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Rwanda: Community Benefit Company Act Takes Effect

by Daniel Sabiiti
4:51 pm

Environment conservation, activities that benefit the community will be part of CBC

Rwanda has published a new Companies Act that allows the incorporation of Community Benefit Company (CBC) for companies with primarily social objectives aimed at community development rather than the founding individual.

The act that was in parliament since November 2020 was published in the official Gazette n° 04 of 08/02/2021 of February 8, 2021.

It allows formation of Limited Life Companies, Protected Cell Companies whose Special provisions will be rolled out by Rwanda Revenue Authority (RRA).

The law defines the CBC as- a company with primary social objectives whose surpluses are reinvested, f in the business or in the community rather than being driven by the need to maximise profit for its shareholders or owners.

Unlike in limited companies which have LTD abbreviation at the end of the company name, a community benefit company will end with the abbreviation “CBC”.

Purpose of a community benefit company

Every community benefit company should have a positive impact on society and the environment, taken as a whole, but proportionate to the size and nature of the business of the company and created by the manner in which the company is operated.

Providing low-income or underserved individuals or communities with beneficial products or services; economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business; conserving and promoting the environment;  improving human health; and promoting the arts, sciences and advancement of knowledge will be among the businesses under CBC.

Change of Company Status

In Rwanda, there are normally two types of companies- Private and Public Companies, however in the new law, article 270 and 271 indicate that a private company or a public company also has the status of a community benefit company if its incorporation documents include a statement that the company is a community benefit company.

The same articles also provide that Community Benefit Company may change its status when its shareholders adopt a special resolution altering its incorporation documents.


The new law stipulates the role/ duties of directors of a community benefit company which have to be discharged considering the effects of their actions or inaction on the shareholders, employees, the environment, local or global impact and the possibility that these interests may be best served with transparency.

The law will require the Board of Directors of a community benefit company to report to shareholders, a report that includes a narrative description of both: the ways in which the company pursued its purposes and the extent to which those purposes were accomplished.

In this way, Article 273, requires, that the CBC board must post all of its annual benefit reports on the public portion of its Internet website, if any.  If the company does not have a website, the company must provide a copy of its most recent annual benefit report to any person that requests a copy.

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