON-MUTUALIST MICROFINANCE INSTITUTIONS
Article 4 - Without prejudice to the provisions of Law No. 2005-016 of September 29, 2005,

1. Level 1 non-mutualist MFIs that do not plan to access level 2 or 3 are established as Associations provided by Ordinance No. 60-133 of October 3, 1960 or as Non-Governmental Organizations (NGOs) provided by Law No. 96-030 of August 14, 1997;
2. Level 1 non-mutualist MFIs that plan to access level 2 or 3 are established as Limited Liability Companies with multiple partners or Joint Stock Companies with fixed capital and multiple shareholders, forms provided by Law No. 2003-036 of December 10, 2003.
   Article 5 - In application of Articles 15 and 16 of Law No. 2005-016 of September 29, 2005, level 2 and 3 non-mutualist MFIs that receive public deposits are established as Joint Stock Companies with fixed capital and multiple shareholders.
   Article 6 - Level 2 non-mutualist MFIs that do not collect public deposits are established either as Limited Liability Companies with multiple partners or as Joint Stock Companies with fixed capital and multiple shareholders.
   Level 3 non-mutualist MFIs that do not collect public deposits are established as Joint Stock Companies with fixed capital and multiple shareholders.

Chapter II: REGISTRATION WITH THE TRADE AND COMPANIES REGISTER
Article 7 - In application of Article 20, paragraph 6 of Law No. 2005-016 of September 29, 2005, and by derogation from the provisions of Law No. 99-025 of August 19, 1999 on business transparency amending Article 5 of the Commercial Code, the following provisions of this Decree shall be observed regarding the registration of Microfinance Institutions.
Article 8 - A microfinance institution is registered with the Trade and Companies Register (T.C.R) under a new category "MICROFINANCE INSTITUTIONS" regardless of its legal form defined by its statutes.
The registration application is filed with the Court Clerk's Office of the location of the registered office within two months from the license or approval issued by the credit institution supervision authority. The application must be accompanied by a copy of the statutes, the minutes of the founding assembly and information on the identity of the managers, all in duplicate.
Article 9 - For MFIs benefiting from collective approval, the institution performing central body functions in application of Article 41 of Law No. 2005-016 is responsible for requesting the unique registration of the entire network with the Trade and Companies Register at its Court Clerk's Office.
Institutions belonging to the same network are registered under a single number with the Trade and Companies Register. An individual file must be created and submitted with the registration application for each affiliated institution.
Cases of modification in the network composition or the legal entity of each affiliated institution must be subject to updates.

Chapter III: TRANSITIONAL AND FINAL PROVISIONS
Article 10 - In application of Article 81 of Law No. 2005-016, the transformation of an already approved mutualist financial institution at the date of publication of this Decree does not create a new legal entity, but merely modifies the statutes decided by the Extraordinary General Assembly of partners according to the form and time conditions provided in these statutes.
During this transformation, the designation of administration or management bodies will be carried out.
In case of merger or division, the rules provided in Article 53 of Law No. 2005-016 shall apply. The merger or division entails the dissolution without liquidation of MFIs that cease to exist at the date of the approval decision by the credit institution supervision authority issued to the absorbing or newly created institution.
Article 11 - In application of Article 79, paragraph 2 of Law No. 2005-016, upon their request for classification into one of the categories provided in Articles 14, 15 and 16 of this law, credit institutions already approved at the date of publication of this Decree must attach a copy of the draft statutes mentioning one of the legal forms provided by this Decree, as well as all other documents specified by instruction of the Banking and Financial Supervision Commission.
Article 12 - Mutualist financial institutions already approved at the date of publication of Law No. 2005-016 of September 29, 2005 must adopt the forms provided by this Decree within a period of (2) two years from the entry into force of said law.
Article 13 - Credit institutions already approved will have a period of six months from their classification as MFI 1, 2 or 3 to complete registration formalities with the Trade and Companies Register.
Article 14 - The implementation modalities of this Decree will be specified, as necessary, by regulatory means.
Article 15 - The Minister of Economy, Finance and Budget and the Governor of the Central Bank are responsible, each within their respective scope, for the implementation of this Decree, which will be published in the Official Journal.
Done at Antananarivo, on January 9, 2007
By the First Minister, Head of Government
Jacques SYLLA
The Minister of Economy, Finance and Budget
Benjamin Andriamparany RADAVIDSON