C O Agbata, Corporate Law Practice Note-1

Chris Ozo Agbata [email protected] chrisozoagbata@edupalinstitute.
com 07035406532
DISCLAIMER:
This note is a compilation by Chris Ozo Agbata on the NLS Yola Campus 2021/2022, using
NLS handbook, class slides and notes. It does not represent NLS official opinion; it is not
for sale and it is for exam preps only.
Any observations, reservations and comments should be directed to Chris Ozo Agbata
using the contact info provided at the header. This is only the first draft, so, such will be
appreciated.
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Chris Ozo Agbata [email protected] [email protected] 07035406532
TABLE OF CONTENTS
An Overview of the Legal Framework & Regulatory Bodies on Corporate Law Practice in
Nigeria............................................................................................................................................. 3
Choice of Business Organization and Formation (I) .................................................................... 19
Business Name/Partnership and Incorporated Trustee ................................................................. 41
Pre-Incorporation Matters ............................................................................................................. 70
Post-Incorporation Matters ........................................................................................................... 83
Foreign Participation in Nigerian Business Sector ..................................................................... 126
Corporate Governance (I) ........................................................................................................... 151
Corporate Governance (2): Officers Of Company- (Directors and Secretary) ........................... 175
Corporate Governance (3): (Membership, Meetings & Resolutions) ......................................... 198
Corporate Governance 4: Financial Statements, Audits and Annual Returns ............................ 218
Corporate Governance 5: Majority Rule, Minority Protection and Investigation Of Companies
..................................................................................................................................................... 228
Company Securities 1 (Shares & Debentures and Enforcement of Securities) .......................... 239
Company Securities 2: Floatation of Securities & Collective Investment Schemes .................. 255
Corporate Restructuring 1, (Internal Options) ............................................................................ 275
Corporate Restructuring 2 – (External Options) ......................................................................... 283
Company Proceedings and Investment Disputes Resolution...................................................... 302
Corporate Insolvency, Company Voluntary Arrangement, Adminisration And Receivership .. 316
Winding Up and Dissolution of Companies ............................................................................... 339
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AN OVERVIEW OF THE LEGAL FRAMEWORK & REGULATORY

BODIES ON CORPORATE LAW PRACTICE IN NIGERIA
Of the applicable laws, it should be noted that common law also applies but when there is a clash
between statute and common law, then the statute must prevail. SC held in Patkun Ind Ltd v
Niger Shoes Ltd that “where a statutory provision is in conflict with, or differ from common
law, the common gives way to the statute…where a common law right has been enacted into a
statutory provision, it is to the statutory provision so made that resort must be had, and not to the
common law.”
Applicable Law Regulatory Body Admin Head
1 Companies and Allied Matters Act Corporate Affairs Commission Registrar-General

2020
2 Investments and Securities Act Securities and Exchange Chairman
2007 Commission
3 Nigerian Investment Promotion The Nigerian Investment Executive Secretary
Commission Act Promotion Commission (NIPC)
4 Foreign Exchange Monetary & Central Bank of Nigeria Governor of the Central
Miscellaneous Provisions Act Bank of Nigeria
5 Immigration Act Nigerian Immigration Service Comptroller-General
6 National Office for Technology National Office for Technology Director-General
Acquisition Promotion Act 2004 Acquisition Promotion
7 Industrial Inspectorate Act Industrial Inspectorate Division Director
of the Federal Ministry of Trade
& Investment
8 Constitution of the Federal
Republic of Nigeria
9 Federal High Court Act Federal High court Chief Judge
10 Banks and other Financial Central Bank of Nigeria Governor of the Central
Institutions Act Bank
11 Asset Management Corporation Asset Management Corporation Managing Director
Act, 2010 of Nigeria (S.10(1)(b) AMCON
12 Insurance Act 2020 National Insurance Commission Chief Executive Officer
13 National Industrial Court Act National Industrial Court President
14 Federal Inland Revenue Service Federal Inland Revenue Service Executive Chairman
Act, 2007
15 National Insurance Commission National Insurance Commission Chief Executive Officer
Act (NAICOM)
16 Nigerian Communication Nigerian Communication Chief Executive Officer
Commission Act Commission
17 National Agency for Food & Drug National Agency for Food & Director General
Administration & Control Act Drug Administration & Control
18 Mortgage Institutions Act Federal Mortgage Bank Managing Director
19 Nigerian Copyright Act Nigerian Copyright Commission Nigerian Copyright Act
20 Nigerian Maritime Administration Nigerian Maritime Nigerian Maritime
& Safety Agency Act Administration & Safety Agency Administration &
(NIMASA) Safety Agency Act
21 Electric Power Sector Reform Act Nigerian Electricity Regulation
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Commission
22 Standard Organisation of Nigeria Standard Organisation of Nigeria
Act
23 Nigeria Deposit Insurance Nigeria Deposit Insurance Managing Director
Corporation Act Corporation
24 Stamp Duties Act
25 Land Use Act
26 Companies Income Tax
(Amendment) Act
27 Export Incentives & Miscellaneous
Provisions Act
28 Food Drugs & Other Related
Product Act
29 Nigeria Minerals Mining Act
30 Petroleum Industry Act 2021
31 Petroleum Profit Tax Act
32 Infrastructure Concession Infrastructure Concession
Regulatory Commission Act Regulatory Commission
33 Nigeria Maritime Administration & Nigeria Maritime Administration
Safety Agency Act & Safety Agency (NIMASA)
34 Nigeria Export Process in Zones Nigeria Export Processing in
Act Zones Authority (NEPZA)
35 Nigeria Export Promotion Council Nigeria Export Promotion
Act Council
36 National Automotive Council National Automotive Council
(Amendment) Act
37 Financial Reporting Council Act Financial Reporting Council
38 Mortgage Institutions Act Federal Mortgage Bank
39 Capital Gains Tax Act
40 Education Tax Act
A. CORPORATE AFFAIRS COMMISSION (CAMA 2020)

CAMA 2020 parts:
• Part A: Corporate Affairs Commission
• Part B: Incorporation of Companies and Incidental Matters
• Part C: The Limited Liability Partnership
• Part D: The Limited Partnership
• Part E: Business Names
• Part F: Incorporated Trustees
• Part G: (General) Establishment, Etc. of Administrative Proceedings Committee
Establishment; S1 CAMA 2020
Functions – S8 CAMA 2020
S8: (1) The functions of the Commission shall be to—
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a. administer this Act, including the registration, regulation and supervision of—
i. the formation, incorporation, management, striking off and winding up of companies,
ii. business names, management and removal of names from the register, and
iii. the formation, incorporation, management and dissolution of incorporated trustees;
b. establish and maintain a company’s registry and office in each State of the Federation
suitably and adequately equipped to perform its functions under this Act or any other law;
c. arrange or conduct an investigation into the affairs of any company, incorporated trustees
or business names where the interest of shareholders, members, partners or public so
demands;
d. ensure compliance by companies, business names and incorporated trustees with the
provisions of this Act and such other regulations as may be made by the Commission;
e. perform such other functions as may be specified in this Act or any other law; and
f. undertake such other activities as are necessary or expedient to give full effect to the
provisions of this Act.
Pre-action notice and restriction on levy of execution S17 CAMA:
A suit shall not be commenced against the Commission before the expiration of 30 days after a
written notice of intention to commence the suit is served upon the Commission by the intending
plaintiff or his agent.
(2) The notice referred to in subsection (1) shall clearly state the—
(a) cause of action;
(b) particulars of the claim;
(c) name and place of abode of the intending plaintiff; and
(d) relief sought.
Form MISC 01 Companies Regulations 2021 - Application for Accreditation of
Professional/Agent
Accreditation is required in respect of matters relating to companies (Part B CAMA). The
professionals authorised to transact business with CAC relating to Part B are:
i. Legal practitioners
ii. Chattered accountants
iii. Chattered secretaries
iv. A firm of any of the above professionals
The procedure for accreditation is as follows:
1. Fill the Application Form for Accreditation online (pre.cac.gov.ng)
2. Gather the following accompanying documents and upload;
i. Passport photograph
ii. Electronic Signature
iii. LL. B certificate
iv. National Youth Service Corps discharge certificate or exemption
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v. Payment receipt of the current year practicing fee

vi. Evidence of payment of the prescribed fee
3. Make payment of the prescribed fees via remita
i. Individual
ii. Firm
4. Send the filled form online and upload the accompanying documents.
5. CAC will send an email to the email address supplied to CAC confirming accreditation
for the year.
Note:
• Evidence of membership of a professional body should be attached.
• Evidence of eligibility to practice for the current year should be attached.
• Accreditation may be withdrawn by the Commission if it appears to it that the holder of
the accreditation is no longer a fit and proper person to act as an agent or professional.
HIGHLIGHTS OF CHANGES IN THE CAMA 2020
1. 1990 had 4 parts but 2020 has 7 parts
2. Pre-action notice is now required to sue CAC S17
3. One man company S18(2)
4. If AGF now fails to consent after 30 days for reg of Ltd/Gte, the company alternatively
can follow other options, no more need for mandamus S26(5)
5. Liability of member in Ltd/Gte is now N100k no longer N10k S26(12)
6. Minimum issued share capital is now N100k & N2m no longer N10k & N500k
S27(2)(a)
7. Issuance of share capital is now all authorised capital, no longer 25% SS27(2) & 124
8. Statement of compliance can now be made by applicant or his agent but a LP can make
a declaration to it sworn before a commissioner for oath or notary public S40
9. IT can now merge if they have similar objectives S849
10. Administrative Proceedings Committee S851, appeals lie to the FHC S251(e) CFRN
11. Electronic innovations:
i. E-reservation of name S31(1)
ii. E-signature S101
iii. E-share transfer S175
iv. E-issue of share transfer certificate S181
v. E-meeting for small company S240
vi. E-registered address S244
FORMS UNDER COMPANIES REGULATIONS 2021
FOR COMPANIES
1. CAC 1.1 - Application to Register a Company
2. CAC 2 - Notice of Financial Year End or Changes Therein
3. CAC 3 - Notice of Change of Name of a Company
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4. CAC 4 - Application for Re-Registration

5. CAC 4A - Directors’ Solvency Statement
6. CAC 5 - Return of Allotment of Shares
7. CAC 5A - Notice of Consolidation, Sub-Division, Redemption of Shares or Re-
Conversion of Shares into Stocks
8. CAC 6 - Notice of Registered or Head Office Address
9. CAC 7 - Appointment of Director
10. CAC 7A - Notice of Vacation of Office/Removal/Resignation of Director
11. CAC 7B - Notice of Change in Particulars of Director
12. CAC 8 - Appointment of Secretary
13. CAC 8A - Notice of Removal of Secretary
14. CAC 8B - Notice of Change in Particulars of Secretary
15. CAC 9 - Particulars of Charge
16. CAC 10 - Statement of Satisfaction in Whole or in Part of a Charge
17. CAC 11 - Appointment of an Administrator, Receiver, Receiver Manager or Supervisor
for Company Voluntary Arrangement
18. CAC 12 - Notice of Cessation to Act as a Receiver, Receiver Manager, Administrator or
Supervisor
19. CAC 13 - Application for Striking-off by a Company
20. CAC 14 - Notice of Statutory Declaration of Solvency
21. CAC 15 - Notice of Resolution for Voluntary Winding Up
22. CAC 16 - Appointment of Liquidator
23. CAC 17 - Notice of Return of Final Meeting
24. CAC 18 - Fourteenth Schedule
25. CAC 19 - Annual Return Form
26. CAC 20 - Extension of Time to Hold Annual General Meeting
27. CAC 21 - Notice of Exemption of Foreign Company
28. CAC 22 - Annual Report of Exempted Foreign Company
FOR ACCREDITATION OF AGENTS AND PROFESSIONALS
1. MISC 01 - Application for Accreditation of Professional/Agent
2. MISC 02 – Application for Accreditation of Insolvency Practitioners
3. MISC 03 – Application for Creation of an Electronic Account
FOR LLP
1. CAC/LLP 01 – Application to Register a Limited Liability Partnership (LLP)
2. CAC/LLP 02 – Notice of Change in Registered Office or Head Office Address
3. CAC/LLP 03 – Application for Change of Name
4. CAC/LLP 04 – Notice of Change in Particulars of Partner
5. CAC/LLP 05 – Admission of Partner of a Limited Liability Partnership
6. CAC/LLP 06 – Notice of Cessation of Partner of a Limited Liability Partnership
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FOR LP
1. CAC/LP 01 – Application to Register a Limited Partnership (LP)
2. CAC/LP/2 – Notice of Change in Principal Place of Business or Branch Address
3. CAC/LP 03 – Notice of Change in Name of Limited Partnership
4. CAC/LP 04 – Annual Return of Limited Partnership
5. CAC/LP 05 – Notice of Change/Correction in Particulars of Partner of a Limited
Partnership
6. CAC/LP 06 – Notice of Change in Objects of Limited Partnership
7. CAC/LP 07 – Notice of Cessation of Limited Partnership
FOR BN
1. CAC/BN 01 – Application to Register Business Name
2. CAC/BN 02 – Notice of Change in Principal Place of Business or Branch Address
3. CAC/BN 03 – Change of Name
4. CAC/BN 04 – Notice of Change in Objects of Business Names
5. CAC/BN 05 – Notice of Change/Correction in Particulars of Proprietor
6. CAC/BN/6 – Annual Return of Business Names
FOR IT
1. CAC/IT 01 – Incorporated Trustees Application Form
2. CAC/IT 2 – Change of Name of Incorporated Trustees
3. CAC/IT 03 – Replacement/Appointment and Change in Particulars of a Trustee
4. CAC/IT 4 – Incorporated Trustees Annual Return
5. CAC/IT 5 – Bi-Annual Statement of Affairs of Incorporated Trustees
6. CAC/IT 6 – Notice of Merger of Incorporated Trustees
7. CAC/IT 7 – Notice of Alteration of Constitution of Incorporated Trustee
B. SECURITIES AND EXCHANGE COMMISSION

Establishment – S1 ISA 2007
The Act also regulates capital market operations, issues protection to investors, and ensures fair
and transparent market.
Functions of SEC – S13 ISA: LIFE PICNIC MATIC BEG ADA FOR VIRUS
a. Levy fees, penalties and administrative costs of proceedings or other charges on any
person in relation to investments and securities business in Nigeria in accordance with the
provisions of this Act;
b. Intervene in the management and control of capital market operators which it
considers has failed, is failing or in crisis, including entering into the premises and doing
whatsoever the Commission deems necessary for the protection of investors;
c. Freeze the assets (including bank accounts) of any person whose assets were derived
from the violation of this Act, or any securities law or regulation in Nigeria or other
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jurisdictions; in furtherance of its role of protecting the integrity of the securities market
(after seeking court order to that effect)
d. Enter and seal up the premises of persons illegally carrying on capital market
operations;
e. Public companies’ securities registration
f. ICT linking facilitation of all markets in securities
g. Cross-border securities transactions authorisation and regulation
h. Nationwide system for securities trading in the Nigerian capital market establishment
facilitation, in order to protect investors and maintain fair and orderly markets;
i. Integrity protection of the securities market against all forms of abuses including insider
dealing;
j. Compensate investors (by establishing a nationwide trust scheme) whose losses are not
covered under the investor’s protection funds administered by securities exchanges and
capital trade points, as an act in the public interest having regard to the protection of
investors and the maintenance of fair and orderly markets
k. Mergers, Acquisitions, Takeovers and all forms of business combinations and affected
transactions of all companies as defined in this Act; to review, approve and regulate
them.
l. Agencies and intermediaries’ registration and regulation (e.g.: securities depository
companies, clearing and settlement companies, custodians of assets and securities, credit
rating agencies)
m. Training programmes organisation
n. Investor education
o. Capital Market Operators (corporate and individual) registration and regulation
p. Business of investments and securities in Nigeria regulation
q. Exchanges registration and regulation (e.g.: securities exchanges, capital trade points,
futures, options and derivatives exchanges, commodity exchanges and any other
recognised investment exchange
r. Guideline preparation
s. Advise the minister
t. Disqualification of unfit persons in the securities industry
u. Assistance rendering (as may be deemed necessary) to promoters and investors wishing
v. Establish securities exchanges and capital trade points;
w. Foreign Portfolio Investment register to be kept and maintained
x. Other necessary functions not inconsistent with the ISA
y. Relate effectively with domestic and foreign regulators and supervisors of other financial
institutions including entering into co-operative agreement on matters of common
interest.
z. Venture capital funds and collective investments schemes (in whatever form) registration
and regulation
aa. Information calling, inspection, inquiries and audit of securities exchanges, capital
market operators, collective investment schemes and all other regulated entities;
bb. Research into all or any aspect of the securities industry
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cc. Unfair and fraudulent trade practices (relating to the securities industry) prevention
dd. Self-regulatory organisations promotion and registration (including securities exchanges,
capital trade points and capital market trade associations to which it may delegate its
powers)
REGISTRATION WITH THE SEC
A. Concept
To operate in the Nigerian capital market as a CMO/CMC, one must be registered by SEC. this
is because S38(1) of ISA provides that no person shall operate in the Nigerian capital market as
an expert or professional or in any other capacity as may be determined by SEC; or carry-on
investment and securities business unless he is registered in accordance with ISA and the rules
and regulations made thereunder.
They can register as firms or persons carrying on business in their names or as a corporate body
Rule 178 SEC Rules 2013. The professionals allowed registration are:
1. Legal Practitioners,
2. Accountants,
3. Auditors,
4. Engineers,
5. Estate Valuers,
6. Property Manager, and
7. Others as determined by SEC.
For individual Partners, they must possess 5 years post-call experience to qualify to be registered
while for sponsored individuals it is 2 years post-call that is needed r178 SEC Rules 2013.
Registration by SEC is totally different from accreditation by CAC SEC v Prof A. B. Kasunmu
SAN
B. Procedure for Corporate Bodies (S178(2) SEC Rules)
1. Send an application to SEC by filling SEC Form 3
2. Pay the application fees of:
i. Firm - N20, 000
ii. Principal Partner - N 5,000
iii. Sponsored Individual - N1, 000
3. Submit the application Form with the following documents:
a. Two sets of duly completed form SEC 2 to be filed by at least two sponsored
individuals, one of whom shall be a principal partner
b. CV of the sponsored individuals including details of activities stated in order of time
from secondary school till date
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c. A copy of the certificate of incorporation of the company certified by the company

secretary. Where an uncertified copy is filed, the applicant must present the original for
sighting by an authorised officer of SEC
d. Profile of the company indicating past and present activities
e. Two copies of the MEMART certified by CAC
f. Signed copy of audited account or audited statement of affairs
g. Full postal address of immediate past employer of sponsored individuals
h. Sworn undertaken to keep proper records and render returns as may be specified by SEC
from time to time
i. Evidence of minimum paid up capital of N5million. That is, bank statement of 3-6months
of the applicant with minimum balance of N5million
4. SEC will then visit the office of the applicant
5. The applicant is to participate in SEC training school
B. Procedure for Firms or Person Carrying out Business in their Names (S178(2) SEC
Rules)
1. Send an application to SEC by filling SEC Form 2
2. Pay the application fees of:
i. Firm - N20, 000
ii. Principal Partner - N 5,000
iii. Sponsored Individual - N1, 000
3. Submit the application Form with the following documents:
a. Certified copy of certificate of business name (where applicable)
b. CV of at least two officers (known as sponsored individuals) including details of
activities arranged in order of time from secondary school till date
c. Profile of the firm, including details of past and present activities
d. A copy of the partnership deed (where applicable)
e. Full postal and electronic address of immediate past employer of sponsored individuals
f. Sworn undertaken to keep proper records and render returns as may be specified by SEC
g. Bank statement of 3-6 months of the applicant with a minimum balance of:
i. Individual - N500,000
ii. Firm- N2, 000,000.00
h. Evidence of payment of practicing fees by sponsored individuals
i. Professional indemnity insurance policy
j. Full postal address of bankers
4. SEC will then visit the office of the applicant
5. The applicant is to participate in SEC training school
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C. Revalidating Accreditation
Revalidate accreditation at SEC every 5 years S38 of the ISA, 2007; R. 178 SEC Rules 2013.
C. FEDERAL COMPETITION AND CONSUMER PROTECTION COMMISSION
Established by S3 of the Federal Competition and Consumer Protection Act, 2018
Functions: S17: The Commission shall -
a. be responsible for the administration and enforcement of the provisions of this Act and
any other enactment with respect to competition and protection of consumers;
b. initiate broad based policies and review economic activities in Nigeria to identify anti-
competitive, anti-consumer protection and restrictive practices which may adversely
affect the economic interest of consumers and make rules and regulations under this Act
and any other enactment with regards to competitions and protection of consumers;
c. advise the Federal Government generally on national policies and matters pertaining to
all goods and services and on the determination of national norms and standards relating
to competition and consumer protection;
d. report annually on market practices and the implications for consumer choice and
competition in the consumer market;
e. carry out investigations or inquiries considered necessary or desirable in connection with
any matter falling within the purview of this Act;
f. advise the Federal Government on any matter relating to the operation of this Act
including making recommendations to the Federal Government for the review of policies,
legislation and subsidiary legislation as considered appropriate or as may be requested by
the Federal Government or any of its ministries, departments or agencies for the
eradication of anti-consumer protection and anti-competitive behaviour;
g. eliminate anti-competitive agreements, misleading, unfair, deceptive or unconscionable
marketing, trading and business practices;
h. resolve disputes or complaints, issue directives and apply sanctions where necessary;
i. give and receive advice from other regulatory authorities or agencies within the relevant
industry or sector on consumer protection and competition matters;
j. create public awareness · through seminars, workshops, studies and make available
information with regard to the exercise of its powers and performance of its functions to
the public;
k. authorise, with or without conditions, prohibit or approve mergers of which notice is
received;
l. protect and promote consumer interests;
m. regulate and seek ways and means of removing or eliminating from the market,
hazardous goods and services, including emission, untested, controversial, emerging or
new technologies, products or devices whatsoever, and cause offenders to replace such
goods or services with safer and more appropriate alternatives;
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n. publish, from time to time, list of goods and services whose consumption and sale have
been banned, withdrawn, restricted or are not approved by the Federal Government or
foreign governments;
o. organise or undertake campaigns and other forms of activities capable of promoting
increased private and public consumer awareness;
p. encourage trade, industry and professional associations to develop and enforce in their
various fields quality standards designed to safeguard the interest of consumers;
q. cause all imported goods to be registered for traceability whenever the need arises;
r. collaborate with consumer protection groups and associations for consumer protection
purposes;
s. ensure that consumers' interests receive due consideration at appropriate fora and provide
redresses to obnoxious practices or the unscrupulous exploitation of consumers by
companies, firms, trade associations or individuals;
t. ensure the adoption of appropriate measures to guarantee that goods and services are safe
for intended or normally safe use;
u. collaborate with international organisations and agencies, firms, organisations, groups or
persons for the purposes of exchange of information to locate the source of substandard
goods;
v. undertake regular research, study and analysis of consumer product standards and
services rendered to the consumer and publish relevant observations, findings and
recommendations in journals or other forms of publications for the benefit and general
information of consumers;
w. collaborate with government agencies or professional bodies in establishing and using
laboratories, testing facilities, common procedures in ensuring or enforcing standards of
consumer goods or in assessing the quantum of loss or damage;
x. act generally to reduce the risk and injury which may occur from consumption of certain
consumer items and other services rendered to consumers which action may include
restriction or prohibition;
y. ensure that all service providers comply with local and international standards of quality
and safe service delivery; and
z. cause an offending company, firm, trade, association or individual to protect,
compensate, provide relief and safeguards to injured consumers or communities from
adverse effects of technologies that are inherently harmful, injurious, violent or highly
hazardous;
D. NIGERIAN INVESTMENT PROMOTION COMMISSION

Established under S1 NIPC ACT as a body corporate with perpetual succession. The
commission shall encourage, promote and coordinate investment in the Nigerian economy.
Functions: S4
The Commission shall encourage, promote and co-ordinate investment in the Nigerian economy
and accordingly, shall—
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a. Co-ordinate and monitor all investment promotion activities to which this Act applies;
b. Initiate and support measures which shall enhance the investment climate in Nigeria;
c. Promote investments through effective promotional means;
d. Collect, collate, analyse and disseminate information about investment opportunities and
sources of investment capital, and advise on request, the availability, choice or suitability
of partners in joint-venture projects;
e. Register and keep records of all enterprises to which this Act applies;
f. Identify specific projects and invite interested investors for participation in those projects;
g. Initiate, organise and participate in promotional activities, such as, exhibitions,
conferences and seminars for the stimulation of investments;
h. Maintain liaison between investors and Ministries, Government departments and
agencies, institutional lenders and other authorities concerned with investments;
i. Provide and disseminate up-to-date information on incentives available to investors
j. Assist incoming and existing investors by providing support services
k. Evaluate the impact of the Commission in investments in Nigeria and make appropriate
recommendations;
l. Advise the Federal Government on policy matters designed to promote the
industrialisation of Nigeria or the general development of the economy
m. Perform such other functions as are supplementary or incidental to the attainment of the
objectives of this Act.
E. NATIONAL OFFICE FOR TECHNOLOGY ACQUISITION AND PROMOTION

Established under S1 NOTAP ACT
The Functions of National Office for Technology Acquisition and Promotion are to:
a. Promote investments of foreign technology in and outside Nigeria through effective
promotional means;
b. Assist incoming and existing investors by providing support services; and
c. Register contracts and agreement that are registrable under the Act
d. Issues Certificate of Registration
e. Monitor continuously the execution of contracts and agreements so registered under it.
SEE S. 4(d) & 6(1) NOTAP ACT.
NB: When the application is made and the Director is satisfied with the execution of agreement,
he shall issue the applicant a Certificate OR may refuse to register it S6(1) and (2) NOTAP Act.
Grounds that may warrant Refusal for Registration:
a. Obsolete technology is not allowed and would not be registered.
b. Technology already existing in Nigeria.
c. When the price or other valuable consideration is not commensurate with the technology.
d. Where limitations are imposed on technological research or development by the
transferee.
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NB: Any remedy to the above? Within 60days from the date of the notice of refusal or
cancellation, file a notice of appeal to the Governing Council of NOTAP S9 NOTAP Act.
Effect of Non-Registration
• No repatriation of funds through the official market S7 NOTAP Act; STANBIC IBTC
v. FRCN & NOTAP
NOTABLES
• Agreement between countries is not compulsory but necessary.
• The CEO of the NOTAP is Director-General of NOTAP
F. ONE STOP INVESTMENT CENTRE (OSIC)

In its continuous effort to encourage Foreign Direct Investment (FDI) in Nigeria, the Nigerian
Investment Promotion Commission established the One Stop Investment Centre (OSIC).
Nigeria like most African nations has set up statutory bodies to regulate foreign investment in the
country. Therefore, foreigners interested in carrying on business in the country are required to
obtain investment approvals after incorporating their companies. The practice has been that
company incorporation and foreign investment approvals are processed in different authorised
government agencies. This process was characterised by delays usually caused by government
bureaucracy, which also stifled the smooth start-up of foreign businesses in Nigeria.
Nigerian Investment Promotion Commission (NIPC) provides that Companies with foreign
participation are required to apply to NIPC for registration and the statute provides that within 14
days from the receipt of completed registration forms, NIPC shall register such companies or
otherwise advice the applicant accordingly.
Functions of OSIC
This includes simplifying and curtailing the procedures and guidelines for granting:
a. Business permit,
b. Entry permits
c. Licences,
d. Authorisations,
e. Incentives
In addition, OSIC is expected to achieve the following functions:
• Reduce the high cost of doing business
• Eliminate dealing with multiple agencies
• Eradicate the use of discretion and lack of transparency in granting approvals, licenses,
permits
• Eliminate over bureaucratisation in procedures and processes
• Eradicate poor service delivery
• Ensure Foreign Direct Investment and investor tracking
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Features of OSIC
• The participating agencies will maintain their existing mandates and responsibilities
within the structure of OSIC
• Only statutory provisions will be administered at OSIC and not special applications
• Agencies will establish their presence at OSIC in phases
• Approval time for business entry approvals is 24 hours
• OSIC covers investments into all sectors of the economy
• It is mandatory for all foreign investors to register with OSIC to facilitate foreign direct
investment tracking/investor tracking as provided in the NIPC Act.
G. NIGERIAN STOCK EXCHANGE

The Nigerian Stock Exchange is an Incorporated Body Limited by Guarantee but however, it is
backed by a statute - the Investment and Securities Act.
Functions of NSE
1. Its role is limited to re-organization involving quoted public companies. When public
quoted companies are re-organizing, it would need to comply with relevant requirements
of NSE.
2. Specifically:
3. It is a self-regulatory organization
4. It provides trading floor for the sale and purchase of securities of public quoted
companies
5. It is responsible for the listing and delisting of public companies and for the general
discipline at the floor of exchange.
6. It publishes periodic reports on market capitalisation and all shares index.
7. It regulates secondary market operations
8. Any listed or quoted public company that intends to merge must notify it
9. It admits “new shares” to Daily Official List and de-lists “scheme shares” of dissolved
companies.
H. ASSET MANAGEMENT CORPORATION

Functions: AMCON performs the following functions “in accordance with the provisions of this
Act” i.e., the AMCOM Act S5)
1. Acquire eligible bank assets from eligible financial institutions
2. Purchase or otherwise invest in eligible equities
3. Hold, manage, realise and dispose of eligible bank assets
4. Pay coupons on, and redeem at maturity, bonds and debt securities issued by the
Corporation as consideration for the acquisition of eligible bank assets
5. Perform such other functions, directly related to the management or the realisation of
eligible bank assets that the Corporation has acquired
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6. Protect, enhance, or realise the value of the eligible bank assets that the Corporation has
acquired
7. Perform such other activities and carry out such other functions which in the opinion of
the Board are necessary, incidental or conducive to the attainment of the objects of the
Corporation.
I. CENTRAL BANK OF NIGERIA

The Central Bank of Nigeria is established under the Central Bank of Nigeria (Establishment)
Act. This body only gets involved in mergers and acquisitions when the merger or acquisition or
other business combination involves banks. This is because S7 BOFIA provides that except with
the prior consent of the CBN Governor, no bank shall enter into an agreement or arrangement:
• Which results in a change in the control of the bank
• For the sale, disposal or transfer howsoever, of the whole or any part of the business of
the bank
• For the amalgamation or merger of the bank with any other person
• For the reconstruction of the bank
• To employ a management agent or to transfer its business to any such agent.
From the foregoing, it is clear that any merger scheme involving a bank in Nigeria must get the
prior approval of the CBN before SEC can grant its formal approval.
J. NIGERIAN COMMUNICATION COMMISSION
Nigerian Communication Commission was established by Nigerian Communication
Commission Act, S1 NCC ACT
ETHICAL ISSUES INVOLVED
1. A lawyer shall not engage in incorporation at CAC before accreditation i.e., don’t use
someone else’s accreditation.
2. A lawyer shall not charge excessive fee that does not commensurate with the service
rendered – Rule 52 RPC.
3. Unless permitted by the General Council of the Bar, a lawyer shall not practice as a legal
practitioner at the same time as he practices any other profession. See Rule 7(1) of the
RPC
4. A lawyer shall not practice as a legal practitioner while personally engaged in the
business of buying and selling commodities or the business of a commission agent - Rule
7(2) RPC.
5. A lawyer, whilst a servant or in a salaried employment of any kind, shall not appear as
advocate in a court or judicial tribunal for his employer except where the lawyer is
employed as a legal officer in a Government department. Rule 8(1) RPC.
6. A lawyer, whilst a servant or in a salaried employment, shall not prepare, sign, or file
pleadings, applications, instruments, agreements, contracts, deeds, letters, memoranda,
17
reports, legal opinion or similar instruments or processes or file any such document for
his employer. Rule 8(2) RPC.
7. A director of a registered company shall not appear as an advocate in court or judicial
tribunal for his company. Rule 8(3) RPC.
8. A lawyer must devote and dedicate to the cause of his client. Rule 14 RPC.
9. A lawyer must represent his client within the bounds of the law e.g., if his client instructs
him to incorporate a company whose objects is to manufacture arms and ammunition or
produce police uniform, it is the duty of the lawyer to advise him against embarking on
such venture. Rule 15 RPC.
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CHOICE OF BUSINESS ORGANIZATION AND FORMATION (I)

I: Companies
NB: EXCEPT WHERE OTHERWISE EXPRESSLY STATED, EVERY REFERENCE
TO A SECTION IN THIS TOPIC AND NOTE IS TO CAMA 2020.
MEANING:
• A Business Organization is a going concern
• Profit – oriented
• Duly formed and incorporated/registered under the extant laws in Nigeria Ss 18 & 20
CAMA
TYPES OF BUSINESS ORGANIZATIONS
• Limited Liability Companies
• Sole Proprietorship
• Partnership
• Business Names
RIGHT TO FORM A COMPANY S18
• Any two or more persons may form and incorporate a co S18(1)
• One person may form and incorporate a private co S18(2)
• A co may not be formed or incorporated for an unlawful purpose S18(3)
ASSOCIATION AND PARTNERSHIP OF MORE THAN 20 MEMBERS WHEN
PERMITTED S19
Except it is a registered co under CAMA or another law, no association, or partnership consisting
of more than 20 persons shall be formed for the purpose of carrying on any business for profit
or gain S19(1)
Exceptions are S19(2):
(a) any co-operative society registered under the provisions of any enactment in force in
Nigeria; or
(b) any partnership for the purpose of carrying on practice—
i. as legal practitioners, by persons each of whom is a legal practitioner, or
ii. as accountants by persons each of whom is entitled by law to practise as an
accountant.
CAPACITY TO FORM A COMPANY S20
A person is not qualified to form a company, if he is:
(a) less than 18 years of age;
(b) of unsound mind and has been so found by a court in Nigeria or elsewhere;
(c) an undischarged bankrupt; or
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(d) disqualified under sections 281 and 283 of this Act from being a director of a company.
TYPES OF COMPANIES S21
• a company limited by shares S21(1)(a)
• a company limited by guarantee S21(1)(b)
• an unlimited company S21(1)(c)
• A company of any of these types may either be a private company or a public company
S21(2)
By implication, the types of companies include:
1. Private company limited by shares (Limited, Ltd)
2. Public company limited by shares (Public Limited Company, Plc)
3. Private company limited by guarantee (Limited by Guarantee, Ltd/Gte)
4. Public company limited by guarantee (Limited by Guarantee, Ltd/Gte)
5. Private unlimited company (Unlimited, Ultd)
6. Public unlimited company (Unlimited, Ultd)
NB: the names of the companies are provided for in S29.
FACTORS THAT MAY DETERMINE THE CHOICE OF BUSINESS
ORGANIZATIONS
1. Nature of Business.
2. Available Capital
3. Number of members
4. Desired extent of liability of members
5. Commercial expediency.
6. The scope of operations.
7. Position of the Law/statutory requirements e.g., commercial banks/chambers of
commerce.
8. The cost of registration and expenses.
9. Speed of processing and completion of registration.
10. Post registration compliance issues.
11. The desire of the client himself
PRIVATE COMPANY S22
1. Private company is one which is stated in its memorandum of association to be a private
company S22(1).
A private company may;
2. S22(2) provides that a private company may restrict the transfer of its shares and also
provide that—
o shall not, without the consent of all its members, sell assets having a value of
more than 50% of the total value of the company’s assets.
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o a member shall not sell that member’s shares in the company to a non-member,
without first offering those shares to existing members.
o a member, or a group of members acting together, shall not sell or agree to sell
more than 50% of the shares in the company to a person who is not then a
member, unless that non-member has offered to buy all the existing members’
interests on the same terms.
3. The total number of members shall not exceed 50, except employees presently or
formerly employed by the co who are not included in the count S22(3).
4. Where two or more persons hold one or more shares in a company jointly, they shall, for
the purpose of subsection (3), be treated as a single member S22(4).
S22(5), A private company shall not, unless authorised by law, invite the public to—
(a) subscribe for any share or debenture of the company; or
(b) deposit money for fixed periods or payable at call, whether or not bearing interest.
5. Minimum issued share capital: minimum issued share capital is N100,000 S27(2)(a).
6. Name: Limited, Ltd S29
7. Statutory meeting: not required to hold SM within six months after incorporation or
file statutory reports S235.
8. Written resolution: all resolutions shall be passed at general meetings and are not
effective unless so passed, but in the case of a private company a written resolution
signed by all the members entitled to attend and vote are as valid and effective as if
passed in a general meeting S259.
9. Age of Directors to be Appointed: No age restriction on the appointment of persons
over 70 years as Directors for private as public companies require special notice for a
special resolution S282.
10. Number of Directors appointed by a motion: Can appoint two or more directors at a
single GM by a resolution S287.
11. Qualification of Secretary: the company secretary need not have certain professional
qualifications such as being a chartered secretary/administrator, legal practitioner,
accountant, a firm of any of these or a person who has practiced as public co’s secretary
for three of the five years immediately prior to CAMA S332.
12. Removal of Secretary: the removal of the CS does not require special procedures such
notice, 7 working days period for defence or 7 working days option to resign S333.
WHEN RECOMMENDED
1. Where the capital available to start off business is relatively small probably less than
N2m
2. Where small and medium scale business organizations need to acquire incorporated
status
3. Where family and friends want to engage in business expected to last over a long period
4. Where a SME seeks to acquire an incorporated status
5. Where there is intention to control the company
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PUBLIC COMPANY
1. Definition: any company other than a private company shall be a public company and its
memorandum of association shall state that it is a public company S24.
2. Membership: it is unlimited S22(3).
3. Public Issue: it can invite members of the public to subscribe to its shares and debentures
S22(5), S67 ISA.
4. Minimum Share Capital: the minimum issued share capital is N2m S27(2)(a).
5. Name: Public Limited Company, Plc S29.
6. Statutory Meeting: must hold SM within six months of incorporation S235.
7. Additional Notice of GM: In addition to the notice required to be given to those entitled
to receive it in accordance with the provisions of this Act every public company shall, at
least 21 days before any general meeting, advertise a notice of such meeting in at least
two daily newspapers S246.
8. Written resolution: all resolutions shall be passed at general meetings and are not
effective unless so passed S259.
9. Appointment of Directors over 70 years: where a person who is above 70 years is to be
made a director, it requires a special notice for a special resolution and the age must be
disclosed S282.
10. Number of Directors appointed by a motion: cannot appoint more than one director at
a single GM by a resolution S287.
13. Qualification of Secretary: the company secretary must be professionally qualified,
such as being a chartered secretary/administrator, legal practitioner, accountant, a firm of
any of these or a person who has practiced as public co’s secretary for three of the five
years immediately prior to CAMA S332.
11. Removal of Secretary: the removal of the CS requires special procedures such as notice,
7 working days period for defence or 7 working days option to resign S333.
WHEN RECOMMENDED:
1. Where the capital available to start off business is relatively large, at least N2m and
above
2. Where the business organization desires to have access to public funds through offering
shares to the public for subscription
3. Where membership is not limited or restricted
4. Where there is intention to control the company
5. Where an SME has grown and needs corporate expansion
6. Where a large number of people, up to 50 desire to incorporate a company
7. Where large expansion is anticipated and the incorporators do not wish for a later
conversion into plc
8. Where any law requires the company being formed to be a plc
DIFFERENCES BETWEEN LTD AND PLC
SN DETAIL LTD PLC
1 Definition Its memo must call it private Its memo must call it public S24
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S22(1)
2 Membership Shall not exceed 50 except for Unlimited S22(3)
employees S22(3)
3 Issue of shares Article may restrict transfer of No such provisions
shares, right of pre-emption,
can’t sell more than 50% of
shares to a non-member S22(2)
4 Issue of shares Unless can’t issue shares to the Can issue shares to the public S67 ISA
public S22(5)
5 Deposit of Money Shall not deposit money for No such provision
fixed periods or payable at call
S22(5)
6 Minimum issued N100k S22(2)(a) N2m S22(2)(a)
share capital
7 Name Limited, Ltd S29 Public Limited Company, Plc S29
8 Statutory meeting Need not SM within 6 months Must hold SM within 6 months of
of incorporation S235 incorporation S235
9 Additional notice No such requirement shall, at least 21 days before any general
of GM meeting, advertise a notice of such meeting
in at least two daily newspapers S246.
10 Written a written resolution signed by All resolutions shall be passed at GMs and
resolution all the members entitled to are not effective unless so passed S259.
attend and vote are as valid and
effective as if passed in a GM
S259.
11 Appointment of No such restrictions or where a person who is above 70 years is to

directors over 70 requirements S282. be made a director, it requires a special
years notice for a special resolution and the age
must be disclosed S282.
12 Number of can appoint more than one cannot appoint more than one director at a
directors director at a single GM by a single GM by a resolution S287.
appointed by a resolution S287.
motion
13 Qualification of None of the special The CS must be professionally qualified,
secretary qualifications is needed S332. such as being a chartered
secretary/administrator, legal practitioner,
accountant, a firm of any of these or a person
who has practiced as public co’s secretary for
three of the five years immediately prior to
CAMA S332.
14 Removal of No such requirements to the removal of the CS requires special
secretary remove a CS S333. procedures such as notice, 7 working days
period for defence or 7 working days option
to resign S333.
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COMPANY LIMITED BY SHARE S 21(1) (a)

It is co having the liability of its members limited by the memorandum of association to the
amount, if any, unpaid on the shares respectively held by them S21 (1) (b). It is empowered by
the Act to create classes of shares and issue same to make profit to be distributed as dividends to
the members.
COMPANY LIMITED BY GUARANTEE Ss 21(1) (b) &26
1. It has the liability of its members limited by the memorandum of association to such
amount as the members may respectively undertake to contribute to the assets of the
company in the event of its being wound up S21 (1) (b).
2. It is for the promotion of commerce, art, science, religion, sports, culture, education,
research, charity or other similar objects, and the income and property of the company are
to be applied solely towards the promotion of its objects and no portion thereof is to be
paid or transferred directly or indirectly to the members of the company except as
permitted CAMA S26 (1).
3. It is not registered as a company limited by shares, but as a company limited by guarantee
S26 (1).
4. Any provision in the Co’s MEMART or resolution purporting to give any person a right
to participate in the divisible profits of the company or purporting to divide the
company’s undertaking into shares or interest is void S26 (2).
5. It shall not be incorporated with the object of carrying on business for the purpose of
making profits for distribution to members S26 (3).
6. Its memo shall not be registered without the authority of the AGF S26 (4).
7. The AGF shall, within 30 days, grant authority to the promoters where there are no
objections to the memorandum or other cogent reason for not granting approval to
register the company as one limited by guarantee S26 (5).
8. Where further info is required by the AGF from the promoters, the 30 days period shall
begin on receipt of all relevant information S26 (6).
9. S26(7) provides that where all valid documents are furnished by the promoters and no
decision has been made by the AGF within the 30 days period—
(a) the promoters shall—
i. place an advertisement in three national daily newspapers, and
ii. invite objections, if any, to the incorporation of the company;
(b) an objection shall state the grounds on which it is made and shall be forwarded to the
Commission within 28 days from the date of the last publications in the
newspapers, where there is objection to the incorporation of the company;
(c) the Commission—
i. shall consider the objection and may require the applicant to furnish further
information or documentation, and
ii. may uphold or reject the objection as it deems fit and inform the applicant
accordingly.
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10. If the Commission is satisfied that the MEMART have complied with the provisions of
this section, it shall cause the application to be advertised, in the prescribed form, in
three national daily newspapers S26(8).
11. The advertisement shall invite objections, if any, to the incorporation of the co and the
objection shall state the grounds on which it is made and shall be forwarded to the
Commission within 28 days of the date of the last publications in the newspapers, and, if
the objection is made, the Commission –
(a) shall consider it and may require the applicant to furnish further information or
documentation; and
(b) may uphold or reject the objection as it deems fit and inform the applicant
accordingly.
12. Where no objection is made and all requirements have been complied with, the
commission may withhold or grant assent and issue cert of incorporation accordingly
S26(10).
13. If it carries on business for the purpose of distributing profits to its members, all officers
and members who are cognisant of the fact that it is so carrying on business shall jointly
and severally be liable for the payment and discharge of all the debts and liabilities of the
company incurred in carrying on such business, and the company and every such officer
and member shall be liable to penalty as prescribed by the Commission for every day
during which it carries on such business S26(11).
14. The total liability of a member to contribute to the assets of the company in the event of
its being wound up shall not at any time be less than N100k S26(12).
15. If a member’s liability is not up to N100k, the articles may provide that he can retire or
be removed from membership by a special resolution duly filed with the Commission
S26(13).
16. If the total liability of the members at any time less than N100k, every director and
member of the company who is cognisant of the breach is liable to a penalty as prescribed
by the Commission for every day during which the default continues S26(14).
17. Subject to section 117 (4) (d) of this Act, if upon the winding-up, there remains, after the
discharge of all its debts and liabilities, any property of the company, the same shall not
be distributed among the members but shall be transferred to some other company limited
by guarantee having objects similar to the objects of the company or applied to some
charitable object and such other company or association shall be determined by the
members prior to dissolution of the company S26(15).
WHEN RECOMMENDED
1. Where the company’s object is for the promotion of commerce, art, science, religion,
sports, culture, education, charity.
2. Where the company’s profit is not to be distributed to members as dividend.
3. It is a subsidiary company set up to render corporate social responsibility, obligations for
the parent company.
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DIFFERENCES BETWEEN CO LTD BY SHARES AND CO LTD BY GUARANTEE

SN DETAIL CO LTD BY SHARES CO LTD BY GUARANTEE
1 Liability of Members Can be implemented at anytime Can only be implemented upon
wound up
2 Retirement or Cannot be removed by article Can be removed by article is the
removal of members liability falls below N100k
3 Registration Consent of AGF not required Consent of AGF required
4 Registration No need for public in national There must be publication in 3
dailies national newspapers
5 Object Object is to carryon business Object is not to carryon business
6 Dividend Shares its profit as dividend to Cannot share its profit as dividend
members but use in its promotion
7 Surplus assets upon Distributed to members Cannot be distributed to members to
dissolution/wound up cos with similar objects or charity
UNLIMITED LIABILITY COMPANY S 21(1) (c)

• An Unlimited Liability Company is a company not having any limit to the liability of its
members.
• At liquidation, members are personally liable to the Company’s indebtedness.
WHEN RECOMMENDED
• For partnership beyond 20 persons S19
• Where a law requires same
• Where the members do not wish their liability to be limited
• Where public confidence is sought to be guaranteed as the members can be personally
proceeded against
SMALL COMPANY S394(3)
1. private company
2. turnover is not more than N120m or such amount as may be fixed by the CAC
3. net assets value is not more than N60M or such amount as may be fixed by the CAC
4. none of its members is an alien
5. none of its members is a government, government corporation or agency or its nominee
6. in the case of a company having share capital, the directors between themselves hold at
least 51% of its equity share capital.
HOLDING COMPANY, SUBSIDIARY AND WHOLLYOWNED SUBSIDIARY S381
A co is deemed to be a subsidiary of another co if the co—
i. is a member of the company and controls the composition of its board of directors;
ii. holds more than 50% in nominal value of its equity share capital; or
iii. the first-mentioned company is a subsidiary of any company which is that other’s
subsidiary.
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(2) For the purposes of subsection (1), the composition of the board of directors of a company is
deemed to be controlled by another company if that other company by the exercise of some
power, without the consent or concurrence of any other person, can appoint or remove the
holders of all or majority of the directors.
REGISTRATION OF COMPANIES
Steps taken towards registration:
1. Taking instruction
2. Create account on CAC Company Registration Portal (CRP)
3. Search for availability of proposed name
4. Pay for reservation of name
5. Reserve name
6. Complete the pre-reg form on the CRP
7. Upload the required docs e.g., signatures and ID of directors and shareholders
8. Pay the filing fee via online payment portal (e-transact)
9. Pay stamp duties online
10. Download and print the electronic and certified extract of reg after approval from your
portal
TAKING INSTRUCTIONS
Client Interview Questionnaire
1. Proposed Name of Company/ Alternative
2. Registered Office Address/ Head Office
3. Nature of Business
4. Location
5. What is the proposed sphere of coverage?
6. How many members/shareholders/proprietors will you have for a start?
7. What is the maximum number of members?
8. Ages of the persons forming the company
9. Who are the Proposed Directors?
10. Any known legal disability
11. Proposed minimum share capital
12. Shareholding structure – Ratio
13. Expatriate employees
14. Control and Management / Leverage on investment
15. Public Issue of Shares and Prospectus
GTE
1. What would be the extent of members undertaking to contribute?
2. Name of the Company
3. What are the objects of business?
4. Are the objects for promotion of commerce, art, science?
27
5. Details of Subscribers
6. Permits and Approvals
7. What is the proposed NAME of the business?
8. Control and Management
9. Raising and Borrowing Power
10. Registered Office Address.
11. Company Secretary
12. Directorship
THE QUESTIONS IN DETAILS
1. Personal details
• Name in full
• Nationality
• Gender
• Age
• Residential address
• NB: Essentially to answer the question of capacity under S20.
2. Shareholders/ownership
• How many persons to start up the business.
o membership
o Details of such members
o Nationality
o Age
3. Details of Directorship
• Who are to be Directors?
o Age
o Qualification = expertise
o Mental capacity
o Number of Directors
o Contact address
4. Sphere/dimension of Business
• Need for registered office address in Nigeria
• Leveraging on ECOWAS Protocol, WTO/GATT, etc
• Incentives - manufacturing and rural location
5. Shares
• Share Capital
• Shares Allotment
• Types/Classes of Shares
28
6. Restrictions on Power of the Company

• S43 provides for full power except curtailed in memo
o Borrowing Power of the Company
• To be expressly stated and with limitation if any.
o Biz and investment. Etc
7. Registered Office Address

• To capture details such as:
o Number
o Street
o Quarters/District
o Town
o LGA
o State
8. Control and Management

• Use of Common Seal
• Life Director
• Chairman
• Majority Shareholding
• Preferential shareholding
• Power to appoint and remove Director
• Compulsory signatory to the account
9. Secretaryship
• Details of Company Secretary
• Qualification etc
10. Type of company

• As envisaged under S21(1) & (2)
11. The date for completion of registration
• Express service at CAC
NOT AVAILABLE AGAIN
• Professional Fees
• Commencement of Business – after incorporation – Ss 37 & 38 CAMA
• NB: Cos have no power of commencement of business before incorporation unlike
business name which enjoys the 28 days rule.
29
12. Nature and objects of Business

• What is the nature of business?
• What are the objects of business? This will help the Solicitor to advice along
o Share capital prescription. e.g., banking, insurance, security, aviation, shipping,
capital market, asset management
o need for proficiency certificate
o Obtaining needed permits, license, approval and consents.
o Regulatory agencies, Bodies, etc
13. Foreign Participation
• JVA
• Necessary permits from NIPC, CBN, NIS etc
• Nature of the foreign participation FPI/FDI.
• Importation of Capital to avoid violation of money laundering statutes.
14. What is the proposed NAME of the business?
Preferred name and Alternative Name
REGISTRABLE AND NON-REGISTRABLE NAMES
• Conflicting Names: Registered corporate Name
• Restricted Names: Names to be used subject to consent of CAC or solely reserved for a
particular type of company
• Prohibited Names: Names that cannot be approved because of their illegal, offensive or
deceptive nature.
Restricted name
• cannot be registered except with the consent of CAC
• Names which contain the words “National”, Government”, “Municipal”, “State”,
Federal”, “Regional” which in the opinion of the CAC suggests or is calculated to
suggest that it enjoys the patronage of the Federal/State Government Nig. or any ministry
or contains the word “Municipal” or “Chartered” or in the opinion of CAC suggest
connection with any municipal or other local authority;
• Contains the words “co-operative” or the words “Building secured
• Contains the word “Group” or “Holding”
• Name that contains the words “Chamber of commerce”
CHECKLIST OF PROHIBITED CORPORATE NAMES
Either because such name conflict with an
1. Already registered
2. Reserved names or
3. Deceptive or
30
4. Illegal or offensive to public policy

THE CONSITUTION OF THE COMPNAY
This is contained in the MEMART. It is compulsory for every co to have MEMART Ss 32 & 36.
PREPARATION OF MEMART
MEMORANDUM OF ASSOCIATION
Contents of MEMO
The statutory requirements with respect to the memorandum of a company are provided for in
S27 and are also contained in CAC CRP which may be adopted subject to the company’s
preferences which may decide to alter it to its needs. The statutory clauses are:
(a) the name of the company; SS27(1)(a); 29(1) and (2).
(b) that the registered office of the company shall be situated in Nigeria; S27(1)(b).
(c) the nature of the business or object depending on whether it is a Ltd or Ltd/Gte S27(1)(c).
(d) the restriction, if any, on the powers of the company; S27(1)(d).
(e) that the company is a private or public company, as the case may be; S27(1)(e).
(f) that the liability of its members is limited by shares, by guarantee or unlimited, as the
case may be.
(g) If the company has a share capital—
i. the minimum issued share capital (capital clause)
ii. each subscriber shall write opposite his name the number of shares he takes
(subscriber clause)
(h) A subscriber of the memo who holds the whole or any part of the shares subscribed by
him in trust for any other person shall disclose that fact and the name of the beneficiary in
the memo.
(i) The memo of a company limited by guarantee shall also state that—
i. the income and property of the company shall be applied solely towards the
promotion of its objects, and that no portion thereof shall be paid or transferred
directly or indirectly to the members of the company except as permitted by
CAMA (special clause)
ii. each member undertakes to contribute to the assets of the company in the event of
its being wound up while he is a member or within one year after he ceases to be a
member for payment of debts and liabilities of the company, and of the costs of
winding-up, such amount as may be required not exceeding a specified amount
and the total of which shall not be less than N100,000 (undertaken clause)
(j) The memorandum of association shall be signed by each subscriber in the presence of at
least one witness who shall attest the signature.
(k) The memorandum shall be stamped as a deed.
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Explanation of the Contents

THE NAME CLAUSE: this depicts the name that the co chooses to go by. However, the choice
of name is strictly regulated as it must neither be a prohibited nor a restricted name, albeit the
latter can be used subject to the fulfilment of certain conditions. The name of the company must
end with the status of the company either in full or in abbreviation pursuant to as provided in
S29.
Prohibited Names 852(1): No company, limited liability partnership, limited partnership,
business name or incorporated trustee shall be registered under this Act by a name or trade mark
which:
(a) is identical with that by which a company or limited liability partnership in existence is
already registered, or so nearly resembles that name as to be calculated to deceive,
except where the company or limited liability partnership in existence is in the course of
being dissolved and signifies its consent in such manner as the Commission requires;
Niger Chemists Ltd v Nigeria Chemists Ltd.
(b) contains the words “Chamber of Commerce” unless it is a company limited by
guarantee; Lagos Chamber of Commerce v Registrar of Companies (1952) 14
WACA 197
(c) is capable of misleading as to the nature or extent of its activities or is undesirable,
offensive or otherwise contrary to public policy; Amasike v Registrar General CAC.
(d) would violate or conflict with any existing trademark or business name registered in
Nigeria or body corporate formed under this Act unless the consent of the owner of the
trade mark, business name or trustees of the body corporate has been obtained;
(e) is likely to mislead the public as to the nationality, race or religion of the persons by
whom the business is wholly or mainly owned or controlled;
(f) deceptive or objectionable in that it contains a reference or suggests association with
any practice, institution, personage, foreign state or government, international
organisation or international brand or is otherwise unsuitable; or
(g) is capable of undermining public peace and national security.
Restricted Names 852(2): Except with the consent of the Commission, no company, limited
liability partnership, limited partnership, business name or incorporated trustees shall be
registered by a name which:
(a) includes the word “Federal”, “National”, “Regional”, “State”;
(b) “Government”, or any other word which, in the opinion of the Commission suggests or
is calculated to suggest that it enjoys the patronage of the Government of the Federation,
the Government of a State in Nigeria, any Ministry or Department of Government, or
contains the word “Municipal” or “Chartered” or in the opinion of the Commission,
suggests or is calculated to suggest, connection with any municipality or other local
authority;
(c) contains the word “Cooperative” or its equivalent in any other language or any
abbreviation; or of the words “Building Society”; or
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(d) contains the word “Group” or “Holding”.

Duty to seek comments of government department or other body S853: the applicants with
respect to the restricted name may apply to the CAC to refer the name to the relevant
government agency to view, CAC to determine whether or not to approve it.
Objection to the registered name S857.
A person (“the applicant”) may object to the registered name of a company, limited liability
partnership, limited partnership, business name or incorporated trustees on the ground that it is—
(a) the same as a name associated with the applicant in which he has goodwill; or
(b) sufficiently similar to such a name that its use in Nigeria would be likely to mislead by
suggesting a connection between the company, limited liability partnership, limited
partnership, business name or incorporated trustee and the applicant.
(2) The objection must be made by application to the Administrative Proceedings committee
established under this Act.
(3) The company, limited liability partnership, limited partnership, business name proprietor or
partners or incorporated trustees concerned shall be the primary respondent to the application
provided that any of its members or directors may be joined as respondents.
(4) If the ground specified in subsection (1) (a) or (b) is established, it is for the respondents to
show that the—
(a) name was registered before the commencement of the activities on which the applicant
relies to show goodwill;
(b) company, limited liability partnership, limited partnership, business name or incorporated
trustee—
i. is operating under the name,
ii. is proposing to do so and has incurred substantial start-up costs in preparation, or
iii. was formerly operating under the name and is now dormant;
(c) name was adopted in good faith; or
(d) interests of the applicant are not adversely affected to any significant extent.
(5) If the facts mentioned in subsection (4) (a) or (b) are established, the objection shall
nevertheless be upheld if the applicant shows that the main purpose of the respondents (or any of
them) in registering the name was to obtain money (or other consideration) from the applicant or
prevent him from registering the name.
(6) If the objection is not upheld under subsection (4) or (5), it shall be dismissed.
(7) In this section “goodwill” includes reputation of any description.
S858 provides that the Administrative Proceedings Committee shall within 30 days of
determining an application under section 857, make its decision and reasons for it available to
the public.
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Availability and Reservation of Name S31:

• The CAC upon application by hardcopy or electronic means may reserve the name
pending registration or change S31(1).
• The reservation shall be up to 60 days but not more S31(2)
• The CAC reserves the right to cancel the name anytime before issuance of cert of incorp
S31(3)
• After lapse of 60 days, the CAC may agree to approve the name for another applicant
S31(4)
• An approved name can be withdrawn or cancelled by the CAC on the grounds of fraud
S31(5)
THE REGISTERED ADRESS/OFFICE S27: this must be situated in Nigeria. S728 provides
that the office shall be the office to which all communications and notices to the company may
be addressed and notice of any change in the address of the registered or head office of the
company shall be given within 14 days of the change to the Commission which shall record the
same.
THE OBJECTS CLAUSE: Must state the objects of business that the company intend to
undertake. However, the doctrine of ultra vires must be borne in mind.
S44(1) provides that a company shall not, carryalter on any business expressly prohibited by its
memorandum and shall not exceed the powers conferred upon it by its memorandum or CAMA.
S44(3) Notwithstanding the provisions of subsection (1), no act of a company, conveyance or
transfer of property to or by a company shall be invalid by reason of the fact that such act,
conveyance or transfer was not done or made for the furtherance of any of the authorised
business of the company or that the company was otherwise exceeding its objects or powers.
This section cures the harsh effects of common law. There is also the abolition of constructive
notice of registered documents and presumption of regularity provided for in Ss 92 and 93
respectively.
CAPITAL CLAUSE: States the capital of the company but if Ltd/Gte, state objects
THE LIMITED LIABILITY CLAUSE: state the extent of the liability of the members, if
Ltd/Gte, extent of guarantee
ASSOCIATION/SUBSCRIPTION CLAUSE: states the shares subscribed to by the
incorporators, number and names. Attested to by at least one witness.
Draft:
SN Names and Addresses Description of subscribers Shares taken
1 Chris Agbata Legal Practitioner 1,000,000.00
15 Edupal Drive, Ikoyi, Lagos
2 Gabriel Odii Businessman 500,000.00
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10 Jackson Cresent, Ikeja, Lagos

3 Theo Uguru Businessman 500,000.00
72 Theo Street, Lekki, Lagos
4 Abdulhafeez Yusuf Legal Practitioner 1,000,000.00
17 Madison Close, Nottingham
5 Victor Onyedika Businessman 600,000.00
20 Broad Street, New York
Total Shares taken 2,600,000.00
DATED the 29th day of June, 2021

Witness to the above signatures
Peter Pan
12 Peter Avenue, Manchester.
ARTICLES OF ASSOCIATION
S32: A company shall have articles of association prescribing regulations for the company.
Articles of association registered by a company shall be contained in a single document, and
divided into paragraphs numbered consecutively.
S33: The Minister may by regulations prescribe model articles of association for companies.
Different model articles may be prescribed for different descriptions of companies. A company
may adopt all or any of the provisions of model articles.
S34: provides for default application of model articles
S35: Unless a company’s articles specifically restrict the objects of the company, its objects are
unrestricted. Where a company amends its articles to add, remove or alter a statement of the
company’s objects;
(a) it shall give notice to the Commission;
(b) on receipt of the notice, the Commission shall register it ; and
(c) the amendment is not effective until after the entry of that notice in the register
CONTENTS OF ARTICLES
1. Interpretation
2. Shares-classes and variation of class rights (S144); restriction on transfer of shares (S176(3);
power of allotment; share certificate (S171)
3. Prohibition of loans or financial assistance to buy shares in the company (S164)
4. Calls on shares (S158)
5. Transfer of shares (S175)
6. Transmission of shares (S179)
7. Increase of share capital (SS127 and 128), Reduction of shares (SS130 -136)
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8. Borrowing
9. Meeting of the company- Types (SS235, 237, 239)
10. Notice of meetings
11. Proceedings at Meetings (SS238, 242), Quorum (S256)
12. Chairman (S265)
13. Voting (S248)
14. Poll (S250)
15. Proxy (S254)
16. Written Resolutions (S259)
17. Number of directors (S271)
18. Appointment of first directors and other directors (S272 and 273)
19. Casual vacancy (S274)
20. Share qualification (S277)
21. Life Director (S281)
22. Vacation of office of Directors (S284)
23. Tenure of directors (S285)
24. Removal (S288)
25. Proceedings at meetings (S289)
26. Written Resolutions of Directors (S289(8), Quorum (S290)
27. Notice of meeting of directors (S292)
28. Remuneration (S293)
29. Managing Director
30. Duties of Directors (SS305-309)
31. The Secretary
32. Appointment and removal (S333)
33. Duties S335
34. Common seal –custody
35. Authority to use
36. Signature of documents
37. Official seal
38. Dividends and Reserve
39. Declaration of dividends and interim dividends (SS426) Reserves (SS430)
40. Payment of dividends
41. Capitalisation of profits (S430(2))
42. Accounts-Directors to cause proper books of accounts to be kept (S374)
43. Audit- Appointment of auditors (S401)
44. Stock Exchange if the company is to seek listing of its shares on a Nigerian Stock Exchange,
the articles must comply with the regulations of the exchange
45. Note: Second tier Securities Market (SSM)
46. Notices (S244)
47. Winding up
48. Indemnity
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REGISTRATION DOCUMENTS
S36(1) The memorandum of association shall be delivered to the Commission together with an
application for registration of the company, the documents required by this section and a
statement of compliance.
• Memo
• Application for reg of the co
• Docs required by S36 (Statement of initial issued share capital and initial shareholdings,
statement of Co’s proposed directors, statement of proposed registered office, a copy of
articles of association)
• Statement of compliance
(2) The application for registration shall state—
(a) the company’s proposed name;
(b) the registered office address and head office address if different from the registered office
address;
(c) whether the liability of the members of the company is to be limited and, if so, whether it
is to be limited by shares or by guarantee; and
(d) whether the company is to be a private or a public company.
(3) If the application is delivered by a person as agent for the subscribers to the memorandum of
association, it shall state the name and address of that agent.
(4) The application shall contain—
(a) in the case of a company that has a share capital, a statement of initial issued share capital
and initial shareholdings;
(b) in the case of a company that is limited by guarantee, a statement of guarantee;
(c) a statement of the company’s proposed directors;
(d) a statement of the proposed registered office of the company; and
(e) a copy of the proposed articles of association to the extent that these are not supplied by
the default application of model articles.
Statement of capital and initial shareholdings
S37(1) The statement of initial issued share capital and initial shareholdings required to be
delivered in the case of a company that has a share capital shall state—
(a) the total number of shares of the company to be taken on formation by the subscribers
to the memorandum of association;
(b) the aggregate nominal value of those shares
(c) for each class of shares—
i. prescribed particulars of the rights attached to the shares,
ii. the total number of issued shares of that class, and
iii. the aggregate nominal value of issued shares of that class; and
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(d) the amount to be paid up and the amount (if any) to be unpaid on each share (whether
on account of the nominal value of the share or by way of premium).
(2) The statement of initial issued share capital and initial shareholdings shall—
(a) contain such information as may be prescribed for the purpose of identifying the
subscribers to the memorandum of association; and
(b) with respect to each subscriber to the memorandum—
i. the number, nominal value (of each share) and class of shares to be taken by him on
formation, and
ii. the amount to be paid up and the amount (if any) to be unpaid on each share (whether
on account of the nominal value of the share or by way of premium).
(3) Where a subscriber to the memorandum is to take shares of more than one class, the
information required under subsection (2) (b) is required for each class.
(4) The total fees payable to the Commission in connection with the filing or increase of a
company’s issued share capital under this Part of this Act shall be as the Minister may by
regulation specify.
Statement of guarantee.
S38(1) The statement of guarantee required to be delivered in the case of a company that is
limited by guarantee shall—
(a) contain such information as may be prescribed for the purpose of identifying the
subscribers to the memo; and
(b) that each member undertakes that, if the company is wound up while he is a member, or
within one year after he ceases to be a member, he shall contribute to the assets of the
company such amount as may be required for—
i. payment of the debts and liabilities of the company contracted before he ceases to be
a member, payment of the costs, charges and expenses of winding-up, and
ii. adjustment of the rights of the contributories among themselves, not exceeding a
specified amount.
Statement of proposed Directors.
S39(1) The statement of the company’s proposed directors required to be delivered to the
Commission shall contain the required particulars of—
(a) the person who is, or persons who are, to be the first director or directors of the co; and
(b) where applicable, the person who is, or persons who are, to be the first secretary or joint
secretaries of the co.
(2) The required particulars are the particulars that are required to be stated in the case of a—
(a) director, in the company’s register of directors and register of directors’ residential
addresses; and
(b) secretary, in the company’s register of secretaries.
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(3) The statement shall also contain a consent by each of the persons named as a director, as
secretary or one of joint secretaries, to act in the relevant capacity but if all the partners in a firm
are to be joint secretaries, consent may be given by one partner on behalf of all of them.
Statement of compliance
S40(1) The statement of compliance required to be delivered to the Commission is a statement
by the applicant or his agent that the requirements of this Act as to registration have been
complied with.
(2) The Commission may accept the statement of compliance as sufficient evidence of
compliance.
(3) Nothing in this section prevents the Commission from accepting declaration of compliance
which is signed by a legal practitioner and attested before the commissioner for oaths or notary
public.
NB: the difference between subsection one is that the applicant or his agent submits the SoC in
(1) but in (3), the LP does a declaration of compliance not signing the SoC, he’s somewhat
attesting or guaranteeing that they’ve complied in a separate doc and not necessarily signing the
SoC.
Grounds to Refuse Registration
S41(1) The Commission shall register the memorandum and articles unless in its opinion—
(a) they do not comply with the provisions CAMA;
(b) the business which the company is to carry on, or the objects for which it is formed, or
any of them, are illegal;
(c) any of the subscribers to the memorandum is incompetent or disqualified with respect to
capacity
(d) there is non-compliance with the requirement of any other law as to registration and
incorporation of a company; or
(e) the proposed name conflicts with or is likely to conflict with an existing company,
trade mark or business name registered in Nigeria.
Notwithstanding the above explanation in line with S36, the fact is that albeit, registration can
now be completed online and certificate of incorporation printed but for the purpose of Bar
Finals, the checklist of docs (filed online) may include:
i. Form CAC 1 for availability of name (no longer in Reg 2021)
ii. Form CAC 1.1; application for registration
iii. Identification documents for every subscriber and secretary (international passport
needed if a foreigner is involved)
iv. MEMART filled online
v. Original receipts of reg fees, stamp duties and statement of compliance or a declaration of
compliance by a LP sworn before a commissioner for oath or notary public
vi. Residence permit, if an alien
39
vii. Electronic signatures of the subscribers, directors, secretary and legal practitioner or
agent incorporating the company
viii. Affidavits where any alterations are made to the application forms
ix. Birth certificate or photo-page of international passport where a minor is involved
x. Board resolution and certificate of reg, where a corporate body is involved
NB: the purpose for the above list it that, in Bar Finals, the question maybe couched in a way
that will require the students to list forms and other docs aside from those listed under S36, thus,
these in conjunction with those in that section will suffice. Better to err on the side of surplusage
until NLS releases the official updated CLP modules operandi.
Documents required to register company limited by guarantee
i. CAC 1- Availability Check and Reservation of name (fill online)
ii. CAC 1.1- Form for Company Registration (to be adopted online with little alteration
allowed)
iii. Memorandum and articles of association (fill online) dully Stamped.
iv. Approval of Attorney General of the Federation
Other documents:
v. Residence permit (where foreigner’s residential address is in Nigeria) (uploaded online).
vi. Recognised means of identification for every director, subscriber and secretary in the
company (uploaded online)
vii. Electronic signatures of the subscribers, directors, secretary and legal practitioner or
agent incorporating the company (uploaded online)
viii. Other documents required by the Commission to satisfy the requirement of any
law relating to the formation of a company (uploaded online).
ETHICAL MATTERS
• Duty to act in good faith
• Duty to take full instruction.
• Duty to Disclose Conflicting Interest Rule 17 RPC.
• The money collected must be disbursed in accordance with client’s lawful instructions.
• Preserve Confidential Information - S192 EA
• It is the duty of the lawyer to devote his attention, energy and expertise to the service of
his client in accordance with Rule 14 (2 - 5) RPC 2007.
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BUSINESS NAME/PARTNERSHIP AND INCORPORATED TRUSTEE

CHOICES OF BUSINESS AND NON-BUSINESS ORGANISATION
• Partnership (LLP, LP, GP)
• Business Names
• Company Limited by Guarantee
• Incorporated Trustees
PARTNERSHIP
Partnership is the relationship which subsists between Persons carrying on business in common
with a view of profit S1(1) Partnership Act 1890, S3(1) Partnership Law, Lagos (PLL).
REGISTRATION AND NUMBER OF MEMBERS S19 CAMA
• It must be registered and must not be more than 20 persons except:
i. It is registered as a company under CAMA
ii. It is formed in pursuance of some other enactments in force in Nigeria
iii. It is a co-operative society registered under the provisions of any enactment in force
in Nigeria or
iv. It is a partnership of legal practitioners (all must be lawyers entitled by law to practice
as such)
v. It is a partnership of accountants (all must be accountants entitled by law to practice
as such)
CHARACTERISTICS OF PARTNERSHIP
i. It must not contain at least two but not more than 20 persons S19(1) CAMA but see
exceptions above S19(2) CAMA
ii. It must be registered S19(1) CAMA but see exceptions above S19(2) CAMA
iii. There must be a legal business S3(1) PLL, Henshaw v Roberts.
iv. The business must be carried on in common by two or more persons S3(1) PLL, Ugorji
v Uzoukwu.
v. The intention must be to make profit and an agreement to share same S3(1) PLL, Ugorji
v Uzoukwu.
vi. Every partner is deemed an agent of the partnership S6 PLL.
CAPACITY OF PARTNERS
• Minors
• Persons of unsound mind (lunatics)
• Bankrupts (companies in liquidation)
• Aliens
• Unincorporated associations
See: S126(g) Bankruptcy Act 2004. Ss 34 (a) and 36 (a) Partnership Law Lagos.
41
PARTNERSHIP AGREEMENT
• Oral
• Written
• By Deed
• Legal Implication
NECESSITY FOR FORMAL AGREEMENT
• Prevention of presumptions of law
• It forms a benchmark for reference time of crisis
• Easy enforceability of the terms
• Avoidance of bad faith, cheating and oppression
• Makes the terms easily ascertainable
RULES FOR DETERMINING EXISTENCE OF PARTNERSHIP S4 PLL
In determining whether a partnership does or does not exist regard shall be had to the following
rules -
(a) Joint tenancy, tenancy in common, joint property, common property or part ownership
does not of itself create a partnership as to anything so held or owned whether the tenants
or owners do or do not share any profits made by the use thereof.
(b) The sharing of gross returns does not of itself create a partnership whether the persons
sharing such returns have or have not a joint or common right or interest in any property
from which or from the use of which the returns are derived.
(c) The receipt by a person of a share of the profits of a business is prima facie evidence that
he is a partner in the business, but receipt of such a share or of a payment contingent on
or varying with the profits of a business, does not of itself make him a partner in the
business; and in particular -
i. the receipt by a person of debt or other liquidated amount by instalments or
otherwise out of the accruing profits of a business does not of itself make him a
partner in the business or liable as such;
ii. a contract for the remuneration of a servant or agent of a person engaged in a
business by a share of the profit of the business does not of itself make the servant or
agent a partner in the business or liable as such;
iii. a person being a widow or child or a deceased partner and receiving by way of
annuity a portion of the profits made in the business in which the deceased person
was a partner is not by reason only of such receipt a partner in the business or liable
as such;
iv. the advance of money by way of loan to a person engaged or about to engage in
any business on a contract with that person that the lender shall receive a rate of
interest varying with the profits or shall receive a share of the profits arising from
carrying on the business, does not of itself make the lender a partner with the person
or persons carrying on the business or liable as such:
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v. If such a contract is not in writing, a person receiving by way of annuity or

otherwise a portion of the profits of a business in consideration of the sale by
him of the goodwill of the business, is not by reason only of such receipt a partner in
the business or liable as such.
TYPES OF PARTNERSHIP
LIMITED LIABILITY PARTNERSHIP (LLP) PART C, SS 746 – 794
S746: Limited liability partnership to be body corporate
1) It is a body corporate and is a legal entity separate from the partners.
2) It shall have perpetual succession.
3) Any change in the partners of a LLP does not affect the existence, rights or liabilities of
the LLP.
S747: Partners
Any individual or body corporate may be a partner in a LLP but not if he is —
(a) of unsound mind and has been so found by a court in Nigeria or elsewhere;
(b) an undischarged bankrupt.
S748: Minimum number of partners
1) Every LLP shall have at least two partners. (NB: it is not exactly clear whether this
should be more than 20, juxtaposing sections 19(1) and 795(2)).
2) If at any time the number of partners is reduced below two and it carries on business for
more than 6 months, the person, who is the only partner during that time and has the
knowledge of the fact that it is carrying on business with him alone, is liable personally
for the obligations of the LLP incurred during that period.
S749: Designated Partner (DP)
1) Every LLP shall have at least two DPs who are individuals and at least one of them
shall be resident in Nigeria:
Provided that in case of a LLP in which all the partners are bodies corporate or in which
one or more partners are individuals and bodies corporate, at least two individuals who
are partners of the LLP or nominees of the bodies corporate shall act as DPs.
2) Subject to the provisions of subsection (1);
(a) if the incorporation document —
i. specifies who are to be DPs, the persons are DPs on incorporation, or
ii. states that each of the partners of a LLP is to be DP, every such partner is a DP; or
(b) any partner may become or cease to be a DP in accordance with the LLP agreement.
3) An individual does not become a DP in any LLP unless he has given his prior written
consent.
4) Every LLP shall file with CAC the particulars of every individual who has given his
consent to act as DP within 30 days of his appointment.
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5) A person ceases to be a DP if he ceases to be a partner.

Incorporation documents S753
753(1) For a LLP to be incorporated—
(a) two or more persons associated for carrying on a lawful business with a view to profit
shall subscribe their names to an incorporation document; and
(b) the incorporation documents shall be filed in the manner and with the fees, as may be
prescribed by CAC from time to time.
(2) The incorporation documents shall be in the form as prescribed by CAC and shall state—
(a) the name of the LLP;
(b) the proposed business of the LLP;
(c) the address of the registered office of the LLP;
(d) the name and address of each of the persons who are partners on incorporation;
(e) the name and address of the persons who are to be DPs on incorporation;
(f) other information as CAC may prescribe.
(3) If a person knowingly makes a statement under subsection (2) which is false, he commits an
offence and is liable on conviction to imprisonment for a term of three months or a fine as the
Court deems fit or both.
INCORPORATION DOCUMENTS OF LLP S753
a. Availability and Reservation of Name Form;
b. Form CAC/LLP 01 – Application to Register a LLP;
c. Partnership Agreement;
d. Copy of recognised and valid photo identification that is: either data page of International
Passport, Driver’s License, National Identity Card, Voter’s Card must be submitted for
every individual partner; and
e. Evidence of payment of filing fee.
Incorporation by registration S754
S754(1) When the requirements imposed under section 753 (1) and (2) have been complied with,
CAC shall, within 14 days—
(a) register the incorporation document; and
(b) give a certificate that the LLP is incorporated by the name specified in the certificate.
EFFECT OF REGISTRATION OF LLP S756
i. The certificate of registration shall be prima facie evidence that the LLP came into
existence on the date of registration;
ii. The LLP can sue and be sued in its name;
iii. The LLP may acquire, own, hold and develop or dispose of property, whether movable or
immovable, tangible or intangible;
44
iv. The LLP if it decides to have a common seal may have one; and
v. The LLP may do and suffer such other acts and things as bodies corporate may lawfully
do and suffer.
NAME OF LIMITED LIABILITY PARTNERSHIP S757 of CAMA
RESERVATION OF NAME S758 of CAMA
PUBLICATION OF NAME OF LLP S760
i. The invoices, official correspondence and publications of the firm to bear the name,
address of its principal office and registration number of the LLP; and a statement that it
is registered as LLP; and
ii. Display of the certificate of registration conspicuously in its principal place of business
and in all its branches where it has branch offices.
ELIGIBILITY TO BE PARTNERS S761
• On the incorporation of a LLP, the persons who subscribed their names to the
incorporation documents shall be its partners and any other person may become a partner
of the LLP in accordance with the LLP agreement.
RELATIONSHIP OF THE PARTNERS S762
CESSATION OF PARTNERSHIP INTEREST S763
i. By agreement with the other partners of the firm;
ii. By giving 30 days’ notice in writing of his intention to resign as a partner of the firm to
the other partners of the firm in the absence of agreement;
iii. Upon the death of the partner;
iv. When a partner is declared to be of unsound mind by a competent court;
v. Where a partner has applied to be adjudged or declared as an insolvent; and
vi. Upon dissolution of the partnership.
REGISTRATION OF CHANGE IN PARTICULARS OF PARTNERS S764
PARTNER AS AGENT S765
• A partner of a LLP is, for the purpose of the business of the LLP, the agent of the LLP,
but not of other partners.
EXTENT OF LIABILITY OF LLP S766
UNLIMITED LIABILITY IN CASE OF FRAUD S769
FORM OF CONTRIBUTION BY PARTNERS S770
MAINTENANCE OF BOOKS OF ACCOUNTS, OTHER RECORDS AND AUDIT S772
i. Register of members.
ii. Books of account.
45
iii. Minutes Book.

ANNUAL RETURN S773
Form CAC/LLP/ 07 – Annual Return of LLP. This is used for filing of annual returns of the
partnership within 60 days of closure of its financial year accompanied by evidence of filing fee.
ASSIGNMENT AND TRANSFER OF PARTNERSHIP RIGHTS S774
Unless otherwise provided in the LLP agreement, the rights of a partner to a share of the profits
and losses of a LLP and to receive distributions in accordance with the LLP agreement are
transferable either wholly or in part.
INVESTIGATION OF THE AFFAIRS OF LLP S773
CAC when called upon to investigate any partnership or CAC suo motu wants to investigate a
partnership, it may appoint one or more competent persons as inspectors to investigate the affairs
of the partnership and the inspector(s) shall make report to CAC in such manner as the CAC may
direct.
The application for investigation of the partnership must be made by at least one-fifth of the total
number of the partners. The application shall be accompanied by evidence that the applicants
have good reason for requesting for the investigation.
THOSE WHO MAY APPLY FOR INVESTIGATION OF LLP
a. The court by its order;
b. CAC on its own motion;
c. At least 1/5 of the total number of partners; and
d. The LLP itself.
GROUNDS FOR INVESTIGATION OF A LIMITED LIABILITY PARTNERSHIP
a. Where CAC is of the opinion that the business of the LLP is being or has been conducted
with an intent to defraud its creditors, partners or any other person, or otherwise for a
fraudulent or unlawful purpose;
b. Where CAC is of the view that the business of the LLP is being or has been conducted in
a manner oppressive or unfairly prejudicial to some or any of its partners, or that the LLP
was formed for any fraudulent or unlawful purpose;
c. Where CAC believes that the affairs of the LLP are not being conducted in line with the
provisions of CAMA; or
d. On receipt of a report of CAC or any other investigating or regulatory agency, CAC is of
the opinion that there are sufficient reasons to show that the affairs of the partnership
ought to be investigated.
APPLICATION BY PARTNERS FOR INVESTIGATION S776
FIRM, BODY CORPORATE OR ASSOCIATION NOT TO BE APPOINTED AS
INSPECTOR S777
46
POWER OF INSPECTORS TO CARRY OUT INVESTIGATION INTO AFFAIRS OF

RELATED ENTITIES S778
PRODUCTION OF DOCUMENTS AND EVIDENCE S779
SEIZURE OF DOCUMENTS BY INSPECTOR S780
INSPECTORS REPORT S781
At the end of the investigation the inspector will make his report and the following are entitled to
receive the report:
a. The LLP (which is sent to at its registered office);
b. Any other entity or person dealt with or related to the report; and
c. On request and on payment of the prescribed fee, CAC may if it deems fit, furnish a copy
of the report to any person or entity related to or affected by the report.
USES OF THE INSPECTOR’S REPORT
The uses of the inspector’s report are as follow:
i. CAC may institute civil proceedings in the name and on behalf of the LLP on the basis of
the inspector’s report, where it appears to CAC that civil proceedings ought to be brought
by the partnership in the public interest.
ii. Where from the inspector’s report a person appears to have been convicted of an offence
for which he is criminally liable, the report shall be referred to the AGF. Where the AGF
considers that the case referred to him is one in which a prosecution ought to be
instituted, he shall direct action accordingly.
iii. Where from the inspector’s report, it appears to CAC that proceedings ought, in the
public interest, be brought by the partnership dealt with by the inspector’s report for the
recovery of damages, in respect of fraud, misfeasance or other misconduct in connection
with the promotion or formation of the partnership or the management of its affairs, or for
the recovery of any property of the partnership which has been misapplied or wrongfully
retained, it may refer the case to the AGF for his opinion as to the bringing of
proceedings for that purpose in the name of the partnership. If proceedings are brought,
all past and present designated partners and partners of the partnership, other than the
defendants in the proceedings, must give to the AGF all assistance in connection with the
proceedings.
iv. Where it appears to CAC from the inspector’s report that it is desirable in the public
interest that the partnership be wound up, CAC may present a petition for it to be wound
up if the court deems it just and equitable to do so, unless the partnership is already
wound up by the court.
v. A copy of the inspector’s report authenticated in such manner, as may be prescribed shall
be admissible in any legal proceeding as evidence in relation to any matter contained in
the report.
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EXPENSES OF INVESTIGATION SS764 – 786

Generally defrayed from consolidated revenue fund except where:
a. any person who is convicted in a prosecution instituted, as a result of the investigation
report by the AGF, or who is ordered to pay damages or restore any property
b. a body corporate in whose name proceedings are brought as aforesaid is liable to the
extent of the amount or value of any sums or property recovered by it as a result of those
proceedings;
c. unless as the result of the investigation a prosecution is instituted by the AGF, the
applicants for the investigation, where the inspector was appointed under section 775 (3)
of this Act, shall be liable to such extent, if any, as CAC may direct, and any amount for
which a body corporate is liable by virtue of paragraph (b), shall be a first charge on the
sums or property mentioned in that paragraph.
FOREIGN LLPs
As a general rule, any foreign limited liability partnership coming into Nigeria to carry on
business must first register a limited liability partnership in Nigerian with CAC - section 788(1).
But there are exceptions to the general rule. Foreign limited liability partnerships exempted
under S788(2) CAMA and R22 of Companies Regulation, 2021 are as follows:
i. LLP invited to Nigeria by or with the approval of the FG to execute any specified
individual project;
ii. LLP in Nigeria for the execution of specific individual loan projects on behalf of a donor
country or international organisation;
iii. LLP owned by a foreign government and engaged solely in export promotion activities;
and
iv. An engineering and technical expert engaged on any individual specialist project under
contract with any of the governments in the federation or any of their agencies or with
any other body or person, where such contract has been approved by the FG.
• A limited liability partnership may be wound up either voluntary or by the court S789.
• If it is winding up by the court, the application to the court is by way of petition S786.
CIRCUMSTANCES THAT WILL WARRANT WINDING UP OF THE PARTNERSHIP
BY THE COURT S790
i. Where all the partners decide that the LLP be so wound up by the court;
ii. Where for a period of more than six months, the number of partners of the partnership
falls below two;
iii. Where the LLP is unable to pay its debts;
iv. Where the partnership has acted against the interests of the sovereignty and integrity of
Nigeria or against her security or public order;
v. Where the partnership has made a default in filing with CAC, the statement of account
and solvency or annual return for any 10 consecutive financial years; or
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vi. Where the court is of the opinion that it is just and equitable that the LLP be wound up.
DISCLOSURE OF SIGNIFICANT CONTROL IN A LLP S791
• Where a partner becomes a person with significant control over a LLP, he shall within 7
days of becoming such a person, indicate to the LLP in writing the particulars of such
control.
• Upon a LLP receiving or being in possession of the information that a partner has
become a person with significant control, the partnership shall within 1 month from the
receipt of the information or any change therein, notify CAC of that fact.
BUSINESS TRANSACTIONS OF PARTNER WITH LLP S792
• A partner may lend money to and transact other business with the LLP and has the same
rights and obligations with respect to the loan or other transactions as a person who is not
a partner.
POWER OF CAC TO STRIKE OUT DEFUNCT LLP OFF REGISTER S793
• CAC can strike out a defunct limited liability partnership off the register if the
Commission has reasonable cause to believe that the partnership is not carrying on
business or operation.
POWER TO MAKE RULES S794
• CAC is mandated to make rules or regulations in respect of fees, forms, duties or
additional duties to be performed by CAC and generally, the conduct and regulation of
registration under this part and any matter incidental thereto.
RELEVANT CAC FORMS UNDER PART D OF CAMA
1. Form CAC/LLP 01 – Application to Register a LLP
2. Form CAC/LLP 02 – Notice of Change in Registered Office or Head Office Address of
LLP
3. Form CAC/LLP 03 – Application of Change of Name of LLP
4. Form CAC/LLP 04 – Notice of Change in Particulars of Partner of LLP
5. Form CAC/LLP 05 – Appointment of Partner of LLP
6. Form CAC/LLP 06 – Termination of Appointment of Partner of an LLP
7. Form CAC/LLP 07 – Annual Return of LLP
LIMITED PARTNERSHIP (LP) PART D, SS 795 - 810
S795 (2) A LP shall not consist of more than 20 persons.
(3) A LP shall consist of one or more persons called general partners, who shall be liable for all
debts and obligations of the firm, and one or more persons called limited partners.
(4) Each limited partner shall at the time of entering into the partnership contribute, or agree to
contribute, thereto a sum or sums as capital or property valued at a stated amount and shall not
49
be liable for the debts of obligations of the firm, beyond the amount so contributed or agreed to
be contributed: Provided that a limited partner is not under obligation to contribute any capital
or property to the partnership where the partners have so agreed in writing.
(5) Unless otherwise agreed in writing by the partners, a limited partner shall not, during the
continuance of the partnership, either directly or indirectly, draw out or receive back any part of
his contribution and if he draws, out or receives back any such part, is liable for the debts and
obligations of the partnership up to the amount so drawn out or received back.
Capacity to form LP S796, any person including body corporate can form LP except a person
of unsound mind or undischarged bankrupt can from LP.
Mandatory Registration S797
1) A partnership carrying on business as a LP must be registered.
2) A partnership not registered shall be deemed to be a general partnership and every limited
partner shall be deemed to be a general partner.
Application for registration S798
798(1) An application for registration as a limited partnership shall be in the form as prescribed
by the Commission and shall—
(a) specify the name under which the limited partnership is to be registered;
(b) be signed or otherwise authenticated by or on behalf of each partner, and
(c) include a statement containing the details listed in subsection (2).
(2) The application for registration of a limited partnership shall include a statement signed by
the partners which shall contain —
(a) the name of the limited partnership;
(b) the general nature of the business;
(c) the principal place of business;
(d) the full name and address of each general partner;
(e) the full name and address of each limited partner;
(f) the term if any, for which the partnership is entered into and the date of its
commencement;
(g) a statement that the partnership is limited and the description of every limited partner
as such; and
(h) the sum contributed, or agreed to be contributed by each limited partner and whether
paid, or to be paid in cash or in another specified form.
DOCUMENTS REQUIRED FOR REGISTRATION OF THE LP
i. Availability and Reservation of Name Form;
ii. Form CAC/LP 01 – Application to Register a Limited Partnership;
iii. Partnership Agreement;
iv. Recent passport photographs of all partners;
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v. Copy of recognised and valid photo identification that is: either data page of International
Passport, Driver’s License, National Identity Card, Voter’s Card or Birth Certificate (in
case of a minor) must be submitted for every individual partner; and
vi. Evidence of payment of filing fee.
REGISTRATION OF LP S797
• A partnership carrying on business as a limited partnership must be registered as limited
partnership failing which, it will be deemed to be general partnership
NAME OF LP S802
• The name of a LP must end with the words "limited partnership" or the abbreviation "LP"
RESERVATION OF NAME AND CHANGE OF NAME OF LP S803.
APPLICATION FOR REGISTRATION OF LP S798.
Application for registration of the partnership is made using Form CAC/LP 01 – Application to
Register a LP and other registration documents namely:
i. Availability and Reservation of Name Form;
ii.Partnership Agreement;
iii.
Recent passport photographs of all partners;
iv.Copy of recognised and valid photo identification that is: either data page of International
Passport, Driver’s License, National Identity Card, Voter’s Card or Birth Certificate (in
case of a minor) must be submitted for every individual partner; and
v. Evidence of payment of filing fee.
CERTIFICATE OF REGISTRATION S799
Upon fulfilling the requirements of incorporation and delivering the registration documents to
CAC, CAC shall register the LP and issue certificate of registration of the LP.
REGISTRATION OF CHANGES IN PARTNERSHIP S800.
NOTICE OF CHANGE IN STATUS OF GENERAL PARTNER OR ASSIGNMENT OF
SHARE OF LP S801
A general partner can become a limited partner if such an arrangement is agreed upon by the
other partners and a notice of the arrangement or transaction specifying the change from general
partner to limited partner is filed with CAC within five days of the change.
COMMISSION TO KEEP REGISTER
CAC must keep at its registry in respect of limited partnership the following books:
i. Register of limited partnership; and
ii. Index of limited partnership S805.
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MODIFICATION OF GENERAL LAW IN CASE OF LP S806.

Application of Part C S807.
Law as to private partnerships to apply where not excluded by CAMA S808.
Inspection of document S809.
Liability for false statement S810.
Relevant CAC Forms under Part D of CAMA
i. Form CAC/LP 01 – Application to Register a LP
ii. Form CAC/LP 02 – Notice of Change in Principal Place of Business or Branch Address
iii. Form CAC/LP 03 – Change of Name of an LP
iv. Form CAC/LP 04 – Annual Return of LP
v. Form CAC/LP 05 – Notice of Change/Correction in Particulars of Partner of an LP
vi. Form CAC/LP 06 – Notice of Change in Object(s) of an LP
vii. Form CAC/LP 07 – Notice of Cessation of an LP
GENERAL PARTNERSHIP (GP)
Other non-specific rules explained above not peculiar to either LLP or LP applies mutatis
mutandis
CONTENT OF PARNERSHIP AGREEMENT
1. Commencement: date; parties; addresses
2. Names and Style of partners
3. Payment of salaries
4. Name and Style of Partnership (Note: prohibited and restricted names)
5. Nature of business
6. Place of business
7. Capital of business (capital is different from advance, the latter is loan that bears interest)
8. Profits and losses
9. Payment of salaries
10. Bank Accounts
11. Banker and Signatories to the account
12. Property of partnership
13. Management
14. Duration
15. Powers and rights of partners
16. Retirement
17. Expulsion and Suspension
18. Arbitration (optional)
19. Termination
20. Drawings
21. Insurance
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22. Limits of Authority

See: Ss 6,7, 25,26, 27, 33 and 37 Partnership Law Lagos.
BUSINESS NAME, PART E, SS 811 – 822
S811: Establishment of business names registry in each state.
S812: The Registrar-General (CAC) shall be the Registrar of Business Names and those of the
various states to be appointed from time to time from among qualified officers of the CAC.
S813: BN may be registered at any head office in any state and it will be deemed as that
registered by the RG at the main head office.
S814: Names that may or may not be registered
• Those qualified:
i. For firm: contains only the surnames, or plus forenames or initials of the forenames e.g.,
AGBATA AND JOHNSON or AGBATA C. O. and JOHNSON J. A. but any other
addition other than this, reg will become necessary.
ii. For individual: contains only the surname, or plus forenames or initials of the forenames
e.g., AGBATA or AGBATA CHRIS OZO or AGBATA C. O.
iii. For company: the name is only the corporate name without any addition e.g., EDUPAL.
iv. For succession: any addition to the name that merely indicates only succession shall not
render reg necessary.
v. For two or more partners with same surname: adding ‘s’ will not render reg necessary
e.g., AGBATAS.
vi. For receiver or manager appointed by any court: reg shall not be necessary.
NB: any other name other than these stated here must be registered, regardless of how minute the
addition is.
NB: the prohibited and restricted names provided for in SS 852 apply here mutatis mutandis, this
has been discussed above under the name clause (Memo of cos).
BAR ON REGISTRATION S852(4): No company, business name or incorporated trustee shall
be registered where there is irrefutable evidence to the effect that the company, business name or
incorporated trustee has previously been involved in fraudulent trade malpractices, either in local
or international trade.
Procedure for registration S815:
S815(1) Every individual, firm or company required to be registered shall, within 28 days after
the commencement of business, furnish to the Registrar at the registry in the State in which the
principal place of business is situated, a statement in writing in the prescribed form, signed and
containing the following particulars—
(a) the business name or, if the business is carried on under two or more business names,
each of those business names;
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(b) the general nature of the business;

(c) the full postal address of the principal place of business;
(d) the full postal address of every other place of business;
(e) where the registration to be effected is that of a firm;

i. the present forenames and surname,
ii. any former forenames or surname,
iii. the nationality and, if that nationality is not the nationality of origin, the
nationality of origin,
iv. the age,
v. the sex,
vi. the usual residence and
vii. any other business occupation of each of the individuals who are partners; and
viii. the corporate name and registered office of such company which is a
partner;
(f) where the registration to be effected is that of an individual;

ii. any former forenames or surnames,
iii. the nationality and, if that nationality is not the nationality of origin, the
nationality of origin,
iv. the age,
v. the sex,
vi. the usual residence and
vii. any other business occupation of the individual;
(g) where the registration to be effected is that of a company;

i. the name and
ii. registered office of the company; and
(h) the date of commencement of the business, whether before or after the coming into
operation of this Act.
815(2): Where the registration to be effected is that of an individual or a firm, some or all of
whose partners are individuals, there shall be submitted to the Registrar copies of the passport
photographs of the individual certified in a manner required by the Registrar.
815(3): Where the registration to be effected is that of a firm or individual carrying on business
on behalf of another individual, firm or corporation whether as nominee or trustee, the statement
required by subsection (1) to be furnished shall contain the following particulars in addition to
the particulars required by that subsection;
ii. any former forenames or surname,
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iii. the nationality and, if that nationality is not the nationality of origin, the nationality of
origin and
iv. the usual residence of each individual on whose behalf the business is carried on; and
v. the name of each firm or corporation on whose behalf the business is carried on.
(4) Where the registration to be effected is that of a firm or individual carrying on business as
general agent for any concern carrying on business outside Nigeria and not having a place of
business in Nigeria, the statement required by subsection (1) to be furnished shall, in addition to
the particulars required by that subsection, state the name and full postal address of each such
concern, provided that in the case of a firm or individual carrying on business as general agent
for three or more such concerns, it shall be sufficient to state the fact that the business is so
carried on and the countries in which the concerns carry on business.
(5) A statement furnished in accordance with subsections (1) - (4) shall in the case of a;
(a) statement furnished by an individual, be signed by him;
(b) statement furnished by a firm, be signed by each individual who is a partner and by a
director or the secretary of each Corporation which is partner; and
(c) corporation, be signed by a director or the secretary:
Provided that, if the statement is accompanied by a statutory declaration made by any person to
the effect that he is a partner of the firm or is a director or the secretary of a corporation which is
a partner of the firm, the statement may be signed by that person alone.
(6) A statement furnished in accordance with subsections (1) - (4) by an individual who is a
minor or by a firm of which one of the partners is a minor shall, in addition to the requirements
of subsection (1), be signed by a magistrate, legal practitioner or police officer of, or above the
rank of Assistant Superintendent of Police.
(7) If an individual, firm or corporation makes default in complying with the provisions of this
section, the individual, corporation or every partner in the firm commits an offence and is liable
on conviction to a fine prescribed in the Commission’s regulations for every day during which
the default continues, and the Court shall order a statement of the required particulars to be
furnished to the Registrar within such time as may be specified in the order.
PROCEDURE FOR REGISTRATION SUMMARY:
Instruction to be taken in respect of the following:
1. The Firm name or names
2. The general nature of the business
3. Full postal address of the principal place of business and of any branches.
4. The full names of the partners or individual proprietor, presence of minors to be noted.
5. Where the business is to be carried on as nominee, trustee or general agent, full
particulars of the principals should be taken.
6. Date of commencement of business.
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TIME FOR REGISTRATION

• Application for registration to be submitted to the Registrar within 28 days of
commencement of business S815 (1).
PLACE OF REGISTRATION
The application for registration will be lodged at the Business Names Registry in each state
capital S813. It is now lodged electronically at CAC website.
REGISTRATION
1. Items to be submitted for Registration:
i. Application or Statement in Form 1 (Firms) or Form individuals (2 copies).
ii. Two passport photographs of each individual S574(2)
iii. Tax Clearance Certificate of each individual or partner.
iv. Availability of Name Form Corporate Affairs Commission
v. Qualifying Certificate in case of professional partnerships.
2. Entry of business name in the register S816
Note: Addition to the business name in brackets in the register, the identification letters of the
state of registration S816 (2).
3. Registrar's duty on registration - See Domingo v The Queen [1963] 1 ALL NL.R. 81).
4. Certificate of registration S817: The certificate will contain as part of the business name, the
identification letters of the state of registration S816(2).
The original of the certificate must be exhibited conspicuously in the principal place of business
and certified copies at each branch office S817 (3) & (4).
EFFECTS OF REGISTRATION
1. Registration does not give legal personality to the business or association but merely
apprises the public of the true identity of the person(s) who trade under the name
Domingo v The Queen.
2. Registration gives priority to use of the name even against registered companies S852 (1)
(d); S41(e).
3. Registration will not be construed as authorising the use of the name if apart from such
registration the use of the name would be prohibited
4. Not proof of partnership Henshaw v Roberts but raises a rebuttable presumption of the
existence of partnership Nwankwo v Nwankwo.
REGISTRATION OF CHANGES
(Other than particulars of the age of an individual)- within 28 days after the change. The
notification may be in writing signed in the same manner as the statement required on
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registration and must be lodged at the office where registration was effected S818, CAC/BN 05
– Notice of Change/Correction in Particulars of Proprietor/Partner.
Publication of true name in all trade catalogues, business letters, etc S820. Searches and Copies
of Entries S820.
DEFAULT OF REGISTRATION
• Penal sanctions S815 (7) Civil Remedies
a. Bar to action to enforce partnership rights Alowonle v Bello.
b. Effect on Contracts: contracts entered into during default are not void but merely
unenforceable and application may be made to a high court in which any such
contract would otherwise be enforceable for relief from the disability section 821.
The high court may grant relief if it is satisfied that the default was as a result of any
of the following grounds:
i. That the default was accidental or due to inadvertence or some other sufficient
cause; or
ii. That on other grounds, it is just and equitable to grant relief.
NB: The other party or parties to the contract are free to enforce their right against the party in
default but the defaulter will be free to counterclaim or otherwise enforce his rights against that
party in that action.
ANNUAL RETURN
To be delivered not later than 30th June in each year except the calendar year in which the
name was registered S822.
REMOVAL OF NAME FROM THE REGISTER S819
• On notice by proprietors within 3 months of cessation of business.
• At the instance of the Registrar where he has reasonable cause to believe that a business
is no longer being carried on, send a later and if no response after two months, the name
may be removed.
CESSATION OF BUSINESS NAME AND DISSOLUTION OF PARTNERSHIP
• BN and partnership can only be brought to an end by cessation and dissolution as
opposed to winding up in the case of companies.
• Upon cessation of its business, either by the death of a sole proprietor or by consents of
the partners or formal dissolution by the courts, the BN is deemed dissolved and the name
is removed from the Register of Business Names at the CAC S819.
• Any of the partners should within 3 months notify the CAC of the dissolution and the
fact that the firm has ceased to do business.
FILING OF NOTICE OF CESSATION OF BUSINESS
• Notification to the effect that the BN has ceased to carry on business to CAC.
57
• The notification is by the proprietor or the personal representative of the proprietor or the
personal representative of the proprietor in the case of death of the proprietor and it has to
be within 3 months of such cessation S819.
DISSOLUTION OF PARTNERSHIP
Partnership can be dissolved:
i. By act of the general partners
ii. By operation of law
iii. By the Court
Relevant CAC Forms under Part E of CAMA:
1. CAC/BN 01 – Application to Register Business Name
2. CAC/BN 02 – Notice of Change in Principal Place of Business or Branch Address of
Business Name
3. CAC/BN 03 – Change of Name of Business Name
4. CAC/BN 04 – Notice of Change in Object(s) of Business Name
5. CAC/BN 05 – Notice of Change/Correction in Particulars of Proprietor/Partner
6. CAC/BN 06 – Annual Return of Business Name
INCORPORATED TRUSTEE (IT) PART F, SS 823 - 850
Regulation 27 of the Companies Regulations 2021 provides that the following classifications
shall apply to incorporated trustees;
1. Religious
2. Educational
3. Literary
4. Scientific
5. Social
6. Developmental
7. Cultural
8. Sporting
9. Charitable
10. Others
S823(1): Where two or more trustees are appointed by any community of persons bound together
by custom, religion, kinship or nationality or by anybody or association of persons established
for any religious, educational, literary, scientific, social, development, cultural, sporting or
charitable purpose, they may, if so authorised by the community, body or association (in this Act
referred to as “the association”) apply to the CAC in the manner provided for registration under
this Act as a corporate body.
Method of application
S825(1) application shall be in the form prescribed by CAC and shall state the:
58
(a) name of the proposed corporate body which must contain the words “Incorporated
Trustees of”;
(b) aims and objects of the association which shall be for the advancement of any
o religious,
o educational,
o literary,
o scientific,
o social,
o development,
o cultural,
o sporting or
o charitable purpose, and
o shall be lawful; and
(c) names, addresses and occupations of the secretary of the association, if any.
(2) There shall be attached to the application;
(a) two printed copies of the constitution of the association;
(b) duly signed copies of the minutes of the meeting appointing the trustees and authorising
the application showing the people present and the votes scored; and
(c) the impression or drawing of the proposed common seal, if there is one.
(3) The application shall be signed by the person making it.
(4) The Commission may require such declaration or other evidence in verification of the
statements and particulars in the application, and such other, information and evidence, if any, as
it may deem fit.
(5) If any person knowingly makes any false statement or gives any false information for the
purpose of incorporating trustees under this Part, he commits an offence and is liable on
conviction to imprisonment for one year or to a fine as the Court deems fit.
PROCEDURE FOR REGISTRATION S825
1. All applications should be submitted to CAC electronically. Form CAC/IT 01 – Application
to Register IT must contain, among other things: -
i. The name of the proposed corporate body which must contain the words, “Incorporated
Trustees of _____________________”
ii. Registered office address
iii. Publication details
iv. Aims and objects of the association
v. Trustees’ details – trustee personal information, residential address and service address
vi. Secretary’s details – personal details of secretary and service address
vii. Impression of common seal (if any)
viii. Enclosures
ix. Details of chairman
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2. The applications must be accompanied by separate enclosures as follow S825:

i. Form for availability and reservation of name
ii. The rules of the applicant body incorporating its objects duly signed and dated
iii. Impression or drawing of the proposed common seal of the applicant body (if any)
iv. Duly signed copy of the extracts of minutes of the meeting where the trustees were
appointed
v. A copy of the resolution adopting the special clause
vi. Evidence of land ownership or an affidavit in lieu
vii. Evidence of advertisement in 2 National Dailies
viii. Sworn affidavit by each trustee (in the prescribed form) that they are not
disqualified from acting as trustees under section 826 CAMA. (This new requirement
replaces the cumbersome and expensive state (SSS) Report on each Trustee)
ix. Payment of the prescribed filling fee
x. Letter authorising the person effecting registration of the applicant body to so act.
Note:
1. The requirement of advertisement and objection S828
2. The content of the constitution or rules of the proposed corporate body S827
3. Effect of registration and certificate S830
4. Related associations S831
5. Change of names or objects S832
6. Alteration of provision of the constitution S833
7. Replacement and appointment of additional trustees S834
8. Council or committee or governing body S836
9. Suspension of trustees and appointment of interim managers S839.
10. Common Seal and contract S840
11. Accounts of dissolved incorporated trustees S842
12. Accounts which cease to be dormant before transfer S843
13. Bi-annual statement of affairs S845
14. Accounting records and statement of accounts S846
15. Annual Returns S848
16. Merger of associations S849
17. Dissolution of a corporate body formed under this Act S850
Qualification of trustees
S826(1) A person shall not be qualified to be appointed or act as a trustee if—
(a) he is an infant;
(b) he is a person of unsound mind having been so found by a court;
(c) he is an undischarged bankrupt; or
(d) he has been convicted of an offence involving fraud or dishonesty within five years of his
proposed appointment.
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(2) If a person disqualified under subsection (1) (c) or (d) acts as a trustee, he shall be liable to a
penalty for every day during which he so acts, the penalty shall be determined in accordance
with regulations made by the Commission from time to time.
Constitution
S827 The constitution of the association shall in addition to any other matter—
(a) state the name or title of the association; e.g., “Incorporated Trustee of ………….”
(b) the aims and objects of the association; and
(c) make provisions, in respect of the following—
i. appointment, powers, duties, tenure of office and replacement of the trustees,
ii. the use and custody of the common seal, if there is one,
iii. the meetings of the association,
iv. the number of members of the governing body, if any, the procedure for their
appointment and removal, and their powers, and where subscriptions and other
contributions are to be collected, the procedure for disbursement of the funds of the
association, the keeping of accounts and the auditing of such accounts.
The checklist may include
1. Name clause
2. Aims and objects
3. Trustees’ appointment, powers, duties, tenure and replacement
4. Common seal (if any)
5. Meeting clause
6. Governing body number, appointment, removal, and powers
7. Source of income
8. Disbursement of fund
9. Keeping of accounts
10. Auditing of accounts
11. Constitution amendment clause is a mandatory provision in the Act (S832, 833 and 835)
no need to include it
Advertisement and objections.
S828(1) If the Commission is satisfied that the application has complied with the provisions of
CAMA, it shall cause the application to be published in a prescribed form in two daily
newspapers circulating in the area where the association is to be situated and at least one of
the newspapers shall be a national newspaper.
(2) The advertisement shall invite objections, if any, to the registration of the body.
(3) The objection shall state the grounds on which it is made and shall be forwarded to reach the
Commission within 28 days of the date of the last of the publications in the newspapers.
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Effect of registration and certificate.

S830(1) From the date of registration, the trustees shall become a body corporate by the name
described in the certificate, and shall have—
(a) perpetual succession;
(b) a common seal if they so wish;
(c) power to sue and be sued in its corporate name as such trustees; and
(d) subject to section 836 of this Part, power to hold and acquire, and transfer, assign or
dispose of any property, or interests therein belonging to, or held for the benefit of such
association, in such manner and subject to such restrictions and provisions as the trustees
might without incorporation, hold or acquire, transfer, assign or otherwise dispose of the
same for the purposes of such community, body or association of persons.
Change of name or objects
S832(1) Where the association is desirous of changing, altering its name, objects or any of them,
the trustees shall apply to the Commission in the prescribed form setting out the alterations
desired and attaching a copy of the resolution approving the change and duly certified by the
trustees.
(2) The Commission on receipt of the application shall consider it and, if satisfied that the
change or alteration is prima facie lawful shall—
(a) cause the application to be published in two daily newspapers in the manner specified in
section 828 (1) of this Act; and
(b) direct the corporation to display for at least 28 days a notice of the proposed change or
alteration conspicuously mounted at the corporation headquarters, or at any branch office,
or any such place where a majority of the members are likely to see it, as the Commission
may require.
(3) The publication and notices shall call for objections which, if any, shall state the grounds of
objection and be forwarded to reach the Commission not later than 28 days after the last of the
publications in the newspapers.
(4) The provisions of section 827 and of section 825 (1) of this Part of this Act shall apply to this
section as they apply to an application for registration.
(5) If the Commission assents to the application, the alterations shall be made and in the case of a
change of name, the Commission shall issue a new certificate in the new name in place of the
former certificate.
Alterations of provisions of the constitution
S833; Subject to sections 827 and 828 of this Part, an association whose trustees are incorporated
under this Part may alter its constitution by resolution passed by simple majority of its members
and approved by the Commission.
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Changes in contravention of certain provisions of this part of this Act

S835; any change or alteration purported to be made in contravention of section 832, 833 or 834
of this Part of this Act void.
Council or governing body
S836; the association may appoint a council, or governing body, which shall include the trustees
and may, subject to the provisions of this Part, assign to it such administrative and management
functions as it deems expedient.
Application of income and property
S838(1) The income and property of a body or association shall be applied solely towards—
(a) the promotion of the objects of the body as set forth in its constitution; and
(b) no portion from it shall be paid or transferred directly or indirectly, by way of dividend,
bonus, or otherwise by way of profit to any of the members of the association.
(2) Nothing in subsection (1) (b) shall prevent the payment, in good faith, of reasonable and
proper remuneration to an officer or servant of the body in return for any service actually
rendered to the body or association:
Provided that—
(a) with the exception of ex-officio members of the governing council, no member of a
council or governing body shall be appointed to any salaried office of the body or any
office of the body paid by fees; and
(b) no remuneration or other benefit in money or money’s worth shall be given by the body to
any member of such council or governing body, except repayment of out-of-pocket
expenses, reasonable rent for premises demised or let to the body or reasonable fee for
services rendered.
(3) A person who knowingly acts or joins in acting in contravention of this section, he is liable to
refund such income or property so misapplied to the association
Merger of associations
S849; Two or more associations with similar aims and objects may merge under terms and
conditions as the Commission may prescribe by regulation.
Dissolution
S850(1) An IT may be dissolved by the Court on a petition brought for that purpose by:
(a) the governing body or council;
(b) one or more trustees;
(c) members of the association constituting at least 50% of the total membership; or
(d) CAC.
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(2) The grounds on which the body corporate may be dissolved are that:
(a) the aims and objects for which it was established have been fully realised and no useful
purpose would be served by keeping the corporation alive;
(b) the body corporate is formed to exist for a specified period, that period has expired and it
is not necessary for it to continue to exist;
(c) all the aims and objects of the association have become illegal or otherwise contrary to
public policy;
(d) it is just and equitable in all the circumstances that the body corporate be dissolved; and
(e) the certificate of registration of the association has been withdrawn, cancelled or revoked
by CAC.
(3) At the hearing of the petition, all persons whose interests or rights may, in the opinion of the
Court, be affected by the dissolution shall be put on notice.
(4) If in the event of a winding-up or dissolution of the corporate body there remains, after the
satisfaction of all its debts and liabilities, any property whatsoever, the same shall not be paid to
or distributed among the members of the association, but shall be given or transferred to some
other institutions having objects similar to the objects of the association:
Provided that the institution shall be determined by the members of the association at or before
the time of dissolution.
(5) If effect cannot be given to the provisions of subsection (4), the remaining property shall be
transferred to some charitable object.
DIFFERENCES BETWEEN IT AND LTD/GTE

SN DETAIL IT LTD/GTE
1 Nature Not for business For business
2 Liability Aren’t liable Are liable up to their guarantee
3 Mode of dissolution By FHC upon application Different procedure
by governing body, 1 or
more trustees, 50% of
members or CAC.
4 Management Governing body Members
5 Reg requirements No AGF’s consent AGF’s consent required
6 Profit Not for profit Can make profit but not distributable
7 Advert requirement Required S828 Unrequired
RELEVANT CAC FORMS UNDER PART F OF CAMA:

1. CAC/IT 01 – Application to register Incorporated Trustees
2. CAC/IT 02 – Change of Name of Incorporated Trustees
3. CAC/IT 03 – Replacement/Appointment and Change in Particulars of Trustees
4. CAC/IT 04 – Annual Return for Incorporated Trustees
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5. CAC/IT 05 – Bi-annual Statement of Incorporated Trustees

6. CAC/IT 06 – Notice of Merger of Incorporated Trustees
7. CAC/IT 07 – Notice of Alteration of Constitution of Incorporated Trustees.
DRAFT: PUBLIC NOTICE
PUBLIC NOTICE
GODLY WOMEN PROMOTION OF BREAST FEEDING
The general public is hereby notified that the above-named association with the office in Plot
555 Balarabe Musa Crescent, Victoria Island, Lagos has applied to the Corporate Affairs
Commission for registration under Part C of the Companies and Allied Matters Act, 2020.
THE TRUSTEES ARE:
1. MRS SYLVA OKEKE
2. MRS MONICA IMAM
3. MRS CHIOMA PAN
The Aims and Objectives of the organization are:
1. To encourage breast-feeding of babies and discourage non-breast feeding.
2. To stop every day-care facilities aiding non-breast feeding mothers
Any objection to this registration should be forwarded to the Registrar-General of Corporate
Affairs Commission, Plot 565, Ndota Street, Wuse 5, Abuja within 28 days of the publication.
Signed:
________________
Chris Ozo Agbata
Solicitor
ASSIGNMENT
ANSWERS TO SCENARIO: CHOICE OF BUSINESS AND NONBUSINESS
ORGANIZATION AND FORMATION (PARTNERSHIP AND INCORPORATED
TRUSTEES)
Nathan Abayomi and Jeriel Uchendu just got enrolled for the mandatory National Youth Service
Corp where they met at Sokoto state, their state of posting. During the service year, they started
collecting and recycling plastic waste out of their passion for a clean and healthy environment.
They eventually made a business out of it when they started supplying their recycled plastic to a
plastic company in Kano and they want to run the business themselves with much ease because
of their little resources. Still in pursuit of their passion for a clean environment, they started
teaching people on how to properly dispose waste and creating awareness on the use of
biodegradable materials for packaging goods and other products, they want this campaign to be a
continuing one and to reach other parts of the country.
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Answer the following questions:

1. Assuming you were engaged to register the business for them, what questions will you ask
them during your meeting with them? (8 Marks)
a. The firm name and alternate name
b. The general nature of business
c. Postal address of the principal place of business and of any branches
d. Full names of the individual proprietor or partners
e. Full particulars of the principals
f. Date of commencement of business
2. The documents you will require from them for registration are as follow:(8 marks)
a. 2 Copies of Application Form (CAC/BN/1)
b. Form CAC 1-Availability and Reservation of Name
c. Passport photographs of each individual
d. Registration Fee
3. The legal implications of the registered name upon registration are as follow:(8 marks)
a. Registration does not give legal personality to the business or association but apprises the
public of the true identity of the persons, who trade under the name Domingo v The
Queen (supra).
b. Registration gives priority to use of the name even against registered companies. See
S31(4) of CAMA.
c. Registration will not be construed as authorising the use of the name, if apart from such
registration; the use of the name could be prohibited. See S. 579(1) of CAMA.
d. Registration is not proof of partnership. See Henshaw v Roberts (supra) but raises a
rebuttable presumption of the existence of partnership. See Nwankwo v Nwankwo
(supra).
4. The name options available to them that will require no registration are as follows: (5 marks)
The true surnames of all partners without any addition other than, the true forenames or the
initials of the partners. The illustrations are as follows:
a. Nathan Abayomi and Jeriel Uchendu
b. N. Abayomi and J. Uchendu
c. Abayomi and Uchendu
5. Assuming they want to register the business as Nat and Jer Cooperative Ventures, the
implications is that: (4 marks)
The Registrar may refuse to register the business name because the word ‘Cooperative ‘in the
proposed name of the business falls under restricted unless the consent of Corporate Affairs
Commission had been obtained. Restricted names are names which in the opinion of the
Registrar of Corporate Affairs Commission is capable of misleading the public.
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6. Three (3) presumptions that can be made as a result of their joint business are as follow: (15
marks)
a. Partnership Capital: It will be presumed in the absence of a provision for capital
contribution in the Partnership Agreement that the partners contributed the capital equally
and must share the profit and losses equally.
b. Remuneration/Salary: It will be presumed in the absence of a provision for payment of
salary/remuneration in the Partnership Agreement that the partners will not be entitled to
receive salary/remuneration.
c. Profit and Loss Sharing: It will be presumed in the absence of a provision for profit and
loss sharing in the Partnership Agreement that the profit and loss will be equally shared
by the partners.
d. Expulsion: It will be presumed in the absence of a provision for expulsion in the
Partnership Agreement that the partners lack the power to expel any partner. If they
attempt to expel any partner, the partnership stands dissolved.
e. Partnership Property: It will be presumed that the partners have equal rights to the
partnership property if nothing is provided on the contrary in the Partnership Agreement.
f. Dissolution of Partnership: The partnership will be presumed to be partnership-at-will
which can be dissolved at the instance of any of the partners (notice). Death, incapacity,
expulsion or resignation of a partner may also signify the dissolution of the partnership if
there is no provision in the Partnership Agreement for continuation of the partnership
after such occurrences.
7. Five clauses that will be included in the agreement that will regulate their joint business are as
follow: (5 marks)
a. Parties
b. Name and style
c. Place of business
d. Nature of business
e. Commencement
f. Duration
g. Capital
h. Property of Partnership
i. Profits and drawings
j. Bankers and signatories to bank account
k. Salary/Remuneration
l. Accounts
m. Powers, rights and duties
n. Retirement
o. Expulsion and Suspension
p. Dissolution
q. Arbitration
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8. The appropriate form of registration for their campaign on a clean environment is to register
Incorporated Trustees under Part C of CAMA. This is because the aims and objectives of the
organization they want to form is to educate the entire people of Nigeria on how to properly
dispose waste and creating awareness on the use of biodegradable materials for packaging goods
and other products, as well as the organization being a non-profit organization falls under Part C
of CAMA.: (3 marks)
S. 590 of CAMA: (1 mark) provides that, “where one or more trustees are appointed by any
community of persons bound together by custom, religion, kinship or nationality or by anybody
or association of persons established for any religious, educational, literary, scientific, social,
development, cultural, sporting or charitable purpose, he or they may, if so authorized by the
community, body or association (in this Act referred to as “the association”) apply to the
Commission in the manner hereafter provided for registration under this Act as a corporate
body”.
9. The steps involved in getting the body registered are as follow: (15 marks)
a. Taking instructions
b. Holding of meeting of the body where the trustees are appointed and the Special Clause
adopted
c. Writing of letter authorising the person handling the registration
d. Conduct availability check and reservation of name
e. Publication in two (2) daily newspapers of which one must be circulating in the local area
and the other one circulating nationally, calling for objection within 28 days
f. Preparation of incorporation documents (filling of application form, constitution, Trustee
Declaration Form, obtaining passport photographs of trustees, etc)
g. Preparation of the Common Seal of the body
h. Formal application addressed to the Registrar-General, of the Corporate Affairs
Commission requesting for his consent/approval for the registration of the body by the
person registering the body
i. Payment of filling fees
j. Filing
k. Obtaining the certificate of incorporation and CTCs of the constitution and application
form (CAC /IT FORM I) of the body.
10. The person that may join in the registration of the body must be: (5 marks)
a. An adult
b. A person of sound mind
c. A person who is not bankrupt
d. A person who has not been convicted of an offence involving fraud or dishonesty within
five (5) years of his proposed appointment. See S. 592 of CAMA.
11. The minimum number of person that is registered for the body to have corporate personality
is one person. CAMA provides that one or more trustees are required for registration of an
Incorporated Trustees.: (2 mark) See. S 590 of CAMA.
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12. The documents required for registration of the body are as follows: (14 marks)
a. Form of approval of name Form CAC 1
b. CAC /IT FORM I -Duly completed set of Incorporation Form
c. Trustees Declaration Form
d. Formal application letter for registration signed by the chairman and secretary
e. Extracts of minutes of general meeting appointing trustees and adopting special clause in
the constitution signed by the chairman signed by the chairman and secretary
f. Two printed copies of the constitution
g. Trustees declaration from duly deposed to by each trustee in the High Court
h. Impression of the common seal of the association on the application form
i. Payment of filing fee
j. Evidence of newspaper publication of advertisement of trustees
k. Impression of common seal
l. Evidence of land ownership
m. Two passport photograph of each Trustees
n. Letter authorising the Solicitor handling the registration
13. Five (5) provisions that must be contained in the constitution of the body are as follows: (5
marks)
a. Name
b. Aims and objectives
c. Common seal
d. Special clause
e. Trustees
f. Governing body
g. Meetings
h. Accounts
PREPARATION OF DOCUMENTS FOR BUSINESS ORGANIZATION AND NON-

BUSINESS ORGANISATION FORMATION
Because of CAMA 2020’s wholesome changes, these are no longer necessary as the
procedures are no online as discussed above.
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PRE-INCORPORATION MATTERS
B. Promotion of Companies and Pre-incorporation contracts
WHO IS A PROMOTER?
By virtue of S85, a promoter of a company is any person;
• who undertakes to take part in forming a company with reference to a given project and
set it going and
• who takes the necessary steps to accomplish that purpose, or who, with regard to a
proposed or newly formed company, undertakes a part in raising capital for it, is deemed
a promoter of the company:
• Provided that a person acting in a professional capacity for persons engaged in procuring
the formation of the company.
Erlanger v New Sombrero Phosphate Co, Lord Blackburn defined promoter as “a short and
convenient way of designating those who set in motion the machinery by which the Act enables
them to create an incorporated company.”
BECOMING A PROMOTER AFTER INCORPORATION?
• YES
• It is possible to become a promoter of a company already registered if for example a
person assists a newly formed company to raise capital, manpower etc.
CAN A CORPORATE BODY BE A PROMOTER?
• YES
• An existing company except the one in liquidation may be a promoter of another new
company if they do the activities of a promoter for the newly formed company S20(4).
CAN A FOREIGN OR ALIEN COMPANY BE A PROMOTER?
• YES
• An alien or a foreign company may join in forming a company S20(5).
WHAT ARE THE PROMOTER’S ACTIVITIES?
• For a company to come into existence, there must be persons who would promote and
float it. Promotion activities usually involve:
i. Fund raising
ii. Obtaining requisite permits
iii. Packaging of incorporation documents
iv. Land acquisition
v. Personality Shopping/Employment/Staffing etc
• More Responsibilities of Promoter

i. Deciding on the most suitable type of company to be formed
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ii. Designating the Directors of the company

iii. Engaging the services of relevant Professionals e.g., Solicitors, Accountant
iv. Promoter takes care of all logistics e.g., purchase of office equipment
v. Advertising
WHAT OF PROFESSIONALS ENGAGED IN COMPANY FORMATION?
• But a person who acted in a professional capacity and was briefed by the Promoter is not
a promoter proviso to S85, see under definition above.
• Accountant who prepares financial analysis or a solicitor who prepares the memorandum
and articles and registers the company for client and is paid his professional fees is not a
promoter.
• Other professionals;
o Solicitor
o Engineer
o Architect
o Surveyor
o Estate agent etc
In Garba v. Sheba Int. (Nig) Ltd the court set up a test of determining who is a promoter, thus:
“a promoter is one who undertakes to form a company with reference to a given object and set it
going and who takes necessary steps to accomplish that purpose.”
However, a professional who does beyond his professional engagement may be treated as a
promoter. For instance, a lawyer who after incorporation, assist in employment, securing
accommodation, personality shopping, equipment etc
A solicitor may become a promoter in some other capacity such as where he joined with another
to negotiate property for the proposed company at a profit Tyrrel v Bank of London.
IS A PROMOTER A TRUSTEE OR AGENT?
• NO
• However, a Promoter is in Fiduciary relationship to the company Garba v Sheba Int.
Limited S86(1)
DUTIES OF PROMOTERS
1. Duty to account for money/ properties received in the course of the promotion activities
2. He must disclose any property or information which is acquired on behalf of the company
especially where he has used the information or property to gain a benefit S86(2).
3. Duty to disclose conflicting interest in transactions with the company
4. Duty not to expose the company to loss
5. Duty not to make secret profit; where made, it must be refunded to the company
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LIABILITIES OF PROMOTERS
Where there is a breach of the duties imposed on a promoter, the company can take any of the
following actions for redress
i. Action to render account of money or property received in the course of promotion
activities
ii. Action to account for secret profit made
iii. Action for damages for wrongful exploitation of confidential information
iv. Refusal to ratify pre-incorporation contract tainted with conflict of interest
v. Action to refund.
vi. Rescission (strongest tool)
REASON FOR RESCISSION
• A promoter is in a fiduciary relationship to the company; thus, any breach of this duty
entitles the company to rescission from such contracts S86(3).
IS THE RIGHT OF RESCISSION OF A COMPANY ABSOLUTE?
• NO
• The court may in its equitable jurisdiction stop a company from rescission. For instance,
a company may not rescind where there is full disclosure of material facts known by the
promoter and the contract has been ratified on behalf of the company:
• Where rescission not possible, the company may take option of RECOVERY OF
PROFIT
• Where it is not possible for the company to rescind the contract, the company may
recover the profit made in the transaction.
• Sometimes, recovering profit only may not be sufficient thus company is entitled to sue
for damages for the breach of the fiduciary duty.
• Also, a subscriber has a right to sue for damages where relied on the false information
given to him by the promoter subscribing for the shares.
IS THERE LIMITATION OF TIME IN ACTION AGAINST A PROMOTER?
Action against a promoter by a company is not limited by time S86(4). But the court has the
discretion to relieve a promoter in whole part from liability considering the circumstances and
lapse of time.
RATIFICATION OF CONTRACT ENTERED BY PROMOTER S86(3)
i. By the company’s Board of directors independent of the promoter
ii. By all the members of the company; or
iii. By the company at a general meeting at which neither the promoter shareholders of any
shares in which he is beneficially interested shall vote on the resolution to enter into or
ratify the transaction.
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REMUNERATION OF PROMOTERS
• A promoter has no right against the company for payment of services rendered before
incorporation.
• The law is that unless the company’s Articles of Association permits the Directors to pay,
a promoter is not entitled to remuneration for services secured as a promoter.
• Where the promoter enters into a contract with the proposed company, he can recover his
fees and preliminary expenses where the contract is ratified by the company.
ISSUES OF REMUNERATION GENERALLY?
i. Promoter
ii. Executive director
iii. Managing director
iv. Non-executive
v. Trustees
vi. Company secretary
See the case of Gluckstein v Barnes.
Erlanger v New Sombrero Phosphate: Frédéric Émile d'Erlanger was a Parisian banker. He
bought the lease of the Anguilla island of Sombrero for phosphate mining for £55,000. He then
set up the New Sombrero Phosphate Co. Eight days after incorporation, he sold the island to the
company for £110,000 through a nominee. One of the directors was the Lord Mayor of London,
who himself was independent of the syndicate that formed the company. Two other directors
were abroad, and the others were mere puppet directors of Erlanger. The board, which was
effectively Erlanger, ratified the sale of the lease. Erlanger, through promotion and advertising,
got many members of the public to invest in the company.
After eight months, the public investors found out the fact that Erlanger (and his syndicate) had
bought the island at half the price the company (now with their money) had paid for it. The New
Sombrero Phosphate Co sued for rescission based on non-disclosure, if they gave back the mine
and an account of profits, or for the difference.
The House of Lords unanimously held that promoters of a company stand in a fiduciary
relationship to investors, meaning they have a duty of disclosure. Further, they held, by majority
(Lord Cairns LC dissenting), that the contract could be rescinded, and that rescission was not
barred by laches.
Lord Blackburn decided that delay did not bar rescission. As a general "condition to a
rescission there must be a restitutio in integrum." There was a question over this, since phosphate
had been mined, and it was not so easy to put the phosphate back. He observed it would "be
obviously unjust that a person who has been in possession of property under the contract which
he seeks to repudiate should be allowed to throw that back on the other party’s hands without
accounting for any benefit he may have derived from the use of the property… [or] making
compensation for that deterioration." In this case, however, adequate compensate could be paid.
So, there was no impossibility in counter restitution.
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Gluckstein v Barnes: Mr G and 3 others formed a syndicate and bought a property for
£120,000, but claimed they were paying £140,000. They also promote a company of which they
become the directors and buy the property (for the company) for £180,000. In order to fund the
purchase, the company invited members of the public to buy shares, for which a prospectus was
issued. However, a £40,000 profit was disclosed, whereas the promoters had actually made an
additional £20,000 secret profit. This was not disclosed to the prospective shareholders but was
instead written in with a vague reference to ‘interim investments’. 4 years later the company
went into liquidation and the extra £20,000 was discovered. The liquidator brought an action to
recover part of this amount from Mr G.
Held: The action succeeded. As promoters they were under a duty to make explicit declarations
of the profits already made.
Lord Macnaghten said that: ‘Everybody knows that sometimes half a truth is no better than a
downright falsehood.’
Lord Macnaghten: there are two things in this case which puzzle me much, and I do not
suppose that I shall ever understand them. I mention them merely because I should be very sorry
if it were thought that in these two matters the House unanimously approved of what has been
done. I do not understand why Mr. Glusktein and his associates were not called upon to refund
the whole of the money which they misappropriated. What they did with it, whether they put it in
their own pockets or distributed it among their confederates, or spent it in charity, seems to me
absolutely immaterial. In the next place, I do not understand why Mr. Gluckstein was only
charged with interest at the rate of 3%. I should have thought it was a case for penal interest.
In these two matters, Mr. Gluckstein has been in my opinion extremely fortunate. But he
complains that he may have a difficulty in recovering from his co-directors their share of the
spoil, and he asks that the official liquidator may proceed against his associates before calling
upon him to make good the whole amount with which he has been charged. My Lords, there may
be occasions in which that would be a proper course to take. But I cannot think that this is a case
in which any indulgence ought to be shown to Mr. Gluckstein.
Lagunas Nitrate v Lagunas Syndicate: The L. Company was promoted and formed by the
directors of the L. Syndicate for the purpose of purchasing part of the property of the syndicate,
consisting of nitrate works. The directors of the syndicate prepared and signed the memorandum
and articles of association of the company, the articles nominating them as directors and stating
specifically that they were also the directors of the syndicate. They also prepared the company’s
prospectus and purchase contract and affixed the seals of the syndicate and of the company to the
latter. The company’s solicitors and secretary were also the same as those of the syndicate. Two
years after the date of the contract and the completion of the purchase the shareholders of the
company, believing that their property had been purchased at an over-value and that there had
been misrepresentations in the contract and prospectus, appointed an independent board of
directors who, after investigating the facts and with the sanction of a general meeting of the
shareholders, brought an action against the syndicate and the directors for rescission of the
contract and damages on the ground of misrepresentation, misfeasance, breach of trust, and
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concealment of material facts, but not alleging fraud. From the date of the contract and down to
and also since the commencement of the action the company had, first by its original directors
and afterwards by its independent board, carried on business and worked the property the subject
of the contract. At the trial Romer J. dismissed the action.
On appeal by the company: -
Held, by Lindley M.R., and Collins L.J., that the company was not entitled to rescission or
damages, for
1. at the date of the contract the company had, by its memorandum and articles, notice that
its directors were also the vendors or agents of the vendor syndicate, and the mere fact
that its directors did not constitute an independent board was not a sufficient ground for
setting aside the contract;
2. there had been no misrepresentation made to, or any material fact concealed from, any of
the persons who were members of the company at the date of the contract, those persons
being the directors themselves;
3. although the contract and prospectus were, on the evidence, misleading in certain
particulars which would have entitled the company at the time to repudiate the contract,
yet through the subsequent alteration of the property consequent on its being worked by
the company, the position of the parties had been so changed that they could not be
restored to their original position; and
4. the defendants, the directors, had not been guilty of such negligence or breach of trust as
to render them liable in damages in law for the loss occasioned to the company, or in
equity to make good the loss.
PRE-INCORPORATION CONTRACTS
S96(1) any contract or other transaction purporting to be entered into by the company or by any
person on behalf of the company prior to its formation may be ratified by the company after its
formation and thereupon the company shall become bound by and entitled to the benefit thereof
as if it has been in existence at the date of such contract or other transaction and had been a party
thereto.
S96(2) prior to ratification by the company, the person who purported to act in the name or on
behalf of the company shall, in the absence of express agreement to the contrary, be personally
bound by the contract or other transaction and entitled to the benefit thereof.
Pre-incorporation contracts entered into by person on behalf of a company before its
incorporation:
i. promotion agreements,
ii. preliminary agreements formation agreements,
iii. shareholders agreement,
iv. memorandum of undertaking,
v. Pre-incorporation agreements etc
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LEGAL STATUS OF PRE-INCORPORATION CONTRACTS

POSITION AT COMMON LAW
Privity of contract was upheld and non-party in this case the company referred to as stranger isn’t
allowed to ratify the contract as someone cannot claim to be an agent to a non-existing principal,
since the company wasn’t in existence at the time that the contract was made, it cannot now
come to ratify it. See cases below:
Kelner v Baxter: A group of company promoters for a new hotel business entered into a
contract, purportedly on behalf of the company which was not yet registered, to purchase wine.
Once the company was registered, it ratified the contract. However, the wine was consumed
before the money was paid, and the company unfortunately went into liquidation. The promoters,
as agents, were sued on the contract. They argued that liability under the contract had passed, by
ratification, to the company and that they were hence not personally liable. It was held, however,
that as the company did not exist at the time of the agreement it would be wholly inoperative
unless it was binding on the promoters personally and a stranger cannot by subsequent
ratification relieve them from that responsibility.
Erle CJ held the promoters were personally liable. He said the following.
I agree that if the Gravesend Royal Alexandra Hotel Company had been an existing company at
this time, the persons who signed the agreement would have signed as agents of the company.
But, as there was no company in existence at the time, the agreement would be wholly
inoperative unless it were held to be binding on the defendants personally. The cases referred to
in the course of the argument fully bear out the proposition that, where a contract is signed by
one who professes to be signing “as agent,” but who has no principal existing at the time, and the
contract would be altogether inoperative unless binding upon the person who signed it, he is
bound thereby: and a stranger cannot by a subsequent ratification relieve him from that
responsibility. When the company came afterwards into existence it was a totally new creature,
having rights and obligations from that time, but no rights or obligations by reason of anything
which might have been done before. It was once, indeed, thought that an inchoate liability might
be incurred on behalf of a proposed company, which would become binding on it when
subsequently formed: but that notion was manifestly contrary to the principles upon which the
law of contract is founded. There must be two parties to a contract; and the rights and obligations
which it creates cannot be transferred by one of them to a third person who was not in a
condition to be bound by it at the time it was made. The history of this company makes this
construction to my mind perfectly clear. It was no doubt the notion of all the parties that success
was certain: but the plaintiff parted with his stock upon the faith of the defendants' engagement
that the price agreed on should be paid on the day named. It cannot be supposed that he for a
moment contemplated that the payment was to be contingent on the formation of the company by
the 28th of February.
Exception: a promoter can avoid personal liability if the company, after incorporation, and the
third party substitutes the original pre-incorporation contract with a new contract on similar
terms. Novation, as this is called, may also be inferred by the conduct of the parties such as
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where the terms of the original agreement are changed. Howard v Patent Ivory Manufacturing
Co, Touche v Metropolitan Railway Warehousing.
Also, in Edokpolo & Co Ltd v Sem-Edo Wire Industries Ltd (1984) 7 S.C. 119, the SC
unanimously upheld novation being a valid ground to make a pre-incorporation contract valid
and binding. Per Nnamani JSC “it seems to me with greatest respect that these conclusions
arise from the fact that the CA didn’t give due consideration to the case of the appellant which is
that there is a new contract between it and the 1st respondent (Sem-Edo Wire) subsequent to its
incorporation. The court’s whole consideration of the case appears to have been limited to the
pre-incorporation contract.” Per Bello JSC “the facts averred in the statement of claim which are
deemed to be true for the purpose of the objection taken in limine show that the appellant and the
1st respondent company entered into a new contract in the terms of the pre-incorporation
contract after the 1st respondent company had been incorporated. In the circumstance, the rule of
company law that a company is not bound by a pre-incorporation agreement entered into by its
promoters and that the company cannot ratify such agreement after its incorporation is
inapplicable to the facts of the case as pleaded in the statement of claim.”
Thus, in Nigeria, novation could not be unilaterally effected by the new corporation all by itself,
the third party must also give his assent until the decision in Edokpolo vs Sem-Edo Wire
Industries Ltd. Therein, on 27th October 1975, Edokpolo had executed a pre-incorporation
agreement with SEM Nigerian Holding GHBH and Company Hamburg, (a German company) to
create Sem-Edo Wire, i.e., that Edokpolo and the German Company would own 40% and 60%,
respectively in the new Sem-Edo Wire company. The agreement was incorporated into the
memorandum of the new company. The company was incorporated on 5th December 1975. On
27th February 1976, in breach, the new company after formation, allotted part of Edokpolo’s
40% to the chairman and the solicitor, despite a post-incorporation adoption of the share
allotment agreement by Sem-Edo Wire’s Board of Directors, i.e., that a new contract had been
created between Edokpolo and Sem-Edo Wire after incorporation on the same terms as the pre-
incorporation contract. Upholding the novation, Justice Nnamani, JSC, held that there was
nothing to prevent the new corporation from ratifying the pre-incorporation after its later
registration: But there is nothing preventing the company after incorporation from entering into a
new contract to put into effect the terms of the pre-incorporation contract. This new contract can
be in express terms or can be implied from the acts of the company after incorporation as well as
from the minutes of its general meetings and board meetings
In Newborne v Sensolid (Great Britain) Ltd, Mr Newborn was selling goods on behalf of the
Newborn company that was not incorporated. The contract was signed – Newborne (London)
Ltd and underneath was the name of the future director – Leopold Newborn. Held: Leopold
Newborne never purported to contract to sell nor sold the goods either as principal or agent. The
contract purported to be made by the company, on whose behalf it was signed by a future
director, and in as much as the company was non-existent at the material time, the contract was a
nullity.
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Parker J. The principle laid down in Kelner v. Baxter is that if a person contracts ostensibly as
agent for a non-existent principal . . . he can be held to be himself personally liable. . . It is plain
that this principle, that the agent is personally liable, . . . is based on this principle, that it is only
by holding him personally liable that any effect can be given to the contract.
Court of Appeal interpreted the finding of Kelner v Baxter in a different way and developed
the principle further. In this case an unformed company entered into a contract, the other
contracting party refused to perform his duty. Lord Goddard observed that before the
incorporation the company cannot be in existence, and if it is not in existence, then the contract
which the unformed company signed would also be not in existence. So, company cannot bring
an action for pre-incorporation contract, and also the promoter cannot bring the suit because they
were not the party to contract.
In the Nigerian case of Caligara vs Giovanni Sartori & Co Ltd., the Court followed the ruling
in Newbourne vs Sensolid Ltd. In December 1956, Giovanni had obtained a loan of £800.00
from Caligara by a cheque cashed on 24th January 1957, but Giovanni had obtained the loan in
the name of the proposed corporation. Honourable Justice Sowemimo, relying on Paragraph
824, Page 425 of Volume 6 of the Halsbury’s Laws of England, (3rd edition), held that the loan
transaction was a nullity and so rejected the argument that the later corporation was liable since
Mr. Sartori had not acted as an agent. Further, the court also held that the corporation could not
ratify the loan, since it had no legal capacity to confer any authority on the borrower: As I earlier
mentioned at the time the cheque was cashed, the defendant company was not in existence and it
could not be said to have taken the benefit of this contract. In the result, the Plaintiff’s claim
must fail. He has his remedy which he can enforce against the proper person
Societte Generale v Societte Generale Bank Nig Ltd 1997 4 NWLR 8 In 1976 three Nigerian
gentlemen entered into an agreement with the appellant to establish a bank in Nigeria, the
Societe Generale Bank (Nigeria) Ltd, the respondent in this matter. In December 1976, the
respondent was duly incorporated under the Companies Act, 1968. The appellant was to act as
manager of the respondent.
In July 1976, five months prior to the bank's incorporation, its founding members entered into
another agreement ("the July agreement"). On 8 March 1977 this agreement was ratified by the
respondent's board of directors.
The July agreement contained a clause that any dispute between the parties would be referred to
arbitration.
The relationship between the appellant and the respondent later started deteriorating, the
respondent accused the appellant, in its capacity as manager of the bank, of mismanagement and
negligence. As a result, the respondent terminated its contract with the appellant and in
December 1989 instituted action in the High Court of Lagos State for the recovery of more than
N190 million as well as the equivalent in Naira of an additional FF20.75 million from its former
manager.
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Thereupon the appellant, invoking the arbitration clause contained in the July agreement, applied
for a stay of proceedings. The matter was heard in January 1990 and in April 1990 the High
Court ordered a Stay of Execution.
The respondent successfully appealed to the Court of Appeal and the appellant now appealed to
this court against the latter ruling. In a cross-appeal, the respondent appealed against the Court of
Appeal's finding that the July agreement constituted a "pre-incorporation contract".
The appellant contended that the July agreement, and hence its arbitration clause, was binding on
the respondent. In support of that it relied upon the provisions of Sections 624 and 626 of the
Companies and Allied Matters Act ("CAMA") which make Section 72 of that Act have
retrospective application, clearly overriding Section 6 of the Interpretation Act as well as the
common law on retroactivity. The provisions of Section 624 make Section 72 apply not only to
companies formed under the Act, but also to existing companies, as was the case here.
Against this, the respondent argued that the relevant sections in CAMA should only apply to
ratification of an earlier agreement if the ratification took place after CAMA came into
operation, in January 1990. In this event, the July agreement was ratified in March 1977, and
after the respondent had been incorporated in December 1976. Nothing, it is contended, shows
that the legislature intended that after 1990 a company should be bound by ratification in 1977 of
a 1976 agreement
The appeal upheld and cross-appeal dismissed.
OGUNDARE, JSC: "Any contract or other transaction purporting to be entered into by Societe
Generale Bank (Nigeria) Limited or by any person on behalf of the company prior to its
formation and ratified by the company after its formation, the company shall become bound by
and entitled to the benefit therefore as if it has been in existence at the date of such contract or
other transaction and had been a party thereto."
WHAT IS THE LEGAL REGIME UNDER CAMA?
• By S96(1), a company upon incorporation can ratify all the pre-incorporation contracts
entered on its behalf. Thus, the company becomes bound and is entitled to the benefits
and obligations thereto.
• However, before such ratification, the person (or promoter) who purported to act in the
name or on behalf of the company shall be personally bound by the contract or
transaction and entitled to the benefits and obligations thereof S96(2).
CONFLICT BETWEEN PROVISIONS OF MEMART & PRE-INCORPORATION
CONTRACT
• Where there is a conflict between the memo and articles on one hand and the pre-
incorporation contract on the other hand, the provision of the memorandum & articles
shall prevail.
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• Even where a “Supremacy clause” is inserted into the pre-incorporation contract, it would
still not go to erode the clear provision of the CAMA which in S46(1) describes the
memo and articles as superior contract of the company.
EFFECTS OF PRE-INCORPORATION CONTRACT ON THE MEMO AND ARTICLES
• The inclusion of the terms of a pre-incorporation contract in the object clause is the
intention to carry out such objects.
• NB, the inclusion of a pre-incorporation contract in the MEMO of a COY does not
impose extra liability on the COY, but amounts to no more than a serious desire by the
promoters that the proposed coy after its formation should execute the terms of the
contract Edokpolor & Co Ltd v Sem-Edowire.
• Provisions made in the Articles of Association on rules of management of the company,
the mgt and members of the company are bound to observe them.
INDICATIONS FOR PRE-INCORPORATION CONTRACTS
a. Payment of promoters’ expenses
b. Shareholder's agreement - need to secure interests of corporators
c. Takeover of business, or purchase of property
d. Joint - Venture especially between Nigerians and aliens
e. Conversion of partnership to registered company
f. Promoters/Directors' service contracts
TYPES OF PRE-INCORPORATION CONTRACTS
i. Joint venture agreement
ii. Shareholder’s agreement
iii. Contract for payment of promoter’s expenses
iv. Directors’ service contract
v. Contract for conversion of partnership into incorporated company
vi. Contract for acquisition of property
vii. Contract of Transfer of Technology
viii. Employment agreement
ix. Procurement agreement
x. Loan agreement
xi. Formation agreement etc.
CONTENTS OF SHAREHOLDERS’ AGREEMENT
1. Commencement (parties and dates)
“This Shareholders Agreement (or Joint Venture Agreement or whatever type) is made this
…………….. day of ………………. BETWEEN Chris Ozo Agbata of 15 Edupal Drive, Ikoyi,
Lagos, Gabriel Odii of 14 Johnso Drive, Manchester and Hafeez Yusuf of Simeon Close,
London.”
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2. Recital (background facts)

3. Definition and interpretation (define special words)
4. Arbitration
“If any question shall arise between the parties hereto or between the company and the executors
or administrators of Mr ……………….as to the interpretation of this Agreement or as to the
rights, duties or liabilities of either party hereunder or as to any act, matter or thing arising out of
or under this Agreement, the same shall be submitted to a single arbitrator to be appointed (in
default of agreement) by the Settlement House and this shall be a submission to arbitration under
the provision of the Arbitration Act 2004 or any statutory re-enactment, modification or
extension thereof for the time being in force.”
5. Consideration
6. Registered office
7. Company’s business
8. Dividend policies
9. Directors
10. Secretary
11. Auditors and Bankers
12. Warranties
13. Guarantees and indemnities
“There shall be paid (or refunded) to Mr ……………rate of N………. per annum (net of such
sums as shall be allowed for tax) to cover all reasonable out of pocket expenses incurred by him
on the company’s business (including expenses of entertainment subsistence and traveling except
outside of …………….).”
14. Financing Accounts
15. Transfer of shares and loans
“Notice may be given by either party by letter (or email) addressed to the other party at in the
case of the company, its registered office for the time being and in case of Mr
…………………his last known address and any such notice given by letter shall be deemed to
have given at the time at which the letter would be delivered in the ordinary course of post.”
16. Restrictive covenants
“Mr …………… shall not whether as principal, servant or agent for a period of ……………..
years from the termination of the said appointment directly or indirectly engage or be concerned
in any business within a radius of ………………. miles from the company’s premises in
competition with the company or (whether or not within such radius) solicit the custom of any
person, firm or corporation who during the continuance of this agreement shall have been a
customer or the company in competition with the company.”
17. Procedure to resolve Deadlock
18. Important management decisions
19. Confidentiality
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“Mr ……………….shall not either during or after the termination of the said appointment
divulge or communicate to any person or persons except to those of the officials of the company
whose province it is to know the same, any of the company’s secrets or any other information
which he may receive or obtain in relation to the company’s affairs or to the working or any
process or invention which is carried on or used by the company or which he may make or
discover while in the service of the company.”
20. Dispute Resolution
21. Pre-emptive rights
22. Winding up
23. Shareholders consent etc
JOINT VENTURE AGREEMENT
• A joint venture Agreement is more specific and formal than the memorandum of
understanding. Binding and enforceable terms.
• At this stage, parties are certain as to the terms of the venture.
• This also contains consideration or contributions.
• It is not unusual to find clauses in the MOU also in the JVA.
CONTENT OF JOINT VENTURE AGREEMENT
1. Parties and their description
2. Date
3. Recital
4. Nature of business
5. Registered office
6. Dividend policies
7. Financing accounts
8. Confidentiality
9. Restrictive covenants
10. Directors
11. Secretary
12. Winding up
13. Consideration
14. Dispute Resolution
15. Applicable law
16. Capital contribution
17. Admission of new partner
18. Transfer of technology, etc
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POST-INCORPORATION MATTERS
PRELIMINARY STEPS BEFORE COMMENCEMENT OF BUSINESS
Three main activities that follow after incorporation are:
1. Trading from Registered Address/Head Office
2. Publication of Name
3. Keeping Statutory Books
4. Make Statutory Filings
REGISTERED AND HEAD OFFICE OF A COMPANY S728
• After registration, a company must trade or operate from its registered address and if any
change should occur, it must notify the CAC in writing within 14 days. Even it was
already operating prior to the commencement of CAMA 2020, it must within 14 days
comply and the address must be a physical address not an online one. Failure to comply
attracts a penalty of fine, the amount of which is to be prescribed in the regulations
periodically.
CERTIFICATE OF INCORPORATION
• Upon registration, a certificate of incorporation will be issued. The certificate must be
displayed conspicuously by the company in all its offices.
PUBLICATION OF NAME BY COMPANY S729
• Every company, after incorporation, shall—
a. paint or affix, and keep painted or affixed, its name and registration number on the
outside of every office or place in which its business is carried on, in a conspicuous
position, in letters easily legible;
b. have its name engraved in legible characters on its seal, where the company has a
seal; and
c. have its name and registration number mentioned in legible characters in all business
letters of the company and in all notices, advertisements, and other official
publications of the company, and in all bills of exchange, promissory notes,
endorsements, cheques, and orders for money or goods purporting to be signed by or
on behalf of the company, and in all bills or parcels, invoices, receipts, and letters of
credit of the company.
• Failure to comply attracts fine penalty, to be prescribed by the regulations.
SUMMARY:
1. Publication of name in name plate
2. Publication of name in common seal
3. Publication of name in official documents and bill of exchanges
4. Publication of name on invoices and receipts
5. Publication on letterheads
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6. Displaying of certificate of incorporation in conspicuous place

7. Failure to comply attracts fine to be fixed by regulation
Name in this regard involve both corporate and trade name. There is a difference between
them. A corporate name is the name with which a corporate body is registered at the CAC that
gives it legal personality and reflected on the certificate of incorporation while a trade name is
the name with which a corporate body carries on its business and affairs. The benefits of the
trade name are:
1. It guarantees the goodwill of the company.
2. It is used for easy advertisement.
3. It is used when mergers and acquisition arise.
For instance, Coca-Cola is a trade name (brand name) while Nigerian Bottling Company Plc is
the corporate name the corporate name. Also, Star is a brand name while Nigerian Breweries Plc
is the corporate name.
In publication of the name, it is the corporate name and the registration number. The trade name
can be published with the RC number on the name plate. However, where it comes to official
documents and court processes, the corporate name must be used.
The importance or significance is that in commencing an action against a corporate body, the
action is to be commenced in its corporate name and not trade or brand name. In BANK OF
BARODA V. IYALABANI LTD, the Court of Appeal in a majority decision held that it is
usually accepted practice to institute an action in company’s full corporate name like Ltd, Unltd,
Plc, ltd
CERTAIN COMPANIES TO PUBLISH STATEMENT IN PRESCRIBED FORM,
FOURTEENTH SCHEDULE, S733
• Every banking company, insurance company or a deposit, provident or benefit
society shall, before it commences business, and also on the first Monday in February
and the first Tuesday in August in every year during which it carries on business,
submit to the Commission a statement in the form in the Fourteenth Schedule to this
Act or as near thereto as circumstances may admit.
• A copy of the statement shall be put up in a conspicuous place in the registered office of
the co, and in every branch office or place where the business of the co is carried on.
• Every member or creditor of the company is entitled to a copy of the statement, on
payment of a sum prescribed in the regulation.
• If default, the co and every director and manager of the co is liable to a penalty prescribed
in the regulation for everyday during which the default continues.
• NB: the statement filed before commencement is called statement of affairs.
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STATUTORY BOOKS (REGISTERS)

Upon registration, there are certain books or registers required by law to be kept by companies at
their registered (or branch offices in some cases as the law may permit), these are called statutory
books.
Form of register S731; Any register, record, index, minute book or book of account may be
made by making entries in bound books or in loose leaves, whether pasted or not, or in a
photographic film form, or may be entered or recorded by any information storage device that is
capable of reproducing the required information in intelligible written form within a reasonable
time, or by recording the matters in question in any other manner in accordance with accepted
commercial usage. If done in any other means including electronically, precaution must be taken
to avoid falsification, failure to comply attracts fine penalty as may be prescribed in the
regulations.
SUMMARY:
Hardcopies
i. Bound leaves
ii. Loose leaves whether pasted or not
iii. Photographic film form
Softcopies
i. Precaution to avoid falsification
ii. Storage device capable of reproducing required info
iii. Recording in any manner acceptable for commercial usage
The following are statutory books to be kept by companies:
1. Register of members; S109
2. Index of members (public company only); S111
3. Register of substantial interest in shares (must for a public company); S122
4. Copies if Instruments Creating Charge; S215
5. Register of charges; S216
6. Register of debenture holders; S218
7. Minutes book (except for one member company); S266
8. Register of Director’s Shareholding; S301
9. Register of Directors; S318
10. Register of Director’s Residential Address; S320
11. Register of Secretaries (must for public companies); S336
12. Accounting Records; S374
1. REGISTER OF MEMBERS S109

• names and addresses of the members, and in the case of a company having a share
capital, a statement of the shares and class of shares, if any, held by each member,
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distinguishing each share by its number so long as the share has a number, and of the
amount paid or agreed to be considered as paid on the shares of each member
• date on which each person was registered as a member
• date on which any person ceased to be a member
• entry shall be made within 28 days of the conclusion of the agreement with the company
to become a member or, in the case of a subscriber of the memorandum, within 28 days
of the registration of the company
• if the person ceases to be a member, entry is also within 28 days or if not at the instance
of the co, within 28 days that it got to co’s knowledge.
• Where a co defaults, it shall be liable to a fine as may be prescribed in the regulation
• Time limitation to enforce action for entry or removal is 20 years.
• Usually kept at the registered office of the company
• Can be kept at another office of the company or where it is made up, but must be within
Nigeria and CAC must be notified.
• CAC must be notified of any change in location of the reg within 28 days, failure
attracts fine to be prescribed in the regulation.
2. INDEX OF MEMBERS (PUBLIC COMPANIES ONLY) S111

• Required where a company has more than 50 members (Plc) to facilitate inspection of
register of members.
• But can be kept by a private company where it serves as a members register instead.
• Any alteration in the members register shall be reflected in the index within 14 days.
• Kept where the register of members is kept and is also open for inspection by the
members and the public.
• Default attracts penalty of fine to be prescribed in the regulation.
3. REGISTER OF SUBSTANTIAL INTEREST IN SHARES (MUST FOR A PUBLIC

COMPANY); S122
• A public company must have and keep a register of its substantial shareholders at the
same place where the register of members is kept.
• The same rule as to inspection of register of members applies to it.
• Where the co ceases to be a plc, it shall still keep the register for 6 years.
• A person is a substantial shareholder in a public company if he holds himself or by his
nominee, shares in the company which entitle him to exercise at least 5% of the
unrestricted voting rights at any general meeting of the company S120.
4. COPIES IF INSTRUMENTS CREATING CHARGE; S215

• Every company shall keep a copy of every instrument creating any charge requiring
registration.
• It is to be kept at the registered office of the company
• In the case of a series of uniform debentures, a copy of one debenture of the series is
sufficient
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5. REGISTER OF CHARGES; S216

• Every limited company must keep at its registered office, a register of charges containing
all charges affecting the properties of the company.
• Giving in each case a short description of the property charged, the amount of the charge,
and, except in the case of securities to bearer, the names of the persons entitled thereto.
• Copies of the instruments creating the charges and the register of charges is open for
inspection to creditors, members and the public always but subject to reasonable
restrictions by the GM, at least 2 hours each day.
6. REGISTER OF DEBENTURE HOLDERS; S218
• A company that issued debentures shall maintain a register of the holders.
• The register shall contain the—
1. names and addresses of the debenture holders;
2. principal of the debentures held by each of them;
3. amount or the highest amount of any premium payable on redemption of the
debentures;
4. issue price of the debenture and the amount paid up on the issue price;
5. date on which the name of each person was entered on the register as a debenture
holder; and
6. date on which each person ceased to be a debenture holder
• The entry required under this section shall be made within 30 days of the conclusion of
the agreement with the company to become a debenture holder or within 30 days of the
date at which he ceases to be one.
• The register except when closed shall be open to debenture holders, members of the
company and the public.
7. MINUTES BOOK (EXCEPT FOR ONE MEMBER COMPANY); S266

• Every company shall cause minutes of proceedings of all its meetings to be entered in the
book kept for that purpose.
• In the case of a company that has only one member, where that single member takes any
decision that—
i. may be taken by the company in general meetings, and
ii. has effect as if agreed by the company in general meeting,
• He shall provide the board with details of that decision
• It is open to members at least 6 hours daily during working hours.
• Minutes are written records of proceedings and decisions taken at a meeting.
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8. REGISTER OF DIRECTORS SHARE HOLDING; S301

• Every company must keep a register showing as respects each director, the number,
description and amount of any shares or debentures of the company or its parent company
or subsidiaries.
• Kept at the registered office or head office.
• Open for inspection for at least 2 hours daily.
• Open for inspection to members, debenture holders of the company and CAC.
9. REGISTER OF DIRECTORS, S318

• Every company shall keep a register of its directors.
• The register shall contain the required particulars of each person who is a director of the
company.
• The register shall be kept available for inspection at the company’s registered office.
• The company shall give notice to the Registrar—
i. of the place at which the register is kept available for inspection, and
ii. of any change in that place, unless it has at all times been kept at the company’s
registered office.
• The Register shall be open to the inspection of any—

i. member of the company without charge, and
ii. other person on payment of such fee as may be prescribed.
10. REGISTER OF DIRECTOR’S RESIDENTIAL ADDRESS; S320

• Every company shall keep a register of directors’ residential addresses.
• The register shall state the usual residential address of each of the company’s directors.
• If a director’s usual residential address is the same as the service address (as stated in the
company’s register of directors), the register of directors’ residential addresses need only
contain an entry to that effect provided the service address is not the company’s
registered office.
• In case of default, the company and each officer of the company are each liable to a
penalty in such amount as the Commission shall specify in its regulations.
11. REGISTER OF SECRETARIES (MUST FOR PUBLIC COS); S336, 337 and 338
• Every public company shall maintain a register of secretaries which shall contain;
• in the case of an individual—
i. full name and any former name or names;
ii. address; and
iii. email address.
• For the purposes of this section a “former name” means a name by which the individual
was formerly known.
• The register may not contain particulars of a former name where the former name—
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i. was changed or disused before the person attained the age of 18 years; or
ii. has been changed or disused for 20 years or more.
• The address required to be stated in the register is a service address which may be stated
to be the company’s registered office.
• in the case of a body corporate, or a firm—
i. corporate or firm name;
ii. registered or principal office; and
iii. email address.
• If all the partners in a firm are joint secretaries it is sufficient to state the particulars that
would be required if the firm were a legal person and the firm had been appointed
secretary.
12. ACCOUNTING RECORDS, S374

• The accounting records should show and explain;
i. disclose with reasonable accuracy, at any time, the financial position of the company;
and
ii. enable the directors to ensure that any financial statements prepared under this Part
comply with the requirements of this Act as to the form and content of the company’s
financial statements.
• The accounting records shall, in particular, contain—

i. entries from day to day of all sums of money received and expended by the company,
and the matters in respect of which the receipt and expenditure took place; and
ii. a record of the assets and liabilities of the company.
• If the business of the company involves dealing in goods, the accounting records shall
contain—
i. statements of stocks held by the company at the end of each year of the company;
ii. all statements of stocktakings from which any such statement of stock as is mentioned
in paragraph (a) has been or is to be prepared; and
iii. except in the case of goods sold by way of ordinary retail trade, statements of all
goods sold and purchased, showing the goods and the buyers and sellers in sufficient
detail to enable all these to be identified.
• Each public company shall keep its audited accounts displayed on its website.
• It must be kept at the registered office of the company or any other place within Nigeria
as approved by the directors.
• It shall at all times be open to inspection by the officers of the company.
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CONVERSION OF COMPANIES AND ALTERATION OF REGISTERED

DOCUMENTS
1. Change of name of a company
2. Change of registered address of a company
3. Alteration/Change of business or object clause
4. Re-registration/Conversion of Change of name of a company
5. Alteration of share capital
6. Conducting corporate search
CHANGE OF NAME OF A COMPANY, SS30 & 50(1).
There are two types of alteration:
• Voluntary change of name and
• Compulsory change of name at the instance of CAC
• The alteration may be at the instance of CAC where:
1. The name is identical or so nearly resembles an existing registered name; or
2. Conflicts with existing business name or trademarks.
PROCEDURE FOR CHANGE OF NAME
1. Board resolution
2. Search for availability and reserve the name
3. Convene general meeting (usually EGM but may come up as special business in AGM)
where special resolution will be passed to authorise the name change, signed by the
secretary and two directors.
4. Alter the Memart
5. Pay filing fees and stamp duty
6. Apply and deliver to CAC the following:
i. Application in Form CAC 3 requesting for consent and giving reasons for the change
of name
ii. Copy of the special resolution;
iii. CAC 1 - Availability and reservation of name;
iv. Original certificate of incorporation;
v. Stamped Memart as altered bearing the new name;
vi. Evidence of payment of filing fees and stamp duty
vii. Evidence of payment of Annual Returns
viii. Statement of affairs (if relevant)
7. CAC if satisfied will

i. approve and register the new name in the register of companies
ii. issue a new certificate of incorporation reflecting the new name
iii. publish the change of name periodically on national daily and on its website.
8. The company after the change of name has been approved by the CAC will:
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i. Alter the common seal, certificates, letter heads; etc of the company;
ii. Alter the memorandum and articles of association of the company; and
iii. Advertise the change of name in a daily newspaper circulating nation-wide
NB: if its compulsory change of name, then the procedure may include;
1. Amendment request letter by the company whose name is infringed to the erring
company to change its name voluntarily.
2. Protest letter from the existing company to the CAC where the erring company doesn’t
act accordingly.
3. Investigation by CAC
4. Direction by CAC, the erring company may be directed to change its name within 6
weeks or such other period as CAC may direct if it found that it infringed the name of the
exiting company.
CAC REQUIREMENTS/DOCUMENTS FOR THE CHANGE OF COMPANY NAME
a. Availability search and reservation of new name
b. Notice of change of the name of a company (Form CAC 3) - to be authorised by a
director, secretary or any other appropriate officer of the company
c. Special resolution stating the change desired, duly signed by director(s) of the company
d. Surrender of the original certificate of incorporation for cancellation
e. Payment of filing fees
f. Up-to-date annual returns
g. The company’s memorandum and articles as proposed to be amended
h. Compliance with S733 (where applicable)
NB: Does a change of name affect the rights and liabilities of the company? S30 (6) CAMA.
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Drafts: Consent Application to Change Name

EDUPAL NIGERIA LIMITED
RC:151025
15 EDUPAL DRIVE, IKOYI, LAGOS
07035406532
([email protected])
Our Ref: 2304______________________________________ Your Ref: _______________
15th August, 2022
The Registrar,
Corporate Affairs Commission,
Plot 256 Maitama,
Abuja.
Dear Sir,
APPLICATION FOR CONSENT TO CHANGE THE NAME OF EDUPAL NIGERIA
LIMITED PURSUANT TO SECTION 30(3) OF THE COMPANIES AND ALLIED
MATTERS ACT, 2020
We are members of the Board of Directors above Company instructed to apply for approval of
the Commission for the name of the above company to be changed to GOD’S FAVOUR LTD.
Please find enclosed, all the documents legally necessary to effect the change.
The circumstances which make the change of name desirable are as follows:
1. to make the name of the company reflect the true nature of the business of the company
as a public company.
2. to make the company easily identifiable.
Thank you.
Yours faithfully,
________________
Chris Ozo Agbata Esq
Company Secretary
Enclosed:
1. Special Resolution dated 15th of August, 2022
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Protest Letter for Change of Name

RC:151025
07035406532
([email protected])
Our Ref: 2304______________________________________ Your Ref: _______________
15th August, 2022
The Registrar,
Plot 256 Maitama,
Abuja.
Dear Sir,
PROTEST AND REQUEST TO COMPEL EDUPAL BEST NIGERIA LIMITED TO CHANGE
ITS NAME PURSUANT TO SECTION 30(1)(4) OF THE COMPANIES AND ALLIED
MATTERS ACT, 2020
It has come to our notice that a certain company has been registered as EDUPAL BEST
NIGERIA LIMITED, on the 19th day of March, 2022 with RC number 458540, a name which
infringes on our corporate name. As a company we came into existence on the 13th day of
March, 2020 with RC number 151025 and have so carried on business in that corporate name till
now.
It is pertinent to state that our business goodwill is likely to be endangered should both
companies be allowed to co-exist. The public will likely be deceived as to whether we are now
operating under a new name. It is therefore imperative that the Commission compels the new
company to change its name.
We have attached a copy of our Certificate of Incorporation as evidence of incorporation.
Please compel EDUPAL BEST NIGERIA LIMITED, to change its name or we may be forced to
take necessary legal actions.
Thank you.
Yours faithfully,
________________
Company Secretary
Enclosed:
Certificate of Incorporation of EDUPAL NIGERIA LIMITED
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Board Resolution for Change of Name

RC:151025
RESOLUTION OF BOARD OF DIRECTORS TO CHANGE THE NAME
At the Board of Directors meeting held on the 15th day of February, 2019 at the Board
conference room of the company, the following resolutions was proposed and duly passed:
“That subject to the consent of the Corporate Affairs Commission, the name of the company
EDUPAL NIGERIA LIMITED be changed to EDUPAL BEST NIGERIA LIMITED”
DATED THIS 15TH DAY OF FEBRUARY 2022
……………… …………………
Director Director
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Special Resolution for Change of Name

RC:151025
SPECIAL RESOLUTION TO CHANGE THE NAME OF EDUPAL NIGERIA LIMITED TO
EDUPAL BEST NIGERIA LIMITED PURSUANT TO SECTION 30(3) OF THE
COMPANIES AND ALLIED MATTERS ACT, 2020
At the General meeting held on the 15th day of February, 2022 at the Board conference room of
the company, the following resolutions was proposed and duly passed:
“That subject to the consent of the Corporate Affairs Commission, the name of the company
EDUPAL NIGERIA LIMITED be changed to EDUPAL BEST NIGERIA LIMITED”
……………… …………………
Director Director
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PROCEDURE FOR AMENDMENT OF BUSINESS, OBJECTS, RESTRICTION OF

POWERS OR ANY OTHER PROVISION OF THE MEMO IS ACCORDING TO S51.
51(1) Where a company has stated its business or objects in its memorandum, such a company
may, at a meeting of which notice in writing has been duly given to all members (whether or not
they are entitled to), by special resolution alter the provisions of its memorandum with respect to
the business or objects of the company: Provided that if an application is made to the Court in
accordance with this section for the alteration to be cancelled, it shall not have effect except in so
far as it is confirmed by the Court.
(2) An application under this section may be made to the Court by the holders of not less—
a. in the aggregate, than 15% in nominal value of the company’s issued share capital or any
class thereof or, if the company is not limited by shares, not less than 15% of the
company’s members; or
b. than 15% of the company’s debentures entitling the holders to object to alterations of its
objects: Provided that any such application shall not be made by any person who has
consented to or voted in favour of the alteration.
(3) An application under this section shall be made not later than 28 days after the date on
which the resolution altering the company’s business or objects was passed, and may be made on
behalf of the persons entitled to make the application by such one or more of them as they may
appoint in writing for that purpose.
(4) On an application under this section, the Court may make an order confirming the alteration
either wholly or in part and on such terms and conditions as it deems fit, and may adjourn the
proceedings in order that an arrangement may be made to the satisfaction of the Court for the
purchase of the interest of dissenting members, and the Court may give such directions and make
such orders as it considers expedient for facilitating or carrying into effect any such arrangement,
but that no part of the capital of the company shall be expended in any case.
(5) The debentures entitling the holders to object to alterations of a company’s business or
objects shall be any debenture secured by a floating charge.
(6) The special resolution altering a company’s business or objects requires the same notice to
the holders of such debentures as to members of the company, and in default of any provision
regulating the giving of notice to any debenture holder, the provisions of the company’s articles
regulating the giving of notice to members shall apply.
(7) Where a company passes a resolution altering its business or objects and—
a. application is thereafter made to the Court for its confirmation under this section, the
company shall forthwith give notice to the Commission of the making of the application,
and thereafter there shall be delivered to the Commission within 15 days from the date of
its making—
i. a certified true copy of the order, in the case of refusal to confirm the resolution, and
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ii. a certified true copy of the order, in the case of confirmation of the resolution together
with a printed copy of the memorandum as altered; and
b. no application is made with respect to confirmation to a Court under this section, the
company shall, within 15 days from the end of the period for making such an
application, deliver to the Commission a copy of the resolution as passed.
(8) If the Commission—
a. is satisfied, a printed copy of the memorandum as altered by the resolution shall forthwith
be delivered to it;
b. is not satisfied, it shall give notice in writing to the company of its decision and an appeal
from its decision shall thereafter lie to the Court at the suit of any person aggrieved and
such appeal shall be made within 21 days from the date of the receipt by the company of
the notice of rejection, or within such extended time as the Court may allow.
(9) The Court may at any time extend the time for the delivery of documents to the Commission
under subsection (7) (a) for such period as the Court may consider proper.
(10) If a company defaults in giving notice or delivering any document to the Commission as
required by subsection (7), the company and every officer of the company who is in default is
liable to such penalty as the Commission shall prescribe by regulation, and for every day during
which the default continues.
(11) The validity of an alteration of the provision of a company’s memorandum with respect to
the business or objects of the company shall not be questioned on the ground that it was not
authorised by subsection (1) except in proceedings taken for the purpose (whether under this
section or otherwise) before the expiration of 21 days after the date of the resolution in that
behalf, and where such proceedings are taken otherwise than under this section, subsections (6),
(7), (8) and (9) of this section shall apply in relation thereto as if they had been taken under this
section, and as if any order declaring the alteration invalid were an order cancelling it and as if
any order dismissing the proceedings were an order confirming the alteration.
(12) For the purpose of this section only, any reference to “member” includes any person
financially interested in the company within the context of subsection (2) (b).
SUMMARY OF S51: this applies mutatis mutandis to all alterations except change of name
which must be in line with S30 and alteration of capital which must be in line with SS128 – 130.
1. Board of directors resolution proposing the alteration (in whole or in part) in the
object of the company
2. Secretary to issue notice (in writing) of GM – 21 days is to be given to all members of
the company and debenture holders secured by floating charge
3. Holding of general meeting and passing of special resolution for alteration of the
business or objects of the company as contained in the memorandum of association.
4. all the members and debenture holder have the right to object only if they voted
against and they have 28 days to do so.
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5. the objectors must old 15% of share or be 15% of members in Ltd and Ltd/Gte
respectively
6. application to alter the memo must be made within 28 days following the resolution
either all of those entitle or by those they shall appoint in writing on their behalf
7. the co shall forthwith apply to court for confirmation of the resolution
8. the co shall within 15 days deliver to CAC the court order whether confirming the
resolution or not
9. the co will file a CTC of the court order if denied but if confirmed or granted, it will
file a CTC of the court order and a copy of the altered memo.
10. if the co defaults in delivering the docs in time, it shall be liable to a fine to be
determined by regulation.
11. if CAC is satisfied, the co should deliver a copy of the altered memo to it
12. if the CAC is dissatisfied and declines, the co has 21 days to appeal to court
13. the validity of the alteration of the memo can be question in any proceedings before
the expiration of the 21 days following the special resolution for the alteration.
14. The court may make any of the following orders:
i. An order confirming the alteration either wholly or in part and on such terms and
conditions as it thinks fit;
ii. An order for an arrangement to be made to purchase the interests of dissenting
members of the company; and
iii. Give such directions and make such orders as it thinks expedient for facilitating or
carrying into effect any such arrangement.
15. If the appeal succeeds, within 15 days from the court order deliver to Corporate
Affairs Commission, a certified true copy of the court order and printed copy of the
memorandum as altered
CHANGE OF REGISTERED ADDRESS OF A COMPANY SS 50 & 51
S50(5) provides that subject to section 54, any other provision of the memorandum maybe
altered in accordance with section 51, or as otherwise provided in this Act. In other words,
change business name (by virtue of S27) being a content of the memorandum will be amended or
changed following the procedure laid down in S51. The procedure is outlined and summarised
above, but below is what is obtainable in practice;
• Board resolution
• Convene general meeting where special resolution will be passed
• Deliver to Corporate Affairs Commission:
i. Form CAC 3 duly signed by a director and company secretary; and
ii. evidence of payment of Annual Returns
• Upon approval by the Corporate Affairs Commission, the company will publish the
change of its registered address to its customers and the rest of the public
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• By S728, any change of registered address mut be communicated to CAC within 14

days.
CHANGE OF OBJECT CLAUSE S51
Refer to S51 explained and summarised above.
CONFIGURATION OR TYPES OF COMPANY CAPITAL
1. AUTHORISED/NOMINAL
This is basically the main type of share capital from which other variants derive.
There are two variants of authorised share capital which are Issued and Unissued but these have
subvariants:
1. ISSUED
By virtue of section 141, a company has the power to issue shares. It is that part or portion of
authorised minimum capital that is offered or issued to the public or assigned to members at the
time of incorporation. It need not be all the shares, provided it is up to either N100k or N2m
depending on whether it is a private or public company in line with section 27(2) in order to
meet up with the minimum issued share capital at incorporation.
Section141: Power of companies to issue shares.
S141. Subject to any limitation in the articles of a company with respect to the number of shares
which may be issued, and any pre-emptive rights prescribed in the articles in relation to the
shares, a company has the power, at such times and for such consideration as it shall determine
to issue shares.
Means of issuing share capital include:
i. Issued at par: When company issues its shares, it has to fix the price per share e.g., N1
per share which becomes the face value. If the face value and issue price per share are
equal, then it is said that the shares have been issued at par. However, issue price will not
always be equal to the face value per share. If issue price is more than face value, then
shares are said to be issued at premium but if issue price is less than face value, then the
shares would be said to have been issued at discount.
Issued at nominal value: this means same thing as issued at par above but issued at
nominal value is the term used in CAMA. By ss 38(1), 39(1), 154(1) and 158(1) a share
may be issued at nominal value or at premium. So, if its issued at par or face value, it
may be said to be issued at nominal value.
ii. Issued at premium: By s145(1) Shares of a company may be issued at a premium. This,
as explained above is when it is issued above the face value. The rise in price of the
shares is subject to market forces of demand and supply usually influenced by the
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reputation of the company and financial projections. See SEC Act and Investment and
Securities Act on the regulations and fixing of prices of various shares.
iii. Issued at discount: By s146 It is unlawful for a company to issue shares at a discount.
This means that a company is not allowed to issue its shares below the face value.
iv. Issued redeemable preference shares: By s147 (1) No company limited by shares shall,
after the commencement of this Act issue any preference shares which are irredeemable.
But subsection (2) provides that A company limited by shares may, if so authorized by
its articles, issue preference shares which are liable to be redeemed subject to such
conditions as may be prescribed in the terms of issue or in the articles of the company.
Apparently, subsection 1 prohibits the issuance of irredeemable preference shares but

subsection 2 permits for redeemable preference shares to be issued if so authorised by
the company’s AOA.
Section 868 provides that a "preference share" means a share, by whatever name
designated, which does not entitle the holder of it to any right to participate beyond a
specified amount in any distribution whether by way of dividend or on redemption, in a
winding up, or otherwise. A share which entitles the holder to a fixed dividend, whose
payment takes priority over that of ordinary share dividends (Equity holders) and the
shares usually do not carry voting rights. Preferred shareholders have prior claim on a
company's assets if it is liquidated, though they remain subordinate to bondholders.
NB: redeemability means that the company can repurchase the shares.
v. Equity Share Capital: s868 "equity share" means a share other than a preference share.
In other words, any share that’s not a preference share is an equity share.
There are two subvariants of issued capital which are Subscribed and Unsubscribed.
i. Subscribed: this includes the shares that are offered to the public for subscription and
actually subscribed by the insiders of the company or outsiders. It may be paid up,
calls-in-arrears, called up or uncalled. There are three variants of subscribed
capital.
➢ Called-up: By s 158(1) Subject to the terms of the issue of the shares and of
the articles, the directors may make calls upon the members in respect of any
money unpaid on their shares (whether on account of the nominal value of the
shares or by way of premium) and not by the conditions of allotment of the
shares made payable at fixed times.
Provided that no call shall exceed one fourth of the nominal value of the share
or be payable at less than one month from the date fixed for the payment of
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the last preceding call, and each member shall (subject to receiving at least 14
days’ notice specifying the time or times and place of payment) pay to the
company at the time or times and place so specified the amount called on his
shares, so however that a call may be revoked or postponed as the directors
may determine.
Flowing from the above, this refers to the part of the uncalled capital that the
company has actually requested or demanded (called) for the subscribers to
pay for. When this happens, it becomes a debt (call-in-arrears) on the
subscriber and as long as it lasts may be paid with interest. Allen v Gold
Reefs of WA.
There are two variants of Called-up capital viz: paid-up and calls-in-
arrears.
o Paid-up: This is the part of the issued shares that have actually been
paid for by the subscribers or holders. Most of the times when a
company issue shares especially at incorporation, they are usually not
all paid for immediately or they may be paid for in part. Thus, the parts
that are fully paid for are referred to as paid-up shares. Ss 131(2),
145(3)
Section 160: Payment for shares.

160. Subject to the provisions of sections 161 and 162, the shares of a
company and any premium on them shall be paid up in cash, or where
the articles so permit, by a valuable consideration other than cash or
partly in cash and partly by a valuable consideration other than cash.
o Calls-in-arrears: the company has made calls for the shares to be paid
up but the holder has not paid. E.g., Allen v Gold Reefs of WA.
➢ Uncalled: Flowing from the above, the part of the issued shares which have
neither been paid-up nor called to be paid-up are referred to as uncalled
shares. In other words, they are still not paid for by the subscribers who are
owing the company, so until the company requests or demands (calls) for the
shares to be paid for, they are called uncalled shares.
There is a variant of uncalled capital called Reserve Liability Capital
• Reserve liability capital: This is a part of uncalled capital that the

company decides not to call up except to cover up for a specific
liability especially in the event of winding up so it may then call it up
and use the proceeds to settle the liabilities.
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Section 159: Reserve liability of company having share capital.

A company limited by shares may, by special resolution determine that
any portion of its share capital which has not been already called up
are not capable of being called up except in the event and for the
purposes of the company being wound up and thereupon, that portion
of its share capital shall not be capable of being called up, except in
the event and for the purposes specified in subsection (1). Re May
Fair Property Co (1898).
➢ Circulating: s868 "circulating capital" means a portion of the subscribed

capital of the company intended to be used by being temporarily parted with
and circulated in business, in the form of money, goods and other assets, and
which, or the proceeds of which, are intended to return to the company with
an increment, and are intended to be used again and again, and to always
return with some accretion.
ii. Unsubscribed: this is a part of issued capital that is not yet subscribed by either the
members of the company or the public.
2. UNISSUED
This is the part of a company’s capital that is not yet issued or offered to either the members or
public for subscription. Other variants of unissued share capital include:
i. Share premium account: NB: refer to 1ii above
By s145(2) Where a company issues shares at a premium, whether for cash or otherwise,
a sum equal to the aggregate amount or value of the premium on those shares shall be
transferred to, “the share premium account”
(4) Notwithstanding anything to the contrary in subsection (2), the share premium
account may be applied by the company in:
(a) paying up unissued shares of the company to be issued to members of the co as fully-
paid bonus shares;
(b) writing off the preliminary expense of a newly incorporated co;
(c) writing off the expenses of, or the commission paid on any issue of shares of the co;
or
(d) providing for the premium payable on redemption of any redeemable share of the co.
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ii. The capital redemption reserve account: NB: refer to 1v above for meaning.
s182: Redemption of redeemable preference shares.
(4) Where shares are redeemed otherwise than out of the proceeds of a fresh issue, there
shall, out of profits which would otherwise have been available for dividend, be
transferred to a reserve fund, to be called “the capital redemption reserve account”, a
sum equal to the nominal amount of the shares redeemed, and the provisions of this Act
relating to the reduction of the share capital of a company shall, except as provided in this
section, apply as if the capital redemption reserve fund were paid-up share capital of the
company.
iii. Reserve funds: This is generally the amount which by the discretion of the directors may
be removed from the profits made by the company to be reinvested or ploughed back into
the business in any manner to yield profit for the company but cannot be deployed into
purchasing of the company’s shares.
s430: Reserve and capitalisation.
(1) The directors may, before recommending any dividend, set aside out of the profits of
the company such sums as they think proper as a reserve or reserves which shall, at the
discretion of the directors, be applicable for any purpose to which the profits of the
company may be properly applied, and pending such application may, at the discretion,
either be employed in the business of the company or be invested in such investments
(other than shares of the company) as the directors think fit, and the directors may
without placing the same to reserve, carry forward any profits which they may think
prudent not to distribute.
(2) The company in general meeting may upon the recommendation of the directors
resolve that it is desirable to capitalise any part of the amount, for the time being,
standing to the credit of any of the company’s reserve accounts or to the credit of the
profit and loss account or available for distribution.
iv. Fixed capital: s868 "fixed capital" means that capital which a company retains in the
form of assets upon which the subscribed capital or other sum has been expended, and
which assets either themselves produced income, independent of any further action by the
company, or being retained by the company are made use of to produce income or gain
profits.
2. NON-CASH ASSET
s868 "non-cash asset" means any property or interest in property other than cash and for this
purpose, cash includes foreign currency.
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3. LOAN CAPITAL
According to Abugu, this refers to debt instruments and securities issued by the company,
particularly debentures (being that portion of a company’s capital that is raised through
borrowing). The term is widely used by businessmen but it is legally inappropriate as the holders
of the debt instruments e.g., debenture holders are creditors of the company, not members. Loans
whilst considered as part of the trading capital of a company, in determining ‘net worth’, they are
classed on the side of liabilities and not as part of capital.
ALTERATION OF SHARE CAPITAL SS 128 – 130
Under sections 125
Section 125: Alteration of share capital by consolidation, etc.
125. A company having a share capital may in general meeting and not otherwise, alter the
conditions of its memorandum to —
(a) consolidate and divide all or any part of its share capital into shares of larger amount than its
existing shares; and
(b) subdivide its shares or any of them, into shares of smaller amount than is fixed by the
memorandum, but in the subdivision the proportion between the amount paid and the amount
unpaid on each reduced share shall be the same as it was in the case of the share from which the
reduced share is derived.
Based on CAMA 2019, there are only 2 principal ways to alter a share, which are by
Consolidation/Division in 125(a) and Subdivision in 125(b). Both Conversion and Cancellation
in the old CAMA 1990 have now been expunged and also the removal of the proviso to section
83(1) in the old CAMA on adding stocks in the register in its equivalence of section 109(1)
CAMA 2019 confirms this.
Consolidation and Division into Shares of Larger Amount: by virtue of s 125(a), a company
may consolidate and divide all or any of its shares into shares of larger amount than its existing
shares. However, this can only be done by the alteration of the conditions in the MOA in a
general meeting.
Subdivision of Shares into Shares of Smaller Amount: this can occur by virtue of s 125(b)
where for instance a company with N1m shares of N1 each subdivides into N2m shares of
50kobo each but in the subdivision the proportion between the amount paid and the amount
unpaid on each reduced share shall be the same as it was in the case of the share from which the
reduced share is derived.
INCREASE OF CAPITAL
S127: Increase of issued share capital and notice of increase.
(1) A company having a share capital, may in general meeting and not otherwise, increase its
issued share capital by the allotment of new shares of such amount as it considers expedient.
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(2) Where a company increased its share capital, it shall, within 15 days after the passing of the
resolution authorising the increase, give to the Commission notice of the increase and the
Commission shall record the increase.
(3) Where, in connection with the increase of shares, any approval is required to be obtained
under any enactment other than this Act, the company shall give notice of that fact to the
Commission within 15 days after the passing of the resolution authorising the increase, together
with an affidavit sworn to by a director of the company to that effect, and upon receipt of the
notice and affidavit by the Commission, the period of 15 days stated in subsection (2) is deemed
extended, for a period terminating no later than 10 days after receipt of the approval is required
to be obtained by the company under an enactment other than this Act.
(4) If the company has not obtained the required approval under an enactment other than this Act
within 48 days of the date on which it notified the Commission under subsection (3), the
company shall file another notice and affidavit to that effect with the Commission, and shall do
so for every successive period of 48 days that elapses after the date on which it first notified the
Commission under subsection (3).
(5) If the Company fails to obtain the approval that is required to be obtained under an enactment
other than this Act within nine months from the date on which it first notified the Commission
under subsection (3), the resolution increasing the company’s issued share capital becomes null
and void.
(6) The notice to be given under this section includes the particulars prescribed with respect to
the classes of shares affected and the condition subject to which the new shares have been or are
to be issued and the notice shall be accompanied by a printed copy of the resolution authorising
the increase.
(7) If default is made in complying with the provisions of this section, the company in default is
liable to such fine as the Commission may prescribe by regulation for every day during which
the default continues.
(8) Where a company increases its share capital, it shall be by an ordinary resolution and shall
amend its memorandum and articles of association to reflect the new issued share capital.
Section 128: Increase of issued capital on increase of shares.
128. (1) Where a company allots new shares, thereby increasing its issued share capital, the
increase shall not take effect unless —
(a) at least 25% of the share capital including the increase has been paid up; and
(b) the directors have delivered to the Commission a statutory declaration verifying that fact.
(2) Where a company fails to comply with the applicable subsection, it shall be liable to such
fine as the Commission may prescribe by regulation for every day during which the default
continues
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SUMMARY OF THE PROCEDURE

1. Board resolution recommending increase
2. Notice of GM
3. Must be in a GM but need not be by special resolution
4. Stamp duties on notice of change of authorised share capital at FIRS
5. Must notify CAC within 15 days from the day of the resolution
6. Where approval is required under another law, CAC must be notified within 15 days of
resolution accompanied by an affidavit sworn to by a director, when CAC receives the
notification, the time is extended by another 10 days, making a total of 25 days.
7. If after 48 days of notifying CAC of such approval under such other law and it has
obtained it, it shall apply again with an affidavit sworn to by a director and shall repeat
same for every 48 days until it obtains the proposal.
8. If it fails to obtain the approval within 9 months, the resolution becomes void.
9. The notice to be given under includes;
i. the particulars prescribed with respect to the classes of shares affected and
ii. the condition subject to which the new shares have been or are to be issued and
iii. it shall be accompanied by a printed copy of the resolution authorising the
increase
10. Failure to comply attracts fine to be fixed by the regulation
11. at least 25% of the share capital including the increase has been paid up
12. the directors have delivered to the Commission a statutory declaration verifying that fact.
13. To be submitted at the CAC includes;
i. A copy of the resolution authorising the increase
ii. A notice of increase stating the classes of shares included the rights attached to
them
iii. Notice of approval by any other regulatory agency where applicable
iv. Dully completed and stamped notice of change (increase) of authorised capital
v. Director’s declaration verifying facts of payment of 25% of new authorised share
capital
vi. Return of allotment of shares dully stamped, if there’s need to pay up of 25% of
total authorised share capital
vii. Evidence if payment of AR to date
14. Obtain certificate of increase from CAC
15. Annex each a copy of each of the resolution and the certificate of increase to the memo of
the company.
16. Once the capital is successfully increased, the co shall by ordinary resolution amend its
memart to reflect same
REDUCTION OF CAPITAL
By general rule under section 130, a company shall not except as authorised by the Act reduce
its share capital but section 131 provides modalities if that must be done to include: confirmation
by the court, authorised by AOA and special resolution. In practice, the procedure include;
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i. Board resolution to propose the reduction

ii. Board prepares scheme of arrangement and directs the secretary to summon GM (EGM
usually)
iii. Notice of meeting is accompanied with explanatory circular and the scheme of reduction
iv. MIGM passes special resolution to approve the reduction
v. Apply to FHC for confirmation of the reduction and approval of the reduction scheme
vi. Deliver copy of the special resolution, the order approving the scheme and extract of the
meeting approving the scheme
vii. Consequential amendment of the memart
viii. Comply with any directive of the court
Docs to submit to CAC; provided for in Reg 30 of Companies Regulations 2012 but no
longer in Companies Regulations 2021.
130: Restriction on reduction of issued share capital.
(1) Except as authorised by this Act, a company having a share capital shall not reduce its issued
share capital.
(2) For the purposes of this section and other sections relating to reduction of share capital, any
issue of share capital shall include the share premium account and any capital redemption reserve
account of a company, and ‘‘issued share capital’’ shall be construed accordingly.
131: Special resolution for reduction of share capital.
(1) Subject to confirmation by the Court, a company having share capital may, if so
authorised by its articles, by special resolution reduce its share capital in any way.
Reduction is by special resolution, so where the AOA didn’t originally provide for reduction
unlike in increase, both can’t be done in the same general meeting as there must be 21 days’
notice.
In Re Patent Investment Sugar Co, a co the regulations of which didn’t authorise a reduction
of capital passed, (1) a resolution inserting in the articles a power to reduce and (2) a resolution
for reducing capital. Both resolutions were confirmed at one meeting. It was held that the court
cannot confirm the resolution for the reduction of capital because a special resolution for that
purpose could not be passed until the regulation of the co had been altered so as to make them
authorise a reduction of capital.
According to subsection (3) below, a special resolution under this section shall in this Act be
referred to as “a resolution for reducing share capital”
(2) In particular, and without prejudice to subsection (1), the company may—
(a) extinguish or reduce the liability on any of its shares in respect of share capital not paid
up,
Reduce liability: the most common reason is to reduce the number of shares to a more
manageable level, i.e., to reduce liability. Example- if the shares are of face value of N50 each of
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which N25 has been paid, the company may reduce them to N25 fully paid-up shares and thus
relieve the shareholders from liability on the uncalled capital of N25 per share.
(b) either with or without extinguishing or reducing liability on any of its shares, cancel any
paid-up share capital which is lost or unrepresented by available assets, or
Example- if the shares of face value of N50 each fully paid-up is represented by N25 worth of
assets. In such a case, reduction of share capital may be effected by cancelling N25 per share and
writing off similar amount of assets.
This is also known as capital loss or loss of capital reduction which occurs probably where a
company’s asset e.g., a building that is uninsured is gutted by fire or where there is diminution in
value e.g., for whatever reason it is now worth less than the original value or it is disposed or
sold at a lesser value. The company can cancel shares in order to ensure that its shares are
represented by its available assets to cover up for the capital loss in the lost asset.
If reduction is to be effected because of the loss of capital or because the capital is not
represented by available assets, evidence of such loss and that the capital is not represented by
available assets must be given. A reduction may be confirmed where capital has been lost but
still represented by available assets Sugar Refineries Ltd Petitioners, Re Hoare & Co Ltd.
(c) either with or without extinguishing or reducing liability on any of its shares, cancel any
paid-up share capital which is in excess of the company’s wants,
Example- shares of face value of N50 each fully paid-up can be reduced to face value of N25
each by paying back or cancelling N25 per share.
This occurs when a company has more paid-up shares than its needed. The company can arrive
at this decision by financial projections. This may also include buying back such shares section
132 (2) (b) i.e., paying the owners of the shares the money they initially paid to purchase them
from profits it had made.
and the company may, if and so far as is necessary, alter its memorandum by reducing the
amount of its share capital and of its shares accordingly.
(3) A special resolution under this section shall in this Act be referred to as “a resolution for
reducing share capital”.
S132: Application to Court for Order of Confirmation
(1) Where a company has passed a resolution for reducing share capital, it may apply to the
court for an order confirming the reduction.
(2) If the proposed reduction of share capital involves either—
(a) diminution of liability in respect of unpaid share capital; or
(b) subject to subsection (6), the payment to a shareholder of any paid-up share capital, and in
any other case if the Court so directs, subsection (3), (4) and (5) shall have effect.
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It is apparent from the (a) and (b) that they both involve diminution of capital as the former is
direct diminution of liability of unpaid shares while the latter is repurchasing of paid-up shares
which further depletes the company’s capital albeit it’s done from profits that is supposed to
serve as dividend Section 185, Payment for share buyback: Where a company buys back its
shares, payment for the share buyback shall be made from the distributable profits of the
company. It was held in Poole v National Bank of China that where the reduction does not
involve a diminution of the liability in respect of unpaid capital, the creditors are not concerned.
Where the creditors aren’t concerned, the court would consider the following questions;
a) Should the court refuse its sanction to the reduction out of regard to the interest of those
members of the public who may be induced to take shares in the company?
b) Whether it is fair and equitable as between the shareholders as it must provide for
uniform treatment of shareholders with similar rights.
c) Is the reduction fair and equitable as between the different classes of shareholders?
(3) Every creditor of the company who, at the date fixed by the court, is entitled to any debt or
claim which, if that date were the commencement of the winding up of the company, would be
admissible in proof against the company, is entitled to object to the reduction of capital.
(4) The Court shall settle a list of creditors entitled to object, and for that purpose—
(a) shall ascertain, as far as possible without requiring an application from any creditor, the
names of those creditors and the nature and amount of the debts or claims; and
(b) may publish notices fixing a day or days within which creditors not entered on the list are to
claim to be so entered or are to be excluded from the right of objecting to the reduction of
capital.
(5) If a creditor entered on the list whose debt or claim is not discharged or has not been
determined does not consent to the reduction, the Court may, if it deems fit, dispense with the
consent of that creditor, on the company securing payment of his debt or claim by
appropriating (as the Court may direct) the following amount if the company —
(a) admits the full amount of the debt or claim or, though not admitting it, is willing to provide
for the full amount of the debt or claim; or
(b) does not admit, and is not willing to provide for, the full amount of the debt or claim, or
if the amount is contingent or not ascertained, then an amount fixed by the court after the like
enquiry and adjudication as if the company were being wound up by the Court.
(6) If a proposed reduction of share capital involves either the diminution of any liability in
respect of unpaid share capital or the payment to any shareholder of any paid-up share capital,
the Court may, if having regard to any special circumstance of the case it considers proper to do
so, direct that subsections (3) - (5) shall not apply as regards any class or classes of creditors.
It was held in Poole v National Bank of China and followed in Re Meux’s Brewery Co Ltd
that where the reduction does not involve a diminution of the liability in respect of unpaid
capital, the creditors are not concerned and thus cannot object except they can show a strong
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case. Ashbury J in Re Meux’s Brewery held “I think it is quite clear from s 49(1) that there is
power in the court to permit a creditor to object to a reduction where no such diminution of
assets is about to take place, but from the framing of the section, and after considering the
observations of Lord Macnaghten in Poole v National Bank of China., I think that I am at
least right in saying that prima facie creditors are not supposed to be concerned in these
questions of reduction of capital where no diminution of unpaid capital or repayment to
shareholders of paid-up capital is involved; in other words, if the court is to allow a secured
creditor in particular to object to a reduction which does not involve such a diminution of assets
as is referred to in s 49(1), it is at least incumbent on him to make out a strong case before such a
direction would be given.”
S133: Court order confirming reduction.
(1) The Court, if satisfied—
(a) with respect to every creditor of the company who under section 132 is entitled to object
to the reduction of capital, that either—
(i) his consent to the reduction has been obtained, or
(ii) his debt or claim has been discharged or determined or secured; and
(b) that the share capital does not by this reduction fall below the minimum issued share
capital, may make an order confirming the reduction on such terms and conditions as it deems
fit.
(2) Where the Court so orders, it may also—
(a) if for any special reason it considers it proper to do so, make an order directing that the
company shall, during such period (commencing on or at any time after the date of the order) as
is specified in the order, add to its name as its last words “and reduced”; and
(b) make an order requiring the company to publish (as the court directs) the reasons for
reduction of capital or such other information in regard to it as the court considers expedient with
a view to giving proper information to the public and (if the court deems fit) the causes which led
to the reduction.
(3) Where the company is ordered to add to its name the words, “and reduced”, those words
shall, until the expiration of the period specified in the order, be deemed to be part of the
company’s name.
ALTERATION OF MEMORANDUM OF ASSOCIATION SS 49, 50 & 51
Other clauses in the memorandum of association can be altered like the object/business clause.
Alteration of the memo is in line with SS50 & 51, explained above. Note the difference between
conditions and other provisions as provided in S49 and also the entrenchment principle in
S52(2).
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ALTERATION OF THE ARTICLES OF ASSOCIATION S53

S53(1) Subject to the provisions of this Act and to the conditions or other provisions contained in
its memorandum, a company may, by special resolution, alter or add to its articles, including
deletion or modification of the provisions stated in section 27 (1) (a)-(d).
(2) Any alteration or addition made in the articles shall, subject to the provisions of this Act, be
as valid as if originally contained therein and be subject, in like manner, to alteration by special
resolution.
Procedure:
• Board resolution
• Convene general meeting and pass special resolution
• Deliver to CAC printed copy of the resolution and the article of association as amended
• Evidence of payment of Annual Returns
• Receipt of payment of filing fee
In Allen v Gold Reefs of WA, a limited company by one of its articles provided that it should
have a lien for all debts and liabilities of any member to the company "upon all shares (not being
fully paid) held by such member."
The company, by way of purchase-money for the property acquired by it, allotted fully paid
shares to Z., a nominee of the vendor to the company. Z. also applied for and had allotted to him
shares not paid up. He was the only holder of fully paid-up shares. At his death he was indebted
to the company in arrears of calls on the unpaid shares, but his assets were insufficient to pay the
arrears. Thereupon the company, by special resolution under s. 50 of the Companies Act, 1862,
altered the above articles by omitting therefrom the words "not being fully paid," thus creating a
lien on Z.'s fully paid shares:
Held, by the Court of Appeal (Lindley M.R., Vaughan Williams and Romer L.JJ.), that the
company had power to alter its articles by extending its lien to fully paid shares:
Held, also, by Lindley M.R. and Romer L.J. (Vaughan Williams L.J. dissenting), that the lien
so extended, having been made in good faith, was enforceable against Z.'s fully paid shares,
since he took them subject to the original articles and the power of altering them given to the
company by s. 50 of the Act, and did not make any special or implied bargain that they should
not be affected by any subsequent alteration of the articles; and that the fact of those shares being
vendor's shares allotted in payment for the property purchased by the company, instead of being
shares paid for in cash in the ordinary way, was immaterial.
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Drafts: Ordinary Resolution for Increase of Share Capital

RC:151025
ORDINARY RESOLUTION FOR INCREASE OF SHARE CAPITAL PURSUANT TO
SECTION 127(1)(8) OF THE COMPANIES AND ALLIED MATTERS ACT, 2020
At an Extra-Ordinary General Meeting of Edupal Nigeria Limited held on the 15th day of
February, 2022 at the main conference room of the company, the following resolutions was
proposed and duly passed:
“That the authorised share capital of the company be increased from N5,000,000.00 (five million
naira) to N10,000,000.00 (ten million naira) by the creation of additional N5,000,000.00 (five
million naira) shares of N5:00 per share, such new shares ranking pari-passu in all respects with
the existing shares in the capital of the company.”
……………… …………………
Director Director
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Special Resolution for Reduction of Share Capital

RC:151025
SPECIAL RESOLUTION FOR REDUCTION OF SHARE CAPITAL PURSUANT TO
SECTION 131 OF THE COMPANIES AND ALLIED MATTERS ACT, 2020
FOR S131(2)(a)
“That, subject to the confirmation of the Federal High Court, the company’s capital of
N5,000,000 divided into 5,000,000 ordinary shares of N1 each of which there has been paid
N2,500,000, be reduced to N2,500,000 by extinguishing the liability on each of the shares still
unpaid”
FOR S131(2)(b)
" That, subject to the confirmation of the Federal High Court, the authorised share capital of the
company of N5,000,000 divided into 5,000,000 ordinary shares of N1 each, be reduced by
cancelling N25,000,000 of 25,000,000 shares, which has been lost and is unrepresented by
available assets"
FOR S131(2)(c)
“That, subject to the confirmation of the Federal High Court, the company’s capital being fully
paid be reduced by returning to shareholders N2,500,000, being the capital in excess of the
company’s wants....”
……………… …………………
Director Director
NB: you have to choose either of the body paragraphs for the purpose of bar finals, depending on
how the question is framed, first extinguishes liability of the unpaid shares, second reduces
shares unrepresented by available assets and third, reduces shares in excess of company’s wants.
Thus, they apply mutatis mutandis.
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RE-REGISTRATION OF COMPANIES S55

S55; A company may by re-registration alter its status from—
a. a private company to a public company;
b. a public company to a private company;
c. a private limited company to an unlimited company;
d. an unlimited company to a limited company; or
e. a public limited company to an unlimited company.
RE-REGISTRATION FROM PRIVATE TO PUBLIC COMPANY S56
S56(1) A private company (whether limited or unlimited) may be reregistered as a public
company limited by shares if—
a. a special resolution that it should be so re-registered is passed;
b. the conditions specified under subsection (2) are met, and
c. an application for re-registration is delivered to the Commission in accordance with
section 60, together with—
i. the other documents required by that section, and
ii. a statement of compliance.
(2) The conditions are—
a. that the company has a share capital;
b. that the requirements of section 57 are met as regards its share capital;
c. that the requirements of section 58 are met as regards its net assets;
d. if section 59 applies, that the requirements of that section are met; and
e. that the company has not previously been re-registered as an unlimited company.
SUMMARY OF PROCEDURES
1. Board resolution for the re-registration
2. Issuance of notice of GM (usually EGM but may come up as special business in AGM)
3. Special Resolution
4. Alteration of memart to reflect the proposed re-registration (name ltd/plc, status priv/pub,
capital clause 100k/2m
5. Application to CAC for re-registration Form CAC 4
6. Condition as to capital; must have a share capital
7. Requirements as to share capital in line with S57
i. Have minimum share capital (N2m)
ii. Of the allotted shares, at least ¼ of the nominal value has been paid-up and all of
the premium paid-up.
iii. If issued share is to be partly/fully paid up by an undertaking, such must be
discharged or performed.
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iv. If share has been issued for consideration other then money, it shall have been
performed or discharged or the co can enter a contract not exceeding 5 years from
resolution date with that holder.
v. There is an exception of shares issued to employees but the shares will not count
as issued shares and should not taken up more than 1/10 of the entire issued
shares.
8. Requirements as to assets in line with S58, must obtain the following
i. Balance sheet of not more than 7 months from the date of application
ii. unqualified report by the company’s auditor on that balance sheet
iii. a written statement by the company’s auditor that, in his opinion at the balance
sheet date, the amount of the company’s net assets was not less than the aggregate
of its called-up share capital and undistributable reserves.
iv. After tendering the balance sheet, before re-registration, there shall be no change
to make the net assets be less than the called-up capital and the undistributable
reserves
9. Recent allotment of shares for non-cash consideration S59
i. This applies to the shares issued between the date balance sheet was prepared and
passing of the resolution
ii. as fully or partly paid up as to their nominal value or any premium on them
otherwise than in cash
iii. CAC shall not accept the co for re-registration except the conditions in S57 above
have been met on allotment of shares
iv. Shares held by the Co’s nominees, nominee of the holding co, nominee of the
subsidiary co, or nominee of the subsidiary of the holding co shall be disregarded
10. Application for reregistration as a public company S60, the app shall contain;
i. a statement of the company’s proposed name on re-registration; and
ii. in the case of a co without a secretary, a statement of the company’s proposed
secretary.
The application shall be accompanied by;
i. a copy of the special resolution that the co should re-register as a public co
ii. a copy of the company’s memart as proposed to be amended
iii. a copy of the balance sheet and other documents referred to in s58 (1); and
iv. if s59 applies, a copy of the valuation report (if any) under subsection (2) (a) of
that section.
v. Statement of compliance that the co has complied with CAMA
11. Issue of certificate of incorporation on reregistration, this is if CAC is satisfied that the co
has met all the conditions and complied with CAMA.
12. NB: for this and all the re-registrations below, you must include the following docs;
i. Evidence of availability
ii. Annual returns
iii. Filing fees
iv. Certificate of re-registration issued
v. Form CAC 4, for re-registration notification
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RE-REGISTRATION OF PUBLIC COMPANY AS PRIVATE S63

1. Board resolution approving the re-registration
2. Notice of meeting to members
3. Convene general meeting (usually EGM but may come up as special business in AGM)
4. Pass special resolution approving the re-registration
5. Amend memart to reflect the proposed re-registration
6. Application to CAC for re-registration
7. 28 days period is allowed for objection and application to the court to cancel the special
resolution.
8. Application for cancellation of the resolution for alteration of the object clause may be
made by the following:
i. holders of not less in the aggregate than 5 % in nominal value of the company’s
issued share capital, or any class thereof; or
ii. not less than 5% of the company’s members.
9. A person who consented to or voted in favour of the resolution for alteration cannot bring
an application for cancellation of the resolution to the court.
10. The applicant will give notice of application to court for cancellation of the resolution to
Corporate Affairs Commission and also to the company
11. The court on getting such an application can make any of the following orders:
i. make that order on such terms and conditions as it deems fit
ii. if it deems fit, adjourn the proceedings in order that an arrangement may be made to
the satisfaction of the Court for the purchase of the interests of dissenting members
iii. give such directions, and make such orders, as it considers expedient for facilitating
or carrying into effect any such arrangement.
12. The company shall within 15 days from the date the court made the order deliver a copy
of the order to CAC
13. Default to notify CAC as stated will attract a penalty of fine to be state in the regulation
APPLICATION FOR REREGISTRATION AS A PUBLIC LIMITED COMPANY S66
1. An application for re-registration as a private limited company shall contain a statement
of the company’s proposed name on re-registration.
2. The application shall be accompanied by a copy of the—
i. resolution that the company should re-register as a private limited company; and
ii. company’s memorandum and articles as proposed to be amended.
3. The statement of compliance required to be delivered together with the application is a
statement that the requirements of this Part as to reregistration as a private limited
company have been complied with.
4. The commission may accept the statement of compliance as sufficient evidence that the
company is entitled to be re-registered as a private limited company.
5. If satisfied, CAC will issue certificate incorporation altered to meet the circumstances.
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6. NB; the numbers 1 – 6 above under S63 apply.

7. NB: you must include the following docs;
ii. Annual returns
iii. Filing fees
REREGISTRATION OF PRIVATE LIMITED COMPANY AS UNLIMITED S68
A private limited company may be re-registered as an unlimited company if—
• all the members of the company have assented to its being so reregistered;
• an application for re-registration is delivered to the Commission in accordance with
• The condition is that the company has not previously been reregistered as limited.
• The company shall make such changes in its name and its memorandum and articles—
i. as are necessary in connection with its becoming an unlimited company; and
ii. if it is to have a share capital, as are necessary in connection with its becoming an
unlimited company having a share capital.
• An application for re-registration as an unlimited company shall contain a statement of
the company’s proposed name on re-registration.
• The application shall be accompanied by—
i. the prescribed form of assent to the company’s being re-registered as an unlimited
company, authenticated by or on behalf of all the members of the company; and
ii. a copy of the company’s memorandum and articles as proposed to be amended.
• The statement of compliance required to be delivered together with the application is a

statement that the requirements of this Part as to reregistration as an unlimited company
have been complied with.
• The statement shall contain a statement by the directors of the company—
i. that the persons by whom or on whose behalf the form of assent is authenticated
constitute the whole membership of the company; and
ii. if any of the members has not authenticated that form himself, that the directors have
taken all reasonable steps to satisfy themselves that each person who authenticated it
on behalf of a member was lawfully empowered to do so.
• The Commission may accept the statement of compliance as sufficient evidence that the
company is entitled to be re-registered as an unlimited company.
• If satisfied, CAC will issue certificate incorporation altered to meet the circumstances.
• NB; the numbers 1 – 6 above under S63 apply
• NB: you must include the following docs;
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ii. Annual returns
iii. Filing fees
REREGISTRATION OF UNLIMITED COMPANY AS LIMITED S71
An unlimited company may be re-registered as a private limited company if—
• a special resolution that it should be re-registered is passed;
• an application for re-registration is delivered to the Commission in accordance with
• The condition is that the company has not previously been reregistered as unlimited.
• The special resolution shall state whether the company is to be limited by shares or by
guarantee.
• The company shall make such changes—
i. in its name; and
ii. in its memorandum and articles, as are necessary in connection with its becoming a
company limited by shares or, as the case may be, by guarantee
• An application for re-registration as a limited company shall contain a statement of the

company’s proposed name on re-registration.
i. a copy of the resolution that the company should re-register as a private limited
company;
ii. if the company is to be limited by guarantee, a statement of guarantee; and
iii. a copy of the company’s memorandum and articles as proposed to be amended.
• The statement of guarantee required to be delivered in the case of a company that is to be
limited by guarantee shall state that each member undertakes that, if the company is
wound up while he is a member, or within one year after he ceases to be a member, he
will contribute to the assets of the company to such amount as may be required for—
i. payment of the debts and liabilities of the company contracted before he ceases to be
a member;
ii. payment of the costs, charges and expenses of winding-up; and
iii. adjustment of the rights of the contributories among themselves, not exceeding a
specified amount.

statement that the requirements of this Part as to reregistration as a limited company have
been complied with.
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ii. Annual returns
iii. Filing fees
REREGISTRATION OF PUBLIC COMPANY AS UNLIMITED S75
A public company limited by shares may be re-registered as an unlimited company with a share
capital if—
• all the members of the company have assented to its being so reregistered;
• an application for re-registration is delivered to the registrar in accordance with section
76, together with—
• The condition is that the company has not previously been reregistered as —
i. limited; or
ii. unlimited.
• The company shall make such changes—

i. in its name; and
ii. in its memorandum and articles, as are necessary in connection with its becoming an
unlimited company.
• An application for re-registration of a public company as an unlimited company shall

contain a statement of the company’s proposed name on re- registration.
i. the prescribed form of assent to the company’s being re-registered as an unlimited
company, authenticated by or on behalf of all the members of the company; and
ii. a copy of the company’s memorandum and articles as proposed to be amended.

statement that the requirements of this Part as to reregistration as an unlimited private
company have been complied with.
• The statement shall contain a statement by the directors of the company—
i. that the persons by whom or on whose behalf the form of assent is authenticated
constitute the whole membership of the company; and
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ii. if any of the members has not authenticated that form himself, that the directors have
taken all reasonable steps to satisfy themselves that each person who authenticated it
on behalf of a member was lawfully empowered to do so.
ii. Annual returns
iii. Filing fees
CORPORATE SEARCHES
• Corporate search is conducted at the CAC to ascertain the profile or status, legal
compliance of a company to legal requirements and standing of a company
• It is necessary in the following circumstances:
1. Opening of bank account
2. Application of loan facility from bank or other financial institutions
3. Conducting due diligence/ legal auditing
4. Verification of profile of a company
5. Ascertaining whether a company is registered or not
6. During investigation of a company
PROCEDURE FOR CONDUCTING CORPORATE SEARCHES
1. Complete CAC prescribed form for search and CTC of documents
2. Write application to CAC to conduct search
3. Payment of search and CTC prescribed fees
4. Payment of AR(annual returns), where requested
5. After the search, prepare the search report attaching the CTC of relevant documents
CONTENTS OF CORPORATE SEARCH REPORT
1. Clients Name:
2. Address of Client:
3. Date of Search:
4. Place of Search:
5. Name of Company:
6. Change of name (if Any):
7. Registered Office address:
8. Registered Certificate Number:
9. Date of Incorporation:
10. Business/Object:
11. Directors and addresses:
12. Share Capital:
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13. Increase in share capital (if any):

14. Allotted shares:
15. Allotees and addresses:
16. Any change in the registered particulars:
17. Any charge/encumbrance:
18. Discharge from encumbrance:
19. Annual Returns:
20. Secretary:
21. Remark:
22. Name and signature of the legal practitioner who conducted the search
Drafts: Application for Corporate Search
C O AGBATA,
LEGAL PRACTITIONERS, SOLICITORS, AND CHARTERED ARBITRATORS
07035406532
([email protected])
Our Ref: 2304______________________________________ Your Ref: _______________
15th August, 2022
The Registrar,
Plot 256 Maitama,
Abuja.
Dear Sir,
APPLICATION TO CONDUCT CORPORATE SEARCH ON EDUPAL NIGERIA LIMITED
We are the external solicitors to ALLS Bank Plc which intends to open and operate an account
for Edupal Nigeria Limited. Thus, we kindly seek your permission to conduct a corporate search
on Edupal Nigeria Limited which claim to be a Nigerian company registered under the
Companies and Allied Matters Act, 2020.
Please find enclosed evidence of payment of search fees, fees for CTC and evidence of annual
returns filed.
Thank you.
Yours faithfully,
________________
Chris Ozo Agbata
(Principal Partner)
For: C O Agbata LP
121
Enclosed:
1. Receipt of search fees
2. Receipt of CTC fees
3. Updated annual returns
122
Cover Letter for Corporate Search

C O AGBATA,
07035406532
([email protected])
Our Ref: 2304______________________________________ Your Ref: _______________
15th August, 2022
The Registrar,
Plot 256 Maitama,
Abuja.
Dear Sir,
COVER LETTER FOR SEARCH REPORT
We are Solicitors engaged in the corporate search of Edupal Nigeria Limited, carried out at the
Corporate Affairs Commission, Maitama, Abuja.
We are pleased to inform you that the said corporate search has been successfully carried out as
instructed.
Please find attached a search report of Edupal Nigeria Limited.
Thank you.
Yours faithfully,
________________
Chris Ozo Agbata
(Principal Partner)
For: C O Agbata LP
123
Drafts: Corporate Search Report

C O AGBATA,
07035406532
([email protected])
Our Ref: 2304______________________________________ Your Ref: _______________
15th August, 2022
The Registrar,
Plot 256 Maitama,
Abuja.
Dear Sir,
CORPORATE SEARCH REPORT ON EQUATOR INVESTMENT LIMITED
We, Solicitors of the above name address hereby give details of the instruction received from
your office in respect of the above subject matter.
Find below the report in respect of the instruction given to our Law Firm on the 15th day of May,
2021.
1. Date of Search: 15th day of August 2021
2. Place of search: Corporate Affairs Commission
3. Name of company: Edupal Nigeria Limited
4. Previous name and date of change: nil
5. RC Number: No 152021
6. Registered office of the company: 15, Edupal Drive, Ikoyi, Lagos.
7. Date of incorporation: 13th March, 2020
8. Business/object of the company: Schooling and Research
9. Particulars of Directors (name, address, occupation): ABC of 12 Johnso Avenue, Ikeja,
DEF of 83 Imam Street, Lagos Island, Lagos.
10. Share capital: N5,000,000 divided into 5,000,000 ordinary shares of N1 each issued and
paid-up shares.
11. Encumbrance: (Encumbered, Not Encumbered)
12. Annual Return: The annual return of the Tropical Investment Limited is up to date.
Comment/ Advise: ALLS Bank Plc can go ahead with view to banking with Edupal Limited.
Thank you.
Yours faithfully,
________________
124
Chris Ozo Agbata

(Principal Partner)
For: C O Agbata LP
125
FOREIGN PARTICIPATION IN NIGERIAN BUSINESS SECTOR

HISTORY OF FOREIGN PARTICIPATION IN NIGERIA
• The Position after Independence but Before 1972
• The Position after 1972 (Nigerian Enterprises Promotion Decrees 1972 and 1977)
• The Steps Taken in 1987 [Nigerian Enterprises Promotion of 1989 (Issue of Non-Voting
Equity Shares)
• The Further Steps Taken in 1989 (Nigerian Enterprises Promotion Decree 1989)
• The 1995 Liberalization [Nigerian Investment Promotion Decree 1995 and Foreign
Exchange (Monitoring and Miscellaneous Provisions) Decree]
EFFECT OF THE LIBERALIZATION OF 1995 ON: (SS 25 & 26 NIPCA)
• Expropriation and Nationalization of Enterprises and compensation issues
• Transfer of funds
• Settlement of disputes
• Repatriation of funds
• Disclosure of source of foreign currency
• Nature of business to undertake
INTRODUCTION
• A foreigner is free to do business alone or in partnership with any other person.
• No one (foreigners and Nigerians) can engage in businesses on the negative list
• Negative list SS 18 & 31 NIPCA.
i. Production of arms, ammunition etc;
ii. Production of and dealing in narcotic drugs and psychotropic substances;
iii. Production of military and paramilitary wears including those of the police, customs,
immigration and prison
iv. Such other items as the Federal Executive Council may determine
REGULATORY LAWS AND INSTITUITIONS
SN LAW INSTITUTION/ MAIN FUNCTIONS
1 Companies and Allied Matters Act Corporate Affairs Commission (CAC) – company
2020 registration, exemption, regulation, monitoring etc.
2 Investment and Securities Act 2007 Securities and Exchange Commission (SEC) – FDI
and FPI registrations
3 Nigerian Investment Promotion Nigerian Investment Promotion Commission (NIPC),
Commission Act 1995 One Stop Investment Centre (OSIC) – reg of
companies with CAC, incentives processing
4 National Office of Technology National Office of Technology Acquisition and
126
Acquisition and Promotion Act Promotion (NOTAP) – tech registration, exemption

5 Immigration Act Nigerian Immigration Service (NIS) – biz permits,
residence permits, expatriate quota, CERPAC card
(green card), issuance of visa etc.
6 Industrial Inspectorate Act Industrial Inspectorate Division, Federal Ministry of
Industries – approval of capital expenditure, issuance
of cert of acceptance of fixed assets
7 Foreign Exchange (Monitoring and Autonomous Foreign Exchange Market (AFEM) –
Miscellaneous Provisions) Act capital importation and waiver of interest for capital
importation
8 Central Bank of Nigeria (CBN) Act, Central Bank of Nigeria (CBN) – general regulation of
2007 the economy
8 Companies Income Tax Act
9 Personal Income Tax Act
10 Pioneer Status Incentive Regulation
2014
11 Industrial Development (Income Tax
Relief) Act, 2014
GUARANTEES FOR INVESTMENT IN NIGERIA

Investment Guarantees, Transfer of Capital, Profits and Dividends S24 NIPCA
• A foreign investor in an enterprise, shall be guaranteed unconditional transferability of
funds through an authorised dealer, in freely convertible currency, of -
o Dividends or taxes (net of taxes) attributed to the investment
o Payments in respect of loan servicing where a foreign loan has been obtained
o The remittance of proceeds (net of taxes) in the event of the sale or liquidation of
the enterprise or any interest attributable to it.
Guarantees against Expropriation S25 NIPCA
• No enterprise shall be nationalized or expropriated by the Federal Government, unless the
acquisition is in the national interest or for public purpose
• No person (including foreigners) whether in part or whole shall be compelled to
surrender his investment to another person
• Where nationalized or expropriated, there must be payment of compensation; and
a right of access to the courts as to amount or quantum of compensation
127
• Compensation to be paid promptly and authorisation for repatriation in convertible

currency where applicable
Dispute Resolution S26 NIPCA
1. Where a dispute arises between an investor and any Government of the Federation in
respect of an enterprise, all efforts shall be made through mutual discussion to reach an
amicable settlement.
2. Any dispute between an investor and any Government of the Federation in respect of an
enterprise to which this Act applies which is not amicably settled through mutual
discussions, may be submitted at the option of the aggrieved party to arbitration as
follows—
(a) in the case of a Nigerian investor, in accordance with the rules of procedure for
arbitration as specified in the Arbitration and Conciliation Act; or
(b) in the case of a foreign investor, within the framework of any bilateral or multilateral
agreement on investment protection to which the Federal Government and the country
of which the investor is a national are parties; or
(c) in accordance with any other national or international machinery for the settlement of
investment disputes agreed on by the parties.
3. Where in respect of any dispute, there is disagreement between the investor and the
Federal Government as to the method of dispute settlement to be adopted, the
International Centre for Settlement of Investment Disputes Rules shall apply.
SCOPE OF FP IN NIGERIA
• Foreign companies and foreign individuals can participate in business in Nigeria. The
former is an incorporated company albeit registered in a country other than Nigeria, S868
CAMA, which makes it a corporate entity or legal person within the meaning of
Salomon v Salomon or S42 CAMA. The latter means a private individual who is not a
Nigerian citizen who wishes to invest in the Nigerian economy or do business in Nigeria.
• Thus, a foreigner can even be a member of a Nigeria company and that doesn’t make the
company a foreign company.
• Classification may be either actively (Foreign Direct Invest, FDI) or passively (Foreign
Portfolio Investment, FPI).
• The third category is through an exempted company.
• An alien or a foreign company may join in forming a company S20(4) CAMA.
• A non-Nigerian may invest and participate in the operation of any enterprise in Nigeria
S17 NIPCA but this is made subject to the negative list SS 18 and 31 NIPCA, see
introduction above.
CLASSIFICATION OF FP
1. Foreign Portfolio Investment (FPI), active participation S26 FEMMPA, S31 NIPCA.
2. Foreign Direct Investment (FDI), passive participation
• Categories of FDI:
128
o Registered Companies
o Exempted Companies
PORTFOLIO INVESTMENT
• It means an investment in shares or other securities traded on the Nigerian Stock
Exchange S31 NIPCA.
• A person whether citizen of Nigeria or not, resident in Nigeria or not may invest in
securities traded on the Nigerian capital market or by private placements in Nigeria
S26 FEMMPA.
• Thus, by virtue of the FEMMPA provision, it is not only securities traded on the NSE but
also by private placements because that would’ve excluded private since they’re not
quoted on the NSE as public companies.
• FPIs should be registered with the SEC S13(l) ISA.
• FPI can be effected with foreign currency imported through an authorised dealer and
converted to Naira at the official exchange rate S15 FEMMPA.
• The Authorised Dealer through which the foreign currency or capital for the investment
is imported shall, within 24 hours of the importation, issue a Certificate of Capital
Importation to the investor and shall, within 48 hours thereafter, make returns to the
CBN giving such information as the CBN may, from time to time, require S15
FEMMPA.
• The CBN may appoint a bank or non-banking organisation or any other corporate body
which is well equipped to operate as an authorised dealer.
PROCEDURE FOR FPI
i. Application for allotment of shares by the foreign investor to the Nigerian Company
ii. Application for allotment of shares can also be done through a capital market operator
iii. Approval of allotment of the shares to the foreigner by the BOD of the issuing company
iv. Importation of capital through authorized dealer
v. Obtain certificate of capital importation
vi. Obtain share certificates
vii. Apply to SEC for registration of security
FOREIGN DIRECT INVESTMENT
• S868 CAMA defines an alien as a person or association, whether corporate or
incorporated, other than a Nigerian citizen or association.
• Subject to the provisions of any enactment regulating the rights and capacity of aliens to
participate or undertake in trade or business, an alien or a foreign company may join in
the formation of a company S20(4) CAMA.
• Direct Investment by foreign investors who invest in Nigeria by establishing a company
for that purpose.
• Here, a foreigner may on his own or in conjunction with other Nigerians, incorporate a co
in Nigeria.
129
• In a narrower sense, it includes building a new facility and a lasting management interest.
• In a broad sense, mergers and acquisitions, building new facilities and reinvesting profits
earned from overseas operations. This may include participation in management, joint
venture, transfer of technology and expertise.
• The company established must be registered unless it qualifies and obtains an exemption
from registration
SUMMARY OF PROCEDURE FOR FDI
i. Apply for and obtain business visa “Subject to Regularisation” (S.T.R.) from the
appropriate Nigerian Diplomatic Mission S9 Immigration Act.
ii. Secure an address in Nigeria for service of documents and other matters preliminary to
the incorporation of company S78(1) CAMA.
iii. Prepare a joint venture agreement (JVA) and any other pre-incorporation agreement that
may be necessary if it involves a Nigerian partner.
iv. Register a company with the CAC S78 CAMA, S19 NIPCA.
v. Apply to register the enterprise with NIPC S20 NIPCA.
vi. Register the investment with SEC S13(l) ISA.
vii. Import capital through an authorised dealer S15 FEMMPA.
viii. Obtain certificate of capital importation S15 FEMMPA.
ix. Apply for necessary permits.
x. Apply for the applicable reliefs and incentives.
DIFFERENCES BETWEEN FPI AND FDI
SN POINT FDI FPI
1 Nature of Participation Active Passive
2 Nature of Biz Direct participation like est a co Securities such as shares
3 Management Partakes in management Doesn’t partake in mgt
4 Physical Presence Needs physical presence Need not be present
5 Registration Both CAC and SEC Only SEC
6 Mode of Entry Must be reg or exemption Needs neither
FOREIGN COMPANIES FDI

“Foreign company” means a company incorporated elsewhere than in Nigeria S868 CAMA.
“Foreign limited liability partnership” means a limited liability partnership formed, incorporated
or registered outside Nigeria S868 CAMA.
From the above, it means that for a company to be referred to as a FC, it must have been
registered elsewhere other than Nigeria. Thus, the fact that a company has a foreigner as its
member doesn’t make it a FC. Even if a company is made up of entirely Nigeria citizens but
130
registered in another country, it is still a FC. Likewise, if a company registered in Nigerian is

made up of entirely foreign members, it is still a Nigerian company.
HOW CAN THEY CARRY ON BIZ IN NIGERIA?
i. Registration
ii. Exemption from registration
WHY REGISTRATION?
• Although, as noted above S20(4) CAMA allows an alien or a FC to join in the formation
of a company, but S78 CAMA expressly prohibits a FC from carrying on any business or
parading as a company unless it is dully either registered in Nigeria or exempted from
registration.
• Every FC incorporated outside Nigeria, and having the intention of carrying on business
in Nigeria, shall obtain incorporation as a separate entity in Nigeria for that purpose, but
until so incorporated, the FC shall not carry on business in Nigeria or exercise any of the
powers of a registered company and shall not have a place of business or an address for
service of documents or processes in Nigeria for any purpose other than the receipt of
notices and other documents, as matters preliminary to incorporation S78 CAMA.
• “Business” includes any trade, industry and profession and any occupation carried on for
profit S868 CAMA.
• “To carry on business” means to conduct, prosecute, or continue a particular vocation or
business as a continuous operation or permanent occupation. The repetition of acts may
be sufficient. It also means to hold oneself out to others as engaged in the selling of goods
or services EIIA v C.IE Ltd (2006) 4NWLR 114 at 125-126.
• In Unipetrol Nigeria Plc v Agip Nigeria Plc, it was held that S78 CAMA is a
mandatory provision and every FC that wishes to either carry on business in Nigeria or
parade itself as a company must follow the provisions of that section.
• This is different from having foreign transactions in Nigeria as was the case in Ritz
GMBH & co KG v Techno Continental Engineers Nig ltd (the case wherein a
Nigerian company borrowed engineering equipment from a Germany to display at trade
fare but then refused to either return or pay for them, the court held that the German
company though not registered in Nigeria was entitled to bring an action, that is, it has
the right to sue and be sued in Nigeria. Similar ratio in Watanmal (Singapore) v Liz
Olofin & Co.
CONSEQUENCES OF FAILING TO REGISTER WITH CAC
• It cannot carry on any business in Nigeria EIIA v C.IE Ltd.
• If it carries out any transactions, such will be void and illegal EIIA v C.IE Ltd.
• Therefore, court will not enforce any of such contract at the instance of any party to the
transaction: Solanke v ABED, 1962 1 ANLR 230.
• It cannot have a place of business for service of documents or processes in Nigeria,
except receipt of documents as a prelude to incorporation S78 CAMA.
131
• If they carryon business with complying with S78 CAMA both company and officers
will be criminally liable, and the officers or agents will be liable whether or not the
company is convicted S79 CAMA.
• However, while it cannot carryon business, FC has the right to either sue or be sued in
Nigeria S84(b) CAMA, Ritz GMBH & Co KG v Techno Continental Engineers Nig
Ltd, Watanmal (Singapore) v Liz Odofin.
EXEMPTION FROM REGISTRATION S80 CAMA
S80(1) CAMA provides that a FC may apply to the Minister for exemption from the provisions
of S78, if that FC belongs to one of the following categories, that is FCs which are;
a. Are not among those specified in paragraph (d) (engineering consultants and technical
experts), invited to Nigeria by or with the approval of the FG to execute any specified
individual project;
b. In Nigeria to execute specific individual loan projects on behalf of a donor country or
international organisation;
c. foreign government-owned companies engaged solely in export promotion activities; and
d. engineering consultants and technical experts engaged on any individual specialist
project under contract with any of the governments in the Federation or any of their
MDAs or with any other body or person, where such contract has been approved by the
FG.
Summary:
a. FCs which are neither engineering consultants or technical experts invited by FG or with
FG’s approval to execute specified individual project
b. FCs in Nigeria to execute loan projects on behalf of the donor country or IO (world bank,
IMF etc). Since Nigeria is owing China, this can be a Chinese a company, e.g., there was
a recent news that Chinese company will join in running in running Nigerian customs.
c. FCs owned by foreign govts which are solely for exportation
d. Engineering consultants and technical experts under contract with a govt in Nigeria or
with any other person approved by the FG. I wonder why this was excepted from one
above; the only difference seems to be that the former is to execute (like one time or
short period project) while the latter is to be under contract and engaged in it (for a
longer period of time), otherwise, it seems to be verbose separating the two.
Excluded under paragraph a and included under paragraph d.
PROCEDURE FOR APPLICATION FOR EXEMPTION S80(2) of CAMA
An application for exemption shall be in writing addressed to the Minister and shall set out;
a. the name and place of business of the FC outside Nigeria;
b. the name and place of business or the proposed name and place of business of the FC in
Nigeria;
c. the name and address of each director, partner or other principal officer of the FC;
132
d. a CTC of the charter, statutes, or memart or other instrument constituting or defining the
constitution of the company and if the instrument is not written in the English Language,
a certified translation thereof;
e. the names and addresses of one or more persons resident in Nigeria authorised to accept,
on behalf of the FC, service of processes and any notice required to be served on the
company;
f. the business or proposed business in Nigeria of the FC and the duration of such business;
g. particulars of any project previously carried out by the company as an exempted FC; and
h. such other particulars as may be required by the Minister or SGF.
Further Points in S80 CAMA.
• Granting of the exemption is at the discretion of the minister and he may impose
conditions as he deems fit, S80(3) CAMA.
• Every exemption must state its duration or (projects) when it shall lapse S80(4) CAMA.
• The Minister may at any time revoke any exemption if he is of the opinion that the
company has contravened any provision of CAMA or has failed to meet any condition
contained in the exemption order or for any other good or sufficient reason S80(5)
CAMA.
• When exemption is granted, the minister shall publish in the FG gazette; the duration or
projects and if it has been revoked, when such revocation occurred S80(6) CAMA.
• The exempted co has 30 days after payment of prescribed fees to deliver notice of
exemption as Form CAC 21 to CAC S80(7) CAMA.
• Failure to comply with the delivery of notice of exemption, it shall be liable to the
penalty as the CAC may specify for everyday of default S80(7) CAMA.
STATUS OF AN EXEMPTED COMPANY S82 CAMA
• The exempted company has the status of an unregistered company S82 CAMA.
LIMITATIONS OF EXEMPTED COMPANIES
i. There is no absolute right to the exemption, it is at the discretion of the Minister
ii. Period of exemption is shown in the order, the exemption is not indefinite
iii. The exemption is only for the specific project/business applied for and does not cover all
businesses carried out by the said foreigner
iv. The Minister may revoke the exemption at any time if he is of the opinion that the
company has contravened CAMA or has not fulfilled any condition of the exemption
order or for any good or sufficient reason
PROCEDURES FOR APPLICATION TO NIPC
Application to NIPC is on NIPC Form 1 for
i. Business Permit and Expatriate Quota; and
ii. Pioneer Status, Technical Assistance Agreement and in case of other fiscal incentives a
separate Form is to be completed.
133
A non-refundable deposit of N10,000 naira is payable for each application in bank draft to the
nearest NIPC office. The application should be forwarded to the NIPC Headquarters, Abuja or
State Ministries of Trade and Industries for onward transmission to NIPC Headquarters, Abuja,
along with two (2) copies of the receipt for purchase of the Form.
PROCEDURE FOR FDI (EST OF BIZ)
i. Prepare JVA or other necessary pre-incorporation contracts (where needed)
ii. Obtain Business visa
iii. Secure address for service of documents in lieu of registration
iv. Register company with CAC or obtain Letter of Exemption (whichever applies)
v. Import capital
vi. After incorporation as a Nigerian company but before starting business, he must register
with the NIPC- S20 NIPCA.
vii. Register security/investment with SEC S54(1) ISA.
viii. Obtain necessary permits
ix. Apply for necessary incentives
REGISTRATION WITH NIPC
• Compulsory by virtue of S20 NIPCA.
• NIPC has 14 working days from the date of receipt of complete reg forms to reg the
enterprise all relevant documents for registration have been duly completed and
submitted or otherwise advise the applicant, accordingly S20(2) NIPCA.
ONE STOP INVESTMENT CENTRE (OSIC) see week one above for details
• OSIC is a brain child of the NIPC established for the following reasons:
i. Eliminates delay in dealing with multiple government agencies in several
locations
ii. Removal of abuse of discretion and lack of transparency in granting permits,
approvals and licenses.
iii. Substantially reduces the cost of establishing a foreign direct investment
iv. Provision of investment information
CHECKLIST OF DOCUMENTS (ATTACHMENTS)
1. 1 copy of completed NIPC Form 1.
2. A bank draft for the payment of the prescribed sum (N10k)
3. 1 copy of (JVA) partnership joint venture agreement where applicable
4. 2 photocopies of payment receipt for application form
5. Certificate of incorporation of the applicant company.
6. CTC of the Memart of the applicant company.
7. CTC of the returns of allotment and particulars of directors.
8. Evidence of Capital importation from an authorised dealer.
9. Tax clearance certificate of the applicant company.
134
10. Receipt for payment of stamp duties on the authorised share capital of the company as at
the date of application.
11. Feasibility report and project implementation programme of the company for its proposed
business.
12. Title deeds of land evidencing firm commitment to acquire requisite business premises
for the company’s operations.
13. Training programme for Nigerian staff or personnel policy of the company, incorporating
management succession schedule for qualified Nigerians.
14. Names, addresses, nationalities and occupations of the proposed directors of the
company, including non-resident directors which should be marked “NRD”.
15. Job title designations of expatriate quota positions required, and the academic and
working experience required, and the academic and working experience required for the
occupants of such positions.
16. Information brochure, if any, on the foreign partner.
REGISTRATION OF FDI WITH SEC
• S13(l) ISA provides that the SEC is required to keep and maintain a register of FPI.
IMPORTATION OF CAPITAL
• Having obtained the requisite NIPC registration, the FC (now a Nigerian company, if
registered) must then import its foreign equity through any of the following ways:
i. Through an authorized dealer
ii. By bringing in equipment
iii. Through the debt-equity conversion scheme
CAPITAL IMPORTATION THROUGH AN AUTHORIZED DEALER
• An authorized dealer is a bank or other body recognized as such by the CBN pursuant to
the FEMMPA and obtain a certificate of Capital Importation from the bank (dealer).
• The Authorised Dealer through which the foreign currency or capital for the investment
is imported shall, within 24 hours of the importation, issue a Certificate of Capital
Importation (CCI) to the investor and shall, within 48 hours thereafter, make returns to
the CBN giving such information as the CBN may, from time to time, require S15
FEMMPA.
• The certificate evinces the importation of capital through the said Authorized dealer
Advantages of CCI
• Entitles the foreign investor to:
i. Open a foreign currency Domiciliary Account with any authorized dealer S17
FE(M&M)PA.
ii. Open a special non-resident Naira account
iii. Buy shares in Nigerian companies out of the naira account.
iv. Repatriate the capital, dividends and incomes at autonomous market rates after taxes
135
v. Nobody is required to declare any foreign currency at the port of entry into Nigeria
excess where such exceeds US $5,000 or its equivalent and even then, the amount
that is declared is for statistical purposes only- S12 FE(M&M)PA.
DEBT-EQUITY PROGRAMME
• Capital can be brought into the country through the debt-equity programme of the FG,
whereby Nigeria's debt instrument is bought at a discounted value from any stock
exchange anywhere in the world. This enables the foreign investor to get the naira
equivalent of the face value of the debt instrument.
• It is a feature of the deregulation programme introduced by the federal military
government in 1988. If for e.g., a foreigner needs to invest $30 million but he has only
$10 million, he can take his $10 million to any stock exchange anywhere in the world to
buy Nigeria’s debt instrument at a discounted value, i.e., he could pay $10 million for a
debt instrument with a face value and not the discounted value, the certificate is brought
into Nigeria, taken to a bank as proof of their capital importation into Nigeria, he can
obtain the naira equivalent of $30 million.
• It must be pointed out that the repatriation of part of the profits derived from the initial
capital outlay i.e. ($30 million) is postponed until after a minimum of five years, while
the capital proceeds cannot be repatriated until after 10 years, even then only 20 per
cent per annum of such capital outlay can be repatriated.
• It is implemented by the Debt Conversion Committee (DCC) in CBN but now taken over
by the Debt Management Office regulated by DEBT MANAGEMENT OFFICE
(ESTABLISHMENT) ACT, NO. 18 2003.
• The minimum amount of debt to be considered under the Scheme shall be $250,000.
136
DRAFT: Application for Exemption:

EDUPAL INC
RC:151025
15 QUEEN’S DRIVE, LONDON, ENGLAND
07035406532
([email protected])
Our Ref: 2304______________________________________ Your Ref: _______________
15th August, 2022
The Minister of Industry, Trade and Investment,
Federal Ministry of Industry, Trade and Investment,
Area 1, Garki,
Abuja.
Dear Sir,
APPLICATION FOR EXEMPTION FROM REGISTRATION AS A NIGERIAN COMPANY
PURSUANT TO SECTIONS 80(1) AND 80(2) OF THE COMPANIES AND ALLIED
MATTERS ACT, 2020
We the above-named foreign company having been invited to Nigeria by the Federal
Government of Nigeria to execute a solar energy project hereby apply for exemption from
incorporation as a Nigerian company.
Please find attached the necessary documents as stipulated by section 80(2) of the Companies
and Allied Matters Act, 2020 for your kind consideration.
Thank you.
Yours faithfully,
________________
Company Secretary
Enclosed:
1. Particulars of EDUPAL INC as the Parent company outside Nigeria.
2. Proposed name and place of business of our company in Nigeria
3. Particulars of the name and address of each Director, Partner or Principal officers of
EDUPAL INC
4. Particulars of persons resident in Nigeria authorised to accept services of any process/
Notice on the foreign company
5. Duration and proposed business of EDUPAL INC in Nigeria
137
6. A certified copy of the charter/Memorandum and Articles of Association of EDUPAL

INC, or a certified translation of them if not written in English.
7. Particulars of any project previously carried out by EDUPAL INC as an exempted
foreign company.
PERMITS AND LICENSES
1. Business permit S8 Immigration Act (IA).
2. Expatriate quota for business capitalization of
• N15M and above = 2 positions;
• N30M and above = 4 positions;
• others on merit
Expatriate quota is of two types:
• Permanent Until Reviewed (PUR)
• Temporary Quota (TQ)
3. Entry permit (visa) S9 IA
4. Residence permit S10(2) IA
5. Work permit S34 IA
BUSINESS PERMIT S8(1)(B) IA
• This is the operational licence granted to an expatriate to enable him carry on business
activities in Nigeria.
• S8(1)(b) IA provides that no person other than a Nigerian citizen shall, on his own
account or in partnership with any other person, practise a profession or establish or take
over any trade or business whatsoever or register or take over any company with limited
liability for any purpose without the written consent of the Minister of Internal Affairs.
The consent of the Minister of Internal Affairs is issued in the form of Business Permit.
• For BP minimum share capital is N10 million
• Granted by the Nigeria Immigration Service (NIS) through the NIPC
• A foreigner working in Nigeria without obtaining a BP has committed an offence and the
punishment is deportation S8(2) IA.
• Santos M. Batalha v West Construction Co. Ltd [2001] 18 N.W.L.R. (Pt. 744) 95
• Oilfield Supply Centre Limited v Joseph Lloyd Johnson (1987) 2 NWLR (Pt.58)’625
PROCEDURE FOR APPLICATION FOR BUSINESS PERMITS
• Applications for business permits and expatriate quotas are made through the NIPC to the
Ministry of Interiors. Where applications for other permits such as pioneer status,
technical service agreement and other fiscal incentives are desired, a separate application
is normally completed.
• For JV and wholly owned FCs, the documents are:
o Completed Immigration Form T/1
138
o Certificate if incorporation
o Memart
o Feasibility report (should certified or registered with CAC)
o Form CAC 1.1
o JVA for partnership venture between Nigerian and foreigners (original to be
presented for sighting)
o Tax certificate (original for sighting)
o Title deeds (lease agreements or C of O) for opening premises (original for
sighting)
DRAFT: APPLICATION FOR RELIEFS/APPROVALS
C O AGBATA,
07035406532
([email protected])
Our Ref: 2304______________________________________ Your Ref: _______________
15th August, 2022
The Director General,
Nigerian Investment and Promotion Commission,
Plot 256 Maitama,
Abuja.
Dear Sir,
APPLICATION FOR RELIEFS/APPROVALS FOR EDUPAL NIGERIA LIMITED
We write as solicitors of Edupal Nigeria Limited (“our client”) on whose instructions we make
this application. Our client is a private company limited by shares with RC NO: 315415 with
registered office at 15 Edupal Drive, Ikoyi, Lagos state incorporated under Companies and
Allied Matters Act, 2020.
Two aliens, Mr Peter Pan and Mr John Lewis are undertaking different values of share capital in
the company. Mr Peter Pan seeks to bring in 100,000 Euros as a loan from an American bank to
expand the company’s capital base.
We therefore apply for the following reliefs;
1. Rural investment allowance under CITA, CAP C21, LFN 2004.
2. Repatriation of capital through an authorised dealer
3. Tax relief of interest on foreign loans
Thank you.
Yours faithfully,
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________________
Chris Ozo Agbata
(Principal Partner)
For: C O Agbata LP
EXPATRIATE QUOTA
• This is the official approval granted to a company to enable it employ individual
expatriates to specifically designated jobs and the quota must state its duration.
• S8(1)(a) IA provides that no person other than a citizen of Nigeria shall accept
employment, not being employment with the Federal or a State Government, without the
approval of the Chief Federal Immigration Officer. The approval is what is known as
“Expatriate Quota”.
EXPATRIATE QUOTA BY BUSINESS CAPITALISATION
• Capitalization of N15m and above = 2 automatic quota positions.
• Capitalization of N30m and above = 4 automatic quota positions.
• All others on merit.
TYPES OF EXPATRIATE QUOTAS:
• Permanent Until Reviewed (PUR), and
• Temporary Quota (TQ).
PERMANENT UNTIL REVIEWED
• This is usually granted to the Chairman of the Board of a company or the Managing
Director. As the name implies, it is permanent until there is a supervening circumstance,
which will necessitate its review.
TEMPORARY QUOTA
• This is usually granted to the directors or other employees of the company. The
maximum time usually granted is 5 years subject to renewal for another term of 2 years.
NATURE OF EXPATRIATE QUOTA
• The quota position attaches to a particular post hence different persons can be covered by
the same quota. It is the duty of the company to apply for the quota and not that of the
employee Oil Fields Supply Centre Ltd v Johnson.
APPLICATION
• Application is made on Immigration Form T/2. It is the duty of the company and not
that of the employee, to apply for expatriate quota.
o Should be accompanied by the following documents
o Completed Immigration Form T/2
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o Certificate of Incorporation
o Memorandum and Article of Association
o Feasibility Report (should be certified or registered with Corporate Affairs
commission (CAC)
o Particulars of First Directors or Changes Thereof
o CAC 5 - Return of Allotment (Post Incorporation) Minimum N10 million
o Company’s Current Tax Clearance Certificate (Original to be presented for
sighting)
o Lease agreement for C of O for opening premises (original to be presented for
sighting) in respect of each Company.
o Proof there is need for an expatriate e.g., Evidence of imported machinery
ENTRY PERMIT/VISA S9 IA
• Generally, everyone needs visa to visit Nigeria but there are exceptions of countries that
Nigeria may have a bilateral or multilateral agreement with. Thus, the citizens of those
countries may not need visas to enter Nigeria, likewise Nigerians not needing visas to
enter those countries e.g., ECOWAS member states, some commonwealth countries and
any other country that has enter such a treaty with Nigeria.
• In some cases, it can be a visa on arrival wherein the person is issued a visa on point of
entry (POE). However, such a person must have applied either online or in-person at the
Nigerian embassy to acquire a letter of approval that he will present at the Nigerian
airport in order to receive the visa on arrival (VOA).
• An employee who is coming into Nigeria must possess a visa to legally come into the
country.
TYPES OF VISAS
• Ordinary, this further categorised into 3:
o Transit: issued to applicants passing through Nigeria with the exception of
ECOWAS citizens
o Single Journey: may be issued as:
▪ Short Visit Visa (SVV): this is usually for a short period e.g., concerts,
conferences etc
▪ STR Visa: This is subject to regularisation obtained from the Nigerian
foreign mission in home country. It is then regularised into residence
permit upon arrival in Nigeria and upon application. This is within 90
days.
▪ TWP: Temporary work permit, usually to those workers who will not stay
long e.g., maintenance, repairs, installation etc.
o Multiple visit
• Diplomatic
• Gratis Courtesy
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REQUIREMENTS FOR THE ISSUANCE OF STR VISA/ENTRY PERMIT

1. Valid passport (within 6 months of validity)
2. Letter of employment
3. Expatriate quota approval
4. Credentials of the applicant
5. Duly completed form IMM22
6. Curriculum Vitae or Resume
7. For Chief Executive Officers (C.E.O.) of corporate organisations, there is need for extract
of the minutes of the Board’s resolution.
8. Obtainable only from Nigerian missions in the countries where applicants are domiciled
for at 6 months.
RESIDENCE PERMIT
• An alien may enter Nigeria with a Tourist Visa or Short Visit Visa and stay therein for
a period of three months without a Residence Visa. However, any person who is not a
Nigerian citizen and who desires to enter Nigeria for the purposes of residence must first
of all obtain a Residence Permit.
• Application (2 copies) is made by the company requesting permission to employ the
alien, accompanied by a valid passport of the alien, to the Immigration Department (via
Consular Authorities).
• The application for residence permit is made by the employer company to the Nigerian
Embassy or Consular Officer in the country where the applicant resides by way of a
letter accompanied by a valid passport of the alien from the company requesting
permission to employ the alien to the Immigration Department (via Consular authorities).
• Also, to be attached is a letter of employment and the photocopy of the Expatriate
Quota.
• On approval, the alien is then granted an STR Visa which on arrival in Nigeria will be
regularised and the alien issued a work permit.
COMBINED EXPATRIATE RESIDENCE PERMIT AND ALIENS CARD (CERPAC)
• The CERPAC scheme was introduced in 2002, providing for foreigners (except
ECOWAS citizens, accredited diplomats and children below the age of 15 years) working
or living in Nigeria to carry CERPAC card.
• The scheme is expected to simplify the process of acquiring residence permit and alien
registration certificate.
• It provides a computerized unit at various points of entries like airports that is linked to a
central database centre containing information on every foreigner residing in Nigeria.
• The residence permit allows a foreigner and his dependents or family to reside in Nigeria.
• In addition to the visa requirement as stated above, while every foreigner resident in
Nigeria for more than 56 days is required to register.
• Unlike the residence permit, the alien registration certificate is essentially a movement
chart.
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• CERPAC is valid for two years, after which application for revalidation must be made.
• Foreigners relocating to a different part of Nigeria must inform the nearest Aliens Office
of the move.
• Also, if a foreigner holding an Aliens Card leaves Nigeria permanently then the card has
to be handed over to the Aliens Office.
• The fee is US$350.
• On payment and submitting of the completed application form, a temporary receipt is
given.
• This receipt should be carried at all times as proof of residence.
• Applicants will then be told when and where to collect their cards.
• In conclusion, a foreigner doing business in Nigeria is required to have
o business permit,
o residence permit,
o alien registration card and
o business visa (3 types).
• Only residence permit and alien registration have been combined.
ECOWAS CITIZENS
• Citizens of ECOWAS under the protocol are entitled to:
i. Free entry within 90 days
ii. Right of residence
iii. Right of establishment of business
• To enjoy the free entry, the ECOWAS citizen must possess valid travel documents like
passport or ECOWAS travel certificate and admission through approved point of entry.
• To enjoy right of residence which is valid for 5 years subject to passport validity, there
must be:
i. Valid travel documents
ii. Admission through approved port of entry
iii. Procurement of residence card
iv. Registration of business with CAC in accordance with CAMA
TRANSFER OF TECHNOLOGY S5(2) NOTAPA
• Every contract or agreement entered into by any person in Nigeria with another person
outside Nigeria involving the transfer of foreign technology to Nigerian partners shall be
registered with NOTAP in the prescribed manner, that is, not later than 60 days from
the execution of the agreement S5(2) NOTAPA.
WHAT CAN BE REGISTERED
• According to S4(d) NOTAPA, an agreement involves transfer of technology if its
purpose or intent is, in the opinion of NOTAP, wholly or partially connected with any of
the following matters:
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i. The use of trademarks

ii. The right to use patented inventions.
iii. The supply of technical expertise in the form of the preparation of plans, diagrams,
operating manuals or any other form of technical assistance of any description
whatsoever.
iv. The supply of basic and detailed engineering.
v. The supply of machinery and plant, and
vi. The provision of operating staff or managerial assistance and the training of
personnel.
WHO TO APPLY TO S6(1) NOTAPA
• S6(1) NOTAPA provides that every application for the registration of a contract or
agreement shall be addressed to the Director of NOTAP and shall be accompanied by
such number of CTCs of such contract or agreement and by all other related documents
and information as may be specified in any particular case by the Director.
WHEN REGISTERED MAY BE REFUSED S6(1) NOTAPA
• The director may refuse to register a contract which falls within 18 specifications, for
example:
1. Where its purpose is the transfer of a technology freely available in Nigeria.
2. Where the price is not commensurate with the technology in question.
3. where provisions are included therein which permit the supplier to regulate or intervene
directly or indirectly in the administration of any undertaking belonging to the transferee
of the technology and are, in his opinion, unnecessary for the due implementation or
execution of such contract or agreement;
4. where there is an onerous or gratuitous obligation on the transferee of the technology to
assign to the transferor or any other person designated by the transferor, patents,
trademarks, technical information, innovations or improvements obtained by such
transferee with no assistance from the transferor or such person;
5. where limitations are imposed on technological research or development by the
transferee;
6. where there is an obligation to acquire equipment, tools, parts or raw materials
exclusively from the transferor or any other person or given source;
7. where it is provided that the exportation of the transferee’s products or services is
prohibited or unreasonably restricted or where there is an obligation on such transferee to
sell the products manufactured by it exclusive to the supplier of the technology concerned
or any other person or source designated by the transferor;
8. where the use by the transferee of complementary technologies is prohibited;
9. where the transferee is required to use permanently or for any unconscionable period
personnel designated by the supplier of the technology;
10. where the volume of production is limited for sale and where resale prices are, in
contravention of the Price Control Act or any other enactment relating to prices, imposed
for domestic consumption or for exportation;
144
11. where the transferee is required to appoint the supplier of technology as the exclusive
sales agent or representative in Nigeria or elsewhere;
12. Where the contract or agreement is expressed to exceed a period of ten years or other
unreasonable term where this is less than ten years;
13. Where the consent of the transferor is required before any modification to products,
processes or plant can be effected by the transferee;
14. Where an obligation is imposed on the transferee to introduce unnecessary design
changes;
15. Where the transferor, by means of quality controls or prescription of standards, seeks to
impose unnecessary and onerous obligations on the transferee;
16. Where there is provision for payment in full by the transferee for transferred technology
which remains unexploited by him;
17. Where there is a requirement for the acceptance by the transferee of additional
technology or other matter, such as consultancy services, international subcontracting,
turn-key projects and similar package arrangements, not required by the transferee for or
in connection with the principal purpose for which technology is to be or has been
acquired by him;
18. Where the transferee is obliged to submit to foreign jurisdiction in any controversy
arising for decision concerning the interpretation or enforcement in Nigeria of any such
contract or agreement or any provisions thereof.
EXCEPTIONS
• The council may direct the direct to issue the certificate in national interest S6(3)
NOTAPA.
• Following the director’s advice, where the parties make the necessary adjustments to the
agreement, the certificate may be issued S6(4) NOTAPA.
REGISTRATION PROCEDURE:
1. Complete NOTAP prescribed form
2. Attach CTC of the company’s memart
3. Certificate of Incorporation
4. Two CTCs of the agreement to be registered
5. Two copies of duly completed questionnaire
6. A copy of the relevant feasibility study
7. Annual audited accounts (if not a new company) and if a new company, a copy of the
Statement of Affairs of the company accompanied with the Certificate of Incorporation
8. Payment of prescribed fees
EFFECT OF NON-REGISTRATION S7 NOTAPA
• Non-registration of a contract does not render the contract void or unenforceable between
the parties but merely frustrates transfer of any fees or payment due under the contract to
the account of the aliens outside Nigeria because they will not enjoy the benefits of
repatriating their fees, profits and royalties through CBN unless there is a Certificate of
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Registration issued by NOTAP accompanying the application to repatriate S7 NOTAPA,

BEECHAMS’s case (1985) 3 NWLR (PT. 12).
INTENTION TO INCUR CAPITAL EXPENDITURE, S3(1) OF THE INDUSTRIAL
INSPECTORATE ACT (IIA)
• Any person proposing to start a new undertaking or in the case of an existing
undertaking, to incur additional expenditure, of not less than N500,000 must give to the
Director of the Industrial Inspectorate Division of the Federal Ministry of Industry notice
of his intention S3(1) IIA.
• Application is made in Form 1 (2 copies) obtainable from the Federal Ministry of
Industries, Inspectorate Division.
• If the director is satisfied with the valuation for the property, he issues a certificate of
acceptance which binds other government like the Board of Customs and Excise and the
Federal Board of Inland Revenue.
• Fiscal Approval- in respect of fees for management, technical, consultancy agreement
etc.
INCENTIVES
1. Pioneer status
2. Tax Relief on Double Taxation with: Canada, France, Pakistan, Romania, Belgium,
Britain, Netherlands
3. Investment Tax Credit
4. Rural Investment Allowance
5. Tax Relief on Foreign Loan S11 CITA
6. Tax Exemption on Certain Profits S23 CITA
7. Local Raw Material Utilisation- for engineering industries. Geared towards encouraging
local raw materials fabrication
8. Labour Intensive Mode of Production
9. Duty Draw Back Scheme (Must Be Applied for Within 2years Of Export)
10. Minimum Local Raw Materials Utilization
11. Export Development Fund
12. Export Free Zone
13. Ecowas Trade Liberalization Scheme, etc
PIONEER STATUS
• Generally, to support the companies in the budding years
• Tax holiday for 3 years renewable for a further 2 years.
• Tax free dividends during the tax holiday period
• Capital allowance on capital expenditure during the tax free period
• FC may buy any Nigerian share in any convertible currency S21 NIPCA
• No more nationalisation or expropriation S25 NIPCA +other guarantees, see above
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CONDITIONS FOR GRANT OF PIONEER STATUS

• Incur capital expenditure of not less than N10M….
• NB: Payment of 2% to NIPC as service charge based on estimated tax savings
REQUIREMENTS
• Applicant to show
o The industry is not being carried on in Nigeria on a scale suitable to the economic
development and requirements of Nigeria or at all, or there are favourable
prospects for further developments in Nigeria of such industry.
o That it is of public interest to encourage a given industry by declaring it a pioneer
industry.
o The industry must be listed as one eligible to be granted the status
o This designation is not necessarily a reflection that a company was pioneer per se
in the industry, it must be listed.
DOUBLE TAXATION TREATIES SS 45-46 of CITA
• If a Nigerian company has paid or is, liable to pay tax, proves that it has paid the tax in a
Commonwealth or another country that has double taxation agreement with Nigeria, then,
such a company will be entitled to relief from tax paid or payable by it.
• Double Taxation Relief between the FRN and the Governments of Canada; France;
Pakistan; Romania; Belgium; Netherlands; United Kingdom and Northern Ireland.
DUTY DRAWBACK/SUSPENSION SCHEME
• Importers of Materials used in the manufacture of exported goods may claim repayment
of import duties earlier paid in respect of the materials, Exported (Incentives and
Miscellaneous Provisions) Act; Customs Duties (Dumped and Subsidized Goods)
Act.
Tax exemption
• The profits of an exporter are exempted from taxation, provided that the proceeds are
repatriated to Nigeria and are used exclusively for the purchase of raw materials, plants,
equipment and spare parts, S23 CITA.
• The profits of a 100% export-oriented manufacturing company are exempted S23 CITA.
• Dividend, interest, rent, or royalty derived by a company from abroad and brought into
Nigeria through CBN or any bank: S23 CITA.
• The interest on foreign currency domiciliary account in Nigeria accruing on or after 1st
January 1990.
• Under the CITA, profits made by cooperative societies, educational, religious or
charitable organisations, sporting activities, et cetera are all exempted from taxation.
• Dividend received from investments in wholly export oriented businesses;
• A new company going into the mining of solid minerals shall be exempt from tax for the
first three years of its operation: S36 CITA.
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• 25% of incomes in FX collected by a hotel shall be exempt from tax provided that such
income is put in a reserved fund to be utilised within five years for the expansion of new
hotels, conference centres and new facilities for the purpose of tourism development: S37
CITA Note also that Development of holiday resorts, hotels, sporting and recreational
facilities is a pioneer industry so no tax.
• Interest on any loan to a company engaged in agricultural business, the fabrication of
local plant or machinery or as working capital for any industry established under Family
(Economic Advancement Programme Establishment, Etc.) Act is exempt from tax
S11 CITA.
• Foreign loans to Nigerian companies S11 CITA minimum of N150, 000, the loan
agreement must be approved by the Federal Ministry of Finance and copies deposited
with them and Federal Inland Revenue Service (FIRS).
INVESTMENT TAX CREDIT
• Companies that are engaged in R&D activities for commercialisation are allowed 20%
investment tax credit on their expenditure
PETROLEUM INVESTMENT ALLOWANCE
• A coy in Production Sharing Contract with the NNPC is entitled to petroleum investment
allowance – 50% of chargeable profit
INVESTMENT TAX CREDIT
• A company, which purchases a locally manufactured plant, machinery or equipment for
use in its business, is allowed 15% investment tax credit on such fixed asset S30 CITA.
• Where a company buy a new machinery to replace an obsolete plant and machinery, there
shall be allowed to that company, 15% investment tax credit: S26 CITA.
RURAL INVESTMENT ALLOWANCE
• Provision of electricity, water, and tarred road telephone, located at least 20 kilometres
away from such facilities, - rural investment allowance: S34 CITA.
LABOUR INTENSIVE MODE OF PRODUCTION
• Tax concession for five years. The rate is graduated in such a way that an industry
employing one hundred will enjoy only 6%, while those employing two hundred will
enjoy 7%, and so on.
EXPORT FREE ZONE
• Onne and Calabar
• The, profit of a 100% export-oriented undertaking established within and outside an
Export Free Zone shall be exempt from tax for the first three consecutive assessment
years
• Unrestricted remittance of profits and dividends earned by foreign investors in EPZs
148
• Though called EPZ coys are allowed to sell 100% of total production in the domestic
market
• No import or export licenses required,
• Sale of up to 25% of production permitted in domestic market
• No quotas on products from Nigeria exported to the European Union, (EU) and the
United States of America
• Made-in Nigeria goods are entitled to preferential tariffs in the EU.
CONDITIONS
i. New business
ii.New plants and machinery
iii.
Export proceeds form 75% of its turnover;
iv.Company repatriates at least 75% of the export earnings to Nigeria and places it in a
dorm account
v. To enjoy exemption from taxation is the profit of a company for the first N6,000 S42
CITA.
Other reliefs:
• Relief is also available where a Nigerian company is liable to pay a Commonwealth Tax
S44 CITA.
• There is relief from payment of double taxation if there are bilateral agreements with
other countries S44 & 45 CITA.
• There is also tax exemption for foreign loans not less than N150,000 granted to a
Nigerian company when it is not repayable within 10 years and is not repaid in less than
8years S9(1) CITA.
• Interests payable on bank loan granted for agricultural trade and business also enjoy tax
concession.
• Bank loan granted to a company engaged in agricultural business and fabrication of local
plant and machinery also enjoys concession.
• Deposit accounts or domiciliary accounts of a foreign non-residence company are also
exempted from taxation provided that the account consists mainly of foreign currencies
imported into Nigeria on or after 1st January 1990 through the CBN or any other
authorised bank.
• Bank loans for manufacture of goods for export are also tax-free.
• Please note that stocks and shares of any description have been removed from the list of
assets liable to Capital Gains Tax (CGT).
DUTY DRAWBACK AND SUSPENSION SCHEME
• The Customs and Excise Management Act and also the Customs Duty Drawback
Scheme/Regulation provides for the refund of import duties on:
o all imported goods used in manufacturing goods meant for export. In such cases,
100 per cent refund of import duties is granted.
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o Papers used in the manufacture of goods supplied for educational purposes to

educational institution recognised by the Minister of Education. In such cases,
100 per cent refund of import duty is granted.
ECOWAS TRADE LIBERALISATION SCHEME
• The Scheme provides for trade Liberalization among member countries.
• It involves total exemption of duties and taxes;
ECOWAS TRADE LIBERALISATION SCHEME
• Free movement of products;
• Adoption of a single currency, the ECO,
• ABOLITION OF EXCISE DUTY
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CORPORATE GOVERNANCE (I)

THE MEANING OF CORPORATE GOVERNANCE (CG)
• This refers to the mechanism of internal and external controls of the actions and
inactions of the organs of a company in a manner that ensures:
i. Compliance with public policy
ii. The interest of stakeholders, and
iii. The avoidance of corporate failure/corporate collapse and abuse.
THE BASIS FOR CORPORATE GOVERNANCE
• It is aimed at building and strengthening the following:
i. Corporate transparency
ii. Accountability
iii. Credibility
iv. Integrity and
v. Trust
COMMONLY ACCEPTED PRINCIPLES OF CORPORATE GOVERNANCE
• Rights and equitable treatment of shareholders
• Interests of other stakeholders (host community, consumers, general public etc.) S305 (3)
and (4) CAMA
• Integrity and ethical behaviour
• Disclosure and transparency
MAJOR LAWS ON CORPORATE GOVERNANCE
1. Companies and Allied Matters Act CAMA 2020
2. Investments and Securities Act ISA 2007
3. Banks and other Financial Institution Act BOFIA 2020
4. Central Bank of Nigeria Act CBN 2007
5. Insurance Act 2003
6. National Insurance Commission Act
7. Financial Reporting Council of Nigeria Act 2018
8. Finance Act 2021
9. Federal Competition and Consumer Protection Act
THEN WHY THE CODES? THE NEED FOR THE CODES
• The available laws do not adequately provide for all the different sectors of the economy.
• The process of passing or amending laws is lengthy and substantial delay may affect the
business sectors involved.
• The Codes allow for quick and effective response to the dynamics of CG etc
• Various codes of corporate governance emerged in response to corporate financial
failures which has caused notable impacts in the macro economy.
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• In Nigeria, some of the codes serve as international benchmarks.

• Such codes include those by the Organisation for Economic Cooperation
Development (OECD), the Halsbury Report and the Cadbury Report.
• The Financial Reporting Council of Nigeria has released a standardised code of corporate
governance known as Nigerian Code of Corporate Governance, 2018 having its
commencement date as January 15, 2019.
• The following entities are required to adopt and comply with the NCCG:
i. All public companies (whether a listed company or not);
ii. All private companies that are holding companies of public companies or other
regulated entities:
iii. All concessioned or privatized companies; and
iv. All regulated private companies being private companies that file return to any
regulatory authority other than the FIRS and the CAC.
HIGHLIGHTS OF C.G. MECHANISMS PROVIDED UNDER CAMA
Checks and balances in the management of a company – 87(3) CAMA
• The BOD exercises management powers in the company while some corporate decisions
cannot be taken without the members in general meeting. Examples:
1. Change of the name of the company SS 51&30 CAMA
2. Change of business/ objects S51 CAMA
3. Capital increase S128 CAMA
4. Reduction of capital S131 CAMA
5. Conversions or re-registration of the company S55 CAMA
6. Mergers ETC
HIGHLIGHTS OF C.G. PROVISIONS UNDER THE ISA
1. Corporate Responsibility of Public companies SS 60-65 ISA
2. Auditors of Public companies to register(accreditation) with SEC S62 ISA
3. The requirement for a listed company to disclose quarterly earnings forecast to SEC S64
4. Periodic or annual audited financial statement to be filed with SEC
5. System of internal controls over financial reporting and security of assets S61 ISA
6. Duty of the auditors of a company to report on the internal control system of the company
to SEC S63
NB: contravention of any of the above provisions is sanctioned by a fine of N1,000,000 and for
every subsequent day N25,000.
THEORIES OF CORPORATE GOVERNANCE
i. Agency Theory/Shareholders Theory
ii. Stakeholders Theory
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AGENCY/SHAREHOLDER THEORY
• The agency/shareholder or stock holder theory posits mainly that the shareholders are the
principal while the directors are their agents.
• The shareholders or the stock holders provide the equity or money with which the
company does business and they bear the risk of the business.
• The directors are appointed by the shareholders to bring in their skills and expertise and
provide a high return on the investment of the shareholders.
• This theory therefore watches for the best interest of the shareholders which is basically
maximisation of profit.
• The theory posits that the officers of the company are its agents who are to carry out the
wishes of the company.
• Under the shareholder theory the main organs of the company are the General Meeting
and the Board of Directors as the decision-making organs of a company S87 CAMA.
• The importance of the interface between members and Directors on the platform of the
GM is sacrosanct and underscored by the principles under part C of the NCCG 2018.
STAKEHOLDER THEORY
• This theory recognizes that there are other persons in the company structure outside the
directors and members that impact meaningfully on the performance and sustainability of
the company.
• These are all referred to as the stakeholders viz: the shareholders, the management, the
employees, the creditors, the society, the government S305 (4) and (5) CAMA.
• These persons could include long term employees who have acquired valuable skills over
time. They might even have benefitted from some trainings from the company and they
are valuable to the company as much as the company is valuable to them.
• As a result, the interests of all these individuals or classes of individuals need to be
protected and a good framework needs to be created to ensure same.
• They bring in ethical considerations into the business of the company and may prompt
the company to perform certain CSR (e.g., oil spillage and flaring issues in Ogoni land).
• Part F of the NCCG is relevant here.
IMPACT OF CORPORATE SOCIAL RESPONSIBILITY (CSR) ON CG
• Society and businesses are interwoven:
• Some of the ingredients required to make the organisation successful are derivable from
the relationship which the organisation has with society.
• For both to co-exist, there must be harmony.
• Hence the need for corporate leaders to transform their businesses by being socially
responsible
• CSR requires that modern business should help find innovative solutions to solving social
and environmental problems regardless of whether or not these organisations created the
problem in the first place.
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• Corporate governance becomes crucial in this regard

The WBCSD defines CSR as:
• The continuing commitment by business to behave ethically and contribute to economic
development while improving the quality of life of the workers and their families as well
as of the local community and society at large
The UK Institute of Directors sees CSR in terms of:
• Businesses and other organizations going beyond the legal obligations to manage the
impact they have on the environment and society. In particular, this could include how
organizations interact with their employees, suppliers, customers and the communities in
which they operate, as well as the extent to which they attempt to protect the
environment.
Carroll:
• Carroll defines social responsibility of business as encompassing the economic, legal,
ethical, and discretionary expectations that society has of organizations at a given point in
time.
• We shall adopt Carroll’s position as our working definition
Salient parts of the working definition
1) The Economic Responsibility of business:
• “To produce goods and services that society desires and to sell them at a profit” (Carroll)
• Profit may be maximised, provided that the business engages in competition without
fraud and deception
2) The legal Responsibility of business:
• The legal responsibility of business refers to the positive and negative obligations put on
businesses by the laws and regulations of the society in which it operates
• Biz are required to obey the laws and regulations of the society in which they operate.
3) The Ethical Responsibility:
• These are activities and practices that are expected or prohibited by society even though
they are not codified into law (Carroll)
• Ethical responsibility represents those standards, norms, or expectations that reflect a
concern for what consumers, employees, shareholders, and the community regard as fair,
just, or in keeping with the respect or protection of stakeholders’ moral rights.
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4)The Philanthropic Responsibility:

• Corporate activities that are in response to society’s expectation that businesses be good
corporate citizens; this comprises actively engaging in programs to promote human
welfare or goodwill
• Includes business contributions to financial resources of the public e.g., contributions to
the arts, education, or the community.
• The difference between philanthropy and ethical responsibility is that the former is not
expected in an ethical or moral sense.
• Communities desire corporations to contribute their money, facilities, and employee time
to humanitarian programs, but they do not regard the firms as unethical if they do not
provide the desired level.
• Hence, philanthropy is more voluntary on the part of businesses; however, there is always
the societal expectation.
SOME CODES ON C.G. IN NIGERIA
1. The Nigerian Code of Corporate Governance (NCCG), 2018 - issued by the Financial
Reporting Council of Nigeria (FRCN). It came into force from the 1st of April, 2019.
2. Code of Corporate Governance for Finance Companies in Nigeria (CCGFCN) -
Issued by the CBN came into force 1st April, 2019.
3. Code of Corporate Governance for Public Companies – issued by SEC.
4. Code of Good Corporate Governance for Banks and Discount Houses – issued by
CBN
5. Code of Corporate Governance for the Telecommunication Industry – issued by the
Nigerian Telecommunications Commission (NCC)
6. Code of Corporate Governance for Insurance Industry in Nigeria – issued by
National Insurance Commission (NAICOM)
7. Code of Corporate Governance for Licensed Pension Fund Operators – issued by the
National Pension Commission (NPC).
AUTHORITY OF THE NCCG, 2018
• It is based on SS11(c) and 51(c) of the FRCN Act, which confer on the Financial
Reporting Council of Nigeria with the following powers:
i. The power to ensure good corporate Governance practices in the public and
private sectors of the Nigerian economy; and
ii. The power to issue the code of corporate governance and guidelines
• The code was approved by the FRCN pursuant to the above-mentioned statute and
recommended to the minister for issuance in accordance with S76 FRCN Act
APPLICATION OF THE NCCG
• The NCCG is applicable to the following companies:
i. All public companies (whether listed/quoted or not)
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ii. All private companies that are holding companies of public companies or regulated
entities.
iii. All concessioned or privatized companies.
iv. All regulated private companies being private companies that file returns to any
regulatory authority other than the FIRS and the CAC.
AIMS AND OBJECTIVES OF THE NCCG, 2018
i. Institutionalising corporate governance best practices in Nigerian companies
ii. Promoting public awareness of essential corporate values and ethical practices that will
enhance the integrity of the business environment
MONITORING METHODS
• The FRCN is the authority responsible for monitoring the implementation of the NCCG
• This may be done through the sectoral regulators and registered exchanges, who are
empowered to impose sanctions based on the specific deviations noted
• Review of implementation methods of the code, by the FRCN, in response to recurrent
cases of deviations
STRUCTURE OF THE CODE
• 7 (parts) in general but 6 operative parts and 28 Principles together with the practices
recommended for implementing the code.
• The parts are:
i. Part A. Board of Directors and Officers of the Board
ii. Part B. Assurance
iii. Part C. Relationship with Shareholders
iv. Part D. Business Conduct and Ethics
v. Part F. Transparency
vi. Part G. Definitions
• In details, the 7 parts cover the following:

Part A. Board of Directors and Officers of the Board
Principle 1: Role of the Board:
• A successful Company is headed by an effective Board which is responsible for providing
entrepreneurial and strategic leadership as well as promoting ethical culture and
responsible corporate citizenship. As a link between stakeholders and the Company, the
Board is to exercise oversight and control to ensure that management acts in the best
interest of the shareholders and other stakeholders while sustaining the prosperity of the
Company.
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Principle 2: Board Structure and Composition:

• The effective discharge of the responsibilities of the Board and its committees is assured
by an appropriate balance of skills and diversity (including experience and gender)
without compromising competence, independence and integrity.
Recommended Practices
• The Board should be of a sufficient size to effectively undertake and fulfil its business; to
oversee, monitor, direct and control the Company’s activities and be relative to the scale
and complexity of its operations.
• The Board should assume responsibility for its composition by setting the direction and
approving the processes for it to attain the appropriate balance of knowledge, skills,
experience, diversity and independence to objectively and effectively discharge its
governance role and responsibilities.
• The Board should consider the following factors in determining the requisite number of
its members:
o appropriate mix of knowledge, skills and experience, including the business,
commercial and industry experience needed to govern the Company;
o appropriate mix of Executive, Non-Executive and Independent Non-Executive
members such that majority of the Board are Non-Executive Directors. It is desirable
that most of the Non-Executive Directors are independent;
o need for a sufficient number of members that qualify to serve on the committees of
the Board;
o need to secure quorum at meetings; and
o diversity targets relating to the composition of the Board.
• The Board should promote diversity in its membership across a variety of attributes
relevant for promoting better decision-making and effective governance. These attributes
include field of knowledge, skills and experience as well as age, culture and gender. The
Board should have a policy to govern this process and establish measurable objectives for
achieving diversity in gender and other areas.
• The Board should periodically invigorate its capabilities by ensuring the appointment of
new members with relevant skills and fresh perspectives, while retaining valuable
knowledge, skills, experience and diversity; and maintaining continuity.
• No individual or small group of individuals should dominate the Board’s decision-
making.
• The positions of the Chairman of the Board and the Managing Director/Chief Executive
Officer (MD/CEO) of the Company should be separate such that no person can combine
the two positions.
• Directors may hold concurrent directorships. However, concurrent service on too many
Boards may interfere with an individual’s ability to discharge his responsibilities. To
assist the Board in determining the appropriateness of concurrent directorships:
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o Prospective Directors should disclose memberships on other Boards, and current

Directors should notify the Board of prospective appointments on other Boards. This
information should be kept current by serving Board members.
o The Board should consider the disclosed directorships, taking into account the
number of other directorships and the responsibilities held, and determine whether the
individual can discharge his responsibilities and contribute effectively to the
performance of the Board before recommending such a person for appointment or
continued service.
o Directors should not be members of Boards of competing companies to avoid conflict
of interest, breach of confidentiality, diversion of corporate opportunity and
divulgence of corporate information.
• The Chairman of the Board should not serve as chairman or member of any Board
committee. The MD/CEO or an Executive Director should not serve as chairman of any
Board committee.
• A person (or group of persons) who is not a serving Director of the Company should not
exercise any influence or dominance over the Board and/or Management. Such a person
or group of persons would be deemed a shadow director as defined by extant laws.
Principle 3: Chairman:
• The Chairman is responsible for providing overall leadership of the Company and the
Board, and eliciting the constructive participation of all Directors to facilitate effective
direction of the Board.
• The Chairman’s primary responsibility is to ensure the effective operation of the Board
such that the Board works as a group towards achieving the Company’s strategic
objectives. He should also provide guidance to the MD/CEO and be available to him for
regular communication.
• The Chairman of the Board should be a NED and not be involved in the day-to-day
operations of the Company, which should be the primary responsibility of the MD/CEO
and the management team.
• The MD/CEO or an Executive Director (ED) should not go on to be the Chairman of the
same Company. If in very exceptional circumstances the Board decides that a former
MD/CEO or an ED should become Chairman, a cool-off period of three years should be
adopted.
• The Chairman’s functions should include the following:
o presiding over meetings of the Board of Directors and general meetings of
shareholders;
o agreeing an annual Board plan with the Board;
o ensuring that the agenda for Board meetings is set;
o ensuring that the Board and its committees are composed of individuals with relevant
skills, competencies and desired experience;
o ensuring that Board meetings are properly conducted;
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o ensuring that the Board is effective and functions in a cohesive manner;

o ensuring that induction programmes are conducted for new Directors and a
continuing education programme is in place for all Directors;
o ensuring effective communication and relations with the Company’s shareholders and
other stakeholders; and
o taking a lead role in the assessment, improvement and development of the Board.
• The Chairman is responsible for ensuring that management provides the Directors with
accurate, timely and adequate information.
• The Chairman may interact with NEDs periodically.
Principle 4: Managing Director/Chief Executive Officer
• The Managing Director/Chief Executive Officer is the head of management delegated by
the Board to run the affairs of the Company to achieve its strategic objectives for
sustainable corporate performance.
• The Board may delegate any of its powers to the MD/CEO as it deems appropriate for the
smooth operation of the Company.
• The MD/CEO should have a broad understanding of the Company’s business. He should
demonstrate entrepreneurial skills, credibility and integrity and have the confidence of the
Board and management.
• The MD/CEO should establish a culture of integrity, conformance and performance
which should be assimilated by personnel at all levels of the Company.
• The functions and responsibilities of the MD/CEO should include:
o day-to-day management of the Company;
o proper implementation and achievement of the Company’s strategic imperatives to
ensure the sustainable development and growth of the Company;
o ensuring prudent management of the Company’s finances and other resources;
o providing the Board with complete, accurate and timely information and
documentation to enable it make sound decisions;
o promoting and protecting the interests of the Company; and
o being the Company's leading representative in its dealings with its stakeholders.
• The authority of the MD/CEO and the relationship between him and the Board should be
clearly set out in a contract of employment.
• The MD/CEO should declare any conflict of interest on appointment and annually
thereafter. In the event that he becomes aware of any potential conflict of interest at any
other point, he should disclose this to the Board at the first possible opportunity. Actions
following disclosure should be subject to the Company’s Conflict of Interest Policy.
• The MD/CEO should not be a member of the committees responsible for remuneration,
audit, or nomination and governance.
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• The MD/CEO may be appointed an NED in any other Company, provided such
appointment is not detrimental to his responsibilities and is in accordance with Board-
approved policy.
Principle 5: Executive Directors
• Executive Directors support the Managing Director/Chief Executive Officer in the
operations and management of the Company.
• EDs should have a broad understanding of the Company’s business in addition to
possessing such other qualifications as may be needed for their specific assignments or
responsibilities.
• EDs should support the MD/CEO in the proper implementation and achievement of the
Company’s strategic imperatives, as well as prudent management of the Company’s
finances and other resources.
• EDs should declare any conflict of interest on appointment and annually thereafter. In the
event that they become aware of any potential conflict of interest at any other point, they
should disclose this to the Board at the first possible opportunity. Actions following
disclosure should be subject to the Company’s Conflict of Interest Policy.
• An ED may be appointed NED in any other company, provided such appointment is not
detrimental to his responsibilities as an ED and is in accordance with Board-approved
policy.
• An ED should not be a member of the committees responsible for remuneration, audit, or
nomination and governance.
• The responsibilities and authority of EDs should be clearly set out in a contract of
employment.
Principle 6: Non-Executive Directors
• Non-Executive Directors bring to bear their knowledge, expertise and independent
judgment on issues of strategy and performance on the Board.
• NEDs should be chosen on the basis of their wide experience, knowledge and personal
qualities and are expected to bring these qualities to bear on the Company’s business and
affairs.
• NEDs should constructively contribute to the development of the Company’s strategy.
• NEDs should not be involved in the day-to-day operations of the Company, which should
be the primary responsibility of the MD/CEO and the management team.
• NEDs should have unfettered access to the EDs, Company Secretary and the Internal
Auditor, while access to other senior management should be through the MD/CEO.
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• To facilitate the effective discharge of their duties, NEDs should be provided, in a timely
manner, with reasonable support as well as quality and comprehensive information
relating to the management of the Company and on all Board matters.
Principle 7: Independent Non-Executive Directors
• Independent Non-Executive Directors bring a high degree of objectivity to the Board for
sustaining stakeholder trust and confidence.
• An Independent Non-Executive Director (INED) should represent a strong independent
voice on the Board, be independent in character and judgment and accordingly be free
from such relationships or circumstances with the Company, its management, or
substantial shareholders as may, or appear to, impair his ability to make independent
judgment.
• An INED is a NED who:
o does not possess a shareholding in the Company the value of which is material to the
holder such as will impair his independence or in excess of 0.01% of the paid-up
capital of the Company;
o is not a representative of a shareholder that has the ability to control or significantly
influence Management;
o is not, or has not been an employee of the Company or group within the last five
years;
o is not a close family member of any of the Company’s advisers, Directors, senior
employees, consultants, auditors, creditors, suppliers, customers or substantial
shareholders;
o does not have, and has not had within the last five years, a material business
relationship with the Company either directly, or as a partner, shareholder, Director or
senior employee of a body that has, or has had, such a relationship with the Company;
o has not served at directorate level or above at the Company's regulator within the last
three years;
o does not render any professional, consultancy or other advisory services to the
Company or the group, other than in the capacity of a Director;
o does not receive, and has not received additional remuneration from the Company
apart from a Director’s fee and allowances; does not participate in the Company’s
share option or a performance-related pay scheme, and is not a member of the
Company’s pension scheme; and
o has not served on the Board for more than nine years from the date of his first
election.
• The above-mentioned criteria for establishing the independent status of an INED are not
exhaustive, but should be considered as examples of some of those relationships or
circumstances which may impair, or appear to impair an INED’s independent judgment.
• The Board should annually ascertain and confirm the continued independence of each
INED of the Company.
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• Reclassification of an existing NED into an INED on the same Board is not desirable.
Principle 8: Company Secretary
• The Company Secretary plays an important role in supporting the effectiveness of the
Board by assisting the Board and management to develop good corporate governance
practices and culture within the Company.
• Without prejudice to the provisions of extant laws, the Company Secretary should be a
person with relevant qualifications and competence necessary to effectively discharge the
duties of his office. The Board should ensure that the person appointed has the gravitas
and objectivity to provide independent guidance and support at the highest level of
decision-making in the Company.
• Where the Company Secretary is an employee of the Company, he should be a member
of senior management and should be appointed through a rigorous selection process
similar to that of new Directors.
• The Company Secretary should be properly empowered by the Board to discharge his
duties and responsibilities.
• The Company Secretary should have both functional and administrative responsibilities.
The functional responsibility is to the Board through the Chairman, while
administratively, he reports to the MD/CEO.
• The Board should approve the performance evaluation of the Company Secretary.
• In addition to his statutory functions, the Company Secretary should carry out the
following duties and responsibilities:
o Provide the Board and Directors individually, with detailed guidance as to how their
responsibilities should be properly discharged in the best interest of the Company;
o Coordinate the induction and training of new Directors.
o Assist the Chairman and MD/CEO in coordinating activities regarding the annual
Board plan and with the administration of other strategic issues at the Board level;
o Notify Board members of upcoming meetings of the Board and its committees as well
as other matters that warrant their attention;
o Compile Board papers and ensure that the Board’s discussions and decisions are
clearly and properly recorded and communicated to relevant persons in a timely
manner;
o Provide a central source of guidance and advice to the Board and the Company on
matters of ethics, conflict of interest and good corporate governance.
• Under the direction of the Chairman, the Company Secretary’s responsibilities include
ensuring good information flow within the Board and its committees and between senior
management and NEDs.
• Subject to the provisions of extant laws, the appointment and removal of the Company
Secretary should be a matter for the Board.
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Principle 9: Access to Independent Advice

• Directors are sometimes required to make decisions of a technical and complex nature
that may require independent external expertise.
• The Board should ensure that Directors, especially NEDs, have access to independent
professional advice where they consider it necessary to discharge their responsibilities as
Directors.
• The Board should ensure that such independent professional advice is obtained as set out
in the Company’s governance policies and at the Company’s expense.
Principle 10: Meetings of the Board
• Meetings are the principal vehicle for conducting the business of the Board and
successfully fulfilling the strategic objectives of the Company.
• In order to effectively perform its oversight function and monitor management’s
performance, the Board should meet at least once every quarter.
• Every Director should endeavour to attend all Board meetings. The attendance record of
Directors should be among the criteria for the re-election of a Director.
• Minutes of meetings of the Board and its committees, as a record of what transpired at
those meetings, should be prepared and sent to Directors on a timely basis. Such minutes
should be formally reviewed and approved by the members of the Board or relevant
Board committee at its next meeting.
Principle 11: Board Committees
• To ensure efficiency and effectiveness, the Board delegates some of its functions, duties
and responsibilities to well-structured committees, without abdicating its responsibilities.
11.1 Board Committees
• The Board should determine the number and composition of its committees as well as
ensure that each is comprised of Directors with relevant skills and competencies.
• Only Directors may be members of Board committees, while members of senior
management may be required to attend committee meetings.
• The terms of reference and composition of such committees should be set out in the
Board-approved committee charter, which should be reviewed periodically.
• The membership of Board committees should be reviewed and refreshed periodically.
• Each committee should be composed of at least three members. Individual Board
committee charters will indicate where INEDs are required.
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• To facilitate adequate oversight, the Board should establish committees responsible for
nomination and governance, remuneration, audit and risk management.
• The Board may combine any of the responsibilities mentioned in Section 11.1.6 on Board
committees, taking into consideration the size, needs and other requirements of the
Company.
• The chairmen of Board committees should be appointed by the Board.
• The Board should ensure that, in appointing members of the Board committees, there is a
balanced distribution of power in respect of membership across committees so that no
individual has the ability to dominate decision making and undue reliance is not placed
on any individual.
• The Company Secretary, or any other officer in the office of the Company Secretary,
should be the secretary of all Board committees.
• The agenda for the meetings of Board committees should be developed in consultation
with the respective committee chairmen.
• The timing of committee meetings should be well coordinated for the effective discharge
of their duties.
• At board meetings, the chairman of each Board committee should present a written report
of the key recommendations made at all the meetings held by the committee since the last
Board meeting.
• Members of Board committees should devote sufficient time to the committees’ work.
• Board Committees may engage a consultant at the expense of the Company for the
purpose of obtaining independent external expertise in carrying out their responsibilities.
This should be done in line with the Company’s policies.
• Board Committees should be accountable to the Board for their own activities and
performance.
11.2 Committee responsible for Nomination and Governance
• The Board should consider assigning the responsibilities for nomination of members and
oversight of governance matters to a stand-alone committee, or to any other committee
capable of combining it with their existing functions, as is appropriate.
• Members of the committee responsible for nomination and governance should be NEDs,
and a majority of them should be INEDs where possible.
• The chairman of the committee should be a NED.
• The committee should meet at least twice a year or such number of times as may be
appropriate to discharge its duties.
• Among other things, the committee should have the duty to:
o Review the structure, size, composition and commitment of the Board at least
annually and make recommendations on any proposed changes to the Board;
o Establish a formal and transparent process for Board appointments, including
establishing the criteria for appointment to the Board and Board committees,
reviewing prospective candidates’ qualifications and any potential conflict of interest;
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assessing the contribution of current Directors against their re-nomination suitability,

and making appropriate recommendations to the Board;
o Identify individuals suitably qualified to become Board members and make
recommendations to the Board for nomination and appointment as Directors;
o Periodically determine the skills, knowledge and experience required on the Board
and its committees;
o Ensure that the Company has a formal programme for the induction and training of
Directors;
o Undertake the annual assessment of the independent status of each INED;
o Ensure that the Company has a succession policy and plan in place for the Chairman
of the Board, the MD/CEO and all other EDs, NEDs and senior management
positions to ensure leadership continuity. Succession planning should be reviewed
periodically, with provision made for succession in emergency situations as well as
long-term vacancies;
o Deal with all matters pertaining to executive management selection and performance,
including an annual evaluation of the performance of the MD/CEO and executive
management.
o Develop a process for, and ensure that the Board undertakes, an annual performance
evaluation of itself, its committees, the Chairman and individual Directors, as well as
the Company’s corporate governance practices.
o Ensure the development and periodic review of Board charters, Board committee
charters and other governance policies, such as the code of ethics, conflict of interest
and whistleblowing policies among others.
11.3 Committee responsible for Remuneration
• The Board should consider assigning the responsibilities for the determination of
remuneration policy and its application to executive management, performance
evaluation, the adoption of incentive plans, and various governance responsibilities
related to remuneration to a stand-alone committee, or to any other committee capable of
combining it with their existing functions, as is appropriate.
• Members of the committee responsible for remuneration should be NEDs, and a majority
of them should be INEDs where possible.
• It is desirable that the chairman of the committee be an INED.
• The committee should meet at least once a year or such number of times as may be
appropriate to discharge its duties.
• The duties of the committee responsible for remuneration should include, among others:
o Development of a formal, clear and transparent framework for the Company’s
remuneration policies and procedures;
o Recommendation to the Board on the Company’s remuneration policy and structure
for all Directors and senior management employees.
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11.4 Committee responsible for Audit

• Without prejudice to the provision of extant laws on the Statutory Audit Committee, it is
desirable for every Company to have a Board committee responsible for audit.
• All members of the committee should be financially literate and should be able to read
and understand financial statements. At least one member of the committee should be a
financial expert, have current knowledge in accounting and financial management and be
able to interpret financial statements.
• For private companies, members of the committee responsible for audit should be NEDs,
and a majority of them should be INEDs where possible.
• In the case of the statutory audit committee, a chairman should be elected from amongst
its members, and should have financial literacy.
• The committee should meet at least once every quarter.
• Subject to the provisions of extant laws, every public company should establish a
statutory audit committee which shall perform the following functions:
1. Ascertain whether the accounting and reporting policies of the Company are in
accordance with legal requirements and agreed ethical practices.
2. Review the scope and planning of audit requirements.
3. Review the findings in management letter in conjunction with the external auditor and
management responses thereon.
4. Keep under review the effectiveness of the Company's system of accounting and
internal control.
5. Make recommendations to the Board regarding the appointment, removal and
remuneration of the external auditors of the Company.
6. Authorise the internal auditor to carry out investigations into any activities of the
Company which may be of interest or concern to the committee.
7. The Board audit committee should have the following additional responsibilities:
8. Exercise oversight over management’s processes to ascertain the integrity of the
Company’s financial statements, compliance with all applicable legal and other
regulatory requirements; and assess the qualifications and independence of the
external auditors, and the performance of the Company’s internal audit function as
well as that of the external auditors;
9. Ensure the establishment of and exercise oversight on the internal audit function
which provides assurance on the effectiveness of the internal controls. On a quarterly
basis, obtain and review a report by the internal auditor describing the strength and
quality of internal controls including identification of any issues or recommendations
for improvement raised by the most recent internal audit review of the Company;
10. Ensure the development of a comprehensive internal control framework for the
Company, obtain appropriate (internal and/or external) assurance and report annually
in the Company’s audited financial report, on the design and operating effectiveness
of the Company’s internal controls over the financial reporting systems;
11. Oversee the process for the identification of fraud risks across the Company and
ensure that adequate prevention, detection and reporting mechanisms are in place;
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12. Discuss the interim or annual audited financial statements as well as significant
financial reporting findings and recommendations with management and external
auditors prior to recommending same to the Board for their consideration and
appropriate action;
13. Maintain oversight of financial and non-financial reporting.
14. Review and ensure that adequate whistle-blowing policies and procedures are in place
and that the issues reported through the whistle-blowing mechanism are summarised
and presented to the board;
15. Review, with the external auditors, any audit scope limitations or significant matters
encountered and management’s responses to same;
16. Develop a policy on the nature, extent and terms under which the external auditors
may perform non-audit services;
17. Review the independence of the external auditors in line with the policy referred to in
Section 11.4.7.9 above prior to their appointment to perform non-audit services to
ensure that where approved non-audit services are provided by the external auditors,
there is no real or perceived conflict of interest, or other legal or ethical impediment;
18. Preserve auditor independence, by setting clear hiring policies for employees or
former employees of external auditors;
19. Ensure the development of a Related Party Transactions policy and monitor its
implementation by management. The Committee should consider any related party
transaction that may arise within the Company.
20. At least once in a year, the committee should hold a discussion with the head of the
internal audit function and the external auditors without the presence of management,
to facilitate an exchange of views and concerns that may not be appropriate for open
discussion.
11.5 Committee responsible for Risk Management
• The Board should consider assigning the responsibilities for oversight of matters relating
to risk management to a stand-alone committee, or to any other committee capable of
combining it with their existing functions, as is appropriate.
• Members of the committee responsible for risk management should include EDs and
NEDs, a majority of whom should be NEDs.
• Where the committees responsible for audit and risk management are separate, the Board
should consider for one or more members to have joint membership of both committees
for more effective functioning as this will enhance the discussions at meetings of both
committees – the risk implication of audit matters will be discussed more extensively,
and a knowledge of findings from the Company’s internal audit activities will bring a
unique perspective to the discussion of risk issues.
• The chairman of the committee should be a NED.
• The committee should meet at least twice every financial year or such number of times as
may be appropriate to discharge its duties.
• The committee should:
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1. Review and recommend for approval of the Board, the risk management policies and
framework, as well as assist the Board in its oversight of risk management strategy;
2. Review the adequacy and effectiveness of risk management and controls in the
Company;
3. Exercise oversight over the process for the identification and assessment of risks
across the Company and the adequacy of prevention, detection and reporting
mechanisms;
4. Review the level of the Company’s compliance with applicable laws and regulatory
requirements which may impact the Company’s risk profile;
5. Periodically review changes in the economic and business environment, including
emerging trends and other factors relevant to the Company’s risk profile and those
trends which may threaten the Company’s business model, key strategies, future
performance, solvency and liquidity and make recommendations to the Board as
appropriate;
6. Review and recommend for approval of the Board, at least annually, the Company’s
Information Technology (IT) data governance framework to ensure that IT data risks
are adequately mitigated and relevant assets are managed effectively. The framework
may include:
a. Development of IT strategy and policy;
b. Proactive monitoring and management of cyber threats and attacks as
well as adverse social media incidents;
c. Management of risks relating to third-party and outsourced IT service
providers;
d. Assessment of value delivered to the Company through investments in
IT; and
e. Periodic independent assurance on the effectiveness of the Company’s
IT arrangements.
7. The person charged with the responsibility for risk management should be a member
of senior management of the Company, a professional with relevant qualifications
and experience and should be in attendance at meetings of the committee. The direct
reporting line of this person should be to the MD/CEO and there should be an indirect
reporting line to the committee responsible for risk management.
Principle 12: Appointment to the Board
• A written, clearly defined, rigorous, formal and transparent procedure serves as a guide
for the selection of Directors to ensure the appointment of high-quality individuals to the
Board.
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Principle 13: Induction and Continuing Education

• A formal induction programme on joining the Board as well as regular training assists
Directors to effectively discharge their duties to the Company.
Principle 14: Board Evaluation
• Annual Board evaluation assesses how each Director, the committees of the Board and
the Board are committed to their roles, work together and continue to contribute
effectively to the achievement of the Company’s objectives.
Principle 15: Corporate Governance Evaluation
• Institutionalising a system for evaluating the Company’s corporate governance practices
ensures that its governance standards, practices and processes are adequate and
effective.
Principle 16: Remuneration Governance
• The Board ensures that the Company remunerates fairly, responsibly and transparently
so as to promote the achievement of strategic objectives and positive outcomes in the
short, medium and long term.
PART B. ASSURANCE
Principle 17. Risk Management
• A sound framework for managing risk and ensuring an effective internal control system is
essential for achieving the strategic objectives of the Company.
Principle 18: Internal Audit Function
• An effective internal audit function provides assurance to the Board on the effectiveness
of the governance, risk management and internal control systems.
Principle 19: Whistle-blowing
• An effective whistle-blowing framework for reporting any illegal or unethical behaviour
minimises the Company's exposure and prevents recurrence.
Principle 20: External Auditors
• An external auditor is appointed to provide an independent opinion on the true and fair
view of the financial statements of the Company to give assurance to stakeholders on the
reliability of the financial statements.
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PART C. RELATIONSHIP WITH SHAREHOLDERS

Principle 21. General Meetings
• General Meetings are important platforms for the Board to engage shareholders to
facilitate greater understanding of the Company’s business, governance and
performance. They provide shareholders with an opportunity to exercise their ownership
rights and express their views to the Board on any areas of interest.
Principle 22: Shareholder Engagement
• The establishment of a system of regular dialogue with shareholders balances their
needs, interests and expectations with the objectives of the Company.
Principle 23: Protection of Shareholder Rights
• Equitable treatment of shareholders and the protection of their statutory and general
rights, particularly the interest of minority shareholders, promote good governance.
PART D. BUSINESS CONDUCT AND ETHICS

Principle 24. Business Conduct and Ethics
• The establishment of professional business and ethical standards underscores the values
for the protection and enhancement of the reputation of the Company while promoting
good conduct and investor confidence.
Principle 25. Ethical Culture
• The establishment of policies and mechanisms for monitoring insider trading, related
party transactions, conflict of interest and other corrupt activities, mitigates the adverse
effects of these abuses on the Company and promotes good ethical conduct and investor
confidence.
PART E. SUSTAINABILITY
Principle 26. Sustainability
• Paying adequate attention to sustainability issues including environment, social,
occupational and community health and safety ensures successful long term business
performance and projects the Company as a responsible corporate citizen contributing to
economic development.
PART F. TRANSPARENCY
Principle 27. Stakeholder Communication
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• Communicating and interacting with stakeholders keeps them conversant with the
activities of the Company and assists them in making informed decisions.
Principle 28. Disclosures
• Full and comprehensive disclosure of all matters material to investors and stakeholders,
and of matters set out in this Code, ensures proper monitoring of its implementation
which engenders good corporate governance practice.
PART G. DEFINITIONS
Principle 29. Definitions
HIGHLIGHTS OF POINTS FROM THE NCCG

RECOMMENDED PRACTICES ON THE ROLE OF THE BOARD
• The BOD, in view of its central position in corporate governance, should have a charter
(document) setting out responsibilities, which, among other objectives, ensures the
following:
i. That the oversight and control of the company is such that promotes the continued
survival and prosperity of the company
ii. Compliance with laws and regulations
iii. Integrity of the annual reports and accounts
COMPOSITION OF THE BOARD OF DIRECTORS
• The BOD is constituted of the following persons or categories of persons:
i. The Chairman of the Board
ii. The Managing Director
iii. Executive Directors (ED’s)
iv. Non-Executive Directors (NED’s)
v. Independent Non-Executive Directors (INED’s)
• NB. The secretary is normally in attendance on the Board in other to guide them for the
purposes of compliance and building a sound corporate governance culture and practice.
FUNCTIONS OF MEMBERS OF THE BOARD
• The members of the board have various responsibilities depending on their designation
which may include the following:
i. The Chairman presides over the proceedings of the Board and has the right to cast a
second ballot to break a tie when the need arises.
ii. The Managing Director is the Chief Executive Officer and oversees the day to day affairs
of the coy.
iii. The ED’s assist the MD, they may be assigned certain responsibilities or portfolios.
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iv. The NED’s bring in their business experience and expertise to help the Board make
critical decisions.
v. The INED should have little or no interest in the coy and should be able to bring
dispassionate view into the Boards decision making process.
BOARD STRUCTURE AND COMPOSITION
• This should be organised in such a way as to ensure a balance of skills and diversity
(including experience and gender) without compromising competence, independence and
integrity.
• It is not advisable for a director to be on several Boards although it is not prohibited,
there should be disclosure- reason effectiveness.
CRITERIA FOR THE APPOINTMENT OF THE INED
• The criteria for the appointment of the INED are broadly contained in S7.2 NCCG and
they include some of the following:
i. Should not hold more than 0.01% of the shares of the coy.
ii. Should not be a representative of a substantial shareholder of the coy.
iii. Should be in the employment of the company or group and should not have been within
the past 5 years.
iv. Not a close family member to a key decision maker of the coy auditor etc. (Brainstorming
on requirements)
CODES ON CORPORATE GOVERNANCE
• Essentially, the various codes of corporate governance were initiated to check the
recurrence of corporate financial failures otherwise known as corporate collapse.
CODE OF CORPORATE GOVERNANCE FOR FINANCIAL COMPANIES IN
NIGERIA (CCGFCN) 2019
• The code is made pursuant to the CBN Act and the BOFIA and aimed at encouraging
investment, access to finance (especially to SME’s) and growth of the economy it is not
only applicable to banks, but to all licensed Financial Companies as well.
• Some key provisions of the code concerning the BOD include the following:
i. Size and composition of the BOD- the minimum size is 5 while the maximum size is
9 and more than 50% of them should be NED’s.
ii. It limits the number of family members that can be on the Board to 2.
iii. There must be one INED on the Board that has no relationship with coy or any
subsidiary, someone completely dethatched from the coy.
iv. At least 2 members of the BOD shall be experienced in Banking.
• The following provision relate to shareholders of the coy:
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i. Right to receive information on a timely and regular basis from the FC, e.g., in
newsletters, websites and other media in addition to the General Meetings.
ii. Dealing with the Shareholders Association shall be in strict compliance with the Code
of Conduct for Shareholders Association issued by SEC.
HIGHLIGHTS OF OTHER PROVISIONS IN THE CODE
• Rights and duties of stakeholders are entrenched.
• Prevention of insider from insider trading and other unethical practices.
• In the event of malpractices in the FC stakeholders are to comply with the Guidelines for
Whistle Blowing for Banks and other Financial
• Institutions in Nigeria for raising alarms.
• Stakeholders also include customers.
• Emphasizes good corporate governance for stakeholders including the host community.
• Provisions on disclosure and transparency.
• Auditing and reporting to CBN on an annual basis.
• Semi-annual report on compliance with the code to be filed with the CBN.
• Non-compliance is sanctioned under S64 of BOFIA.
HIGHLIGHTS OF THE CCG FOR BANKS AND DISCOUNT HOUSES
1. The Board shall act in the best interest of the bank’s employees and other stakeholders
(employees are therefore recognized as stakeholders).
2. There must be in place a succession plan for the CEO, ED’s and other top management
staff.
3. The size of the Board should be between 5 and 20.
4. Banks shall have 2 INED’s while discount houses shall have 1 INED.
5. Not more than 2 members of the same extended family shall be on the Board at the
same time.
6. No 2 members of the same extended family shall hold the positions of CEO and
Chairman at the same time.
7. NED’s can only serve for a maximum of 3 terms of 4 years each only.
8. The maximum term for a CEO is 10 years which may be broken into two tenures of
5years each.
9. No director can serve as a member of the Board of the Bank and a holding company
within the group at the same time.
10. The remuneration of the ED’s is determined by a committee constituted of only NED’s
11. Other remuneration committees are to be constituted by NED’s alone.
12. The Chairman shall not be a member of any Board Committee.
WEEK 10 ASSIGNMENT
Tantaloom (Nigeria) Plc was incorporated in October 2018. Later, it was as a listed public
company. Since incorporation however, it is yet to hold an AGM (Annual General Meeting) or
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even a statutory meeting. As contained in the Memorandum of Association, the objects of the
company are as follows: Haulage, Warehousing, production of palm kernel cake (PKC), Palm
Kernel Oil (PKO) and Palm Kernel Sludge (PKS).
Led by Mr. Onyemere Onuku, the Chairman and Chief Executive Officer, the company has not
kept a proper record of its substantial shareholders. There is also no indication that an internal
audit function has been established, even though an annual report is ready to be filed on behalf of
the company.
As a result, many shareholders are aggrieved with the way the affairs of the company is being
managed by the four-man Board of the company. Some have also argued that the family ties
between Mr. and Mrs. Jaiye Owopo, makes them ineligible to serve on the Board of Tantaloom
(Nigeria) Plc.
Answer the following questions:
1. List the codes of corporate governance applicable to the company and the issuing
authority for each code.
2. What are the applicable laws on corporate governance in the present circumstance?
3. Assuming that Tantaloom (Nigeria) Plc is an insurance company, what additional laws on
corporate governance will apply?
4. Comment on the following:
a. The absence of the internal audit function in the company; and
b. The relevant time frame for holding the statutory meeting of the company.
5. What would be your answer in respect of the following matters:
a. The propriety or otherwise, that Mr. and Mrs. JaiyeOwopo are ineligible to serve on
the company’s Board; and
b. The composition of the entire Board of Tantaloom (Nigeria) Plc.
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CORPORATE GOVERNANCE (2): OFFICERS OF COMPANY-

(DIRECTORS AND SECRETARY)
STATUTORY FORMS
For Appointment/Removal of Directors
• Form CAC 7: Appointment of Director
• Form CAC 7A: Notice of vacation of office/ Removal/ Resignation of a director
• Form CAC 7B: Notice of change in Particulars of a director
For Appointment/Removal of Secretary
• Form CAC 8: Appointment of Secretary
• Form CAC 8A: Notice of Removal of Secretary
• Form CAC 8B: Notice of change in particulars of Secretary
ORGANS OF CORPORATE ADMINISTRATION (CAP 5 CAMA 2020)
It is human reps of an artificial person that run its affairs. CAMA 2020 is a must.
Bolton (Engineering) Co Ltd v Graham and Sons Ltd: Per LORD DENNING "A company
may in many ways be likened to a human body. It has a brain and nerve centre which controls
what it does. It also has hands which hold the tools and act in accordance with directions from
the centre. Some of the people in the company are mere servants and agents who are nothing
more than hands to do the work and cannot be said to represent the mind or will. Others are
directors and managers who represent the directing mind and will of the company, and control
what it does. The state of mind of these managers is the state of mind of the company and is
treated by the law as such."
Lord Haldane in St Lennards Carrying Co v Asiatic Petroleum Ltd “a corporation is
abstraction. It has no mind of its own any more than it has a body of its own, its active and
directing will must subsequently be sought in the person of somebody who for some purposes
may be called an agent, but who is really the directing mind and will of the corporation, the very
ego and centre of the personality of the corporation.”
It is not possible for the company to rep itself, it must be by human beings. You have
i. Directors (in general board of directors)
ii. Members (members in general meeting)
iii. Officers (directors, secretaries)
iv. Agents
But how do they rank? Sections 87, 88, 89, 90
There are two types of actors:
1. Primary actors
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2. Secondary actors
The latter are officers and agents s87(1) but the former are MIGM and BOD (and MD by virtue
of s89 which used the three in the same pedestrian). The primary can also act through the
secondary.
Division of powers between members in general meeting and board of directors.
87. (1) A company shall act through its members in general meeting or its board of directors
or through officers or agents appointed by, or under authority derived from, the members
in general meeting or the board of directors.
There are two main organs identified here which are members in general meeting and board
of directors and the law also recognises that they can also allocate such powers to agents to
act on their behalf. NB: it must be BOARD OF DIRECTORS and MEMBERS IN GEENRAL
MEETING and not otherwise as the law clearly states. The purport of this provision is that the
other two organs (officers or agents) cannot act until they derive the authority from either of the
Board of Directors or Members in General Meeting.
But how do the powers function? How do they relate?
On how and what powers are exercised by the primary actors, it is in s87(2) but while drafting
the AOA, regard must be had to s723 as the Act supersedes where there’s inconsistency.
S87(2): Subject to the provisions of this Act, the respective powers of the members in general
meeting and the board of directors shall be determined by the company’s articles.
There are two instruments that determine the allocation of powers and functions to the Board of
Directors and Members in General Meeting, which are the Act and AOA (subject to the
provisions of the Act). If the two conflicts, it is section 723 that will apply and the Act will take
precedent.
(3) Except as otherwise provided in the company’s articles, the business of the company shall
be managed by the board of directors who may exercise all such powers of the company as are
not by this Act or the articles required to be exercised by the members in general meeting.
(4) Unless the articles otherwise provide, the board of directors, when acting within the powers
conferred upon them by this Act or the articles, is not bound to obey the directions or
instructions of the members in general meeting provided that the directors acted in good faith
and with due diligence.
(5) Notwithstanding the provisions of subsection (3), the members in general meeting may—
This subsection seeks to be taking away from subsection 3 but it has stringent conditions
(a) act in any matter if the members of the board of directors are disqualified or unable to act
because of a deadlock on the board or otherwise; what can make the board to be disqualified?
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Deadlock is for example when there is a tie in vote among them and they cannot move forward.
Then the “otherwise” means other similar instances. Section 291, Failure to have a quorum:
where the board is unable to act because a quorum cannot be formed, the general meeting may
act in place of the board and where a committee is unable to act because a quorum cannot be
formed, the board may act in place of the committee.
(b) institute legal proceedings in the name and on behalf of the company, if the board of
directors refuse or neglect to do so; you must note that this will only be the case wherein the
AOA so provides. See s346 for derivative action.
(c) ratify or confirm any action taken by the board of directors; or It is only when the board has
acted where it doesn’t have the power so to do that there will be need for ratification and for
confirmation, why confirm what someone already has the power to do?
(d) make recommendations to the board of directors regarding action to be taken by the
board. While making recommendations may be weak as the board can ignore (subsection 4
above) but the MIGM can also remove the board, so it is in their best interest to obey the MIGM
as they also have the power to remove them.
(6) No alteration of the articles invalidates any prior act of the board of directors which
would have been valid if that alteration had not been made. This clearly clears the air with
regards to alteration of AOA under section 53(2), also because 53(2) stated “subject to the
provisions of this Act”.
DIRECTORS
WHO IS A DIRECTOR?
In Re Marseilles Extension Railway, 7Ch. 161, Mellish L.J. defines a company director thus,
“A director is simply a person appointed to act as one of a board, with power to bind the
company when acting as a board – but having otherwise no power to bind them.”
S269 defines directors in terms of what they do. Also, see the definition in s868.
S868 "director" includes any person occupying the position of director by whatever name
called; and includes any person in accordance with whose directions or instructions the directors
of the company are accustomed to act
S269. Meaning of Directors. (1) A Director of a company registered under this Act is a person
duly appointed by the company to direct and manage the business of the company.
S270. Shadow director.
(1) Without prejudice to the provisions of sections 269 and 276 of this Act, and for the purposes
of sections 279, 301 and 307 of this Act, “director” shall include any person on whose
instructions and directions the Directors are accustomed to act.
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Bolton (Engineering) Co Ltd v Graham and Sons Ltd: Per LORD DENNING "A company
may in many ways be likened to a human body. It has a brain and nerve centre which controls
what it does. It also has hands which hold the tools and act in accordance with directions from
the centre. Some of the people in the company are mere servants and agents who are nothing
more than hands to do the work and cannot be said to represent the mind or will. Others are
directors and managers who represent the directing mind and will of the company, and control
what it does. The state of mind of these managers is the state of mind of the company and is
treated by the law as such."
Lord Haldane in St Lennards Carrying Co v Asiatic Petroleum Ltd “a corporation is
abstraction. It has no mind of its own any more than it has a body of its own, its active and
directing will must subsequently be sought in the person of somebody who for some purposes
may be called an agent, but who is really the directing mind and will of the corporation, the very
ego and centre of the personality of the corporation.”
PRESUMPTION OF DUE APPOINTMENT AND LIABILITY FOR HOLDING OUT AS
A DIRECTOR
Section 269 (1) A Director of a company registered under this Act is a person duly appointed by
the company to direct and manage the business of the company.
(2) There is a rebuttable presumption in favour of any person dealing with the company that
all persons who are described by the company as directors, whether as executive or otherwise, is
duly appointed.
(3) Where a person not duly appointed acts or holds himself out as a director, he commits an
offence and is liable on conviction to imprisonment for a term of two years or a fine as the
Court deems fit for each day he so acts or holds out himself as a director or both and shall be
restrained by the company.
(4) If it is the company that holds him out as a director, it is liable to a fine in such amount as
the Commission shall specify in its regulations for each day it holds him out, and he and the
company may be restrained by any member from so acting until he is duly appointed.
LEGAL STATUS OF DIRECTORS
1. Directors as Trustees: Directors occupy a position of trust. Hence, they are accountable
for all company’s money and properties that is entrusted to them. They are to exercise
their powers in the interest of the company rather than gratifying their personal interest –
section 309 (1) provides that “Directors are trustees of the company’s money, properties
and their powers and as such shall account for all the money over which they exercise
control, refund any money improperly paid away, and shall exercise their powers
honestly in the interest of the company and all the shareholders, and not in their own or
sectional interests.”
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2. Directors as agents: section 309(2) “A director may, when acting within his authority
and the powers of the company, be regarded as agents of the company under Part III of
this Act.”
NUMBER OF DIRECTORS
• Except for small companies, S271 (1) CAMA puts the minimum number of directors,
upon registration to be two (2)
• Except for small companies, if the number falls below 2, the company must fill that
vacancy within one month of such development or else the company shall not carry-
on business after the expiration of the one-month period, as specified in S271(2)
CAMA
• Any director acting without filling the vacancy after 60 days shall be personally
liable for all the debts incurred by the company within that period S71(3) CAMA
TYPES OF DIRECTORS
Three Types of Directors
There are basically three types of directors but with several subcategories especially for de-jure
director.
1. De-facto Director
2. Shadow Director
3. De-jure Director. This may be further subdivided into:
i. First directors
ii. Subsequent directors
iii. Executive directors
iv. Non-executive directors
v. Independent executive directors
vi. Independent non-executive directors
vii. Life directors
viii. Alternate directors
ix. Assignee directors
DE-FACTO DIRECTOR:
This is the type of director who holds himself out to act as a director without necessarily being
legally appointed as such. However, he still acts in that capacity as a director by performing the
kind of functions that someone in the position of a director will ordinarily perform.
S868 provides that "director" includes any person occupying the position of director by
whatever name called; and includes any person in accordance with whose directions or
instructions the directors of the company are accustomed to act
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From this provision, there is no mention of being duly or legally appointed but simply that “he
occupies the position of director by whatever name called.
In the case of Re Hydrodam (Corby) Ltd, Millett J held: “I would interpose at this point by
observing that in my judgment an allegation that a defendant acted as de facto or shadow
director, without distinguishing between the two, is embarrassing. It suggests – and counsel’s
submissions to me support the inference – that the liquidator takes the view that de facto or
shadow directors are very similar, that their roles overlap, and that it may not be possible to
determine in any given case whether a particular person was a de facto or a shadow director. I
do not accept that at all. The terms do not overlap. They are alternatives, and in most and
perhaps all cases are mutually exclusive.
A de facto director is a person who assumes to act as a director. He is held out as a director by
the company, and claims and purports to be a director, although never actually or validly
appointed as such. To establish that a person was a de facto director of a company it is
necessary to plead and prove that he undertook functions in relation to the company which could
properly be discharged only by a director. It is not sufficient to show that he was concerned in
the management of the company’s affairs or undertook tasks in relation to its business which can
properly be performed by a manager below board level.
A de facto director, I repeat, is one who claims to act and purports to act as director, although
not validly appointed as such.
SHADOW DIRECTOR
This is the type of director that lurks in the background but dictates the tune and the directors of
the company dance to it. The directors of the company are accustomed to follow his directions
and instructions. He does not hold himself out to be a director but rather hides himself, despite
this, his instructions and directions are still followed by the directors of the company.
S270 (1) on shadow director, provides that; without prejudice to the provisions of sections 269
and 276 of this Act, and for the purposes of sections 279, 301 and 307 of this Act, “director”
shall include any person on whose instructions and directions the Directors are accustomed to
act.
Similarly, shadow director is also well captured in latter part of the definition in S868 "director"
includes any person occupying the position of director by whatever name called; and includes
any person in accordance with whose directions or instructions the directors of the
company are accustomed to act,
However, where a person gives advice in professional capacity, even if the directors are
accustomed to act or follow such directions and instructions, such as person will not be regarded
as a shadow director.
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In Holland v HM RC, Lord Hope explained that “In relation to a company, ‘shadow director’
means a person in accordance with whose directions or instructions the directors of the company
are accustomed to act. However, a person is not deemed a shadow director by reason only that
the directors act on advice given by him in a professional capacity.”
DE-JURE DIRECTOR
These types of directors are those who are legally and duly appointed whether at incorporation as
first directors or subsequently as subsequent director, whatever name they are called, provided
that they occupy the position of directors and are duly and legally appointed, they are de-jure
directors.
S269(1) on the meaning of directors provides that, “a director of a company registered under this
Act is a person duly appointed by the company to direct and manage the business of the
company.”
• Types of De-jure Directors: (this is not sacrosanct as any of those may still fall under
de-facto director)
1. First directors: These are the directors at the time of incorporation of a company who
may be appointed by the subscribers or a majority of the subscribers or provided in the
articles of the company.
• S272 provides that the number of directors and the names of the first directors shall be
determined in writing by the subscribers of the memorandum of association or a majority
of them or the directors may be named in the articles.
2. Subsequent directors:
• These are the directors appointed after the company has been incorporated and
become a going concern. This is usually done in the AGM wherein such directors
may be re-elected or rejected.
• S273(1) provides that the members at the annual general meeting may re-elect or
reject directors and appoint new ones.
• NB: where all the directors die at a time: S273(2) provides that; In the event of all
the directors and shareholders dying, any of the personal representatives apply to the
Court for an order to convene a meeting of all the personal representatives of the
shareholders entitled to attend and vote at a general meeting to appoint new directors
to manage the company, and if they fail to convene a meeting, the creditors, if any,
may do so.
• NB: subsequent directors may also be appointed to fill causal vacancy created in the
case of death, removal, resignation or retirement of directors. S274(1) provides that
the Board of directors may appoint new directors to fill any casual vacancy arising
out of death, resignation, retirement or removal.
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3. Executive directors are involved in the day to day running of the company and are
normally paid salaries Longe v FBN
• An executive director holds his office as an alter ego as well as an employee of the
company and is entitled to the payment of salary.
• The MD/ CEO and all other directors of the company who are also employees and are
entitled to the payment of salary are therefore subsumed under the platform of
executive directors
• Officers holding service contracts of the company appointed to the board.
• Executive directors are responsible for the day-to-day running of the company and
their powers are usually circumscribed by the articles.
• He is entitled to be remunerated.
4. Non-executive directors: appointed pursuant to the CAMA and not regular salaried
employees of the company.
• In public companies, the Chairman of the BOD is a non-executive director
• S269(2) of CAMA also stipulates that a person described as director of the company
may be appointed in the capacity of an executive director or a non-executive director
• A non-executive director is a director that attends board of directors meeting and is
not entitled to be remunerated apart from re-imbursement of his out-of-pocket
expenses in attending company’s matters.
• But non-executive directors can be remunerated where the articles of association of
the company provides for it.
5. Independent Directors:
• S275(1) provides that a public company shall have at least three independent
directors.
• S275(3) in this section, “independent director” means a director of the company who,
or whose relatives either separately or together with him or each other, during the
two years preceding the time in question—
o was not an employee of the company;
o did not—
▪ make to or receive from the company payments of more than N20m,
or
▪ own more than a 30% share or other ownership interest, directly or
indirectly, in an entity that made to or received from the company
payments of more than N20m or act as a partner, director or officer of
a partnership or company that made to or received from the company
payments of more than such amount;
o did not own directly or indirectly more than 30% of the shares of any type
or class of the company, and
o was not engaged directly or indirectly as an auditor for the company
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6. Life Director:
• By virtue of S281, a person may be appointed a director for life, usually in a private
company, but such person shall be removable under S288 by an ordinary resolution.
• Being a life director simply means he is not subject to retirement by rotation S281.
7. Retiring Directors S284(2):

• Their re-appointment is one of the ordinary businesses at an annual general meeting.
Where a director presents himself for re-election, a record of his attendance at the
meeting of the board during the preceding one year must be made available to the
members at the general meeting where he is to be re-elected.
8. Alternate Director:
• Where the articles of the company permits, a substantive director may appoint an
alternate director to act in his place during his absence. Such temporary delegation of
functions subsist pending the revocation of power by the appointing authority.
• In Baffa v Odili the court made a distinction between a director under S269 and an
alternate director is that the latter is appointed by a substantive director where so
enabled under the AOA of the company and the alternated director sits in for his
substantive director when the substantive director cannot attend the meeting.
• Also, S11(1)(b) Interpretation Act on the fact that he who appoints can also remove.
9. Assignee director:
• This is a director that has been permanently assigned to manage particular activities
of the company e.g., a director of operations. Flowing from the position above in
Baffa v Odili, the difference is that, the alternate is on temporary while assignee is on
permanent basis.
10. Nominee Director:

• Where a company is a director in another company it will necessarily appoint a
natural person to represent it on the board of the other company. Such a person duly
appointed is known as a nominee director S283(e).
MANAGING DIRECTOR
S88(b) empowers the BOD to appoint MD and can delegate part or all its powers to him. S88.
Unless otherwise provided in this Act or in the articles, the board of directors may— (b)
from time to time, appoint one or more of its members to the office of managing director and
may delegate all or any of its powers to such managing director.
S89 uses MIGM, BOD and MD on the same pedestrian, meaning they are all at the same level
and their acts bind the company S89: Acts of the general meeting, board of directors, or of
managing directors. Any act of the members in general meeting, the board of directors, or a
managing director while carrying on in the usual way the business of the company, shall be
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treated as the act of the company itself and the company is criminally and civilly liable to the
same extent as if it were a natural person.
RESPONSIBILITIES OF THE MANAGING DIRECTOR/ CEO
1. Day-to-day management of the Company;
2. Proper implementation and achievement of the Company’s
3. Strategic imperatives to ensure the sustainable development and growth of the Company;
4. Ensuring prudent management of the Company’s finances and other resources;
5. Providing the Board with complete, accurate and timely
6. Information and documentation to enable it make sound decisions;
7. Promoting and protecting the interests of the Company; and
8. Being the Company's leading representative in its dealings with stakeholders
APPOINTMENT OF DIRECTORS
This will be discussed under the following headings:
a) Appointment of fist directors
b) Subsequent directors
(a) APPOINTMENT OF FIRST DIRECTORS S272
• The number of directors and the names of the first directors shall be determined in
writing by the subscribers of the memorandum of association or a majority of them or the
directors may be named in the articles S272 CAMA
• The names of the first directors of the company, at the time of registration are usually
filled in the space provided for the particulars of first directors in the pre-incorporation
forms.
• This is appointed by all or majority of the subscribers or the name of the directors will be
provided in the AOA of the company.
Sample Draft:
THAT Chris Ozo Agbata of 15 Edupal Drive, Ikoyi Lagos and Theo Uguru of
16 Robinson Close, Victoria Island, Lagos, being adults of less than 70 years of
age, having being nominated, are hereby appointed as first Directors of
EDUPAL NIGERIA LTD, by the Subscribers to the Memorandum and Articles
of Association of the within named company.
(b) APPOINTMENT OF SUBSEQUENT DIRECTORS S273(1).

• The members at the annual general meeting may re-elect or reject directors and appoint
new ones.
• Procedure:
1. Recommendation by directors
2. Nomination by member
• notice in writing by member & person to be elected 3 – 21days before meeting.
184
• note- retiring directors exempted.

• Secretary convenes a general meeting of the company-21days Notice
• Pass an Ordinary Resolution
• Fill Form CAC 7B- notice of change of directors etc.
• Apply to CAC with relevant documents within 14 days.
• Alter the register of directors & secretary.
OTHER MODES OF APPOINTMENT OF SUBSEQUENT DIRECTORS INCLUDE:
1. APPOINTMENT BY A PERSON EMPOWERED BY THE MEMART S46(3)
• Where the memorandum or articles empower any person to appoint or remove any
director or other officer of the company, such power shall be enforceable by that person
notwithstanding that he is not a member or officer of the company.
2. APPOINTMENT OF THE MD S88(b), Yalaju’s Case, Longe v FBN

• Articles
• Resolution of the Board
• Confirmation by the General meeting.
• Note-Confirmation by the AGM is not required where he is appointed as a first director.
3. APPOINTMENT OF EDs S88(b), Longe v FBN, Iwuchukwu v Nwizu.

• Not directly provided in CAMA. Inference may be drawn from
• Articles
• Board Resolution, confirmation by the General Meeting.
4. APPOINTMENT TO FILL UP WHEN LESS THAN TWO S271(2)

• Any company whose number of directors falls below two shall, within one month of its
so falling, appoint new directors and shall not carry-on business after the expiration of
one month, unless such new directors are appointed.
5. APPOINTMENT BY PERSONAL REPRESENTATIVES/CREDITORS S273(2)

• If all the shareholders and directors die, any of the personal reps of the shareholders may
apply to the court to convene a meeting of all the PRs of those shareholders who were
qualified to attend GM and vote, and vote to appoint new directors, but their failure to do
so, the creditor(s) of the company may do so.
• Conditions:
o All the shareholders/directors have to die
o Any PR of the shareholders may apply to court for an order to convene a GM
o It is a meeting of all the PRs of shareholders hitherto entitled to attend and vote at
GMs
o Th GM is to appoint new directors to run the business of the company
o If the PRs fail to do so, then the creditors may take up the responsibility
185
6. APPOINTMENT BY CASUAL VACANCY S274 (1) & (2).

• Reason: death, retirement, resignation or removal of a director.
• Appointment by Resolution of the Board
• Must be approved at the next Annual General Meeting.
• If not approved appointment lapses
Draft:
RC:151025
RESOLUTION OF THE BOARD FILLING CAUSAL VACANCY ON THE BOARD
PURSUANT TO SECTION 274(1) OF THE COMPANIES AND ALLIED-MATTERS ACT,
2020
“That Mr. Chris Ozo Agbata of 15 Edupal Drive, Ikoyi, Lagos, be appointed a director of the
company until the next annual general meeting in the place of Mr Theo Uguru,
retired/deceased/resigned.”
……………… …………………
Director Director
NB: drafting of other resolutions follow same format, the relevant sections and purpose of the
resolutions apply mutatis mutandis.
7. APPOINTMENT BY DIRECTORS SUBJECT TO AOA S274(3).
• The directors may increase the number of directors if it does not exceed the maximum
allowed by the articles,
• But the GM may increase or reduce the number of directors generally
• The GM may also determine in what rotation the directors shall retire, but that such
reduction shall not invalidate any prior act of the removed director.
8. APPOINTMENT OF DIRECTOR FOR LIFE S281

• Although it would appear so but position not sacrosanct as removal is still subject to
S288.
• Applicable to private & public companies.
• Mode of appointment is usually by the Articles U.O.O. Nigeria Plc v Okafor & Ors,
per Peter-Odili JSC.
186
• Advantage:
o Means of exercising control in the company
o Not subject to the rule on rotation.
9. APPOINTMENT TO REPLACE A REMOVED DIRECTOR S288(5)

• A person may be appointed to replace and competed the tenure of a removed director
• Such a person only completes the term of the removed director
• His term is calculated to have started on the date the person he is placed was appointed
LIABILITY OF A PERSON WHERE NOT DULY APPOINTED S276
• Where a person not duly appointed as a director, acts as such on behalf of the company,
his act does not bind the company and he is personally liable for such action
• But where it is the company which holds him out as director, the company is bound by
his acts.
• Thus, unless the company holds him out as a director, if he so acts, he is on his own.
SHARE QUALIFICATION OF DIRECTORS S277
• The articles of a company may prescribe share qualification as the condition for the
appointment of a person as a director but if not so prescribed, none shall be required
S277(1).
• Where such is prescribed every director has 2 months to acquire such shares upon
appointment S277(2).
• Failure to obtain the share qualification within 2 months, his office is vacated and he
ceases to hold office as director S277(3).
• He is permanently disqualified from re-appointment until he obtains the share
qualification S277(4).
• If he continues to carry-on directorship after 2 months with obtaining the share
qualification, the he is liable to penalty of fine as maybe prescribed by regulation
S277(5).
AGE OF DIRECTORS S282
• Private & Public Co.- 18yrs and above
• Public co to appoint someone who is 70 years and above:
i. Special notice is required of any resolution appointing or approving the appointment
ii. Such notice to the members must state the material fact of the age of the director
DISQUALIFICATION S283
The following persons shall be disqualified from being director—
(a) an infant, that is, a person under the age of 18 years;
(b) a lunatic or person of unsound mind;
(c) a person suspended or removed under S288
187
(d) a person disqualified under S279 (insolvency), S280 (fraud), S284 and
(e) a corporation other than its representative appointed to the board for a given term.
VACATION OF OFFICE A DIRECTOR, S 284(1)

A person occupying the office of a director shall vacate the office in one of the following
circumstances:
1. Failure to obtain share qualification pursuant to S277
2. Becomes bankrupt or makes any arrangement or composition with his creditors
3. Becomes prohibited from being a director by reason of any order made under SS280-281
4. Becomes of unsound mind
5. Resigns his office by notice in writing to the company
ROTATION OF DIRECTORS S285
• Unless provided in the AOA, all the directors shall retire at the first AGM
• At the AGM in every subsequent year 1/3 of the directors or if their number is not three
or a multiple of three, then the number nearest 1/3 shall retire from office.
• Determination of who to retire is by seniority of appointment date and if appointed on
same date, then it is determined by lot.
• The company may re-elect the director if he offers himself for re-election of replace him
• Except for a retiring director being re-elected, for any new director to be elected, he must
have left at the head office of the company a letter signed by a member entitled to attend
and vote at AGM nominating him and his own letter of acceptance.
• Such letters must be left at the head-office between 3 – 21 days before the AGM.
Summary
• 1st AGM – all retire
• Subsequent AGM- 1/3 retire
• Those to retire?
o Longest in office
o Agreement
o Lot if appointed on same day
• NB: The Articles may exempt some directors from being subject to the rule e.g.,
executive directors, MD, directors for life also not subject to retirement by rotation.
• Re-election, retiring director deemed re-elected, except-
o director did not offer himself
o members resolved not to fill that vacancy
o lost resolution to re-elect.
VALIDITY OF ACTS OF DIRECTORS S286
• The acts of a director, manager, or secretary are valid notwithstanding any defect that
may afterwards be discovered in his appointment or qualification.
188
• But compare with S276 above, where it is the officer who holds himself out, although the
act will be valid but he would be personally liable.
• Albeit actual knowledge vitiates any claims of any person against the company SS92 &
93(d)(ii), British Roya Bank v Torquand, Onwuka v Taymani.
MODE OF VOTING ON APPOINTMENT S287
• private company- single resolution for all directors.
• public company- separate resolution each director.
• unless a resolution that it shall be done has been agreed at the meeting without any vote
against it (unanimous resolution).
• a motion for approving a person’s appointment or for nominating a person for
appointment is treated as a motion for his appointment.
REMOVAL OF DIRECTORS S288.
(1) A company may by ordinary resolution remove a director before the expiration of his period
of office, notwithstanding anything in its articles or in any agreement between the company and
him.
(2) A special notice is required of any resolution to remove a director under this section, or to
appoint some other person instead of a director so removed, at the meeting at which he is
removed, and on receipt of notice of an intended resolution to remove a director under this
section, the company shall immediately send a copy of the notice to the director concerned and
(whether or not he is a member of the company) and is entitled to be heard on the resolution at
the meeting.
(3) Where notice is given of an intended resolution to remove a director under this section and
the director concerned makes, with respect to it, representations in writing to the company (not
exceeding a reasonable length) and requests their notification to members of the company, the
company shall, unless the representations are received by it too late for it to do so—
(a) in any notice of the resolution given to members of the company, state the fact of the
representations having been made; and
(b) send a copy of the representations to every member of the company to whom notice of the
meeting is sent (whether before or after receipt of the representations by the company), and if a
copy of the representations is not sent as required in this section because it is received too late or
because of the company’s default, the director may (without prejudice to his right to be heard
orally) require that the representations are read out at the meeting:
Provided that copies of the representations need not be sent out and the representations need not
be read out at the meeting if, on the application either of the company or any other person who
claims to be aggrieved, the court is satisfied that the rights conferred by this section are being
abused to secure needless publicity for defamatory matter and the court may order the company’s
189
costs on an application under this section to be paid in whole or in part by the director,
notwithstanding that he is not a party to the application.
(4) A vacancy created by the removal of a director under this section, if not filled at the meeting
at which he is removed, may be filled as a casual vacancy.
(5) A person appointed director in place of a person removed under this section is treated, for the
purpose of determining the time at which he or any other director is to retire, as if he had become
director on the day on which the person in whose place he is appointed was last appointed a
director.
(6) Nothing in this section is taken as depriving a person removed under it of compensation or
damages payable to him in respect of the termination of his appointment as a director or of any
appointment terminating with that as director, or as derogating from any power to remove a
director which may exist apart from this section.
• The articles of association or directors service contract (if any) may spell out the manner
of removing directors, in absence of which recourse is made to the CAMA, U.O.O.
Nigeria Plc v Okafor & Ors, per Peter-Odili JSC, Longe v FBN, Oni v Cadbury,
Iwuchukwu v Nwizu, Omenka v Morison Ind. Plc.
• A director may be removed before the expiration of his tenure by an ordinary resolution,
regardless of the provisions of the article or agreement to the contrary S288(1).
• The articles or contract must not just state that a director can be removed, but it must state
HOW (procedure) before it will apply, if not, CAMA shall apply Longe v FBN per
Oguntade JSC.
• This is known as alternative removal scheme (ARS) provided in the last phrase of
S288(6) “Nothing in this section is taken as depriving a person removed under it of
compensation or damages payable to him in respect of the termination of his appointment
as a director or of any appointment terminating with that as director, or as derogating
from any power to remove a director which may exist apart from this section.”
• ARS is also provided for in S46(3).
PROCEDURE FOR REMOVAL OF A DIRECTOR
1. Check the articles for ARS or any agreement between the co and the director.
2. Special notice of 28 days is given to the company by the person who wants the director
removed
3. On the receipt of such a resolution to remove the intended director, the company sends a
copy to the director concerned and also issue a notice of meeting at least 21 days before
the date of the meeting.
4. Director may make written representation which shall be given to members attached to
the notice of the meeting sent to them.
5. Where such representation is received late by the company and it was not attached to the
notice, the director pursuant to his right to heard can make oral representations at the
meeting by having the representation read out at the meeting.
190
6. Director is allowed to put up a defence before members at a meeting.

7. However, such a defence will be denied if upon application to the court by a member or
an aggrieved party, the court is satisfied that the representation process is being abused to
secure needless publicity for defamatory matter and the court may order the company’s
costs on an application under this section to be paid in whole or in part by the director.
8. After (if he’s heard) hearing the director, the matter is put to vote and he stands removed
by an ordinary resolution.
9. Filing of returns to CAC.
10. Consequential amendment of register of directors, register of directors shareholding cards
letter heads etc., to reflect removal SS288; 304
• NB. A director cannot be removed by a written resolution because of the right he has to
make a representation before the resolution for his removal can be put to vote S288(2).
• A director may be removed and replaced by the same resolution in the same meeting, but
special notice of that fact must be contained in the special notice calling for the meeting
S288(2).
• No special procedure for the removal of a shadow director.
• A regulatory body may be empowered to remove a director e.g., the power of the CBN
Governor over the banks recently exercised in the removal of the director of FBN.
REMEDIES FOR WRONGFUL REMOVAL
1. Action for declaration of wrongful removal
2. Injunction against the company for continued removal
3. Damages for breach of contract S288(6)
4. Compensation S288(6)
THE PROCEEDINGS OF DIRECTORS
• The directors can decide when to hold other meetings but must hold the first meeting not
later than six months after incorporation S289(1).
• Unless the articles provide otherwise, any question arising at any meeting of the directors
is decided by a simple majority of votes, and in case of an equality of votes, the chairman
has a second or casting vote S289(2).
• The secretary on the requisition of a director shall, at any time summon a meeting of the
directors S289(3).
• The chairman presides over the board meeting, but in the event of his absence for 5
minutes, the directors can appoint one of their number to be the chairman of the meeting
S289(4).
• The directors can delegate their powers to the MD or a committee S289(5).
• In all the directors‘ meetings, each director is entitled to one vote S289(9).
WHO CAN REQUISITION THE MEETING OF DIRECTORS?
• A director may call a meeting
• The secretary on the requisition of a director
191
THE FOLLOWING ISSUES MAY COME UP AT THE FIRST MEETING OF

DIRECTORS:
1. Election of chairman
2. Appointment of the MD
3. Appointment of Secretary
4. Appointment of Bankers and Auditors
5. Adoption of common seal, if the use of seal is provided in the articles
6. Call-up of un-paid issued shares
7. Fixing of date for first AGM
QUORUM OF DIRECTORS S290
• Unless the articles provide otherwise, the quorum necessary for the transaction of the
business of directors are as follows:
• Where the company has no more than six directors: Two will constitute a quorum
• Where there are more than six directors: the quorum is 1/3 of the number of directors,
and where the number of directors is not a multiple of three, then the quorum is 1/3 to the
nearest number S290(1).
• Where a committee of directors is appointed by the board of directors, the board shall fix
its quorum, but where no quorum is fixed, the whole committee shall meet and act by a
majority S290(2).
FAILURE TO HAVE A QUORUM S291
• Where the board is unable to act because a quorum cannot be formed, the GM may act in
place of the board and where a committee is unable to act because a quorum cannot be
formed, the board may act in place of the committee
• GM in place of board
• Board in place of committee
NOTICE OF DIRECTORS MEETING S292
• Every director is entitled to a notice of the meeting S292(1)
• The 14 days’ notice shall be in writing unless provided in the articles S292(2)
• Failure to give notice as such invalidates the meeting S292(3)
• A director not in Nigeria is not entitled to notice except he left address of service in
Nigeria where the notice shall then be served unless the AOA provides S292(4).
REMUNERATION S293
• The remuneration of the directors is determined by GM and such remuneration is deemed
to accrue from day-to-day.
• The directors may also be paid travelling, hotel and other expenses properly incurred by
them in attending and returning from meetings of the business of the company.
192
• Where remuneration has been fixed by the articles, it is alterable only by a special
resolution.
• A co is not bound to pay remuneration, but where the co agrees to pay, the directors shall
be paid such remuneration out of the fund of the co.
• The amount of remuneration is a debt from the co so that if directors take office on the
basis of the articles, they shall be able to sue the co on account of the debt or prove it in
liquidation.
• A director who receives more money than he is entitled to, is guilty of misfeasance and is
accountable to the co for such money.
• The remunerations of directors is apportionable.
DUTIES OF DIRECTORS SS 305, 306, 308, 278
Directors are in fiduciary relationship with the company, all their duties therefore flow from the
fiduciary duty that they owe the company S305(1)
1. Utmost good faith: since directors are in a fiduciary relationship with the co, they must
always observe utmost good faith towards the company in any transaction with it or on its
behalf S305(1)
2. Duty to act in the best interest of the company: a director must separate his personal
interest from the interest of the company. The test is subjective which depends on each
circumstance, but the director must have displayed faithfulness, diligence, carefulness
and ordinary skill S305(3).
3. Duty not to fetter discretion: discretion will be fettered when for example the director
uses the right to vote for a collateral reason S305(6).
4. Duty to avoid conflict of interest: personal interest must not conflict with duties as a
director (especially in making secret profit) S306 (1) and (2).
5. Duty to account: a director is accountable to the company for any secret profit made by
him or any benefit derived by him S306(3)
6. Duty not o misuse corporate information: this duty still binds him even after resigning as
a director and can be bound by injunction to not misuse the information S306(5)
7. Duty of care and skill: simply means a director must not be negligent in the discharge of
his duties S308 (1).
8. Duty to give notice: notice of interest in contracts, loans and/or shareholding.
9. Duty to disclose age and Multiple directorships in case of public company:
i. Age: Any person who is appointed or to his knowledge proposed to be appointed
director of a public company and who is 70 or more years old shall disclose this
fact to the members at the general meeting S278(1)
ii. Multiple Directorship: Any person who its proposed to be appointed a director
of a public company shall disclose any position he holds as a director in any other
public company at “the meeting in which he 1s proposed for appointment as a
director S278(2).
193
REMEDIES FOR BREACH OF DIRECTORS DUTIES

The following remedies are available to the company against a director for breach of duties:
1. Accounts of profits
2. Rescission of contracts
3. Summary termination of appointment with the company/dismissal of the director
4. Restoration of the company’s property
5. Damages/compensation
6. Injunction and/or declaration
REQUIREMENTS FOR THE OFFICE OF THE SECRETARY S330
• Except for a small company, it is mandatory for every other company to have a secretary
S330(1)
• There is no strict professional requirement for a secretary of a private company. The
directors must only satisfy themselves that such person has sufficient knowledge and
experience.
• Public companies have only 6 months to appoint secretaries or be liable to fine as may
be prescribed by CAC.
QUALIFICATIONS OF THE SECRETARY OF A PUBLIC COMPANY S332
For a public company the following are the qualification for the office of a secretary:
1. Member of chartered institute of secretaries and administrators.
2. Legal practitioner within the meaning of LPA.
3. A member of any professional body of accountants established from time to time by an
Act of the National Assembly
4. any person who has held the office of the secretary of a public co for at least three years
of the five years immediately preceding his appointment in a public company; or
5. A body corporate or firm consisting of members who possess any of the qualifications
specified above
APPOINTMENT OF FIRST SECRETARY
• PRIVATE/PUBLIC
o By the subscribers to the Memorandum & Articles of Association
o Fill relevant portion of Form CAC 8 Application for Registration of a Company.
o After Incorporation- Register the name in the Register of Directors and
Secretaries.
APPOINTMENT OF SUBSEQUENT SECRETARY
• Private / Public Company
o Company to give 14 days’ Notice of Board meeting
o Pass Resolution appointing the Secretary
o Fill Form CAC 8 removing secretary.
194
o File with CAC within 14days with

o Attach necessary documents.
o Alter Register of Directors and Secretary Accordingly.
REMOVAL OF SECRETARY
• PRIVATE COMPANY
o Company to give 14days Notice of Board meeting
o Pass Resolution removing the Secretary
o Fill Form CAC 8 removing secretary.
o File with CAC within 14days with
o Attach necessary documents.
o Alter Register of Directors and Secretary Accordingly.
APPOINTMENT AND REMOVAL OF SECRETARIES S333
• PUBLIC COMPANY
• A secretary is appointment and removed by the directors.
• For a public company the procedure for removal is spelt out as follows:
1. BOD shall give a notice to the secretary stating the intention to remove him
2. The grounds for the removal
3. Give him not less than 7 working days to make a defence
4. Option to resign within the period of 7 working days.
• In the event where the secretary does not make a defence or resign, the BOD may remove
him and make a report at the next GM.
• If the sec. without resigning makes a defence, but the BOD deems it insufficient, if the
ground is fraud or serious misconduct, the BOD may remove him and report at the next
GM.
• For other grounds, the BOD may suspend and report to the next GM for approval
• Where the sec. is removed with the approval of the GM, the removal may take effect
from such time as the GM may determine.
195
Draft:
RC:151025
07035406532
([email protected])
Our Ref: 2304______________________________________ Your Ref: _______________
15th August, 2022
Mr Chris Ozo Agbata,
15 Edupal Drive,
Ikoyi, Lagos.
Sir,
NOTICE OF BORAD OF DIRECTORS’ INTENTION TO REMOVE YOU AS THE
COMPANY SECRETARY PURSUANT TO SECTION 288 OF THE COMPANIES AND
ALLIEDMATTERS ACT, 2020
You are hereby given Notice of the Board’s intention to remove you as the secretary of the
company for failing to file statutory returns to the Corporate Affairs Commission for a period of
six months now.
You are given a period of seven (7) working days to make your defence or alternatively to put in
a Notice of your resignation to the Board.
Thank you.
Yours faithfully,
________________
Chairman
By Order of the Board
NB: other notices apply mutatis mutandis.
DUTIES OF THE SECRETARY S335 CAMA

Fiduciary Duties? A Secretary has no fiduciary duties to the company but where he performs
administrative duties he becomes an agent of the company and therefore a fiduciary.
The general duties include:
1. Attendance at all meetings of the co’s BOD and committees and rendering secretarial
services.
2. Maintaining registers and records required to be maintained under the CAMA
196
3. Rendering proper returns and notifications to the CAC. (Note the various returns)
4. Carrying out other administrative activities directed by the company or directors.
5. Can only exercise powers of the board with authority of the board.
RETURNS TO BE MADE BY COMPANY SECRETARY
1. Court orders e.g., S51(7)(b); S65(3); S115(4).
2. Notice of change of particulars of directors or secretaries SS 321(1) & 339.
3. Registration of charges S222
4. Registration of certain resolutions S262
5. Annual Returns S421. Note concessions granted to small companies, S419.
6. Return of allotment S154
7. Returns on the alteration of share capital SS 126, 127, 131, 134
8. Statutory Reports S235(6)
9. Statement by Banks, Insurance Companies, etc. S733
RETURNS TO BE MADE BY A COMPANY AND THE PERIOD WITHIN WHICH:
1. Final return of accounts of co being wound up by liquidators within 7 days of meeting of
members and creditors.
2. Notice of appointment of liquidator within 14 days of appointment
3. Notice of change of director within 14 days of such change
4. Notice of change of secretary within 14 days of such change
5. Notice of removal of an auditor within 14 days of passing resolution.
6. Order of court sanctioning reduction of share capital within 15 days.
7. Special resolution within 15 days of passing same
8. Notice of increase of shares within 15 days.
9. Returns of allotment within one month of making allotment.
10. Annual returns within 42 days of holding AGM
11. Registration of charges within 90 days of its creation
RESOLUTIONS TO BE FORWARDED TO CAC S262(4)
The following resolutions are enumerated to be sent to CAC within 15 days of passing the
resolution for registration.
1. Special resolution
2. Unanimous resolution on issue which requires special resolution
3. Unanimous class resolution
4. Resolution requiring a company to wind up voluntarily under S620
CLASS EXERCISE
1. Outline the procedure for the appointment of a chairman.
2. Outline the duties of the company secretary before during and after the General Meeting.
NB: To answer this question, it will not suffice to merely re-state S335.
197
CORPORATE GOVERNANCE (3): (MEMBERSHIP, MEETINGS &

RESOLUTIONS)
MEMBERSHIP OF A COMPANY
S105(1) A subscriber of the memorandum of a company shall be deemed to have agreed to
become a member of the company, and on its registration shall be entered as the member in its
register of members.
(2) Every other person who agrees in writing to become a member of a company, and whose
name is entered in its register of members, is a member of the company.
(3) In the case of a company having a share capital, each member is a shareholder of the
company and shall hold at least one share, except in relation to a company that has only one
shareholder.
Thus, there are two main types of members:
1. Subscriber to memorandum: A subscriber to the memorandum becomes a member on
the incorporation of the company. They are deemed to have taken the shares set opposite
their names.
2. Other Members: Every person other than subscribers must meet two conditions to
become a member of a company
a. An agreement in writing to become a member: and
b. Entry of his name in the register of members.
HOW TO ACQUIRE MEMBERSHIP
1. Subscription: only available to the first subscribers, promoters, S105
2. Allotment & being placed on the register of members, S149 “Authority to allot shares”.
3. Transfer of shares from existing shareholders and being placed on the register of
members S135 “shares as transferable property”, S175 “transfer of shares”.
4. Transmission i.e., by succeeding to the estate of deceased/bankrupt member, and being
placed on the register of members. S179 “transmission of shares”
5. Estoppel
6. Conversion of debentures to shares
1. SUBSCRIPTION S105
• A person can agree to become a member by subscribing to the Memorandum of
Association at incorporation S105(1). Thus, subscribers automatically become members
Martins v Ogungbadero; Ezeonwu v Onyechi.
• Can a person who agreed to be a subscriber but left out as such maintain an action to have
the register of the company rectified by inserting his name as a subscriber? NO Starcola
(Nig.) Ltd v Adeniji
• All persons mentioned above (except subscribers) do not actually become members until
their names are entered in the register of members. Thus, apart from subscribers, all other
members must have their names in the register of members to be referred to as members.
198
• A subscriber of the memorandum who holds the whole or any part of the shares
subscribed by him in trust for any other person shall disclose in the memorandum that
fact and the name of the beneficiary S27(3)
• With respect to a co having a share capital, each member shall be a shareholder of the co
and shall hold at least one share. In such a co, the term “members” and “shareholders”
may be used interchangeably.
• However, in companies limited by guarantee, membership is acquired by subscription
and by an undertaking under S27(4)(b) followed by registration by the company.
• A person who undertakes to make a contribution, in the event of the winding up of a co
limited by guarantee, becomes a member of the co when his name is entered in the
Register of Members.
• All subscribers must together subscribe to shares amounting in value to at least N100k
for small co and N2m for big cos of the authorised share capital S27(2)(a).
2. ALLOTMENT AND REGISTRATION S150

• This is the application for shares in a company by desirous members of the public. The
company where it accepts the offer, will allot shares to that person.
• This is the allocation of a specified number of shares of a company to an applicant.
• Within 42 days of allotment, the company writes a letter of Allotment to the applicant
notifying him of the allotment and the number of shares allotted to him.
• The company shall within 2 months after allotment, issue a certificate of Allotment to
the allotee S171(1).
Draft:
RC:151025
07035406532
([email protected])
Our Ref: 2304______________________________________ Your Ref: _______________
15th August, 2022
15 Edupal Drive,
Ikoyi, Lagos.
Sir,
LETTER OF ALLOTMENT
I am directed by the Board of Directors to inform you on your allotment pursuant to your
application dated.............. day of............................ 2022. The Board has approved the allotment
of a total number of 2000 shares in the capital of the company.
199
Please find attached the original Share Certificate and allotment mode.
Please accept my warmest congratulations.
Thank you.
Yours faithfully,
________________
Theo Uguru,
Company Secretary.

RC:151025
07035406532
([email protected])
Our Ref: 2304______________________________________ Your Ref: _______________
15th August, 2022
15 Edupal Drive,
Ikoyi, Lagos.
Sir,
LETTER OF REGRET
I am directed by the Board of Directors to inform on the above subject matter.
The Board regrets to inform you your application for 4000 number of shares in the capital of the
company was not approved.
Please find attached enclosed cheque in your favour in the sum of N200,000.00 which you paid
for the purchase of the share.
We regret any inconvenience this might cause you.
Thank you.
Yours faithfully,
________________
Theo Uguru,
Company Secretary.
200
3. TRANSFER OF SHARES S175

• S135 “shares as transferable property”
• A person may become a member of a company by having the shares of that company
transferred to him by the holder of those shares.
• It is the assignment or sale of shares held in a co by a holder of shares called Transferor
to another person with whom agreement has been reached known as the Transferee for a
gift or upon consideration.
• Upon the transfer, steps are taken to register the transfer with the company so that the
name of the transfer is substituted with the name of the transferee.
4. TRANSMISSION OF SHARES S179

• The vesting of shares in the personal representatives on the death of a shareholder is
known as transmission of shares rather than transfer.
• On the death of a member the survivor(s) where the deceased was a joint holder or the
personal representative of the deceased where he was a sole holder, shall be the only
persons recognised by the company as having any title to his interest in the shares.
• It occurs where the shares of a deceased shareholder or shareholder who is bankrupt
devolves or transmits to the successors in title or his personal representatives
• It is automatic and by operation of law
5. ESTOPPEL
• Where any person has his name in the register of members with his knowledge. Such a
person cannot afterwards deny his membership, and in such an instance becomes a
member by estoppel.
6. CONVERSION OF DEBENTURES TO SHARES

• Conversion of debentures into shares in lieu of redemption by a debenture holder at his
option by writing to the company intimating them of his intention to become a member or
at the instance of the company.
• S197 provides that “Debentures may be issued upon the terms that in lieu of redemption
or repayment, they may, at the option of the holder or the company, be converted into
shares in the company upon such terms as may be stated in the debentures.”
INCIDENTS /RIGHTS OF MEMBERSHIP
1. Right to dividends (Debts due & recoverable)
2. Right to bonus shares if declared (shares at premium)
3. Right to attend meetings Longe v FBN
4. Right to receive notice of meetings
5. Right to vote at meetings and be voted for
6. Right to demand poll
7. Right to appoint proxy
8. Right to requisition Extra-ordinary general meeting
201
9. Right to own shares

10. Right to transfer shares
11. Right to sell, mortgage or otherwise dispose of shares
12. Return of capital on reduction of capital/winding up if there is surplus
13. Right to object to alteration of objects clause, shares etc
14. Right to take up minority action
15. Right to petition for investigation by CAC, SEC
16. Right to petition for winding up
17. Right to copies of memo and articles
18. Right to financial Reports
19. Right to inspect minutes of meetings
20. Right to remain a member unless restructured out and shares acquired.
CESSATION OF MEMBERSHIP
• Transfer
• Forfeiture of shares S165
• Right and exercise of lien by company
• Valid surrender Trevor v Whitworth
• Transmission S179
MEETINGS
Types of General meetings of a company
1. Statutory Meeting (SM) S235
2. Annual General Meeting (AGM) S237
3. Extra-ordinary General Meeting (EGM) S239
STATUTORY MEETING: S235
• This type of meeting is prescribed for public companies only S235(1).
• It is to be held within 6 months from the date of incorporation S235(1)
• It is to consider the statutory report which must be sent to the members by the directors at
least 21 days before the date of the meeting S235(2).
• The statutory report shall be certified by not less than two directors or by a director and
the secretary of the company and shall state S235(3).
• S235(3) states the contents of the statutory report as:
i. the total number of shares allotted, distinguishing shares allotted as fully or partly
paid-up than in cash, and stating in the case of shares partly paid-up, the extent to
which they are paid up, and the consideration for which they have been allotted;
ii. the total amount of cash received by the company in respect of all the shares allotted,
distinguished as aforesaid;
iii. the names, addresses and descriptions of the directors, auditors, managers, if any, and
secretary of the company;
202
iv. the particulars of any pre-incorporation contract together with the particulars of any
modification or proposed modification;
v. any underwriting contract that has not been carried out and the reasons therefor;
vi. the arrears, if any, due on calls from every director; and
vii. the particulars of any commission or brokerage paid or to be paid in connection with
the issue or sale of shares or debentures to any director or to the manager.
• The report shall contain an abstract of the receipts of the company and the payments
made from them up to a date within seven days of the date of the report S235(4).
• The statutory report must be delivered to the CAC within 14days S235(6).
• Failure to deliver the report to CAC or holding of SM is a ground for winding up the
company S571.
• The members have a right to discuss at the meeting, any issue in respect of the formation
of the company and commencement of business or any matter arising out of the statutory
report S235(8).
• Any member who wishes a resolution to be passed on any matter arising out of the
statutory report shall give further 21 days’ notice from the date on which the statutory
report was received to the company of his intention to propose such a resolution, in which
case, the statutory meeting shall not be held until the expiration of the 21 days’ notice
given to the company by the member S235(9).
• There is a penalty of fine for everyday of default in holding the meeting S236.
• SM must be held in Nigeria S240(1).
ANNUAL GENERAL MEETING S237
• Every company shall in each year hold a general meeting as its AGM, in addition to any
other meeting in that year and shall specify the meeting as such in the notice calling it
and not more than 15 months shall elapse between the date of one AGM of a company
and the next.
• The only exceptions are; a small company or any company having a single shareholder.
Essential features of AGM
• A company must hold its first AGM within 18 months of incorporation.
• The co need not hold its first AGM in the 1st or the following year of its incorporation
S237(1). For example, if a company was incorporated on 1st November 1995, it need not
hold AGM in 1995 or 1996 but must hold it at least in April 1997.
• Except for the first AGM, for the subsequent AGMs, CAC may extend the time for
holding the meeting by not more than 3 months S237(1)(b).
• If a company fails to call AGM, a member can apply to CAC which will give directives
on calling the meeting and such directive will include the power for one member to apply
to court to make an order that such member shall take decisions that will bind members
of the company S237(2).
203
• If there is a default in carrying out the directive of CAC, there is a penalty of amount as
the CAC may determine on the co and every officer at fault S237(5).
Business Transacted at AGM S238
• Two types of businesses are transacted at the AGM of a company
i. Ordinary Business
ii. Special Business.
Ordinary Business of AGM
i. Declaration of dividend
ii. Presentation of the Financial Statement and the Report of Directors and Auditors
iii. Election of directors in place of those retiring
iv. Appointment of Auditors
v. Fixing of remuneration of the auditors
vi. Appointment of members of the Audit committee
vii. Disclosure of remuneration of managers of a company
Special Business of AGM
• Any other business not listed as ordinary business of AGM is deemed a special business.
• Examples Of Special Business
i. To alter the object/ memart
ii. Change of Name
iii. Re-registration of all types
iv. Reduction of capital
v. Removal of auditor before expiration of tenure etc
EXTRA-ORDINARY GENERAL MEETING S239
• EGM is the GM held at any time to transact business that cannot comfortably wait for the
next AGM.
• The board of directors may convene an extraordinary GM whenever they deem fit, and if
at any time they are not within Nigeria, sufficient directors capable of acting to form a
quorum, any director may convene an EGM.
Who can convene an EGM? S239
i. Board of Directors
ii. Requisition by members holding not less than 1/10 of the paid-up capital of the co,
carrying voting rights Pedley v Inland Waterways Association Ltd.
iii. In case of limited by guarantee or in the case of a company without a share capital,
members holding 1/10 of the total voting rights of all the member.
iv. Auditors can requisition EGM for the purpose of directors receiving and considering his
explanation as to the circumstances connected with his resignation S413(1).
204
Procedure for member’s requisitioned EGM S239

• The requisition shall state the objects of the meeting, and be signed by the requisitionists
and deposited at the registered office of the company, and the requisition may consist of
several documents in like form each signed by one or more requisitionists.
Where Directors Fail to Convene? S239
• If the directors do not within 21 days from the date of the deposition of the requisition
proceed duly to convene a meeting, the requsitionists, or any one or more of then,
representing more than ½ of the total voting rights of all of them, may themselves
convene a meeting.
Expenses incurred by Requisitionist S239
• Any reasonable expenses of the requisitionist in convening the meeting where the
directors failed to convene shall be repaid to the requisitionist by the company
Business Transacted at EGM S239
• All businesses transacted at an EGM shall be deemed “Special Business”.
• Therefore, a matter which constitutes ordinary cannot be discussed at EGM.
VENUE OF MEETING S240
• With the exception of small companies and companies having a single shareholder, all
SMs and AGMs of a company shall be held in Nigeria S240(1).
• Thus, EGM need not hold in Nigeria.
• A private company may hold its GMs electronically provided that such meetings are
conducted in accordance with the articles of the company S240(2).
NOTICE OF MEETING S241
• The notice required for all types of GMs is 21 days from the date on which the notice
was sent out S241(1). If not, the meeting will be deemed not to have been properly called
• Exceptions:
o If AGM, all those entitled to attend and vote unanimously agree
o In other types of meetings, agreement of those holding at least 95% of the
nominal value of shares of those with right to attend and vote and in a Ltd/Gte
95% of voting rights.
IMPORTANCE OF NOTICE
• To adequately inform the member of the kind of meeting he is called to attend, the venue,
the business or items to be discussed so as to prepare either to participate in the
discussion or even to understand what is going to be discussed.
205
CONTENTS OF NOTICE S242

• The notice of a meeting shall specify the
i. place,
ii. date and
iii. time of the meeting,
iv. the general nature of the business to be transacted in sufficient detail to enable
those to whom it is given to decide whether to attend or not,
v. where the meeting is to consider a special resolution, set out the terms of the
resolution.
• In AGM, it will suffice to state in the notice that the purpose of the meeting is to transact
the ordinary business S242(2).
• No business may be transacted at any general meeting unless notice of it has been duly
given S242(4).
• An error or omission in a notice with respect to the place, date, time or general nature of
the business of a meeting shall not invalidate the meeting, unless the officer of the
company responsible for the error or omission acted in bad faith or failed to exercise care
and diligence provided that in the case of accidental error or omission, the officer
responsible shall effect the necessary correction either before or during the meeting
S242(6).
PERSONS ENTITLED TO NOTICE S243
The following persons are entitled to receive notice of a general meeting every;
i. member;
ii. person upon whom the ownership of a share devolves by reason of his being a legal
representative, receiver or a trustee in bankruptcy of a member;
iii. director of the company;
iv. auditor for the time being of the company; and
v. the secretary, and Commission in the case of public companies.
vi. No other person is entitled to receive notice of general meetings.
SERVICE OF NOTICE S244
• A notice may be served personally or by post to the person entitled or to his registered
address or if he has not registered address within Nigeria to the address if any supplied by
him to the company for giving of notice to him S244(1).
• Where a notice is sent by post and the letter is properly addressed and stamped, then the
addressee is deemed to receive it 7 days after the letter is posted if it is a notice for a
meeting and in any other case at the time at which the letter would be delivered in the
ordinary course of post S244(2).
• Thus, the 21 days is calculated from that time.
• Notice may also be given by electronic mail to any member who has provided the
company an electronic mail address S244(3).
206
• A notice may be given to the joint holders of a share by giving the notice to the joint
holder first named in the register of members in respect of the share S244(4).
• A notice may be given by the company to the persons entitled to a share in consequence
of the death or bankruptcy of a member S244(5).
FAILURE TO GIVE NOTICE S245
• Failure to give notice of meeting to a person entitled to receive it shall invalidate the
meeting.
• The exception is where such failure is an accidental omission on the part of the persons
giving the notice FBN v Longe.
• Failure to give notice to a person entitled to it, due to a misrepresentation or
misinterpretation of the provisions of CAMA, or the articles, shall not amount to an
accidental omission.
ADDITIONAL NOTICE S246
• In addition to the normal individual notices sent out, every public company shall, at
least 21 days before any GM advertise such meeting in at least two daily newspapers.
COURT ORDERED MEETING (COM) S247
• S247(1) provides that the FHC can suo motu or upon an application, by director or
member who is entitled to vote in the case of GM or a director in the case of a BOD
meeting order a meeting in any of the following circumstances;
o If for any reason it is impracticable to call a meeting of a company in the
prescribed form or
o To conduct such meeting in any manner prescribed by the Articles or CAMA
ORDERS COURT MAY MAKE
i. That the meeting be called, held and conducted in any manner it deems fit S247(1).
ii. Where any such order is made, may give such ancillary or consequential directions as it
deems expedient S247(1).
iii. That one member of the company present in person or by proxy in the case of a meeting
of the company, and one director in the case of the board may apply to the Court for an
order to take a decision which shall bind all the members S247(2).
iv. Any COM is for all purposes deemed to be a meeting of the company or of the board of
directors duly called, held and conducted.
In case of death of all Directors & Shareholders S273(2)
• In the event of all the directors and shareholders dying, any of the PRs may apply to the
Court for an order to convene a meeting of all the PRs of the shareholders entitled to
attend and vote at a GM to appoint new directors to manage the company, and if they fail
to convene a meeting, the creditors, if any, may do so S273(2).
207
ISSUES AFFECTING VALIDITY OF PROCEEDINGS AT MEETING

• Examples of such issues touching on proceedings of the meeting include:
1. Voting
2. Proxies
3. Corporation representation
4. Quorum
5. Resolution
6. Adjournment
7. Minutes of Meting
8. Class meetings
VOTING S248
• Voting is done to ascertain the support of a particular Resolution by members. There are
basically two types of voting at any General meeting
i. Show of hand
ii. By demanding a poll
• Show of Hand: this is voting according to the number of persons present and entitled to
vote even by proxy. It is determined by counting the number of members supporting or
opposing a resolution by a show of hand.
• Demand of a poll: this entails the shareholders voting according to the number of shares
one owns. Although one share attracts one votes, certain classes of share are permitted to
have weighted vote i.e., attracts more than one vote e.g., preferential shares S168.
Who can demand a poll? S248(1)
• The following persons can demand on poll
i. The Chairman, where he is a shareholder or a proxy
ii. At least three members present in person or by proxy
iii. A member or members present in person or by proxy and who represent not less than
1/10 of the total voting rights of all members having right to vote at the meeting.
iv. Any member or members holding shares not less than 1/10 of the total fully paid-up
shares in the capital of the company
Effect of a poll S248(2)
• Where a poll is duly demanded, the result of the previous show of hands is then
disregarded.
Right (+Restrictions) to demand poll S249
• Any provision contained in a company’s articles is void if it would limit the right to
demand poll except question on:
i. the election of the chairman of the meeting or
ii. the adjournment of the meeting or
208
iii. making ineffective a demand for a poll on any such question which is made by any of
the persons mentioned in section 248.
• The instrument appointing a proxy to vote at a meeting of a company is also deemed also
to confer authority to demand or join in demanding a poll, a demand by a person as proxy
for a member is the same as a demand by the member
• There shall be no right to demand a poll on the election of members of the audit
committee S249(3).
Voting on a poll S250
• On a poll taken at a meeting of a company, or a meeting of any class of members of a
company, a member entitled to more than one vote, if he votes, need not use all his votes
or cast all the votes he uses in the same way S250(1).
• If a poll is duly demanded, it shall be taken in such manner as the chairman directs, and
the result of the poll is deemed to be the resolution of the meeting at which the poll was
demanded S250(2).
• The exceptions are; a poll demanded on the election of a chairman or on a question of
adjournment which is taken immediately not on chairman’s direction S250(2) & (4).
• In the case of an equality of votes, whether on a show of hands or on a poll, the chairman
of the meeting shall be entitled to a second or casting vote S250(3).
PROXIES S254
• Proxy means a person nominated by any member to attend a meeting on his behalf, he
takes part in the voting and can exercise the same right as the member appointing him
S254(1).
• Only a member who is entitled to attend and vote at a meeting can appoint a proxy
S254(1).
• Proxy is not allowed in company without share capital unless its articles permit S254(1).
• Meeting notice must provide for members right to appoint proxy, breach of this
constitutes on offence and attracts penalty of fine as may be determined CAC S254(2).
• There shall not be more than 48 hours during which to appoint a proxy and if the co’s
articles provides otherwise, it is void S254(3).
• The instrument appointing a proxy shall be in writing, under the hand of the appointer or
his attorney duly authorised in writing and, if the appointer is a corporation, either by
deed, or under the hand of an officer or attorney duly authorised S254(6).
• The proxy instrument shall be deposited at the registered office or head office of the
company or at such other place within Nigeria as is specified for that purpose in the
Notice of the meeting S254(7).
• The instrument shall be deposited at least 48 hours before the time for holding the
meeting or adjourned meeting, at which the person named in the instrument proposes to
vote, or, in the case of a poll, at least 24 hours before the time appointed for the taking
of the poll, and if defaulted, the instrument of proxy shall not be treated as valid S254(7).
209
CORPORATE REPRESENTATION S255

• A company which is a shareholder or member of another company is required to appoint
any person by a Resolution of the Board or governing Council, to be it representative in
the general meetings of the company of which it is a member S255(1)(a).
• A creditor company being a Debenture Holder of another company can also appoint a
Representative to be attending the creditors meeting in the Debtor company S255(1)(b).
• NB: Such a Representative is not a Proxy and therefore exercises the right of the
company as if the co was a natural person S255(2).
QUORUM S256
• Quorum refers to the total Nos of members present in person or by proxy, whose
presence satisfies the required minimum number of members that would be present for
the meeting to start & progressively proceed to the expected end.
• Except in the case of a company with one member or provided in the articles, no business
shall be transacted at any general meeting unless a quorum of members is present at the
time when the meeting proceeds to business and throughout the meeting S256(1).
How is Quorum determined? S256(2)
• For the purpose of determining a quorum, all members or their proxies shall be counted
S256(2).
• Unless otherwise provided in the articles, the quorum for a meeting shall be;
o 1/3 of the total number of members of the company or 25 members (whichever is
less) present in person or proxy
o Where the number of members is not a multiple of 3, then the number nearest to
1/3
o Where the number of members is 6 or less, the quorum shall be 2 members
Quorum during the progress of the meeting
• Unless the Articles otherwise provides, quorum is to be maintained from the starting of
the business of the meeting and throughout the meeting S256(1).
• Where some members leave recuing the quorum for reasons insufficient to the
chairman, the meeting shall continue and decisions shall be binding except it is one
person left, then order of court shall be had before a binding decision shall be made
S256(3).
• However, where the exit of some member is dues to reasons what chairman considers
sufficient reason, the meeting shall be adjourned for one week for the same venue and
time and if there’s still no quorum, the meeting shall continue and decisions shall be
binding except it is one person left, then order of court shall be had before a binding
decision shall be made S256(4).
210
RESOLUTIONS
• Resolutions refer to decisions taken at the company meetings, arrived at through voting,
or unanimous agreement by members entitled to vote.
Types of Resolution
There are two types of resolutions provided for in S258(1) and (2) respectively:
i. Ordinary Resolution
ii. Special Resolution
Other types may include:
i. Unanimous Resolution
ii. Written Resolution
iii. Resolutions Requiring Special Notice
ORDINARY RESOLUTION S258(1)
• A resolution is an ordinary resolution when it has been passed by a simple majority of
votes cast by members of the company as, being entitled to do so, vote in person or by
proxy at a GM S258(1).
• Ordinary resolution is presumed when the Act simply requires the passing of a resolution
by the company, without saying which (ordinary or special).
SPECIAL RESOLUTION S258(2)
• This is a resolution passed by not less than ¾ (three-four) of the votes cast by such
members being entitled to vote either in person or by proxy; of which 21 days’ notice,
specifying the intention to propose the resolution as a special Resolution has been duly
given
• Shorter notice may however be given if agreed to by majority holding not less than 95%
of the nominal value of the shares or by members representing not less than 95% of the
total voting rights in case of company not having share capital.
• A declaration of the chairman that the resolution is carried is, unless a poll is demanded,
conclusive evidence of the fact without proof of the number or proportion of the votes
recorded in favour of or against the resolution S258(3).
Examples of matters requiring special Resolution
1. Change of Name S30
2. Alteration of objects S51
3. Alteration of the Articles S53
4. Reduction of capital S127
5. Re-registration of LTD as PLC S56(1)
6. Re-registration of PLC as LTD S63(1)
7. Re- registration of ULTD as LTD S71(1)
211
WRITTEN RESOLUTION S259.

• Written Resolution is resolution passed without formal physical meeting of members who
are entitled to attend the meeting & vote.
• Thus, S259 provides that;
o All resolutions shall be passed at general meetings and are not effective unless so
passed
o But in the case of a private company a written resolution signed by all the
members entitled to attend and vote are as valid and effective as if passed in a
general meeting.
RESOLUTIONS REQUIRING SPECIAL NOTICE S261.
• Difference between special resolution and special notice: Special Resolution deals
with the number of votes to be cast for a decision; whereas Special Notice deals with how
to inform those entitled to attend and vote on the resolution.
• The Procedure is:
o The member gives special Notice of his intention to the co at least 28 days before
the date of the meeting at which he intends to move the resolution is enclosed.
o Where the company fails to call a meeting for a date 28 days or less after the
notice has been given, this will not invalidate the meeting.
Examples of special notice
i. Appointing or re-appointing a Director aged more than 70 for a Public company S282
ii. Removing a Director from office S288(2)
iii. Appointing new Director to replace a removed Director in the same meeting after
removal S288(2)
iv. Appointment of a person other than a retiring Auditor S401
REQUISITION OF RESOLUTION 260(1)
• Holders of 1/20th of total voting rights can requisition a notice of their resolution to be
circulated to members entitled to receive notice of the meeting to which the requisition
relates.
REGISTRATION OF CERTAIN RESOLUTION S262
Printed copies of the following Resolution and agreement must be forwarded to CAC for
registration within 15 days after the passage:
i. Special resolution
ii. Unanimous resolution on issue which requires special resolution
iii. Unanimous class resolution
iv. Resolution requiring a company to be wound up voluntarily under S620
212
EFFECT OF RESOLUTIONS PASSED AT ADJOURNED MEETINGS S263

• Resolution passed at company meetings even on adjourned meeting shall be treated as
passed on the date on which it was actually passed and not an earlier date.
• For written Resolution, it is deemed to be passed when the last signature is affixed to the
resolution
ADJOURNMENT OF MEETINGS S264 (this does not apply to a one-man company)
• A meeting may be adjourned either because
i. No quorum is formed at the original meeting or
ii. The business was unfinished at the original meeting
• The Chairman, may with the consent or directive from them at the meeting, adjourn the
meeting from time to time and from place-to-place S264(1).
• No new business is allowed at the adjourned meeting, only the unfinished business from
the original meeting shall be transact S264(1).
• It is not necessary to give notice of adjourned meeting if it is adjourned for not more
than thirty days, but where it is more, then it shall be treated as a new meeting for the
purpose of issuing notice of meeting and business to be transacted S264(2).
Quorum at Adjournment Meeting
• If within 1 hour from the time an adjourned meeting is declared starts, a quorum is not
present S264(3).
• If the meeting is convened upon the requisition of members, the meeting shall be
dissolved S264(3).
• If not, it shall stand adjourned to the same day in the next week, at the same time & place
or such other day, time & place as directed by chairman or director S264(3).
• At the second adjourned meeting, any two or more members present shall form a quorum
and their decisions shall bind all shareholders S264(4).
• But if only one member is present, he may seek the direction of the court to take a
decision that can become binding S264(2).
MINUTES OF PROCEEDINGS S266
• With the exception of a co having a single member, every co must cause minutes of'
proceedings of its GMs, board of directors or management meetings to be kept S266(1) at
its registered office S267(1).
• Once the minute is signed by the charman, it serves as prima facie evidence of the
proceedings without need for proof S266(1).
• The minutes must be entered in books kept for that purpose International Agricultural
Industries (Nig.) Ltd. v Chika Brothers Ltd [1990] 1 NWLR70.
• In the case of a company that has only one member, where that single member takes any
decision that—
i. may be taken by the company in general meetings, and
213
ii. has effect as if agreed by the company in general meeting, he shall provide the
board with details of that decision
• The book is to be kept at the co’s registered address or head office and open to the
members without charge for at least 6 hours a day during business S267(1).
• Any member is entitled to be furnished within seven days after receipt of his request in
that behalf to the company, with a copy of any such minutes certified by the secretary at a
charge not exceeding N100 for every page S267(2).
CLASS MEETINGS S268
• This is the meeting held by classes of shareholders where a company has different classes
of shares.
• S68 provides that the provisions of CAMA relating to meetings shall apply to any class
meeting except if expressly excluded by CAMA itself.
DRAFTS OF NOTICES:
IN THE FEDERAL HIGH COURT OF NIGERIA
HOLDEN AT LAGOS
SUIT NO: FHC/L/C/15/2022
IN THE MATTER OF AN APPLICATION UNDER SECTION 711 OF THE COMPANIES
AND ALLIED MATTERS ACT, 2020
AND
IN THE MATTER OF EDUPAL NIGERIA LTD
IN RE: EDUPAL NIGERIA LTD-----------------------------------------------------------APPLICANT
COURT-ORDERED MEETING OF THE HOLDERS OF THE FULLY PAID ORDINARY
SHARES OF EDUPAL NIGERIA LTD
NOTICE IS HEREBY GIVEN that by an Order of the FHC holden at Lagos (the Court) dated
the 15th day of April, 2022 made in the above matter, the Court has directed that a meeting of
the holders of the fully paid ordinary shares of Edupal Nigeria Ltd (the Company) be convened
for the purpose of considering and if thought fit, approving (with or without modification), a
proposed Scheme of Arrangement pursuant to Section 711 of the Companies and Allied Matters
Act, 2020. The Scheme is explained in detail in the Explanatory Statement on Pages 15 to 20 of
the Scheme Document.
The meeting will hold at the Edupal’s Main Hall at No 15 Edupal Drive, Ikoyi, Lagos State,
Nigeria on Wednesday the 15th day of May, 2022 at 11am at which place the above mentioned
shareholders are requested to attend.
The following resolutions will be proposed and if thought fit, passed as special resolutions at the
meeting with or without modifications:
214
1. The holders of the fully paid ordinary shares hereby agree to surrender ten (10%) percent
of their fully paid ordinary shares to the preference shareholders who have agreed to take
fully paid ordinary shares in lieu of their dividend which is cumulative and in arrears, by
way of a Scheme of Arrangement and Compromise pursuant to section 711 of the
Companies and Allied Matters Act, 2020.
2. The company be and is hereby authorised to effect the transfer of the designated fully
paid ordinary shares to the preference shareholders who have agreed to take fully paid
ordinary shares in lieu of their dividend which is cumulative and in arrears, by way of a
Scheme of Arrangement and Compromise pursuant to section 711 of the Companies and
Allied Matters Act, 2020.
By the said Order, the Court has appointed Mr Stephen Agbata, a director of the Company or
failing him, Mr. Theo Uguru, also a director of the company or failing them both, any other
director so appointed in their stead, to act as Chairman of the meeting.
A member of the company entitled to attend and vote at the Meeting is entitled to appoint a
proxy to attend, speak and vote instead of that member. A proxy need not be a member of the
company.
Any member of the company entitled to attend and vote at the Meeting who is unable to attend
the meeting and who wish to be represented at the Meeting by proxies, must complete and return
the attached form of proxy in accordance with the instructions contained in the form of proxy so
as to be received by the Company Secretary at the Registered Office of the Company at 15,
Edupal Drive, Ikoyi, Lagos, not less than 48 hours before the date of the meeting.
The Register of Members will be closed from 10th day of May, 2022 to 15th day of May, 2022,
both dates inclusive, for the purpose of attendance at the Court Ordered Meeting.
Dated this 15th day of April, 2022
________________
For: C O Agbata LP
(Solicitors to Edupal Nigeria Limited)
15 Johnson Drive, Ikoyi, Lagos.
[email protected]
07035406532
215

RC:151025
07035406532
([email protected])
Our Ref: 2304______________________________________ Your Ref: _______________
15th August, 2022
NOTICE OF THE FIRST ANNUAL GENERAL MEETING PURSUANT TO SECTION 237
OF THE COMPANIES AND ALLIED MATTERS ACT, 2020
NOTICE IS HEREBY GIVEN that the first annual general meeting of Edupal Limited will be
held at Edupal Mian Hall, Ikoyi, Lagos on the 15th May, 2022 at 10:00am to transact the
following business:
Ordinary Business:
1. Appointment and fixing of the remuneration of the auditors
2. Appointment of the members of the audit committee
Special Business:
1. Fixing the remuneration of Directors.
2. Increase in share capital
Proxies Attendance
A member of the company is entitled to appoint a proxy to attend and vote instead of him. A
proxy need not be a member. A form of proxy is enclosed and if it is to be valid or the purpose of
the meeting, it must be completed, stamped and deposited at the Registered office of the
company at 15, Edupal Drive, Ikoyi, Lagos not less than 48 Hours before the time fixed for
holding the meeting.

________________
Company Secretary
ENCL:
1. Proxy Form
216

RC:151025
07035406532
([email protected])
Our Ref: 2304______________________________________ Your Ref: _______________
15th August, 2022
NOTICE OF THE 1ST STATUTORY GENERAL MEETING PURSUANT TO SECTION 235
OF THE COMPANIES AND ALLIED MATTERS ACT, 2020
NOTICE IS HEREBY GIVEN that the Statutory Meeting of the above-named Company
required to be held by section 235 of the Companies and Allied Maters Act, 2020 will be held at
Edupal Mian Hall, Ikoyi, Lagos on the 15th May, 2022 at 10:00am for the purpose of
considering the statutory report and of considering all other business which ought to be
conducted at such statutory meeting.
Proxies Attendance
A member of the company is entitled to appoint a proxy to attend and vote instead of him. A
proxy need not be a member. A form of proxy is enclosed and if it is to be valid or the purpose of
the meeting, it must be completed, stamped and deposited at the Registered office of the
company at 15, Edupal Drive, Ikoyi, Lagos not less than 48 Hours before the time fixed for
holding the meeting.

________________
Company Secretary
ENCL:
1. Proxy Form
217
CORPORATE GOVERNANCE 4: FINANCIAL STATEMENTS, AUDITS

AND ANNUAL RETURNS
SOME KEY TERMS
1. Audit: authentication and certification of financial statement by an independent person or
body.
2. Special Notice S261: see above; it applies to appointment and removal of auditors except
the reappointment of a retiring auditor S411
3. Accounting Records S374: daily records of the co’s business
4. Financial Statement S377: series of financial records presented annually
5. Group of Companies S379: several subsidiaries controlled by a common holding
company.
6. Group financial statements of holding company S379: a statement prepared by the
holding company covering all the subsidiaries together.
7. Holding company S381: a company is deemed to be the holding company of another, if
the other is its subsidiary
8. Wholly owned company S381: a body corporate is deemed to be the wholly-owned
subsidiary of another, if it has no member except that other and that other’s wholly
owned subsidiaries are its or their nominees.
9. Subsidiary Company S381: a company is deemed to be a subsidiary of another
company if the company
i. is a member of the company and controls the composition of its board of
directors;
ii. holds more than 50% in nominal value of its equity share capital; or
iii. the first-mentioned company is a subsidiary of any company which is that other’s
subsidiary.
10. Modified Financial Statement S393: abbreviated form in accordance with Schedule 6
which may miss out on some parts like P&L account and directors report.
11. Small Company S394: see above explanation, page 24.
12. Abridged Financial Statement S399(1): any balance sheet or profit and loss account
relating to a year of the company or purporting to deal with any such year, otherwise than
as part of full financial statements (individual or group). Where AFS is published co need
not file auditor’s report S399(4)
13. Financial Literacy S404: ability to read and understand financial documents and to be
able to use such skills to make financial decisions/judgments.
14. Casual Vacancy S411: vacancy created in the office of an auditor before the expiration
of his tenure.
FINANCIAL STATEMENTS S374
• FS of a co show the annual state of affairs of a co and they are important not only to
members of the co but to the public, so as to decide whether to invest or de-invest from
the company.
• Examples: profit and loss account, balance sheet, etc.
218
• S374 provides that, every company must keep accounting records that will be sufficient
to show and explain the transactions of the company, so as to
i. disclose with reasonable accuracy, at any time, the financial position of the
company;
ii. enable the directors to ensure that financial statements comply with the
requirements of the Act.
CONTENTS OF ACCOUNTING RECORDS S374(3)
• It must specifically contain;
i. entries from day to day of all sums of money received and expended by the company;
ii. the matters in respect of which the receipt and expenditure took place
iii. a record of the assets and liabilities of the company; and
• If the business of the co involves dealing in goods, the accounting records shall
contain;
i. statements of stocks held by the co at the end of each year of the co;
ii. all statements of stocktakings from which any such statement of stock has been or is
to be prepared; and
iii. except in the case of goods sold by way of ordinary retail trade, statements of all
goods sold and purchased, showing the goods and the buyers and sellers in sufficient
detail to enable all these to be identified.
• Each public company shall keep its audited accounts displayed on its website S374(6).
PLACE, DURATION AND FORM OF RECORDS S375
• The accounting records shall be kept at the company’s registered office or such other
place in Nigeria as the directors think fit and will be open at all times to inspection by
officers of the company S375(1).
• The company is required to preserve the accounting records for a period of six years
though subject to any direction with respect to the disposal of records given under
winding up rules S375(2).
• A company may, in addition to original hard copies, keep electronic copies or registers
of any document or record it is obliged to keep or maintain under this Act, and where a
company chooses to maintain electronic copies or registers of its documents or records,
the company shall give sufficient consideration to the quality of the hardware and
software to be used, and technical specifications such as protocol, security, anti-virus
protection or encryption S375(3).\
DIRECTORS’ DUTY TO PREPARE ANNUAL ACCOUNTS S377
• The directors of a company must yearly prepare financial statements S377(1).
• CONTENTS OF FS S377(2)
a) statement of the accounting policies (not for ltd, only plc).
b) balance sheet as at the last day of the year;
219
c) P&L account or, for a co not trading for profit, an income and expenditure
account for the year;
d) notes on the accounts;
e) auditors’ report;
f) directors’ report;
g) statement of cash flow (not for ltd, only plc)
h) changes in equity (not for ltd, only plc)
i) value-added statement for the year;
j) five-year financial summary;
k) group financial statements for holding cos
l) other matters required by accounting standards (not for ltd, only plc).
• The FS of a private company need not include (a), (g), (h) and (i) above S377(3).
• At the first board meeting of a Company, the directors must determine the date each year,
when financial statements shall be made up and notify CAC within 14 days of the
determination S377(4).
• In the case of a holding company, the directors shall ensure that, except where in their
opinion there are good reasons against it, the year of each of its subsidiaries shall
coincide with the year of the company S377(5).
DIRECTORS’ REPORT S385
In the case of every co, there shall be prepared in respect of each year, a report by the directors—
i. containing a fair view of the development of the business of the co and its subsidiaries
during the year and of their position at the end of it; and
ii. stating the amount, if any, which they recommend should be paid as dividend and the
amount (if any) which they propose to carry to reserves.
iii. state the names of the persons who, at any time during the year, were directors of the co,
and the financial activities of the co and its subsidiaries in the course of the year and any
significant change in those activities in the year.
iv. Report matters contained in Parts I, II and III of the Fourth Schedule.
v. Failure to comply attracts penalty of fine as may be prescribed in the regulation by CAC
but it will be a defence to prove that reasonable care and skill were deployed to comply.
SIGNING OF BALANCE SHEET AND DOCUMENTS TO BE ANNEXED THERETO
S386
• A co’s BS and every copy of it which is either laid before the co in GM or delivered to
CAC shall be signed on behalf of the board by two of the directors of the co.
• Failure to comply, attracts penalty of fine to be determined by regulation.
PERSONS ENTITLED TO RECEIVE FINANCIAL STATEMENTS AS OF RIGHT S387
• A copy of the co’s FS for the year shall, at least 21 days before the date of the meeting
at which they are to be laid be sent to the following persons—
i. Every member of the company;
220
ii. Every debenture holder;

iii. All persons other than members and debenture holders, being persons so entitled;
iv. With respect of company not having share capital, only members and debenture
holders entitled to receive notices of AGM of the company.
THOSE NOT ENTITLED S387(3)
i. Members or debenture holders who are not entitled to notices of GMs and members
whose addresses are unknown;
ii. More than one of the joint holders of shares and debentures, who are not entitled to
receive notices of meeting; and
iii. Other joint holders of shares and debentures not entitled to receive such notices.
• If copies of the FS are sent less than 21 days before the date of the meeting, it is,
notwithstanding that fact, deemed to have been duly sent if it is so agreed by all the
members entitled to attend and vote at the meeting S387(4).
DIRECTOR’S DUTY TO LAY AND DELIVER FINANCIAL STATEMENTS S388
• The directors shall lay before the co in GM, copies of the FS of the co made up to a date
not exceeding nine months previous to the date of the meeting:
i. Directors must at a date not later than 18 months after the incorporation
ii. For subsequent years, once every calendar year.
• The auditors’ report shall be read before the co in GM, and be open to the inspection of
any member of the co.
• In respect of each year, the directors shall deliver with the annual return to CAC
i. a copy of the balance sheet,
ii. the profit and loss account and
iii. the notes on the statements which were laid before the GM.
SHAREHOLDERS’ RIGHT TO OBTAIN COPIES OF FS S392
• Any member or debenture holder of a co, whether or not entitled to have copies of the
co’s FS sent to him as of right is entitled to be furnished on demand and without charge
with a copy of the co’s last FS.
• If after 7 days of the demand, the co fails to comply, it shall be liable for a penalty of
fine as may be specified in the regulation.
MODIFIED FINANCIAL STATEMENTS BY SMALL COMPANIES S393
• A small company may deliver to CAC, modified financial statements in accordance with
Part 1 of Schedule 6.
• The modified balance sheet shall be an abbreviated version of the Full balance sheet. In
this circumstance, the profit and loss account, director’s report and auditor’s report need
not be delivered to CAC as annexures to the balance sheet.
221
• The “balance sheet total” means the aggregate of the amounts shown as assets in the
company’s balance sheet S394(5).
• The “number of employees” means the average number of persons employed by the
company in that year S394(6).
PUBLICATION OF FINANCIAL STATEMENTS S398
• This means the publication by a company of full individual or group FS required by S388
to be laid before the company in GM and delivered to CAC, including the directors’
report.
• That is laying the account before the general meeting of the company, reading auditor’s
report before the company in general meeting and
• Delivering to CAC,
i. a copy each of the balance sheet,
ii. profit and loss account and
iii. notes on the statements laid before the company in general meeting along with
iv. annual return of the company.
• S398 deals with publication of full FS while,
• S399 deals with publication of abridged FS.
AUDITOR
• An auditor is a person appointed and saddled with the responsibility of examining
company’s books and accounts, and making a report to the members on the accounts
examined by him including every BS, P&L account and all group accounts, laid before a
company in general meeting, during his tenure of office.
APPOINTMENT OF AUDITORS S401
Every company shall at each AGM appoint an auditor or auditors to audit the FS of the co, and to
hold office from the conclusion of that, until the conclusion of the next, AGM S401(1).
APPOINTMENT OF AUDITORS BY DIRECTORS S401(5)
• The first auditors may be appointed by the directors at any time before the company is
entitled to commence business and auditors so appointed hold office until the conclusion
of the next AGM, provided that—
a) the company may at a GM remove any such auditors and appoint in their place any
other person who has been nominated for appointment by any member of the
company and of whose nomination notice has been given to the members of the
company at least 14 days before the date of the meeting; and
b) if the directors fail to appoint, the co may, in a GM convened for that purpose,
appoint the first auditors.
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• The directors can appoint auditor(s) under the following circumstances;

i. the first auditor(s) usually at any time before the company is entitled to commence
business S401(5)
ii. the directors may fill any casual vacancy in the office of the auditor 401(6)
iii. if members at AGM fail to appoint or re-appoint auditor(s), the directors may appoint
a person to fill the vacancy 401(3).
• Members at AGM can also appoint auditor(s) under the following circumstances;
i. where the directors fail to exercise their power to appoint the 1st auditor(s)
S401(5)(b);
ii. Subsequent appointments of auditor(s) are made by members at each AGM with
the exception of filling casual vacancies S401(1).
iii. At any AGM, a retiring auditor however appointed, shall be re-appointed without any
resolution being passed unless S401(2);
a) he is not qualified for re-appointment; or
b) a resolution has been passed at the meeting appointing some other person instead
of him or expressly providing that, he should not be reappointed; or
c) he has given the company written notice of his unwillingness to be reappointed.
EXEMPTION FROM AUDIT REQUIREMENT S402
• A company is exempt from audit of accounts in respect of a financial year if—
i. it has not carried on any business since its incorporation; or
ii. it is a small company within the meaning of section 394.
• A company is not entitled to an exemption if it was at any time within the financial year
in question
i. an insurance company,
ii. a bank or
iii. any other company as may be prescribed by the Commission.
QUALIFICATION OF AUDITORS S403
None of the following persons is qualified for appointment as auditor of a company:
1. an officer or servant of the company;
2. a person who is a partner of or in the employment of an officer or servant of the co;
3. a body corporate.
4. persons who in respect of any period of an audit were in the employment of the co or
were connected therewith in any manner.
5. a person disqualified from being an auditor of a holding or subsidiary co
6. a debtor to the co or related co, in an amount exceeding N500,000
7. a shareholder or spouse of a shareholder of a co whose employee is an officer of the co
8. a person who is or whose partner, employee or employer is responsible for the keeping of
the register of holders of debentures of the co
223
9. an employee of or consultant to the co who has been engaged for more than one year in
the maintenance of any of the co’s financial records or preparation of any of its FS
10. a firm is qualified for appointment as auditor of a company if, all the partners are
qualified for appointment as auditors of the company.
AUDITOR’S REPORT AND AUDIT COMMITTEE S404
• The auditor(s) of a co, shall make a report to the members on the account examined by
him and on every BS and P&L account and on all group FS, copies of which are to be
laid before the company in a GM, during the auditor’s tenure of office.
• The auditors’ report shall state the matters set out in the Fifth Schedule in addition to the
report made under subsection (1), and the auditor shall in the case of a pub co, make a
report to an audit committee which shall be established by the pub co
• For a pub co, the report must be subject to the scrutiny of an audit committee.
DUTIES AND LIABILITIES OF AUDITORS
1. Utmost good faith (full disclosure of financial malfeasance)
2. Duty to exercise reasonable care and skill (S415) implying that he could be liable for
negligence. In Re Kingston Cotton Mill No2, Lindely L.J. said an auditor is a watchdog
while Lord Denning in Formento Sterling Area Ltd v Selsdon Fountain Co Ltd said
that, though auditor is not blood bound, he must approach his work with an inquiring
mind suspecting that someone might have made a mistake.
3. Duty to certify only what he believes
4. Duty to make exhaustive investigation
5. An auditor is liable in damages if he is found to be negligent and the co suffers loss.
Directors are to sue in such situation, but if they fail, any member can sue after notice of
30 days has been given to the directors
6. An auditor can be liable to an investor who invests and suffers loss due to information
given by the auditor Hedley Bryne & Co v Hellers & Partners Ltd.
REMUNERATION OF AUDITORS S408
• in the case of an auditor appointed by the directors, the remuneration may be fixed by the
directors; or
• be fixed by the company in GM or in such manner as the co in GM may determine
• “remuneration” includes sums paid by the company in respect of the auditors’ expenses.
REMOVAL OF AUDITORS S409
• An auditor may be removed by ordinary resolution of which special notice was given
notwithstanding, any agreement between them, before the expiration of his tenure
provided S409(1)
• The company shall within 14 days give notice in the prescribed form to CAC and failure
attracts fine penalty to be specified by regulation S409(2).
224
• He shall be paid compensation or damages for such termination, if he is entitled to them

S409(3).
RESIGNATION OF AUDITORS S412
• An auditor may resign his appointment by depositing a notice of his resignation in
writing at the registered office of the company.
• Any such notice shall operate to end the auditor(s) appointment, on the date of which the
notice is deposited or on a later date as maybe specified in the notice.
• The notice of resignation shall not be effective unless, it contains either;
a) a statement that there are no circumstances connected with his resignation which he
considers, should be brought to the notice of the members or creditors of the
company; or
b) a statement of any such circumstances as mentioned above.
• The company shall within 14 days send a copy of the notice:
a) to the CAC; and
b) if the notice contained a statement of circumstances connected with his resignation
which he considers, should be brought to the notice of the members or creditors of the
co, to every person entitled to be sent copies of the financial statements as of right
under S387.
• The company or aggrieved person may, within 14 days of the receipt by the co of a
notice containing a statement of circumstances connected with his resignation which he
considers, should be brought to the notice of the members or creditors of the co, apply to
the Court for an order.
• If on such an application the Court is satisfied that the auditor is using the notice to
secure needless publicity for defamatory matter, it may, by order, direct that copies of the
notice need not be sent out, and the Court may further order the company’s costs on the
application to be paid in whole or in part by the auditor, notwithstanding that he is not a
party to the application.
• The company shall, within 14 days of the Court’s decision, send to the persons entitled
to be sent FR as of right under S387:
a) if the Court makes an order on the ground of needless publicity for defamatory
matter, a statement setting out the effect of the order; and
b) if not, a copy of the notice containing the statement of circumstances connected with
his resignation which he considers, should be brought to the notice of the members or
creditors of the co.
AUDIT COMMITTEE S404
• Audit committee is applicable to only public companies.
• The purpose of setting it up is to act as watchdog on the co’s records and accounts,
ensures probity by moderating the expenses incurred by the co, help the external
auditor(s) in performing their duties, makes it impossible for the internal and external
225
auditors to liaise and defraud the company and questioning the directors on the findings
of the auditor(s).
COMPOSITION OF THE AUDIT COMMITTEE S404
• It shall consist of five members comprising of
i. three members and
ii. two non-executive directors,
• Remuneration? the members of the audit committee are not entitled to remuneration,
• Tenure of office: they are subject to election annually.
• The AC shall examine the auditors’ report and make recommendations thereon to the
annual general meeting as it may deem fit.
• All members of the AC shall be financially literate, and at least one member shall be a
member of a professional accounting body in Nigeria established by an Act of the
National Assembly.
• Any member may nominate another member of the co to the AC by giving written notice
of such nomination to the secretary of the company at least 21 days before the AGM
and any nomination not received prior to the meeting as stipulated is invalid.
OBJECTIVES AND FUNCTIONS OF AUDIT COMMITTEE 404(7)
Subject to such other additional functions and powers that the company’s articles may stipulate,
the objectives and functions of the AC are to—
1. ascertain whether the accounting and reporting policies of the co are in accordance with
legal requirements and agreed ethical practices;
2. review the scope and planning of audit requirements;
3. review the findings on management matters in conjunction with the external auditor and
departmental responses thereon;
4. keep under review the effectiveness of the co’s system of accounting and internal control;
5. make recommendations to the board with regard to the appointment, removal and
remuneration of the external auditors of the co; and
6. authorise the internal auditor to carry out investigations into any activities of the co which
may be of interest or concern to the committee.
ANNUAL RETURNS CAP16 from S417
• Every company shall, once at least in every year, make and deliver to the Commission an
annual return but the company needs not make a return in the year if the company does
not hold a meeting in that year under review S417.
• CAC Form 19 (Annual Returns Form) while
• CAC Form 22 is Annual Report of Exempted Company (unregistered company).
FORM OF ANNUAL RETURN
• The AR shall be in the following form;
i. Schedule 7 – Company having share capital other than small company S418
226
ii. Schedule 8 - Small Company S419

iii. Schedule 9 - Company Limited by Guarantee S420
TIME FOR COMPLETION AND DELIVERY OF AR S421
• AR must be completed within 42 days after AGM for the year and the company must
forthwith forward to CAC, a copy signed by a director and the secretary of the
company.
• The co may apply to CAC for extension of time within which to file the AR.
DOCUMENTS TO BE ANNEXED TO ANNUAL RETURN S423
• Subject to the provisions of S424, exempting unlimited companies and small
companies, the annual returns must have annexed to it, the following;
i. a written copy, certified by a director and the secretary to be true copy of every
balance sheet and profit and loss account laid before the co in GM, held in the year to
which the return relates;
ii. a copy certified by a director and the secretary of the auditor’s report and the report of
the directors accompanying the balance sheet.
• If a balance sheet after laying it before the general meeting is amended, it must be stated.
• In the case of a private company whether small company or limited by guarantee, the
annual return will be accompanied by the following;
i. a certificate by a director and the secretary of the private company, to the effect that,
the company has not since the date of its incorporation or last AR, as the case maybe
issued any invitation to the public to subscribe to any of its shares or debenture;
ii. where the AR discloses the fact that the number of members of the company exceed
50, also, a Certificate signed by a director and the secretary that the excess number
consists wholly of persons who under S.22(3) are not included in reckoning the
number of 50 i.e., employees of the co.
• A small company shall in addition to the certificate, send with the AR a certificate signed
by a director and the secretary that:
i. it is a private company limited by shares;
ii. the amount of its turn-over for that year is not more than N120,000,000 or such
amount as may be fixed by the Commission;
iii. its net assets value is not more than N60,000,000 or such amount as may be fixed by
the Commission;
iv. none of its members is an alien;
v. none of its members is a government, a government agent or nominee; and
vi. the directors among them hold at least 51% of the equity share capital of the
company.
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CORPORATE GOVERNANCE 5: MAJORITY RULE, MINORITY

PROTECTION AND INVESTIGATION OF COMPANIES
According to the explanation proffered by Allan Dignam and John Lowry in “Company Law”:
• Majority rule is a principle that in the context of corporate law, the logical principle is
that the majority will always prevail. This is because decisions are based on votes. The
majority can then become overbearing as most times instead of acting in the company’s
interest, they act in their own interest against the company or minority.
• There is the indoor management, historically the court has been of the view that the court
is not the manager of the business or managing the squabbles within the business. The
attitude of the court is that even when there is an issue, the court would consider if it is
what the majority can solve and if so, the court would not intervene.
• The court or law however, tries to equilibrate the situation to contain the overbearing
influence of the majority. However, the court won’t allow the minority to always turn to
it at every single action taken by the majority. So, it is usually when there is fraud.
CORPORATE SOVEREIGNTY
• The rule of corporate sovereignty was laid down in the old English case of Foss v
Harbottle (1843)2 Hare 461; SPDC Nigeria Limited v. Nwawka (2003) 6 NWLR (Pt.
815) 184 SC; Elufioye & Ors, v. Halilu & Ors. (1993) 6 NWLR (Pt. 301) 570;
Abubakri v. Smith (1973) 6 SC 31; Yalaju-Amaye v. Associated Registered
Engineering Contractors Ltd (1990) 4 NWLR (Pt 145) 422; Edokpolor& Co Ltd v.
Sem – Edo Wire Industries Ltd (1984) 15 NSCC 553, Mariner Nominees v FBIR.
• The rule is codified in S341: where an irregularity has been committed in the course of a
company’s affairs or any wrong has been done to the company, only the company can sue
to remedy that wrong, and only the company can ratify the irregular conduct.
• As explained by Jenkins LJ in Edwards v Halliwell [1950] 2 All ER 1064, it has two
limbs:
i. The proper plaintiff in an action in respect of a wrong done to a company is prima
facie the company itself.
ii. Where the alleged wrong is a transaction which might be made binding on the
company and all its members by a simple majority of the members (ordinary
resolution), no individual member of the company is allowed to maintain an action in
respect of that matter ‘for the simple reason that, if a mere majority of the members of
the company…is in favour of what has been done, then cadit quaestio (in other
words, the majority rule)
RATIONALE FOR CORPORATE SOVEREIGNTY.
• Prevents multiplicity of suits over one or similar incidents or arising from the same set of
facts.
• Members in a general meeting can ratify the wrongful acts of the directors.
228
• Logical consequence of separate legal personality S42, Salomon v Salomon.

• Preserves the principle of majority rule.
MINORITY PROTECTION – EXCEPTIONS TO THE RULE S343
• A member may by injunction or a declaration restrain the company from the following:
1. entering into any transaction which is illegal or ultra vires; S343(a), Parke v Daily
News; Hogg v Cramphorn.
2. purporting to do by ordinary resolution any act which by its articles or CAMA is
required to be done by special resolution; S343(b), Edwards v Halliwell.
3. any act or omission affecting the applicant’s individual rights as a member; S343(c),
Pender v Lushington.
4. committing fraud on either the company or the minority shareholders where the
directors fail to take appropriate action to redress the wrong done; S343(d), Cook v
Deeks.
5. where a company meeting cannot be called in time to be of practical use in redressing
a wrong done to the company or to minority shareholders; S343(e).
6. where the directors are likely to derive a profit or benefit, or have profited or
benefited from their negligence or from their breach of duty; S343 (f).
7. and any other act or omission, where the interest of justice so demands S343(g),
Edopkolor v Sem-Edo Wire per Aniogolu JSC.
RELIEFS TO BE SOUGHT S344
The remedies available to personal and representative actions are either;
• Damages for loss or breach of right
• Injunction; or
• Declaration
WHO CAN SUE? S345
• Members which include;
o Personal representative of a deceased member; and
o Any person to whom shares have been transferred or transmitted to by operation
of law.
TYPES OF MINORITY PROTECTION ACTIONS
i. Personal Action;
ii. Representative Action; and
iii. Derivative Action.
PERSONAL ACTION S344(1)
• It is essentially where an individual right of an individual peculiar to him as a member is
infringed, he can bring an action. For example, not paying a shareholder dividend may be
because he’s accused of being a rabble rouser.
229
• As Mellish LJ observed in MacDougall v Gardiner, where the right of a shareholder

has been infringed by the majority, he can sue. Here, the injury or wrong in question is
not suffered by the company as such, but by the shareholder personally.
• Thus, where a dividend is declared but not paid, a shareholder can sue personally for
payment by way of a legal debt. See, Wood v Odessa Waterworks Co (1889).
• Personal action is one instituted by an individual in his personal name against the
company and or its controlling members.
• A personal action does arise where a member seeks to redress a personal wrong to him in
his personal capacity Pender v. Lushington.
• It is brought solely to enforce a personal right.
• Where a member institutes a personal action to enforce a right due to him personally, or a
representative action on behalf of himself and other affected members to enforce any
right due to them, he or they are entitled to:
i. damages for any loss incurred on account of the breach of that right; or
ii. declaration or injunction to restrain the company or the directors from doing a
particular act.
REPRESENTATIVE ACTION S344(2), S46(4)
• A representative action is brought by a shareholder on behalf of himself and all other
members who have an interest in the litigation. For example, where a class of
shareholders allege that a class right has been infringed.
• The action avoids the costs of multiple suits. The court’s judgment will be binding on
those represented see Quin & Axtens Ltd v Salmon.
• Thus, a representative action is brought where a wrong has been committed by the
company to a class of shareholders.
• Consent of the members of the class: S46(4) provides that; in any action by any
member or officer to enforce any obligation owed under the memart to him and any other
member or officer, such member or officer may, if any other member or officer is
affected by the alleged breach of such obligation, with his consent, sue in a representative
capacity on behalf of himself and all other members or officers who may be affected
other than any who is a defendant and the provisions of Chapter 13 (minority protection).
DERIVATIVE ACTION S346
• It brought by one or more shareholders, but to enforce a cause of action that the company
itself has.
• The shareholder is not suing to enforce their own rights, but is instead suing to enforce
the company’s rights – say in respect of a breach of duty owed to the company by a
director.
• And if successful, the benefits will go to the company, not the shareholder.
• It is one in which an individual or minority is allowed to bring an action, as if it were
company itself suing for the wrong done to it.
230
• The basic feature and uniqueness of this domain of action is that it is an action which the
company, alone, ordinarily is empowered to maintain S346.
• However, the Act empowers a shareholder to, with leave of court, bring an action in the
name or on behalf of the company or intervene in an action, or to intervene in an action to
which the company or the company’s subsidiary is a party, for the purpose of
prosecuting, defending or discontinuing the action on behalf of the company or the
company’s subsidiary S346(1).
GROUNDS UPON WHICH THE COURT MAY GRANT LEAVE S346(2)
• No action may be brought and no intervention may be made, unless the Court is satisfied
that:
i. a cause of action has arisen from an actual or proposed act or omission involving
negligence, default, breach of duty or trust by a director or a former director of the
company;
ii. the applicant has given reasonable notice to the directors of the company of his
intention to apply to the Court;
iii. the directors of the company do not bring, diligently prosecute, defend or discontinue
the action;
iv. the notice contains a factual basis for the claim and the actual or potential damage
caused to the company;
v. the applicant is acting in good faith; and
vi. it appears to be in the best interest of the company that the action be brought,
prosecuted, defended or discontinued.
• A DA may be against the director or any other person (or both).
• In any DA, the plaintiff shall have the right to obtain any relevant documents from the
defendant and the witnesses at trial, and may in pursuance of that right request categories
of documents from such person without identifying specific documents.
ORDERS THE COURT CAN MAKE UPON A SUCCESSFUL DA S347(2)
The Court may make an order;
i. authorising the applicant or any other person to control the conduct of the action;
ii. giving directions for the conduct of the action;
iii. directing that any amount adjudged payable by a defendant in the action is paid, in whole
or in part, directly to former and present security holders of the company instead of to the
company; and
iv. requiring the company to pay reasonable legal fees incurred by the applicant in
connection with the proceedings
WHO CAN INSTITUTE A DERIVATIVE ACTION? S352
“applicant” means;
i. a registered holder or a beneficial owner and a former registered holder or beneficial
owner, of a security of a company;
231
ii. a director or an officer or a former director or officer of a company;

iii. the Commission; or
iv. any other person who in the discretion of the Court, is a proper person to make an
application for DA.
MODE OF COMMENCING DERIVATIVE ACTION S346, Agip Nigeria Limited v. Agip
Petrol Internationale
• Apply for leave of court by way of
o originating summons with
o verifying affidavit in support of the application showing the conditions outlined in
S346(2) above as conditions for granting of leave.
RELIEF ON GROUNDS OF UNFAIRLY PREJUDICIAL AND OPPRESSIVE
CONDUCT S353
• A member who alleges that the affairs of the company are being conducted in a manner
oppressive or unfairly prejudicial to a member or members may apply to court for relief
by petition S354(1); Ijale Properties Ltd v Omololu-Mulele [2000] FWLR (Pt.5) 709).
• An application to the court by petition for an order may be made by:
i. a member of the company;
ii. a director or officer, former director or officer of the company;
iii. a creditor;
iv. the Commission; or
v. any other person who, in the discretion of the court, is the proper person to make an
application under section 354.
GROUNDS UPON WHICH THE APPLICATION MAY BE MADE S354
• An application to court by petition for an order under this section in relation to a
company may be made by any of those named above.
• If the past, present or future action of the company has been, is or will become oppressive
or unfairly prejudicial or unfairly discriminatory.
RELIEFS BY THE COURT S355
The Court may make an order;
1. that the company be wound up;
2. for regulating the conduct of the affairs of the company in future;
3. for the purchase of the shares of any member by other members of the company;
4. for the purchase of the shares of any member by the company and for the reduction
accordingly of the company’s capital;
5. directing the company to institute, prosecute, defend or discontinue specific proceedings,
or authorising a member or the company to institute, prosecute, defend or discontinue
specific proceedings in the name or on behalf of the company;
232
6. varying or setting aside a transaction or contract to which the company is a party and
compensating the company or any other party to the transaction or contract;
7. directing an investigation to be made by the CAC;
8. appointing a receiver or a receiver and manager of property of the company;
9. restraining a person from engaging in specific conduct or from doing a specific act or
thing; or
10. requiring a person to do a specific act or thing.
NB:
• where an order that a company be wound up is made under this section, the provisions of
the Act relating to winding up of companies shall apply mutatis mutandis, as if the order
had been made upon an application duly filed in the court by the company S355(3).
• where an order under this section makes any alteration or addition to the memart of a
company, the alteration or addition supersedes provisions of the Act, and shall have
effect as if it had been duly made by a resolution of the company, and cannot be altered
without the leave of the court S355(4).
• a CTC of the order shall, within 14 days of the making of the order, or such longer
period as the court may allow, be delivered to CAC for registration by the co S355(5).
INVESTIGATION OF THE COMPANY BY CAC S357
• This section applies to where the co itself or its members applies for such investigation.
• The Commission may appoint one or more competent inspectors to investigate the affairs
of a company and to report on them in such manner as it may direct.
• The appointment may be made:
i. in the case of a co having a share capital, on the application of members holding
at least 1/10 of issued share capital;
ii. in the case of a company not having a share capital, on the application of at least
1/10 in number of the persons on the company’s register of members; and
iii. in any other case, on the application of the company.
• The application shall be supported by such evidence as CAC may require for the purpose
of showing that the applicant(s) have good reason for requiring the investigation S357(3).
• Where a co’s employee, in compliance with an inspector’s request, provides the inspector
with any information concerning the co’s affairs, the co shall protect the employee from
any form of discrimination or other unfair treatment S357(4).
• Any employee relieved of his employment without any just cause, other than for reason
of disclosure made pursuant to the provision of this section, is entitled to a compensation
which is calculated as if he had attained the maximum age of retirement or had served the
maximum period of service, in accordance with his terms of employment or conditions of
service to the co S357(5).
233
OTHER INVESTIGATIONS OF COMPANY S358

• Notwithstanding the provisions of sections 357, CAC may appoint one or more
competent inspectors to investigate the affairs of a co and report on them in such manner
as it directs, if it appears to it that there are circumstances suggesting that;
i. the company’s affairs are being or have been conducted with intent to defraud its
creditors or the creditors of any other person, or in a manner which is unfairly
prejudicial to some part of its members;
ii. any actual or proposed act or omission of the company (including an act or omission
on its behalf) is or would be so prejudicial, or that the company was formed for any
fraudulent or unlawful purpose;
iii. persons concerned with the company’s formation or the management of its affairs
have in connection therewith been guilty of fraud, misfeasance or other misconduct
towards it or towards its members; or
iv. the company’s members have not been given all the information with respect to its
affairs which they might reasonably expect.
NB:
• Inspectors’ powers during investigation S359.
• Production of documents and evidence to inspectors, this applies to both past and
present officers of the co S360.
• Power of inspector to call for directors’ bank accounts S361.
• Obstruction of inspectors to be treated as contempt of court, whoever does it, is liable
for an offence S362.
INSPECTOR’S REPORT S363
• The inspector may, and if so directed by the CAC, make interim reports to the CAC, and
on the conclusion of his investigation shall make a final report to it and any such report
shall be written or printed, as the CAC may direct.
• The CAC may direct that a copy of the inspector’s report be forwarded to the company at
its registered or head office.
• Where an inspector is appointed under section 357 in pursuance of an order of the Court,
the Commission shall furnish a copy of any of its reports to the Court.
• In any other case, the Commission may, if it deems fit—
o furnish a copy on request and on payment of the prescribed fee to—
▪ any member of the co or other body corporate which is the subject of the
report,
▪ any person whose conduct is referred to in the report,
▪ the auditors of that company or body corporate,
▪ the applicants for the investigation, and
▪ any other person whose financial interests appear to the CAC to be
affected by the matters dealt with in the report, whether as creditors of the
co or body corporate, or otherwise; and
234
o cause any such report to be printed and published.

POWER TO BRING CIVIL PROCEEDINGS ON COMPANY’S BEHALF S364
• If, from any report made under section 363, it appears to CAC that any civil proceeding
ought in the public interest to be brought by the co or anybody corporate, CAC may itself
bring such proceedings in the name and on behalf of the co or the body corporate.
• The CAC shall indemnify the body corporate against any costs or expenses incurred by it
in or in connection with proceedings brought under this section, and any costs or
expenses so incurred shall, if not otherwise recoverable, be defrayed out of the
Consolidated Revenue Fund.
CRIMINAL PROCEEDINGS AND OTHER PROCEEDINGS BY THE AGF S365.
• If, from any report made under section 363, it appears that any person has, in relation to
the co or anybody corporate whose affairs have been investigated by virtue of section
359, been guilty of any offence for which he is criminally liable, the report shall be
referred to the AGF.
POWER OF THE COMMISSION TO PRESENT WINDING UP PETITION S366
• If, in the case of any body corporate liable to be wound up under this Act, it appears to
the CAC from a report made by an inspector under section 363 that it is expedient in the
public interest that the body corporate should be wound up, the CAC may (unless the
body corporate is already wound up by the court) present a petition for it to be wound up
if the court considers it just and equitable to do so.
INSPECTORS’ REPORT TO BE USED AS EVIDENCE IN LEGAL PROCEEDINGS
S368
• A copy of any report of an inspector appointed under sections 357 and 358, certified by
the CAC to be a true copy, is admissible in any legal proceedings as evidence of the
opinion of the inspector in relation to any matter contained in the report.
APPOINTMENT OF INSPECTORS TO INVESTIGATE OWNERSHIP OF A
COMPANY S369
• Where it appears to the CAC that there is good reason so to do, it may appoint one or
more competent inspectors to investigate and report on the membership of any co, and
otherwise with respect to the co, for the purpose of determining the true persons who are
or have been financially interested in the success or failure (real or apparent) of the co or
able to control or materially to influence the policy of the co.
WINDING UP UNDER JUST AND EQUITABLE GROUNDS
S571 has listed six grounds for winding up of a company by court but the one relevant to us is
the sixth one which I underlined for emphasis;
235
S571, A company may be wound up by the court if;

(a) the company has by special resolution resolved that the company be wound up by the
Court;
(b) default is made in delivering the statutory report to the Commission or in holding the
statutory meeting;
(c) the number of members is reduced below two in the case of companies with more than
one shareholder;
(d) the company is unable to pay its debts;
(e) the condition precedent to the operation of the company has ceased to exist; or
(f) the Court is of opinion that it is just and equitable that the company should be
wound up.
Someone can bring action to wind up under just and Equitable Grounds, the remedy wasn’t
readily available. If there was some form of other remedy, the court won’t grant it.
The remedy was readily available in the context of small family companies or quasi partnerships.
It’s what happened in Ebrahimi v Westborn Galleries Ltd as it’s a co of father and son and the
applicant. The father and son ganged up and removed him as director from the co and they
followed the correct procedures of passing ordinary resolution while removing him making it
legal. Being hard-done by the removal and very unhappy brought action to wind up the company
under “winding up on just and equitable ground”, lost at TC and CA but won at HL based on
equitable grounds.
It is immaterial whether the act is in the interest of the co, provided it is inequitable per Lord
Wilberforce. This was given the initial understanding that all three of them would be directors,
the HL held it to suffice and because that was the only remedy available in the 1948 act, it was
wound up. But now, there are more remedies like unfair prejudice, so the court wouldn’t grant
that now but likely follow other remedies. It would amount to using a sledge hammer to kill an
ant. You cannot be closing up companies that create employment just like that when millions are
unemployed, such public interest is usually considered by the court.
If at all it would apply today, it would be in very small companies and there must be evidence
that like in Ebrahimi, there was a pre-agreement between them and the would-be directors. The
phrase is legitimate expectation. This was expressed in O’Neil v Phillips where Lord Hoffman
referred to the phrase as an unruly horse that won’t be allowed to dent the smooth process of
corporate operations. So, even the legitimate expectation based on the pre-agreement may not
now suffice in all circumstances.
The remedies now are numerous, so this winding up under just and equitable grounds, though
still in the statute books is highly unlikely to be granted.
236
In Fasakin v Fasakin, an application on the ground that there was reckless spending by the
director and treating the company as his personal property was refused with the CA overruling
the TC which had earlier granted it.
DRAFT: APPLICATION FOR DERIVATION ACTION
HOLDEN AT LAGOS
IN THE MATTER OF EDUPAL NIGERIA LIMITED
AND
IN THE MATTER OF COMPANIES AND ALLIED MATTERS ACT, 2020
BETWEEN
EDUPAL NIGERIA LTD----------------------------------------------------PLAINTIFF/APPLICANT
AND
PETER PAN --------------------------------------------------------------DEFENDANT/RESPONDENT
MOTION ON NOTICE
BROUGHT PURSUANT TO RULE 2(2) COMPANIES PROCEEDING RULES 1992,
SECTION 346 COMPANIES AND ALLIED MATTERS ACT, 2020 AND THE INHERENT
JURISDICTION OF THE COURT
TAKE NOTICE that this honourable court shall be moved on the 15th day of August, 2022 at the
hour of 9 O’clock or so soon thereafter as Counsel to the Applicant may be heard praying the
court for the following reliefs:
1. AN ORDER FOR LEAVE of court to bring an action in the name or on behalf of the
company to which the company is a party for the purpose of prosecuting the action on
behalf of the company.
2. AN ORDER directing an investigation to be made into the approval of a new
remuneration for the Managing Director of the company by the Corporate Affairs
Commission.
3. AN ORDER varying or setting aside the resolution of the Board of Director approving a
new remuneration for the Managing Director pending the investigation by the Corporate
Affairs Commission.
4. AND FOR SUCH FURTHER OTHER ORDERS as the honourable court may deem fit
to make in the circumstances.
Dated the 19th day of April, 2019.
____________________________
SOLICITOR FOR THE APPLICANT
Chris Ozo Agbata.
C. O. Agbata LP
237
12, Johnson Street, Asokoro,

Abuja.
[email protected]
07035406532
FOR SERVICE ON:

Respondent’s Counsel
Theo Uguru Esq
56 Madison Close,
Abuja.
238
COMPANY SECURITIES 1 (SHARES & DEBENTURES AND

ENFORCEMENT OF SECURITIES)
COMPANY SECURITIES
• Company’s securities are basically funds available for company’s operations which may
be either internally or externally obtained. It is made up of shares, debentures and bonds
among others. Shares are internally generated while debentures are externally generated.
• S868 proffers the following definitions:
o “securities” includes shares, debentures, debenture stock, bonds, notes (other than
promissory notes) and units under a unit trust scheme;
o “share” means the interests in a company’s share capital of a member who is
entitled to share in the capital or income of such company; and except where a
distinction between stock and shares is expressed or implied, includes stock;
o “debenture” means a written acknowledgment of indebtedness by the company,
setting out the terms and conditions of the indebtedness, and includes debenture
stock, bonds and any other securities of a company whether constituting a charge
on the assets of the company or not;
SHARES
• The classical definition was given by Farwell J in Borland’s Trustee v Steel Brothers &
Co Ltd [1901], he defined it as A share is the interest of a shareholder in the company
measured by a sum of money, for the purpose of liability in the first place, and of interest
in the second, but also consisting of a series of mutual covenants entered into by all the
shareholders inter se in accordance with s 16 (our own section 46(1) CAMA 2020) of the
Companies Act 1862. The contract contained in the articles of association is one of the
original incidents of the share. A share is not a sum of money settled in the way
suggested, but is an interest measured by a sum of money and made up of various rights
contained in the contract, including the right to a sum of money of a more or less
amount.”
• From the above definition, the elements of a share include:
1. It is a unit of investment
2. It is not a sum of money
3. It is an interest measured by a sum of money
4. It is measured by a sum of money for the purpose of interest or benefit
5. It is measured by a sum of money for the purpose of liability
6. It confers right of membership as contained in the AOA
7. It confers a right to the refund of your capital in a more or less amount
• The securities of a company consist mainly of shares and debentures.

• A share represents a unit of the bundle of rights and liabilities, which a shareholder has in
a company as provided in the terms of issue and the articles.
239
• Some of the rights attaching to shareholding include; the right to attend and vote at a
meeting S138(a) and (b).
• A share is a chose inaction and is property transferable as provided in the articles S139.
See Okoya v Santili.
TYPES/CLASSES OF SHARES
• Please see as from page 86 infra on construction of share capital.
PROHIBITION OF NON-VOTING AND WEIGHTED SHARES
• S140 abolished and prohibits the issue of non-voting and weighted shares with the
exception of preference shares in certain circumstances.
• S168 provides for the circumstances where preferences shares are permitted to carry
more than one vote per share are as follows, upon any resolution;
(a) during such period as the preferential dividend or any part of it remains in arrears and unpaid,
such period starting from a date not more than 12 months or such lesser period as the articles
may provide, after the due date of the dividend;
(b) which varies the rights attached to such shares;
(c) to remove an auditor of the company or to appoint another person in place of such auditor; or
(d) for the winding up of the company or during the winding up of the company.
(2) Notwithstanding the provisions of section 140, any special resolution of a company
increasing the number of shares of any class, may validly resolve that any existing class of
preference shares shall carry the right to such votes additional to one vote per share as is
necessary in order to preserve the existing ratio which the votes exercisable by the holders of
such preference shares at a general meeting of the company bear to the total votes exercisable at
the meeting.
This subsection is to the effect that even when the share capital of a company is increased, the
company may through its article provide for increment of the votes of preference shares to
maintain the ratio that hitherto existed. Even more controlling power, because if they were
already majority may be by virtue of subsection 1 of this section, increase in shares that would
have provided opportunity for the ordinary shareholders to reduce preference shares majority
through the backdoor as happened in Greenhalgh v. Ardene Cinemas Ltd. (No. 1) per Lord
Green, White v. Bristol Aeroplane Co, Ltd per Romer J and Cumbrian Newspapers Group
Ltd v. Cumberland and Westmoreland Herald Newspapers and Printing Co. Ltd per Scot
J has also been scuffled by this subsection.
(3) For the purposes of subsection (2), a dividend is deemed to be due on the date appointed in
the articles for the payment of the dividend for any year or other period, or if no such date is
240
appointed, upon the day immediately following the expiration of the year or other period, and
whether or not such dividend shall have been earned or declared.
ISSUE OF SHARES
• Please see as from page 86 infra on construction of share capital.
MODES OF ACQUISITION OF SHARES
i. Subscription S105
ii. Allotment S149
iii. Transfer S175
iv. Transmission S179
SUBSCRIPTION S105
• One can become a member of a company by subscription. By subscription we mean the
members who signed/subscribed to the memorandum and articles of association of a
company. They are known as the subscribers and are the first members of the company.
• The subscribers must together subscribe to all the shares amounting in value to the
authorised share capital as provided in S27(2)(b).
• At incorporation, the amount of the share capital stated in the memorandum to be
registered shall not be less than the minimum issued share capital S124(1).
• At least 25% of the share capital must be paid up S128(1)(a).
ALLOTMENT S149
• It is the allocation of a specified number of shares of a company to an applicant.
• Upon receipt of an application, a company shall where it wholly or partially accepts the
application, make an allotment to the applicant and within 42 days notify the applicant of
the fact of the allotment and the number of shares allotted to him S150(1)(c).
• The notification is by way of letter of allotment or a letter demanding payment for the
shares allotted.
• An applicant shall have the right at any time before allotment, to withdraw his application
by written notice to the company S150(2). This is known as renunciation.
• The company will subsequently enter the name of such allotee in the register of members
thereby, making him a member of the company.
METHOD OF APPLICATION FOR ALLOTMENT S150
• This depends of the type of co (whether is private or public)
o For a private co or pub co where the issue is not public, an applicant applies in
writing stating the number of shares he wishes to purchase.
o For a pub co where the issue is public, the application is made by the applicant
completing, signing and returning the form of application to the co.
• The BOD will have to pass a resolution to decide on the application
241
• Notification of allotment of shares forms a contract between the co and the applicant with
effect from the date of the allotment S151
• Sending a letter of regret, where the whole shares applied for cannot be granted
• In the event where a letter of regret is sent, part of the money representing the shares not
issued to the applicant should be refunded Dangote Ind Ltd v Bank PHB, it was held
that when issuing letter of regret, the money or part of it should be refunded, not merely
to increase share capital to issue.
• Return of allotment is done by filing Form CAC 5 within 1-month S154.
• There is also, pre-emptive rights with respect to allotment of shares S142.
PROCEDURE FOR ALLOTMENT OF SHARES (PLC)
1. Issue a prospectus.
2. Open a subscription list.
3. Receive applications and record in Application and Allotment Sheets.
4. Convene board (or Allotment Committee) meeting to pass a resolution of allotment.
5. Issue letters of allotment and letters of regret as appropriate and applicable.
6. Deal with letters of renunciation if any.
7. Prepare share certificates to be issued within 2 months S171.
8. Enter allottees’ names in the register of members.
9. File Return of Allotment (Form CAC 5) within one month of allotment.
NB: shares maybe paid for in cash or non-cash consideration S160.
10. If consideration involves capital investment of N20,000 or more, apply under the
Industrial Inspectorate Act for approval.
11. If shares are issued for a consideration other than cash; have the consideration valued and
by an independent valuer and obtain particulars of valuation.
12. Prepare and file along with Form CAC 5;
i. Particulars of valuation (valuation report);
ii. Agreement for sale of property or for services or other consideration;
iii. Agreement constituting the title of the allottee to the allotment.
iv. BOD resolution approving allotment by non-cash consideration
RETURN OF ALLOTMENT S154
• Every company within one month of allotment of shares must file with CAC Return of
Allotment that is, Form CAC 5.
CALL ON SHARES S158
• This is a demand made by a company upon a member to pay an amount outstanding on
his partly paid shares.
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PAYMENT FOR SHARES S160

• Shares can be paid for either in cash or by valuable consideration. It can also be paid for
partly in cash and partly by a valuable consideration if permitted by the articles of
association of the company.
• If paid by valuable consideration, an independent valuer will be to determine its true
value of the consideration and makes a valuation report to the co. Examples of valuable
considerations are: transfer of property, machinery, good will, know how, stock etc.
• Payment in cash includes: cash, cheque, bank draft or other securities for money.
LIEN ON SHARES S164
• Lien is described as a right to retain possession of property until a debt is paid.
• It is an equitable charge on the shares and entitles a co to sell the shares in case of default.
• A company has lien on shares not fully paid up.
FORFEITURE OF SHARES S165
• Forfeiture of shares is a situation where a shareholder ceases to be owner of the shares of
a co and the forfeited shares become the property of the co, which may be re-issued or
sold to another person.
• Although a shareholder ceases to be a member of a co, once his shares are forfeited, he is
notwithstanding liable to pay any outstanding liability on the shares as at the date of
forfeiture.
• The forfeiture may be cancelled before sale or disposition.
• A statutory declaration must be made by either a director or secretary that shares had
been forfeited as evidence of such forfeiture.
NUMBERING OF SHARES S170
• Every share of a company must be numbered to differentiate it from others especially
where a company issued different classes of shares.
• Numbering of shares may not be necessary if all issued shares are fully paid up or the
shares rank pari-passu/equally for all purposes.
SHARE CERTIFICATE S171
• A company must within 2 months of allotment issue share certificate and in the case of
transfer, the period is 3 months.
• It is not a document of title but prima-facie evidence of ownership.
TRANSFER OF SHARES
• Shares or other interests of a member in a company are personal property transferable
subject to the articles S139.
• The shares or other interests of a member in a company shall be property transferable in
the manner provided in the articles of association of the company S139.
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• A person may become a member of a company by having the shares of that company
transferred to him by the holder of those shares and entering his name in the register of
members.
METHOD OF TRANSFER OF SHARES S175
• Transfer of shares shall be effected by delivery of a proper instrument of transfer to the
company and the subsequent registration of the transferee in the register of members
S175(1) & (2).
• The transferor is deemed to remain a holder of the share until the name of the transferee
is entered in the register of members in respect of the shares S175(3), Ferris George &
Son Ltd v Khoury; Starcola Nig Ltd v Adeniji.
• The directors may refuse to register any transfer of shares and notice to that effect must
be given to the transferee within 2 months.
PROCEDURE OF TRANSFER SS 175, 176 & 181
• The procedure varies depending on whether the transferor is selling all his shares to one
purchaser or only part of his shares or all his shares to different purchasers.
• Where he is selling all his shares, the procedure is:
1. The transferor completes and signs the instrument of transfer under seal and delivers
it with the share certificate to the transferee.
2. The transferee completes and signs the instrument and delivers it with the share
certificate to the company for registration.
3. The transferee becomes the holder once his name is entered in the register of
members.
4. The company issues him a new certificate within 3 months and cancels the old one.
5. Alteration is effected on the register.
6. Notice to CAC as in Form CAC 5 (return of allotment).
• If what is transferred is part of the shares or all the shares but to more than one
purchaser, the procedure is as follows: S181
1. The transferor executes the instrument of transfer and delivers it together with the
share certificate to the company.
2. The company on receipt of the instrument and the certificate endorses on the
instrument the words “certificate lodged”
3. The endorsed instrument is delivered to the transferee in exchange for the price.
4. The transferee executes and sends the instrument to the company for registration and
issuance of share certificate.
5. Old certificate is submitted and a new certificate is issued to the transferee within 3
months.
6. Alteration is effected on the register.
7. Notice to CAC as in Form CAC 5 (return of allotment).
• This process is called certification of a transfer.
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TRANSMISSION S179
• The vesting of shares in the personal representatives on the death of a shareholder is
known as transmission of shares.
• On the death of a member, the survivor(s) where the deceased was a joint holder or the
personal representatives of the deceased where he was a sole holder, shall be the only
persons recognized by the company as having any title to his interest in the shares
S179(1).
• The PR may decide to elect another person in whose name the shares will be registered
but the co reserves the right still refuse to register it as it would have had was it
transferred by the original owner in his lifetime S179(2).
• The means to claim title to the interest in shares is the production of probate of the will or
letters of the administration of the estate S173. See Tika Tore Press Ltd v Abina.
• A personal representative may himself validly transfer the share or other interests of a
deceased member even though he is not registered as a member S178.
PROCTECTION OF BENEFICIARIES S180
• Any person claiming to be interested in any share, dividend or interest on them, may
protect his interest by serving on the company concerned a notice of his interest.
• The company shall enter, on the register of members, the fact that such notice has been
served and shall not register any transfer or make any payment or return in respect of the
shares contrary to the terms of the notice until the expiration of 42 days’ notice to the
claimant to the proposed transfer or payment.
• In the event of any default by the company in complying with this section, the company
shall compensate any person injured by the default.
• The interests of a beneficiary under a will are equitable only until the shares are
transferred to him and he has been registered as a member of the company.
DIVIDEND WARRANT
• This is the instrument used for paying dividend due on profits to members.
• It is now regarded as a negotiable instrument.
• Stamp Duty on Dividend Warrant.
• Currently, dividend warrant is no longer in use. What is presently in use is E-dividend.
MORTGAGE OF SHARES
• Shares are property transferrable as security for an advance.
• In other words, it can serve as a collateral for grant of facilities.
• The mortgage may be legal or equitable.
ATTACHMENT OF SHARES
• Shares held by a judgment debtor in public company or corporation may be attached and
sold by the judgment creditor.
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• This is made possible by the Judgment Enforcement Rules (Order V Rule 1) under the
Sheriffs and Civil Process Act.
DEBENTURES
• A company may borrow money for the purpose of its business or objects and may charge
or mortgage its undertaking or property and issue debentures S191.
• Debentures are instruments issued to lenders to acknowledge indebtedness by a company.
• The instrument is often, but not necessarily, by deed Union Bank of Nig. Ltd. v Tropic
Foods Ltd.
• A debenture is a legal document which states the terms on which a company had
borrowed money that is; a written acknowledgement of debt.
• Put differently, debenture is a loan agreement by which the lenders provide money to a
company to be repaid at a later date while bearing interest at an agreed rate.
• Debenture is usually secured on company’s property though, it need not always be so, as
there are unsecured debentures.
• Unlike shares, debenture is an external source of capital of a company for a company’s
business or objects. See General Auction Estate Co. v Smith; Inter-contractors (Nig)
Ltd v N.P.F.M.B and Union Bank of Nig. Ltd v Tropic Foods Ltd.
• Debentures are transferable securities and the normal conditions require the company to
maintain a register of debenture holders (except bearer debentures).
• The co can only borrow to the extent that the AOA allows but if it exceeds, it may be
ratified by MIGM.
• Co can issue debentures beyond borrowing limit, even outside of its authorised business
objects and it shall be valid S44(3), SS 92, 93, British Royal Bank v Torquand.
• Debentures may generally be of two forms:
o simple debenture or
o series of debenture (debenture stock) covered by trust deed
• Holder is entitled to a certificate within 60 days of creation and it can be reissued when
lost S192.
• Statement on a debenture is prima-facie evidence of title of the debenture by the person
named on it S194
• Every co must keep a register of charges SS 215 – 216
• Registration with CAC as in Form CAC 9 within 90 days of creation, non-registration
makes it void against a liquidator S222
• Form CAC 10 is for satisfaction of charge.
TYPES OF DEBENTURES
1. Perpetual Debentures; S196
2. Convertible Debentures; S197
3. Secured and Unsecured (Naked) Debentures; S198
4. Redeemable Debentures; S199
5. Registered Debentures;
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6. Bearer Debentures
7. Syndicate or Loan Debentures
PERPETUAL DEBENTURES S196
• These debentures are made irredeemable or redeemable only on the happening of a
contingency, however remote, or on the expiration of a period, however long.
• Such contingency maybe winding up of a company, takeover bid etc.
CONVERTIBLE DEBENTURES S197
• These are debentures issued with a proviso that at a determinable future date and at the
option of the debenture holders shall be converted into ordinary shares.
• But no debenture so converted into shares shall appear as if the shares were sold at a
discount. This is because of the ban on issue of shares at discount S146.
• The conversion is in lieu of redemption or repayment.
SECURED AND UNSECURED (NAKED) DEBENTURES S198
• Secured Debentures:
o A secured debenture is that which is secured by a charge over the company’s
property and it may be so secured by a fixed charge or by a floating charge.
• Naked Debentures:
o While a naked debenture is one which is not secured by a charge also called an
unsecured loan note.
• Debentures may be secured by a fixed charge on certain of the company’s property or a
floating charge over the whole or a specified part of the company’s undertaking and
assets, or by both a fixed charge on certain property and a floating charge.
• A charge securing debentures shall become enforceable on the occurrence of the events
specified in the debentures or the deed securing the same.
REDEEMABLE DEBENTURES S199
• A company limited by shares may issue debentures which are, or at the option of the
company are, liable to be redeemed.
• These debentures at the time of issuance are said to be redeemable at an agreed date.
• Redemption of this type of debenture is out of the profit of the co or from a Sinking
Fund, which is a fund set aside for redemption of debentures at a future or agreed date.
REGISTERED DEBENTURES
• These are debentures registered in the register of debenture holders and payable only to
the registered holders.
• It can be transferred and the transfer becomes effective after registration in the register of
debenture holders.
• It cannot be used as a negotiable instrument.
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BEARER DEBENTURES
• These are negotiable instruments and payable to the bearer.
• It is in succession and payable to the last endorsee.
• Bearer debentures do not require the company to maintain a register of debenture holders.
SYNDICATE OR LOAN DEBENTURES
• It is a successive or series of debentures on the same property with not right of priority of
one after the other, they rank pari-passu but asset mut cover borrowing
ISSUE OF DEBENTURES
• Debentures are issued in accordance with the provisions in the memart of association.
• If debentures are issued to the public, apart from complying with memart, they must also
comply with requirements, of S71(1) ISA i.e., a prospectus must be issued.
• A prospectus is the basis of the contract between the company and the public.
FORMS OF DEBENTURES
• There are two forms of debentures
i. Simple debenture and
ii. Debenture stock.
• Simple Debenture:
o This type is used where the loan is from one or few people.
o It is an agreement stating the sum borrowed, signed, sealed and delivered on
behalf of the lender/holder and the borrower/company
o The conditions of borrowing are endorsed at the back.
• Debenture Stock:
o Where the loan is from a large number of people, debenture stock is used.
o A debenture stock is a securitised loan stock by which loans are made by way of
securities, which are alloted in the same way shares are allotted except that
debenture stock holders are creditors to the company.
o Debenture stock must be issued under a trust deed between the company and the
trustee of the debenture holders appointed by the deed S208(1).
o No debenture trust deed shall cover more than one class of debentures, whether or
not the trust deed is required by this section to be executed.
CONTENTS OF EVERY DEBENTURE TRUST DEED S209
Every debenture trust deed, whether required by section 208 or not, shall state;
a) the maximum sum which the co may raise by issuing debentures of the same class;
b) the maximum discount which may be allowed on the issue or reissue of the debentures,
and
• the maximum premium at which the debentures may be made redeemable;
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c) the nature of any asset over which a mortgage, charge or security is created by the trust
deed in favour of the trustee for the benefit of the debenture holders equally, and
• the identity of the assets except where such a charge is a floating charge;
d) the nature of any asset over which a mortgage, charge or security has been or will be
created in favour of any person other than the trustee for the benefit of the debenture
holders equally, and,
• the identity of the assets subject to it except where such a charge is a floating
charge.
e) whether the company has created or will create any mortgage, charge or security for the
benefit of some, but not all, of the holders of debentures issued under the trust deed;
f) any prohibition or restriction on the power of the co to issue debentures or create
mortgages, charges or any security on any of its assets ranking in priority to, or equally
with the debentures issued under the trust deed;
g) whether the co has power to acquire debentures issued under the trust deed before the
date of their redemption and to re-issue the debentures;
h) the rate of, and the dates on which, interest on the debentures issued under the trust deed
shall be paid and the manner in which payment may be made;
i) the date or dates on which the principal or the debentures issued under the trust deed shall
be repaid or redeemed, and unless the whole principal is to be repaid to all the debenture
holders at the same time, the manner in which redemption is effected, whether by the
payment of equal instalments of principal in respect of each debenture, or by the selection
of debentures for redemption by the company, or by drawing, ballot, or otherwise;
j) in the case of convertible debentures, the dates and terms on which the debentures may be
converted into shares and the amounts which may be credited as paid up on those shares
in the right of the debentures held by them;
k) the circumstances in which the debenture holders are entitled to realise any mortgage,
charge or security vested in the trustee or any other person for their benefit (other than the
circumstances in which they are entitled to do so by this Act);
l) the powers of the co and the trustee to call meetings of the debenture holders and the
rights of debenture holders to require the co or the trustee to call such meetings;
m) whether the rights of debenture holders may be altered or abrogated and if so, the
conditions which shall be fulfilled, and the procedure which shall be followed, to effect
such an alteration or abrogation;
n) the amount or rate of remuneration to be paid to the trustee and the period for which it is
paid, and whether it is paid in priority to the principal, interest and costs in respect of
debentures issued under the trust deed; and
o) provisions for the replacement of the trustee if required.
CONTENTS OF DEBENTURE COVERED BY TRUST DEED S210
• Every debenture covered by a debenture trust deed shall state, either in the body or in a
note forming part of the same document or endorsed therein:
a) the matters required to be stated in a debenture trust deed by section 209 (1) (a), (b),
(f), (h), (i), (j), (l) and (m) above;
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b) whether the trustee of the covering debenture trust deed holds the mortgages, charges
and securities vested in him by the trust deed in trust for the debenture holders
equally, or in trust for some only of the debenture holders, and if so, which debenture
holders; and
c) whether the debenture is secured by a floating charge vested in the trustee of the
covering debenture trust deed or in the debenture holders.
CHARGES SECURING DEBENTURES SS203, 204
• Debentures may be secured by
i. Fixed charges
ii. Floating charges
• A Floating Charge means an equitable charge over the whole or a specified part of the
company’s undertakings and assets, including cash and uncalled capital of the company
both present and future, but so that the charge shall not preclude the company from
dealing with such assets until:
a) the security becomes enforceable and the holder thereof, pursuant to a power in that
behalf in the debenture or the deed securing the same, appoints a receiver or manager
or enters into possession of such assets; or
b) the Court appoints a receiver or manager of such assets on the application of the
holder; or
c) the company goes into liquidation.
• On the happening of any of the events mentioned above, the charge shall be deemed to
crystallise and become a fixed equitable charge on such of the company’s assets as are
subject to the charge, and if a receiver or manager is withdrawn with the consent of the
chargee, or the charge withdraws from possession before the charge has been fully
discharged, the charge shall thereupon be deemed to cease to be a fixed charge and again
to become a floating charge.
• A Fixed or Specific Charge is a charge attaching to a particular asset on creation. In

other words, it is a mortgage of a specified property of the co like land, machinery,
building, etc. It is best suited to fixed assets which the co is likely to retain for a long
period. A fixed charge maybe a legal mortgage or an equitable mortgage.
• A fixed charge on any property shall have priority over a floating charge affecting that
property, unless the terms on which the floating charge was granted prohibits the
company from granting any later charge having priority over the floating charge and the
person in whose favour such later charge was granted had notice of that prohibition at the
time when the charge was granted to him:
o Provided that a person is deemed to have notice of such prohibition in a floating
charge where a notice indicating the existence of such prohibition is registered
with the CAC S204.
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PROCEDURE FOR CREATION OF CHARGE

The following steps are taken in creating a charge:
1. Convene a board meeting to pass resolution authorising the loan and preparation of loan
documents including the prospectus if necessary;
2. Prepare, Execute and Stamp the documents:
i. Deed of Mortgage;
ii. Power of Attorney (if any);
iii. Debenture Trust Deed (if any);
3. Obtain Governor’s Consent if necessary; See N.I.D.B. v Olalomi Ind. Ltd.
4. File documents at Lands Registry;
5. File documents for registration at CAC:
i. Mortgage/Charge;
ii. Trust Deed;
iii. Particulars of Charge in Form CAC 9;
6. Leave copies of documents for inspection at the registered office of the co that is, in the
record of instruments;
7. Enter particulars of charges in the Register of Charges and also in the Register of
debenture holders where applicable;
8. Obtain Certificate of registration from CAC and have a copy of the charge endorsed on
every debenture or certificate of debenture stock issued by the co, the payment of which
is secured by the charge;
9. On the satisfaction of the charge, file statement of satisfaction in whole or in part of a
charge – Form CAC 10 along with deed of release or other instruments.
10. Notify CAC of the appointment of a Receiver or Manager upon enforcement of the
security.
REGISTRATION OF CHARGES S222
• Where a co creates a charge, it shall not later than 90 days after its creation deliver the
prescribed particulars of the charge (including any provisions in a floating charge that
prohibits or restricts the company from granting any further charge ranking in priority to
or pari passu with the floating charge) together with the instrument to CAC for
registration S222(1).
• Failure to register makes it and the amount on it immediately becomes payable S222(1).
• The registration is effected by filling the prescribed forms - Form CAC 9; which is used
for the registration of mortgage(s)/charge(s).
• When the charge is registered, CAC must issue a certificate.
• The certificate is a prima facie evidence of compliance with the requirements or
registration S223(2).
• The certificate must be endorsed on every debenture or debenture stock certificate issued
by the company and secured on the charge S228(1).
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EFFECT OF NON-REGISTRATION OF CHARGES

• Failure to register a charge as required will render it void against the liquidator and any
creditor of the company S222(1).
• The obligation to pay the debt is however, not thereby discharged as held in Capital
Finance Co. Ltd v Strokes (1969) 1 Ch. 261.
• When a charge becomes void, the money secured shall immediately become payable.
RECORDS TO BE KEPT AFTER CREATING DEBENTURES
• When a company issues a debenture, certain records are kept namely:
i. record of instruments S215
ii. register of charges S216; and
iii. register of debenture holders S218.
SATISFACTION OF CHARGES S229
• Where the co repays its debt to the debenture holder, it must file a Memorandum of
Satisfaction of the charge.
• This is done by using Form CAC 10 which is delivered to CAC and entered in the
register of charges.
RECTIFICATION OF REGISTER AND EXTENSION OF TIME S230
• A co and any person interested, may apply to court for rectification of the register of
charges and extension of time for registration in respect of omission to register a charge
within time.
• The court may grant the relief is satisfied that on other grounds, it is just and equitable to
do so.
NOTICE OF ENFORCEMENT OF SECURITY S231
• Any person who obtains an order of court for the appointment of a receiver or manager of
property of the co or appoints such a receiver or manager under powers contained in any
instrument must within seven (7) days from the date of the order or appointment
under the powers, give notice of the fact to the CAC which will register the fact in the
register of charges.
REMEDIES AVAILABLE TO DEBENTURE HOLDERS S233
1. Recovery of Principal and Interest
• Whether the debenture is a secured or an unsecured one, if there is default in the payment
of the principal and interest, as for any other debt, and after judgment, he may levy
execution on the property of the company.
2. Petition for winding up

• Subject to any conditions imposed by the debenture, the debenture holder may present a
petition for winding up as creditor of the company if the company is unable to pay the
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principal and/or interest which, as a debt, will be ground for winding up under
S233(b)(ii).
3. Debenture holders' Action

• When the debenture is one of a series, one of the debenture holders may bring a
debenture holders’ action (rep action) against the co on behalf of other debenture holders
of the same class as himself S233(2)(b).
A secured debenture holder has both remedies and the following additional recourse:
i. Bring Action: He may institute a debenture holders' action by which he may sue on
behalf of himself and all other debenture holders to obtain payment and enforce his
security by sale.
ii. Appoint a receiver or manager: He may exercise the power to appoint a receiver or
managers under an enabling power in the debenture or he may apply to court for the
appointment.
iii. Foreclose: He may apply to court for foreclosure of the company's right to redeem the
debentures.
iv. Exercise power of sell: He may proceed to sell the charged property if such a power is
conferred by the debenture instrument.
v. Proof for the balance: If the company is insolvent and his security is insufficient, he
may value his security and prove for the balance. In the alternative, he may surrender his
security and prove for the amount of the debt.
4. Sale
The power of sale may be exercised in the following circumstances:
i. If there is power in the debenture or trust deed. Where there is a single debenture, it
will normally contain power of sale to be exercised by the receiver. Even where there is
no express power, the implied power of sale by a mortgage may be exercised. Where
there is a trust deed, there will normally be an express power of sale and a sale of the
company's business operates to determine the contract of service of employees.
ii. On the order of court following a debenture holder's action. When an order is made,
the sale is generally carried out under the direction of the court and the purchased money
paid into the court. The court may in special circumstances, authorise sale out of court.
5. Foreclosure
• Foreclosure may be claimed and granted in a debenture holder's action S233(2)(b)(i). The
effect of the order is the same as for any mortgage, and the foreclosure may extend to
uncalled capital of the co. An order will not be made unless all the debenture holders of
every class are parties to the action, but the court may order sale instead of foreclosure if
it considers it just so to do.
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6. Valuation of Security and Providing for Balance on Winding up

• Where the debenture is secured, the debenture holder is in the same position as any
secured creditor of the company and therefore, on winding up, he may value his security
and if it is insufficient, he may prove for the balance like any unsecured creditor.
7. Remedies in the Instrument S233(5)

• The remedies given by this section are in addition to, and not in substitution for, any
other powers and remedies conferred on the trustee of the debenture trust deed or on the
debenture holders, by the debentures or debenture trust deed, and any power or remedy
which is expressed in any instrument to be exercisable if the debenture holders become
entitled to realise their security S233(5).
8. Bar on Limitation of Remedies S233(7)

• No provision in any instrument which purports to exclude or restrict the remedies given
by this section is valid.
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COMPANY SECURITIES 2: FLOATATION OF SECURITIES &

COLLECTIVE INVESTMENT SCHEMES
LEGAL FRAMEWORK
1. Investments and Securities Act (ISA)
2. Companies and Allied Matters Act (CAMA)
3. Federal Competition and Consumer Protection Act (FCCPA)
4. Federal High Court Act (FHCA)
5. Securities and Exchange Commission Rules (SEC Rules)
REGULATORY AUTHORITIES
1. Securities and Exchange Commission (SEC) – main Regulator -S13 ISA
2. Nigerian Stock Exchange (NSE)
3. Corporate Affairs Commission (CAC)
4. Federal High Court (FHC)
5. Debt Management Office
THE CAPITAL MARKET
• The capital market is a financial market for the buying and sale of securities, such as
shares, debentures, bonds and units of collective investment schemes S868 CAMA
for the definition of securities.
• The capital market is a platform for companies and governments to raise medium and
long term capital
NB
• For companies: Capital market financing, (through the issuance of securities, such as
shares, debentures and bonds) provide the required capital to implement the company’s
business objects
• For governments: The issuance of securities, such as bonds and sukuk, provide funds
for infrastructural development. Some time ago, the Federal government of Nigeria, in
order to raise funds for the construction of roads, issued some sovereign “sukuk” bond
THE DIVISION OF THE CAPITAL MARKET IN NIGERIA
1. The Primary Market
2. Secondary Market
• Primary Market: In this part of the capital market fresh securities are issued by
companies, for the purpose of raising capital.
• New securities in this regard may be traded by way of:
o Initial Public Offer
o Subsequent public offer
o Hybrid issue
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• Secondary Market: Here, investors can buy shares and other securities that have been
previously issued and traded.
CAPITAL MARKET OPERATORS AND CONSULTANTS
• Capital market operators
• They are to be registered with SEC. These include:
i. Issuing Houses
ii. Securities Dealers
iii. Stock Brokers
iv. Trustees
v. Portfolio Managers
vi. Underwriters
vii. Custodians
• Capital Market Consultants
• They offer expertise service in the capital market.
• To operate in the capital market, they must be registered with SEC.
• Examples of capital market consultants:
i. Solicitors
ii. Accountants
iii. Valuers
iv. Investment Advisers
v. Rating Agencies
vi. Engineers
REGISTRABLE SECURITIES R279 SEC Rules 2013.
NB: Security offers by the following entities must be registered with SEC R279 (1) (a) & (b)
SEC Rules:
• All securities of:
i. Public companies
ii. Collective Investment Schemes
iii. Investment trust companies
iv. Government and its agencies
v. Supranational bodies
NB: securities arising from conversion of a private company to public limited company shall be
registered by the SEC R279 (1)(d) SEC Rules.
METHODS OF PUBLIC OFFER OF SECURITIES R279 (1)(c) SEC Rules
All securities subject to registration may be offered through the following methods:
1. Initial public offer
2. Offer by Introduction
3. Direct offer to the public (offer for subscription)
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4. Offer for sale

5. Private placement by public companies and other entities
6. Rights issue
7. Bonus issue
8. Debt equity conversion
9. Debenture/ loan stock
10. Sukuk
11. Bonds
12. Offer by tender
1. Initial Public Offer (IPO)

• In this type of offer, a company invites members of the public, for the very first time, to
subscribe to its shares or debentures.
• IPOs represent the first entry of the company into the capital market.
• Subsequent offers made by the company are no longer called IPO but are rather known as
Public offers or Offer for subscription.
2. Offer by Introduction
• By this method, the shares of a company can be listed without the conduct of an initial
public offer (IPO).
• The company will usually have raised capital, prior to the initial listing of the company’s
shares on the trading board
3. Direct offer to the Public (Offer for Subscription)

• The company offers its shares or debentures to the public through an issuing house. This
is done by means of a document called the prospectus.
• In such case, the issuing house merely acts as an agent in the transaction, becoming a link
between the company, the regulatory authority and the investing public.
• Since the issuing house does not bear the risk of failure of the offer, the company usually
protects itself by arranging for the issue to be underwritten at an agreed commission.
• NB: An issuing house, in this case, may be a bank or some other financial institution.
4. Offer for sale

• This involves the following:
• The company sells the whole issue of shares or debentures to an issuing house, which
then invites the public to buy from it, usually at a higher price.
• The issuing house, while acting as the official liaison for the company, bears the risk in
the event of under subscription.
• To protect itself, the issuing house underwrites the issue
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5. Placing
• Involves the issuance of the securities of public companies, not to the public at large but
to an issuing house, which then sells to clients or institutional investors (e.g., banks,
pension funds, etc) Placement (also known as private placement by public companies)
• The company pays brokerage (commission) to the issuing house.
• This is a means by which an unquoted public company may arrange to offer its shares to
the public
• By R340(2) SEC Rules there are conditions that must be satisfied foe private placement:
• No public company shall offer securities by way of private placement without the prior
approval of the Commission.
• Private placement by public companies shall be subject to the following conditions:
a) The company shall show evidence of dire need of fresh funds or technical expertise
and shall satisfy the Commission that private placement remains the only viable
option to achieving its objective.
b) The securities shall not be offered to more than 50 subscribers.
c) The resolution of the company authorizing the placement shall be Special as defined
in the CAMA, and shall state the number of shares to be offered and the price.
d) The notice of the GM authorizing the placement shall be published in two national
daily newspapers and evidence of the publications shall be filed with SEC.
e) The aggregate number of shares to be offered through private placement by a public
quoted company shall be 30% of its existing issued and paid-up capital prior to the
offer: Provided that where the company is ailing, it may offer a higher number of
shares, subject to the approval of SEC.
f) The price of the securities of the company, if quoted, shall be on technical suspension
during the period of placement.
g) The offer shall be for a period as proposed by the issuer and approved by SEC but
not exceeding ten (10) working days: Provided that SEC may extend the period
under special circumstances.
h) All subsequent capital raising shall be approved only upon satisfactory account of
utilization of previous issue proceeds.
• Private Placements shall not be advertised, mentioned and/or discussed in the print and
electronic media. Approval of a private placement may be suspended or withdrawn for
violation of this rule. Any Capital Market Operator engaged in an advisory role on the
private placement may also be sanctioned.
6. Rights Issue
• An invitation to existing shareholders to subscribe to new securities being issued by the
company, at a special price and in proportion to their existing holdings. E.g., The
issuance of 2 new shares for every 10 shares held in the company.
• It requires prospectus but an abridged prospectus may be sufficient
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7. Bonus Issue
• The proportionate issuance of new shares to the existing shareholders of the company
at no cost to the shareholders by the capitalisation of accumulated reserves from the
profits earned in the previous year
• NB: No need for the issuance of prospectus
8. Debt equity conversion

• This is a process that enables the conversion of debt instruments into equity, based on
certain conditions reached by the parties involved in the transaction.
• E.g., where the company owes a person, an agreement can be reached between both
parties for the debt to be converted into shares. Hence, the creditor is paid with the shares
of the company.
9. Debenture
• A debenture is a medium or long-term debt instruments used by companies to borrow
money.
10. Bonds
• Bonds are tradable security issued by the following authorities:
i. Governments at the Federal (sovereign bonds)
ii. states, local governments and government agencies (revenue bonds)
iii. cities within a local government (municipal bonds)
iv. Public Companies
• FG, SG & LG bonds are tradable securities issued by the govt to raise funds for particular
projects authorised by the issuing authority SS 222 – 223 ISA.
• They can issue registered bonds or promissory notes cumulative loan outstanding shall
not be more than 50% of its revenue for the preceding year.
11. Sukuk
• It is an Islamic financial certificate that is similar to a bond.
• It represents aggregate and undivided shares of ownership in a tangible asset, as it relates
to a specific project or specific investment activity.
• Investment certificates issued as evidence of undivided ownership of tangible assets,
usufructs and services, or some investment activity, based sharia principles, approved by
SEC, R569 SEC Rules.
• The difference between bond and sukuk: the sukuk holder receives, on a periodic
basis, a portion of the profit generated by the associated asset while the bond holder
receives periodic interests, arising from the debt obligation owed to him by the bond
issuer
12. Offer by Tender

• Applications are invited from the public to tender for shares or debentures of a company.
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• The minimum price is fixed but the maximum price is determined by the prices tendered
in the applications.
• Allotments are made to the highest bidder.
13. Electronic Offer and transfer of securities

• S55(1) ISA and R345 SEC Rules empowers a company to use electronic mode of offer
and transfer of securities, subject to other rules and regulations, provided that where an
investor elects to have a share certificate, the company shall issue him with a share
certificate.
• The electronic transfer is usually adopted for the over the counter (OTC) market
transactions.
• It is currently used at the secondary market of the NSE under the auspices of the Central
Securities Clearing System (CSCS).
• The CSCS provides an electronic platform, which enables stocks to be processed in an
electronic book entry form.
• Delivery of share certificates is replaced with electronic credits and debits to
shareholders’ stock position held at the Central Securities Depository at the CSCS.
COMPULSORY REGISTRATION OF SECURITIES
• All securities proposed to be offered for sale to or for subscription by the public or to be
offered privately with the intention that the securities shall be held ultimately other than
by those to whom the offers were made must be registered with the SEC, S54 ISA.
PROCEDURE FOR FLOATATION
• Step 1: internal compliance, board resolutions, special resolution for conversion (e.g.,
ltd to plc), consequential amendments etc.
• Step 2: appointment of professionals including; solicitors, underwriters, valuers,
reporting accountants, issuing houses etc.
• Step 3: team meeting, assigning of responsibilities and time line.
• Step 4: documentation and payment of fees, resolutions, audited accounts,
underwriting contracts, vending contracts, accounts histories and projections, prospectus,
etc.
• Step 5: registration with SEC (by issuing house on behalf of the company).
• Step 6: obtain approvals and converge a meeting.
• Step 7: marketing and distribution.
• Step 8: allotment, deal with oversubscription, allotment proposal filed with SEC, prepare
range of analysis, e-allotment and issuance of certificate etc.
DOCUMENTS TO FILE FOR REGISTRATION
The documents to file in addition to Form SEC 6 for the registration of securities are provided
for under R279(2) SEC Rules as follows:
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1. Duly completed Form SEC 6

2. A CTC of the resolution(s) by the general meeting authorising the offer
3. Two CTCs of the altered Memart
4. A CTC of certificate of incorporation of the issuer,
5. A signed copy of audited accounts for the preceding five (5) years or number of years for
which the issuer company has been in operation, (if less than five (5) years) or audited
statement of affairs (in the case of a new company).
6. Two copies each of the draft prospectus/rights circular/placement memorandum and
abridged prospectus;
7. Two copies of the draft underwriting agreement and sub-underwriting agreement, where
applicable;
8. Two copies of draft vending agreement, between issuer and the issuing house.
9. Letters of consent given by the parties to the issue, sworn to before a Notary Public or
Commissioner for Oaths.
10. Evidence of technical agreement (if any) reached between the issuer and technical
partner(s), advisers/consultants;
11. CTC of Form CAC 7B (particulars of directors)
12. A copy of the mandate letter by the issuer to the issuing house;
13. Evidence of payment of registration and filing fees;
14. A certificate of exemption from a recognised stock exchange (where applicable)
CERTIFICATE OF REGISTRATION
• Upon registration, SEC will issue a certificate of registration in respect of the securities
and investments registered by it, S54(4) ISA.
ISSUANCE OF PROSPECTUS IN OFFERS OF SECURITIES MADE TO THE PUBLIC
• Offers of securities made to members of the public must be accompanied by the issuance
of prospectus S71 ISA.
• Exceptions: that is where abridged prospectus may be issued:
o No need for prospectus if the shares are issued to existing members of the
company or the securities are in all respects uniform with securities previously
issued S74 ISA.
o Prospectus may also be exempted by SEC in line with S76 ISA.
The prospectus shall have endorsed on it or attached to it:
1. the consent of every expert whose statement is contained in the prospectus,
2. in the case of prospectus issued generally:
i. a copy of any applicable contract;
ii. written statement by an expert in respect of adjustment made in any report.
3. state that a copy has been delivered for registration; and
4. specify or refer to statements included in the prospectus which specify any documents
required to be endorsed on or attached to the copy so delivered (statement of experts).
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REGISTRATION OF THE PROSPECTUS

• Persons or bodies which issue an advertisement or make an invitation to the public to buy
the securities of a company shall, within 6 months prior to the making of such
invitation, deposit a prospectus relating to the offer, with the SEC for registration SS 75,
76, 79 ISA.
• They are also required to supply to every person to whom the invitation is made, a true
copy of such prospectus S78(1)(a) ISA.
• Statements of Experts on the Prospectus: To be valid for registration by SEC, every
prospectus inviting members of the public to subscribe for securities must contain a
written statement by an expert, consenting to the issue S77 ISA.
WHAT IS A PROSPECTUS?
• Any written or electronic information, notice, advertisement or other forms of invitation
made to the public, for the purchase of shares, debentures or other approved and
recognised securities of a company and other issues or schemes S315 ISA.
• For the contents of a prospectus S79 ISA; and the third Schedule (parts 1 & II) ISA.
THE RELEVANCE OF PROSPECTUS
• To keep potential subscribers and purchasers of securities informed of all the facts that
are material to the offer
Forms of Prospectus
1. Full prospectus
2. Abridged Prospectus
3. Deemed Prospectus
4. Statement in Lieu of Prospectus
1. Full prospectus
• Contains a full or detailed description of the offer
2. Abridged Prospectus
• It is a summarised version of the prospectus, containing the key requirements of a
prospectus
• Takes the place of a full prospectus, which is bulky and contains many documents
• It usually issued in restricted invitation S79 ISA where the invitations are:
i. made solely to the existing shareholders of that company; or
ii. in all respects is uniform with its existing listed shares
iii. made under S79(3) and (4).
iv. involving the exemptions under S76(a) and (b).
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3. Deemed Prospectus
• It does not bear the title “prospectus”, yet, it contains the basic requirements of a
prospectus which are relevant to a public offer.
4. Statement in Lieu of Prospectus

• This is a statement delivered to the SEC in place of a prospectus.
• A public company may deliver this document to SEC in any of the following instances:
i. Where it intends to allot shares to the public but has not issued a prospectus
ii. Where it has issued a prospectus but has not allotted the shares
• Where a statement in lieu of prospectus is issued, the company shall at least 3 days
before the first allotment of the shares deliver to SEC for registration, the statement in
lieu of prospectus signed by every person who is named in it as a director or a proposed
director of the company or by his agent authorised in writing.
• Statement in lieu of prospectus shall be in the form and contain the particulars set out in
part 1 of the 4th schedule to this Act, and in the cases mentioned in part II of that
schedule, set out the reports specified therein, and the said parts shall have effect subject
to the provisions contained in part III of that schedule., S84 ISA.
CONTRACT IN PROSPECTUS, etc., NOT TO BE VARIED WITHOUT LEAVE S81 ISA
• A company limited by shares shall not, before the statutory meeting, vary the terms of a
contract referred to in the prospectus or a statement in lieu of prospectus, except with the
approval of the statutory meeting.
• Observations: could it be that this provision refers generally to all the meetings provided
for in CAMA (SM, AGM and EGM) as statutory meetings? This is because, according to
CAMA SM is held once in a company’s lifetime which is 6 months after incorporation
but public issue of shares is done limitlessly, so how can the variation of terms in the
prospectus or statements in lieu of prospectus be only in a SM? There’s definitely a legal
coordinate dissonance and lack of concomitance between the two.
CIVIL AND CRIMINAL LIABILITY FOR MISSTATEMENTS IN THE PROSPECTUS
(OR STATEMENT IN LIEU)
• Civil liability S85 ISA
• Subscribers who suffered loss, as a result of the untrue statement or misstatements in the
prospectus shall be compensated by:
o The issuing house and its principal officers
o Employees of the company and directors who facilitated or participated in the
issuance of the prospectuses R292 SEC Rules, 2013.
• Criminal Liability S86 ISA

• Where criminal liability arises, the following penalty applies:
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o Any director or officer who authorised the issuance of the prospectus commits an
offence and is liable on conviction to:
▪ A fine of not less than N1, 000,000,000 (one billion naira); or
▪ To imprisonment not exceeding 3years; or to both fine and imprisonment.
▪ But if it is summary conviction, although, the fine penalty is same but the
prison term is three months.
▪ Exception: unless he proves either that the untrue statement or mis-
statement was immaterial or that he had reasonable ground to believe and
did, up to the time of the issue of the prospectus, believe that the
statement was true.
o It is same liability for misstatement in statement lieu of prospectus but it is
provided for in S87 ISA not S86, all the elements and quantum are same.
Other liabilities:
• Liability for Non-Issuance of Prospectus: N500,000 (body corporate) and N100,000
(individual) S67(2) ISA.
• Liability for Issuing Application Form without Prospectus: N100,000 fine S71(4)
ISA.
• Non-Registration of Prospectus: N25,000 for company & N5,000 for individuals for
each day of default S80(6) ISA.
PROCEDURES FOR THE FLOTATION OF SHARES IN THE CAPITAL MARKET
1. Preparation of a Draft Prospectus (or statement in lieu of prospectus)
2. The Issuing House submits the prospectus to the SEC, along with Application for the
Registration of the Securities
3. Printing the final copy of the prospectus, as approved by SEC
4. Obtaining the consent of experts whose reports or statements are contained in the
prospectus
5. Having the final copy of the prospectus duly signed by every person named in it as a
director
6. Submission of the printed prospectus to SEC for registration
7. Sending the Approved and registered prospectus to NSE and CAC for record purposes
8. Publishing the prospectus which contains the invitation for the public to subscribe to the
securities of the company
FLOTATION OF BONDS
• Bonds are fixed income securities issued as debt instruments with low interest yield but
guaranteed return on investment over time.
• Bonds may be floated by the govt or a corporate organisation in order to raise funds
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FEATURES
• Interest is paid at periodic intervals but the principal sum is paid at specified maturity
dates.
• It is traded at the NSE like debentures, shares
• It is a means by which the govt raises money to finance projects.
• A corporate body can also issue bonds, in order to raise the capital needed to fund its
business objects
CLASSIFICATION OF BONDS
• public bonds may be issued by the government or a public company
i. if issued by the govt or any of its agencies, they are referred to as govt bonds
ii. if issued by a company, they are known as corporate bonds
• In both situations, all public bonds are regulated by the SEC
i. Government bonds: Issued by government at all levels (FG, SG, LG). It is:
a) Sovereign bonds – Issued by the Federal Government
b) Revenue bonds – Issued by the SG, LG and government agencies
c) Municipal bonds – Issued by cities within local governments
ii. Corporate bonds - They are issued by the following entities:

a) Public companies
b) Foreign companies
c) Multinational Bodies
• Those who can issue public bonds S222 ISA

i. the Federal Government;
ii. Federal Government agencies;
iii. State Governments and their agencies;
iv. The Federal Capital Territory and its agencies;
v. Local Governments; and
vi. any company which is wholly owned by the Federal, State, Federal Capital Territory
and Local Governments
PROCEDURE FOR ISSUANCE OF CORPORATE BONDS
1. Convene a board meeting and pass a resolution authorising the bond issue.
2. A resolution passed at the GM will be needed if the amount to be borrowed is beyond the
issuing companies borrowing limit or the bond is a convertible bond.
3. The company will file a registration statement accompanied by the following
documents:
a. Duly completed form SEC 6;
b. Appropriate filing and registration fees;
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c. Two (2) copies of the board resolution authorising the issue of the bond or special
resolution if needed
d. Two (2) copies of the Memart (CTC) of the Issuer
e. A copy of certificate of incorporation of the issuer certified by the company
secretary;
f. A signed copy of the issuers latest audited accounts for the preceding three (3)
years, with the latest account not more than nine (9) months old at the time of
filing with SEC;
g. Reporting accountant report;
h. Consent letters of the parties to the offer;
i. Two (2) copies of the draft vending agreement between the issuer and the issuing
house;
j. Draft underwriting agreement (where applicable);
k. Rating report by a registered rating agency;
l. A letter of “No Objection” from the relevant regulatory body (where
applicable);
m. Two (2) copies of draft trust deed;
n. A draft prospectus, right circular, placement memorandum or any form of
information Memorandum with specified contents in R567(n)(i-xi) SEC Rules
o. Declaration by the issuer on compliance with all requirements of the Act;
SOME CONDITIONS FOR ISSUANCE OF GOVERNMENT BONDS
1. A law passed by the National Assembly, State House of Assembly or Local Government
authorising the issuance of bonds.
2. It must be registered S223(1)(b) ISA.
3. The total amount of out-standing loan and the bond of the issuer should not exceed more
than half of its actual revenue for the preceding financial year S223(1)(b) ISA; R565(2)
SEC Rules.
4. The bond issue must be in accordance with ISA S224(1) ISA, R564 SEC Rules.
5. The fund shall be managed by a corporate trustee registered by SEC S224(5) ISA.
6. The principal monies and interest shall be charged on and payable out of the general
revenue and assets of the body concerned and of the assets of the appropriate authority or
project which is the beneficiary of the proceeds of the loan S225 ISA.
7. The particulars of each loan to be raised shall be published in the Gazette or any other
official document by the body raising the loan S226 ISA.
8. Redemption date shall not exceed 25years from date of issue of the bond S226(2) ISA.
9. No person shall be entitled to any registered bond unless he is registered as a bond holder
in respect of the bond S230 ISA.
10. The bond holders must pay full purchase price before registration S231 ISA.
11. Bond Certificates must be issued to bondholders by the registrar within 2 months of the
issue S232 ISA; R565(5) SEC Rules.
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12. The bond instrument must bear crest of the govt body and be signed by the minister,
commissioner or chairman or other appropriate officer of the body raising the loan
S241(1) ISA.
13. Registered Bonds may be designated in any denominations approved by SEC S241(2)
ISA.
14. A separate sinking fund shall be established for each loan raised S251 of ISA.
15. Letter of authority of guarantee by the Accountant General of state or federation stating
that the bond shall be paid and to deduct at source from the statutory allocation due to the
issuer in the event of default or failure to meet its payment obligations.
PROCEDURE FOR THE REGISTRATION OF GOVERNMENT BONDS R565(1) SEC
Rules; S224(3) ISA.
Fill Application Form SEC 6 with the following attached:
1. A copy of the Law authorising the issue of the bond by the State Government, etc. or a
Resolution of either the House of Assembly (or the Senate if it is by the Federal
Government) or the State (Federal) Executive Council in lieu of a formal Law.
2. Copies of the draft trust deed, where applicable
3. An irrevocable Letter of authority issued by the Accountant-General of the State to the
Accountant General of the Federation to deduct at source from the statutory allocation to
it (the issuer) into the sinking fund(note-waiver)
4. Evidence of technical agreement (if any) reached between the issuer and technical
partner(s), advisers/consultants;
5. A feasibility report on the project to be financed
6. Copies of the draft underwriting agreement and sub-underwriting agreement
7. A copy of a rating report by a rating agency
8. The latest audited accounts shall not be more than twelve months old for states, local
governments and Federal Government agencies and supranational bodies.
9. Publication of annual financial statements in 2 daily newspapers.
10. Details of sinking fund
11. Evidence of payment of registration and filing fees
FLOTATION OF GLOBAL DEPOSITORY RECEIPT (GDR)
• It is a type of investment by a foreigner, whereby the foreigner buys the shares of a
foreign company in his home country and in the local currency
• Dividend on GDR is paid in the local currency of the foreigner
• No share certificate is given
• Only listed companies can enjoy the issuance of GDR.
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CREATION AND MANAGEMENT OF COLLECTIVE INVESTMENT SCHEMES (CIS)

MEANING OF CIS:
• This is a scheme in which members of the public are invited to, or permitted to invest
money in a portfolio, which is then managed on their behalf by a fund manager who may
invest same in venture capitals, bonds and other forms of securities.
• S153(1) ISA defines a CIS as a scheme in whatever form, including an open-ended
investment company, in pursuance of which members of the public are invited or
permitted to invest money or other assets in a portfolio, and in terms of which:
i. Two or more investors contribute money or other assets to and hold a participatory
interest in a portfolio of the scheme through shares, units or any other form of
participatory interest; and
ii. The investors share the risk and the benefit of investment in proportion to their
participatory interest in a portfolio of a scheme or on any other basis determined in
the deed, but not a CIS authorised by any other Act.
• Investors in CIS are known as unit holders.
• They are not members of the company in which their money is invested; they only have a
participatory interest in the scheme.
• They are only entitled to a pro rata share of dividends, interest or other income of the
securities comprised in the unit based on the level of participatory interest in the scheme.
FEATURES OF CIS
1. The participants pool funds together into a portfolio
2. It managed (day to day) by a designated professional fund manager
3. Benefit and liability is shared on a pro-rata basis
4. Contributors aren’t involved in the management of the company
5. The participants in a CIS merely have a participatory interest in the scheme
6. They do not enjoy membership rights of the company
7. Participants in a CIS are designated as unit holders
8. There is a trustee, custodian and fund manager
9. It is regulated by law, trust deed and agreement (custodial agreement)
REGULATION OF CIS S160(1) ISA
• CIS is regulated by the SEC, S160(1) ISA provides thus, “no person shall establish or
operate a CIS or carry on the business of a CIS unless such scheme is authorized by and
registered with the commission”.
ORGANS OF CIS S152 ISA.
1. Manager (Fund or portfolio Manager): means a fund or portfolio manager registered
by SEC
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2. Holder: means any investor or beneficiary who has acquired units of a collective
investment scheme and is entitled to a pro rata share of dividends, interest or other
income of the securities comprised in the unit
3. Custodian: means a person who has custody as a bailee of securities or certificate issued
in the investor's name with the investor's name appearing in the issuer's register as the
beneficial owner of the securities
4. Trustee: under a unit trust scheme or such other arrangement, means the person in whom
the property for the time being subject to any trust created in pursuance of the scheme is
or may be vested in accordance with the terms of the trust
5. Issuer: means the person performing the duties of a manager pursuant to the provisions
of the trust deed or other agreement under which the units or securities are issued
6. Auditor: means a member of a body of Accountants, from time to time, recognised by an
Act of the National Assembly and appointed as Auditor of a company or trust by
managers with the approval of the trustees
TYPES OF CIS S154 ISA.
1. Unit Trusts Scheme
2. Investment Trust Scheme (investors can decide the type of investment to be made with
their money)
3. Real Estate Investment Schemes (REIS)
4. Community Savings Scheme (esusu, adashe, ajo)
5. Open-ended investment schemes (different classes of investment/portfolios with differ
investment plans)
6. Other CIS that may be published in a gazette.
DISTINCTION BETWEEN CIS AND INVESTMENT IN SHARES
1. A person who owns shares in a company is called a shareholder but participation in a
CIS makes the investor a unit holder
2. A shareholder is a member of the company in which his money is invested and is
entitled to Exercise the rights of membership but a unit holder is not a member of the
company in which his money is invested and is not involved in the running of the
company
3. The Board of Directors manage the company in shares investment but a CIS is managed
by the fund manager
4. For their investments, shareholders are rewarded with dividends but a participant in the
CIS is entitled to pro rata distribution of profits, liabilities, interests and dividends.
UNIT TRUSTS
• "Unit trust scheme" means any arrangement made for the purpose, or having the effect, of
providing facilities for the participation of the public as beneficiaries under a trust in
profits or income arising from acquisition, holding, management or disposal of securities
or any other property whatsoever S152 ISA.
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• It is an investment arrangement which affords members of the public to pool their

resources together under a trust deed.
• It is essentially a trust
• Members of the public pool their resources together for investment (in stocks, shares and
other securities), which are then managed on their behalf by a corporate entity.
REGULATION OF UNIT TRUSTS
• Regulation of unit trust is vested in SEC. No person shall operate or register a unit trust
scheme or carry on the business of dealing in units of a unit trust scheme unless the
scheme is authorised by and registered with SEC, S160(1) ISA.
ELEMENTS OF UTS S152 ISA.
1. Units: Interests created under the scheme are divided into units. in relation to a unit trust
scheme, means any units (described whether as units or otherwise) into which are divided
the beneficial interest in the assets subject to any trust created under the scheme;
2. The trust deed: the agreement drawn up between the trustees or custodian and the
manager for regulating the operation of a collective investment scheme. It contains rights,
responsibilities, investment objectives, policies, etc
3. The holder: An investor in the Unit trust scheme
4. The fund: The total pool of contributions made by the investors
5. The manager: Persons who manage the property under the scheme
o The manager must be an incorporated company; and
o Must be registered as a fund or portfolio manager with SEC
6. The trustee: The person in whom the property, subject to any trust created under the
scheme, is vested in accordance with terms of the scheme.
o The trustee must be a corporate body, such as a bank or an insurance company
CONDITIONS FOR AUTHORISATION OF THE SCHEME S160(3) ISA.
A unit trust scheme may be authorized and registered only if:
1. SEC is satisfied that in relation to the relevant scheme, the manager and trustee
respectively are suitably qualified
2. The manager, trustee or custodian must be a body corporate which is incorporated under
the CAMA
3. The manager, trustee or custodian must have capital and reserve as may be prescribed by
SEC from time to time
4. The manager, trustee or custodian must be registered with SEC
5. The name of the scheme is not, in the opinion of SEC, undesirable
6. SEC is satisfied that the trust deed or custodial agreement is in compliance with ISA and
SEC Rules for the time being in force
7. SEC is satisfied that the scheme is such that the effective control of its affairs is vested in
the manager and exercised independently of the trustee or custodian of the scheme
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8. SEC may refuse to authorise a scheme if in the opinion of SEC, it fails to comply with
ISA and shall so notify the manager, trustee or custodian under the scheme stating its
reasons for refusal within sixty days of filing the application.
CONTENTS OF THE TRUST DEED
1. Definition of terms
2. Provision as to certificates
3. Provision as to holders (of units),
4. Register of holders,
5. Transfer & transmission
6. Constitution of the trust
7. Issue of Units
8. Realisation of Units
9. Investment of property held on the trust
10. Distributions
11. Voting right on assets held on the trust
12. Interest upon deposited cash
13. Remuneration of Trustee and Manager
14. The trustee and the Manager
15. Accounts
16. Retirement of Trustee
17. Removal or retirement of Manager
18. Termination of the trust
19. Notices
20. Reconstruction and amalgamation
21. Meeting of holders
REGISTRATION
• Units are registered by the SEC under ISA, S160(1) ISA.
• Application for registration of units is made on Form SEC 6A in duplicates and made
along with the application for authorisation of the scheme.
• An application for registration of units shall become effective on the 60th day after
“filing thereof or such earlier dates as SEC may determine.
ALTERATION S162 ISA
• It is unlawful for any manager or trustee to make any alteration in the trust deed or in the
name of the authorised scheme without the prior approval of SEC.
• A manager or trustee under a scheme who defaults, is liable to a fine of N100,000 and a
further sum of N5,000 for every day the contravention continues.
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PROSPECTUS S164 ISA

• Where units are to be offered to the public, the prospectus and other documents prepared
by the managers must be approved by the trustee and submitted to SEC for approval
before they are published.
REDEMPTION OF UNITS S166 ISA.
• A holder of units may redeem his units by requesting the manager to buy them and the
manager when so requested shall buy the units within the time specified by SEC at the
price for the time being at which the manager buys units of the scheme.
• Upon the revocation of a unit scheme the manager must buy all the units under the
scheme at the price at which the manager buys units of the scheme.
PRICE OF UNITS S170
• The calculation of prices at which units of any trust scheme may be bought or sold shall
be done in accordance with the formula laid down by the SEC.
INVESTMENT TRUST SCHEME (ITS)/ ETHICAL MUTUAL INVESTMENT R526 SEC
Rules
• It is regulated like the Unit Trust Scheme as both are similar but different in operation
R526 SEC Rules.
• It complies with ethical or moral principles;
• It is usually packaged as a specialised ITS, whereby unit holders define in advance, what
type of securities their money would be invested in.
• E.g., IBTC Ethical Fund which prohibits investments in tobacco and alcohol beverage
companies
REAL ESTATE INVESTMENT SCHEME R508 SEC Rules
• Established for the purpose of acquiring intermediate and long-term interest in real estate
or property development and to raise funds from the capital market through the issuance
of securities with the following features:
i. An income certificate giving the investor a right to a share of the income of any
property or property development; and
ii. An ordinary share in the body corporate giving the investor voting right in the
management of the body corporate.
• Unlike the UTS, here the investors are entitled to retain control over their investment by
investing directly in a particular property rather than in a portfolio of investments.
COMMUNITY SAVINGS SCHEME
• It is the oldest form of CIS in various communities
• Popular among low-level workers and voluntary organisations in Nigeria
• Required to be registered at the local government, where they operate
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• They are required to maintain a register of all their members

• Known variously as esusu, adashe, ajo amongst others
PROCEDURE FOR THE CREATION & MANAGEMENT OF COLLECTIVE
INVESTMENT SCHEME
1. The manager, trustee or custodian of the CIS must:
i. Obtain incorporation under CAMA
ii. Register with SEC
iii. Have the capital and reserve fund as may be prescribed by SEC S160(3)(b)
ISA
2. Preparation of Trust deed or Custodian Agreement S160(3)(d) ISA
3. Registration of the Scheme with SEC S160(1) ISA
4. Registration of Units or securities with SEC S161 ISA
5. Approval of prospectus and other offer documents of the scheme NB: Liability will arise
for any untrue statement in the publication, see discussion above.
6. Determining the market price of unit or security. The mode, in this regard, may be
prescribed by SEC S170 ISA
7. Investing of the fund by the manager, in accordance with the provisions of the trust deed
S171 ISA
8. The manager may invest the fund and assets of a scheme in units of any investment fund,
provided it is within the approved category of investments set out in S171(2) ISA
9. Where the interest of the scheme or that of its beneficiary demands, SEC may impose
additional restrictions on the category of investments that may be made by the manager
10. The manager shall have due regard to the risk rating of instruments that has been
undertaken by a rating company, which is registered under ISA S171 ISA
ROLES OF SOLICITORS (LP) IN CAPITAL MARKET TRANSACTION R180 SEC
RULES
1. Review the statutory corporate documents of an issuer and other transaction parties to
ensure that they have the necessary legal capacity and authority to enter into a
transaction;
2. Carry out due diligence to ensure that all information material to a transaction are
disclosed in the transaction documents;
3. Advise on the legal structure of the transaction and on legal risks associated with it;
4. Negotiate, draft and review all legal documentations required for a transaction including
but not limited to the prospectus, offer/scheme documents, trust deeds, vending
agreements, powers of attorney/consents and underwriting agreements;
5. Advise parties on disclosure obligations and general observance of and compliance with
sound corporate governance principles, rules and regulations as they relate to a
transaction;
6. Advise on compliance with the requirements of CAC, SEC, the listing requirements of
the NSE and other relevant industry specific regulatory requirements;
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7. Certify or obtain certification of compliance with all statutory requirements by the issuer
and other parties to a transaction;
8. Make all statutory filings and provide confirmations (legal opinion) as to the
enforceability and effectiveness of transaction documents;
9. File necessary applications in court in support of transactions; and
10. Any other roles ancillary to any of the above.
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CORPORATE RESTRUCTURING 1, (INTERNAL OPTIONS)

WHAT IS CORPORATE RESTRUCTURING?
• It is simply mechanisms, techniques or arrangements to rejig the status-quo structure of a
corporation to keep it afloat as a going concern.
• It is a change in the constitution or framework of a co in order to avoid a collapse of the
corporation or to ensure its sustainability.
• CR may involve an alteration or modification of the rights of members, debenture holders
or a class thereof, or an arrangement with another co in the form of a merger,
amalgamation or take over etc.
CR OPTIONS
1. Internal Options
2. External Options
1. Internal Options
i. Arrangement and compromise
ii. Arrangement on sale
iii. Management buy-out
iv. Reduction in share-capital
v. Share reconstruction/consolidation
2. External Options
i. Merger and amalgamation
ii. Take over
iii. Acquisition
iv. Purchase and assumption (agreement)
v. Management Buy In
vi. Cherry picking
vii. Other forms applicable under the law
REGULATORY BODIES AND LAWS
SN BODY LAW
1 Corporate Affairs Commission (CAC) Companies and Allied Matters Act, 2020
2 Securities and Exchange Commission (SEC) Investments and Securities Act, 2007
3 Federal High Court (FHC) Federal High Court Act
4 Central Bank of Nigeria (CBN) Central Bank of Nigeria (Establishment) Act
5 Nigerian Investment Promotion Commission Nigerian Investment Promotion Commission
(NIPC) Act
6 Nigeria Deposit Insurance Corporation (NDIC) Nigeria Deposit Insurance Corporation Act
7 Nigerian Exchange Limited (NEL) Investments and Securities Act, 2007
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8 Federal Competition and Consumer Protection Federal Competition and Consumer

Commission (FCCPC) Protection Act, 2018
9 CFRN, 1999 as Amended
10 Securities and Exchange Commission (SEC) Securities and Exchange Commission Rules
ARRANGEMENTS AND COMPROMISES

• Arrangement means any change in the rights or liabilities of members, debenture
holders or creditors of a company or any class of them or in the regulation of a co, other
than a change effected under CAMA or by the unanimous agreement of all parties
affected S710 CAMA.
• Compromise means an arrangement by a company with its creditors and/or members or
a class of them, to accept less than they are actually entitled to in full and final
satisfaction of the obligations which the company owes to them. It may require the
company to negotiate with the creditors and request that they relinquish their security or
to permit the creation of a prior or pari passu charge in favour of other creditors.
• It is also possible under a compromise for a co to persuade its creditors to accept shares
or part shares and part cash in satisfaction of their debt (debt conversion). Another
alternative could be convincing shareholders or a class of them to vary rights.
• Arrangement is more general while compromise is specific. The former is generally the
alteration of rights and liabilities while the latter must include sacrificing or relinquishing
a particular right or entitlement based on an equitable understanding between the parties.
• Arrangement and compromise must always be with the sanction of the court (FHC)
Sneath v Valley Gold Ltd.
• The scheme of arrangement and compromise must be fair and reasonable. In Re NTU
Development Trust Ltd, the members of a limited liability company were to give up
their rights and get nothing in return. The court refused to the sanction arrangement and
compromise because it was not beneficial to both parties.
• When the scheme of arrangement and compromise is sanctioned by the court as being
fair, reasonable and equitable, it becomes binding. There must be a compromise in every
arrangement Re-Savoy Hotel Ltd.
DEPLOYMENT OF ARRANGEMENTS AND COMPROMISES S715
• As provided for under S715 CAMA, a co can enter into an arrangement with its members
and creditors under any of the following schemes:
• Where the arrangement is with members, it could be:
i. Reconstruction of shares under a share reconstruction scheme.
ii. Arrangement with preferential shareholders to cancel dividend arears, reduce
dividends or convert shares to ordinary shares
iii. Ordinary shareholders to surrender part of their holdings or shares to the preferential
shareholders who agree to accept ordinary shareholders in lieu of dividend arrears.
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• Where the arrangement is with debenture holders (creditors), it could be:

i. Debenture taking up shares in satisfaction of their debts (debt-equity conversion or
swap).
ii. Creditors/debenture holders agreeing to a lower interest rate
iii. Creditors accepting longer periods of repayment (by implication extending legal due
date).
iv. Debenture holders or creditors relinquishing their security or to permit the creation of
a prior or pari passu charge, or undertake to pay them off prior to the reconstruction.
USE OF SHCEME IN RESTRUCTURING
• A scheme is required in almost every restructuring option, but what is a scheme?
• A scheme is a broad objective of how a purpose will be achieved in general parlance
• It is a design or plan formed to accomplish some purpose – a system…s document
containing provisions for regulating the management or distribution of property, or for
making an arrangement between persons having conflicting rights…Blacks’ Law Dico.
PROCEDURE FOR ARRANGEMENTS AND COMPROMISES UNDER S715
The procedure for such arrangements is as follows:
1. Preparation of Scheme of Arrangement & Compromise: The scheme or compromise
is prepared by the co, a member, creditor or where the co is being wound up, the
liquidator.
2. Application to the FHC for a Court Ordered Meeting: An application in a summary
way is made to court for an order calling for a separate meeting of the applicants to be
affected by the scheme to be summoned in such a manner as the court directs.
3. Issuance & Service of Notice of the Court Ordered Meeting: Following the court
order, a notice of the meeting is sent. The notice is accompanied by a statement
explaining the general effect of the arrangement and in particular state any material
interests of the directors of the co and whether it would affect the directors differently
from other persons. Similarly, if it affects debenture holders give particulars.
4. Approval of Scheme of Arrangement & Compromise: If a majority representing not
less than ¾ in value of the shares of members or class of members, or of the interest of
creditors or class of creditors, as the case may be, present and voting either in person or
by proxy, agree to the scheme.
5. Sending Approved Report to the FHC: an application may be made to court by one or
more of the companies, and the court shall sanction the scheme.
6. Referral of the Scheme by the FHC to the SEC for Investigation: The court refers the
scheme to the SEC, which appoints one or more inspectors to investigate the fairness of
the scheme or compromise and make a report thereon to the court. The court shall specify
a time frame for its receipt of the report from the SEC.
7. Sanction of Scheme by the Court upon Satisfaction as to its Fairness: If the court is
satisfied as to the fairness of the compromise or arrangement, it shall sanction it and shall
be binding on all creditors or the class of creditors or on the members of the co as the
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case may be and also on the co and in the case of a co being wound up on the liquidator
and contributories of the co Re Lipton of Nig. Ltd. (Unreported) Suit No. FHC/ L
/M2185 at 9.
8. Delivery of CTC of the Court Order for Registration: An order sanctioning the
scheme shall have no effect unless an office copy of the order has been delivered by the
co to CAC for registration
9. Annexing Copy of Court Order to the Company Memo: A copy of the order must be
annexed to every copy of the memorandum of association of the co issued after the order
has been made.
ARRANGEMENT OR COMPROMISE BETWEEN TWO OR MORE COMPANIES S711
• Where under a scheme proposed for a compromise, arrangement or reconstruction
between two or more companies or the merger of any two or more companies, the whole
or any part of the undertaking or the property of any company concerned in the scheme
(in this section referred to as “the transfer of company”) is to be transferred to another
company S711(1).
PROCEDURE S711
1. Preparation of Scheme of Arrangement & Compromise: The cos involved prepare the
scheme.
2. Application to the FHC for a Court Ordered Meeting: Any of the cos involved in the
scheme may apply to the court for a court ordered meeting of each of the cos involved in
the scheme.
3. Issuance & Service of Notice of the Court Ordered Meeting: Following the court
order, a notice of the meeting is sent.
4. Approval of Scheme of Arrangement & Compromise: A majority representing at
least ¾ in value of the share of members being present and voting either in person or by
proxy at each of the separate meetings agree to the scheme.
5. Sending Approved Report to the FHC: If approved at the various meetings, an
application may be made to the Court by one or more of the cos, and the Court shall
sanction the scheme.
6. Court Order Binding on all Parties: When the scheme is sanctioned by the Court, it
becomes binding on the companies.
ORDERS COURT MAY MAKE S711(3) & (4)
Court may, by the order sanctioning the scheme or by any subsequent order, make provision for:
1. the transfer to the transferee co of the whole or any part of the undertaking and of the
property or liabilities of any transferor co;
2. the allotting or appropriation by the transferee co of shares, debentures, policies or other
like interests in that co which under the compromise or arrangement are to be allotted or
appropriated by that co to or for any person;
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3. the continuation by or against the transferee co of legal proceedings pending by or against

any transferor co;
4. the dissolution, without winding-up, of any transferor co;
5. the provision to be made for any persons who in such manner as the court may direct,
dissent from the compromise or arrangement; and
6. such incidental, consequential and supplemental matters as are necessary to secure that
the reconstruction or merger shall be fully and effectively carried out.
NB: an order for a dissolution without winding-up of the transferor co shall not be made
unless;
i. the whole of the undertaking and the property, assets and liabilities of the transferor co
are being transferred into the transferee co; and
ii. the Court is satisfied that adequate provision by way of compensation or otherwise have
been made with respect to the employees of the co to be dissolved.
BUYING OFF A COMPANY NOT UNDER A TAKEOVER BID (SCHEMES OR
CONTRACT INVOLVING TRANSFER OF SHARES IN A COMPANY) S712
• This is provided for under S712 which involves transfer of shares in-between companies
not involving takeover.
• Where a scheme, not being a take-over bid under the ISA involving the transfer of shares
or any class of shares in a co to another co has, within four months after the making of
the offer in that behalf by the transferee co been approved by the holders of at least 9/10
in value of the shares of the co (other than shares already held at the date of the offer by a
nominee for the transferee co, or its subsidiary), the transferee co may at any time within
two months after the expiration of the said four months give notice in the prescribed
manner to any dissenting shareholder that it desires to acquire his shares.
SUMMARY OF THE PROCEDURE UNDER S712
• Offer from transferee to the transferor co
• Approval of the scheme by 9/10 of the members of the transferor within 4 months
• The transferee co may at any time within 2 months after the expiration of the 4 months
give notice in the prescribed manner to any dissenting shareholder that it desires to
acquire his shares
• After issuing the notice, the transferee co is, unless the dissenting shareholder applies to
court within one month and court orders otherwise, entitled and bound to acquire those
shares on the terms on which, under the scheme, the shares of the approving shareholders
are to be transferred.
• Where there’s neither dissenting shareholder application nor court order to the contrary
on the expiration of one month, the transferee co shall, transmit a copy of the notice to
the transferor company together with an instrument of transfer executed on behalf of the
shareholder by any person appointed by the transferee co and on its behalf by the
transferee co;
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• The transferee co shall pay or transfer to the transferor co the amount or other
consideration representing the price payable by the transferee co for the shares which that
company is entitled to acquire, and the transferor co shall thereupon register the
transferee co as the holder of those shares.
• Any sum received by the transferor co shall be paid into a separate bank account, and
such sums and any other consideration so received shall be held by that co on trust for the
several persons entitled to the shares in respect of which the said sums or other
consideration, were respectively received.
DISSENTING SHAREHOLDERS S713
• This section applies where at least 9/10 of the shares in transferor co is transferred to the
transferee co
• The transferee co shall, within one month from the date of the transfer (unless on a
previous transfer in pursuance of the scheme it has already complied with this
requirement), give notice of that fact in the prescribed manner to the holders of the
remaining shares or of the remaining shares of that class, as the case may be, who have
not assented to the scheme.
• A holder may, within three months from the giving of the notice to him, require the
transferee co to acquire the shares in question.
• If a shareholder gives the notice, the transferee co is entitled and bound to acquire those
shares on the terms on which under the scheme, the shares of the approving shareholders
were transferred to it, or on such other terms as may be agreed on as the Court hearing
the application of either the transferee co or the shareholder deems fit.
ARRANGEMENT ON SALE UNDER S714
A co may by special resolution resolve that the co be put into members’ voluntary winding-up
and that the liquidator be authorised to sell the whole or part of its undertaking or assets to
another body corporate, in consideration or part consideration of fully paid shares, and to
distribute the same in specie among the members of the co in accordance with their rights in the
liquidation S714(1).
SUMMARY OF THE PROCEDURE
• The members in general meetings pass a special resolution for members’ voluntary
winding up and appoint a liquidator. For the procedure on members voluntary winding
up, SS 620- 633 CAMA.
• The liquidator to give effect to the resolution.
• If no objection or dissent, the MVWU is carried by selling in part or whole of the co’s
assets and distributed among the members pro-rata as if would have been in liquidation.
• If within one year from the date of the passing of the special resolution an order is made
under SS 353 - 355 CAMA, relief on the grounds of unfairly prejudicial and oppressive
conduct or for the winding-up of the co under a creditors’ voluntary winding-up, the
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arrangement for the sale and distribution shall not be valid unless sanctioned by the
Court.
o Thus, these two conditions constitute the only instances under which there
must be an application to court to effect a valid AFS:
i. Where there is a court order that the MVWU is unfairly prejudicial
or oppressive conduct or
ii. Order for creditors’ voluntary winding up
• If any member, within 30 days, by writing addressed to the liquidator and left at the
registered office or head office of the company, dissents in respect of any of the shares
held by him, the liquidator shall either abstain from carrying the resolution into effect or
purchase such shares at a price to be determined by agreement if a private co without
foreign participation but if a priv co with FP or a pub co by SEC.
• Any member who fails to signify his dissent is deemed to have accepted the resolution.
• If a liquidator elects to purchase the shares of a dissenting shareholder, the price shall be
determined by agreement if it is private co without foreign participation but if either a
private co with FP or pub co, then by SEC.
• This formula for determining prices applies to all other instances where the co undertakes
to sell part or whole of its assets.
• Nothing contained in this section authorises any variation or abrogation of the rights of
any creditor of the company.
MANAGEMENT BUY-OUT (MBO) R449, SEC Rules.
• Management buy-out is the acquisition by a management team of a company, of
controlling shares of that company or its subsidiaries with or without third-party
financing.
• It concerns a deal when the existing management team of a business purchases all or part
of that business from its current owners.
• Management Buy-In (MBI) conversely, is where all or part of a business is purchased
by an external management team, albeit it is an external restructuring option to be
discussed below.
PROCEDURE
Management team to apply to SEC for the approval of the scheme accompanied by prescribed
documents:
i. resolution of the shareholders of the co approving the MBO;
ii. resolution of the management team to undertake the MBO;
iii. a copy of the certificate of incorporation of the co;
iv. a copy of the memart of the co;
v. two copies of the Prospectus which shall contain the following, among others:
a) profile of the co;
b) profile of the management team buying over the co;
c) objectives of the MBO;
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d) five (5) years audited financial statement of the co (or if less than five (5)
years, the statement of affairs for the number of years in existence);
e) claims and litigation;
vi. sale agreement between the co and the management team which shall contain the
following terms amongst others:
a) terms and conditions of sale;
b) indemnity against contingent liabilities by the seller to: -
1. third-parties;
2. pay tax not provided for in the account;
c) if employees of the target company operate a pension scheme, the agreement
should have a clause on the continuation of the scheme;
d) sale and purchase of assets;
e) contracts and creditors;
f) employees: the liabilities and obligations under the existing contract of
employment will pass to the buyer with accrued contractual and statutory
rights unaffected;
g) debtors: the agreement should reflect that monies owed the seller by its
debtors should be paid to the seller unless assigned to the buyer. The purchase
price must reflect the fact that the debts are assigned;
h) name: the agreement should state whether the buyer or seller would like to
carry on the business under the existing name. Where a new name would be
used, it should be so stated and copies of relevant documents shall be filed
with SEC;
i) Trust Deed (where applicable);
j) any other document that may be required by SEC from time to time.
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CORPORATE RESTRUCTURING 2 – (EXTERNAL OPTIONS)

REASONS FOR EXTERNAL OPTIONS IN CORPORATE RESTRUCTURING
i. To consolidate in order to maximize market opportunities.
ii. Govt. directive in order to avoid corporate collapse which may dent public/international
perception of the Nigerian economy.
iii. To leverage on the economy of scale in order to reduce production cost and optimize
profit.
OPTIONS IN EXTERNAL RECONSTRUCTION
i. Mergers & Amalgamation
ii. Takeover
iii. Acquisition
iv. Purchase and Assumption
v. Management Buy-In (MBI)
vi. External restructuring (restructuring of a group of companies)
vii. Cherry-picking
BASIC DEFINITIONS R421 SEC RULES
• Acquisition means where a person or group of persons buys most (if not all) of a
company’s ownership stake in order to assume control of a the target company R433
SEC Rules.
• Merger means any amalgamation of the undertakings or any part of the undertakings or
interest of two or more companies and one or more corporate bodies
o Horizontal merger means mergers involving direct competitors
o Vertical merger means mergers involving firms in non-competitive relationships
o Conglomerate merger means other types of mergers
• Takeover means the acquisition by one company of sufficient shares in another company
to give the acquiring company control over that other company S117 ISA
• External restructuring in this rules and regulations shall include restructuring of a
group of companies and other related party transactions.
• COMMENT: these definitions would seem closely intertwined especially “acquisition”
in r421 SEC Rules and S117 ISA, vis-à-vis the definition in r433 SEC Rules. However,
the solution may lie in the percentage distinctions, in terms of the proportion of the issued
share capital acquired or purchased; thus, if its below 30% it is acquisition S131 ISA, if
its between 30% and 51% it is takeover S131 ISA and if it is above 51% then it is a
merger S133(3) ISA, S92(2)(a) FCCPA. See also, corporate law practice handbook
page 160.
• NB: the definition in R421 SEC Rules has now been deleted by the New SEC Sundry
Regulations 2019.
MERGERS/AMALGAMATION
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• S165 FCCPA which is the principal legislation on mergers has now repealed SS 118 –
128 ISA which hitherto governed mergers, thus for the purpose of mergers, the only
relevant legislation is FCCPA alongside rules and regulations made pursuant to it, such as
o FCCPC Notice of Threshold for Merger Notifications, 2019
o Merger Review Regulations, 2020
o Merger Review Guidelines, 2020
o Merger Review Amended Regulations, 2021
o Amendment to the Rules on Mergers, Takeovers and Acquisitions, 2021
• Merger is a contemporary restructuring tool that has long being deployed in corporate
law practice to resolve liquidity problems, leveraging on economies of scale, desire for
growth, profitability and increase in market share, sectorial survival strategy etc.
• A merger occurs when one or more undertakings directly or indirectly acquire or
establish direct or indirect control over the whole or part of the business of another
undertaking S92(1) FCCPA.
• S92(2) FCCPA provides that a merger may be achieved through;
i. the purchase or lease of the shares, an interest or assets of the other
undertaking in question,
ii. the amalgamation or other combination with the other undertaking in
question, or
iii. a joint venture.
JURISDICTIONAL APPLICABILITY OF MERGERS Reg 3 FCCPC Merger Review
Regulations (MRR) 2020
Merging Parties for the purposes of S92 FCCPA, FCCPC shall consider an undertaking to be
involved in a merger if it–
a. is being acquired directly or indirectly by another undertaking;
b. is directly or indirectly acquiring another undertaking;
c. establishes direct or indirect control over the whole or part of the business of another
undertaking by way of acquisition of either shares or assets;
d. is involved in an amalgamation or other combination with another undertaking or is the
product of that amalgamation or combination between the undertakings; and
e. is entering into a joint venture with another undertaking or is the product of an
understanding to create a joint venture between two or more undertakings. The JV that
operates on a regular or lasting basis.
WHAT DOES HAVING “CONTROL” MEAN? S92(2) FCCPA
An undertaking has control over the business of another undertaking if it:
a. beneficially owns more than one half of the issued share capital or assets of the
undertaking;
b. is entitled to cast a majority of the votes that may be cast at a general meeting of the
undertaking or has the ability to control the voting of a majority of those votes, either
directly or through a controlled entity of that undertaking;
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c. is able to appoint or to veto the appointment of a majority of the directors of the

undertaking;
d. is a holding company, and the undertaking is its subsidiary.
e. in the case of an undertaking that is a trust, has the ability to control the majority of the
votes of the trustees, to appoint the majority of the trustees or to appoint or change
the majority of the beneficiaries of the trust;
f. has the ability to materially influence the policy of the undertaking in a manner
comparable to a person who, in ordinary commercial practice, can exercise an element of
control referred to in paragraphs (a) to (e).
WHAT DOES NOT AMOUNT TO “CONTROL”? S92(3) FCCPA
a. Where credit institutions or other financial institutions or insurance companies, hold
securities temporarily for the purpose of reselling them, that
i. they do not exercise voting rights in respect of those securities with a view to
determining the competitive behaviour of that undertaking
ii. that they exercise such voting rights only with a view to preparing the disposal of
all or part of that undertaking or of its assets or the disposal of those securities
iii. any such disposal takes place within one year of the date of acquisition; that
period may be extended by the Commission on request where such institutions or
companies
b. Where control is acquired by an office-holder according to the laws of the Federation
relating to
i. liquidation,
ii. winding up,
iii. insolvency,
iv. cessation of payments,
v. compositions or
vi. analogous proceedings.
c. Internal restructuring or reorganisation of affiliated undertakings without a change
of control is not merger for the purpose of notification and approval by FCCPC, Reg
4(1) MRR but if a change of control is involved it becomes a notifiable merger Reg 4(2)
MRR.
TYPES OF MERGER Reg 22 FCCPC MRR 2020
FCCPC assesses three types of mergers, namely;
• Horizontal merger means mergers involving direct competitors. It involves the fusion of
enterprises in the same line of business. Same market, same level of business e.g., 2008
to 2010 merger of commercial banks in Nigeria, West-East-Merger, Standard Trust Bank
Plc and United Bank for Africa (UBA).
• Vertical merger means mergers involving firms in non-competitive relationships. It
entails the fusion of enterprises that complement each other. This is loosely known as
symbiotic relationship. Same market but different levels of production e.g., merger of
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sack producing company with a cement manufacturing company, North-South-Merger

e.g., Bagco Super Sack Plc and Dangote Cement Plc.
• Conglomerate merger are mergers between undertakings which operate at different
levels of the production or supply chain of an industry. It involves the fusion of totally
unrelated businesses. Different market with unrelated products-aims at market control.
CATEGORIES OF MERGER S92(4) FCCPA
• Mergers are classified in terms of the combined monetary value (combination of turnover
and assets in Nigeria) of the merging entities.
i. Small Merger
ii. Large Merger
• a "small merger" means a merger with a value at or below the threshold stipulated by the
Commission by regulations;
• a "large merger" means a merger with a value above the threshold stipulated by the
Commission by regulations.
• The FCCPC is saddled with the responsibility of prescribing the upper and lower
thresholds on combinations of turnover and or assets in Nigeria S92 (4) (a) & (b)
FCCPA, 2018.
FCCPC Notice of Threshold for Merger Notification 2019 which is the only regulation or
notice where FCCPC has made provisions for the threshold provides in Reg 1 that:
• Notice shall be given notice of a merger before implementation if, in the financial year
preceding the merger:
a. The combined annual turnover of the acquiring undertaking and the target
undertaking in, into or from Nigeria equals or exceeds N1,000,000,000 (about
US$3,267,974); or
b. The annual turnover of the target undertaking in, into or from Nigeria equals or
exceeds N500,000,000 (about US$1,633,987).
It is clear that there are two ways of determining threshold for the purpose of notification: first is,
cumulative turnover value of N1bn or more and the second is the turnover value of the target
undertaking of N500m or more, check out SS95 and 96 FCCPA below and attempt the posers
that follow.
In terms of who should notify the commission before a merger, FCCPA has the following
provisions:
• S95(1) FCCPA provides that a party to a small merger is not required to notify the
Commission of that merger unless the Commission requires it to do so.
• S96(1) FCCPA provides that a party to a large merger shall notify the Commission of the
merger in the prescribed manner and form.
The questions now are:
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What exactly is the threshold for a small merger? If it is N1bn and below as the provisions
suggest, does it mean that, if its cumulatively N1bn which from the provisions of the act is at the
threshold and ought to be a small merger, it should now require notification contrary to the
express provisions of SS 95(1) & 96(1) FCCPA respectively?
Submission: The Act will always take precedent over the regulation made pursuant to it, so
clearly, the threshold for small merger should be N1bn and below and notification should be only
for cumulative turnover above N1bn. Varied views are very welcomed.
SMALL MERGER
• Please refer above for the meaning and threshold
• Parties to a small merger are not required to notify the Commission and may even
implement without an approval from the Commission, unless it expressly requires the
notification S95 FCCPA.
• However, S95(3) FCCPA, provides that the Commission may within six months after a
small merger is commenced require the parties to notify it of the merger where it forms
the opinion that the merger could substantially prevent or lessen competition or cannot be
justified on the grounds of public interest.
DEEMED APPROVAL OF SMALL MERGER
• If at the expiration of the 20 working days period provided in S95(6) FCCPA or the
extension thereof contemplated therein, the FCCPC has not notified the parties of its
decision, the small merger shall be deemed as having been approved subject to subsection
7.
LARGE MERGER
• Please refer above for the meaning and threshold
• The procedural step for large merger is contained in SS96 and 97 of FCCPA, 2018 and
MRR.
• Also note the additional requirements for merger of associations in Reg 35, Companies
Regulations, 2021.
PROCEDURE FOR LARGE MERGER S96 FCCPA
1. A party to a large merger shall notify FCCPC of the merger in the prescribed manner and
form.
2. The notification of the merger shall be published within five business days after receipt
by FCCPC.
3. The primary acquiring undertaking and the primary target undertaking shall each provide
a copy of the notice to -
a) any registered trade union that represents the employees in the acquiring and target
undertakings respectively; or
b) the employees or representatives of the employees of the acquiring and target
undertakings, if there are no such registered trade unions.
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4. The parties to a large merger shall not implement the merger unless approved, with or
without conditions, by the FCCPC.
5. Any action undertaken by any party to implement the merger without approval is void.
6. FCCPC may exercise any of the powers available to it to render void any merger
implementation that fails to notify its employees as stated in no3 above void.
7. An undertaking that implements merger without FCCPC’s approval, commits an offence
and is liable on conviction to a fine not exceeding 10% of turnover of the undertaking
in the business year preceding the date of the commission of the offence or to such other
percentage as the court may determine having regard to the circumstances of the case.
Procedure after compliance with FCCPC S97 FCCPA
8. Within 60 business days after the parties to a large merger have fulfilled all notification
requirements, FCCPC-
a) may extend the period in which it has to consider the proposed merger to 120
business days and issue an extension notice to all parties to the merger; or
b) after having considered the merger, issue a report in the prescribed form -
i. approving the merger,
ii. approving the merger subject to conditions, or
iii. prohibiting implementation of the merger.
MERGER OF ASSOCIATIONS Reg 35 Companies Reg 2021.
The requirements for merger of association shall include the following –
1. Similar aims and objectives
2. Resolution passed by 75% of members of each of the associations
3. Publication of application for merger in two daily newspaper circulating in the area
where the associations are situated, one of which shall be a national newspaper.
4. Display of notice of the proposed merger conspicuously at the headquarters and branches
of each of the associations for at least 28 days.
5. The publications and notices shall call for objections to the application which shall state
the grounds for objection and be forwarded to reach the Registrar-General of the CAC
not later than 28 days of the last publication or notice, whichever is later.
6. Scheme of merger sanctioned by the Federal High Court
FOREIGN MERGERS WITH NIGERIAN COMPONENT REG 9 MRR
1. An undertaking in Nigeria that comes within the control of a foreign undertaking will be
subject to merger review if:
i. it attains the turnover requirements under the Threshold for Merger Regulations 2019
or
ii. its acquisition affects the market structure by preventing or lessening competition in
Nigeria.
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2. In any event where a merger will occur purely as a result of a transaction involving
undertakings wholly domiciled outside Nigeria, the Commission will nonetheless assess
the merger if it has a local component.
3. The Commission will only assert jurisdiction over a transaction in subregulation (2) if the
foreign enterprise has a local component materiality, such as having subsidiaries in
Nigeria or having attained the turnover requirements for large mergers as provided under
the Threshold Regulations.
4. Parties outside Nigeria shall appoint local legal representatives to notify the merger to the
Commission on their behalf in accordance with the laws of Nigeria.
REGULATORY BODIES INVOLVED IN MERGER TRANSACTIONS
1. Federal Competition and Consumer Protection Commission (FCCPC)
2. Central Bank of Nigeria (CBN)
3. Corporate Affairs Commission (CAC)
4. Securities and Exchange Commission (SEC)
5. Nigerian Exchange Limited (NEL)
6. Federal High Court (FHC)
7. Court of Appeal
Other sector specific regulators such as
8. Nigerian Electricity Regulatory Commission (NERC)
9. Nigerian Communications Commission (NCC)
10. National Insurance Commission (NAICOM)
REGISTERED MARKET OPERATORS INVOLVED IN MERGER TRANSACTIONS
1. Financial Advisers/Issuing Houses
2. Solicitors
3. Auditors
4. Reporting Accountants
5. Registrars
6. Stockbrokers
DOCUMENTATIONS IN MERGER TRANSACTIONS
In the build up to the consummation of a merger transaction, the preparation and execution of
certain agreements are very important. The agreements are as follow:
1. Exclusivity Agreement;
2. Memorandum of Understanding;
3. Confidentiality Agreements; and
4. Scheme of Merger.
PRELIMINARY STEPS TO A MERGER
1. Due Diligence
2. Preparation of Merger Scheme (Merger Agreement)
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3. Memorandum of Understanding (MoU)

4. Technical Implementation Agreement (TIA)
5. Application for negative clearance Reg 10 MRR
6. Pre-notification consultations Reg 11 MRR
7. Notification to FCCPC Reg 12 MRR
DUE DILIGENCE
Before the scheme of merger is prepared and handed in at the Commission for vetting,
investigation/due diligence would be conducted to ascertain the accuracy and veracity of
information supplied by the merging entities.
There are two types of due diligence
1. Legal due diligence; and
2. Financial due diligence.
Some of the items to be covered under legal due diligences are as follows:
1. Ownership of company.
2. Directors of the company and any service contract.
3. Copies of license to do business.
4. Any change in the status of the company.
5. The date and registration status of the company
6. All statutory books of the company.
7. All charges created by the company and the debenture holders.
8. All titles to the properties of the company.
9. Legal status of the assets and liabilities of the company.
10. Copies of collective bargaining agreement and employees benefit plans.
Some of the items to be covered under financial due diligences are as follows:
1. Accounting records of the company.
2. Value of assets and liabilities to be acquired.
3. Product development and competitors.
4. Capital investments, profitability, merger, price earnings ratio.
5. Tax liabilities of the company and tax implication of the transaction.
6. Ability to raise short term and long-term capital as well as the cost of such capital in
relation to general industrial indicators.
APPLICATION FOR NEGATIVE CLEARANCE (ANC) REG 10 MRR
• Where any undertaking or any other party to a transaction is uncertain of whether or not a
transaction or proposed transaction constitutes a relevant merger and is notifiable, it may
apply to FCCPC by way of preliminary assessment for negative clearance and shall
provide such information as required by FCCPC.
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PRE-NOTIFICATION CONSULTATION (PNC) REG 11 MRR

1. Parties may request for pre-notification consultations with FCCPC to assist in
determining the course of a case.
2. Such consultations may take place in person, by telephone, by video conference or other
digital means, or by any other means FCCPC determines to be appropriate to enable the
parties and FCCPC to clarify matters such as-
a. whether or not a merger is required to be notified;
b. the calculation of annual turnover, value of assets, market shares, the merger
notification filing fee and other matters;
c. the requirements of Forms MRR 1 and MRR 2; and
d. requests for confidential treatment of information or documents.
STEPS TOWARDS APPROVAL OF MERGER BY FCCPC
• FCCPC will set out the Notification threshold from time to time. Therefore, regardless of
the categories, a proposed merger within the notification threshold shall not be
implemented unless there is prior notification and approval from FCCPC S93(1)
FCCPA.
FACTORS THAT FCCPC WOULD CONSIDER FOR APPROVAL S94 FCCPA
When considering a merger or a proposed merger, the Commission shall-
a) determine whether or not the merger is likely to substantially prevent or lessen
competition, by assessing these factors;
1. the actual and potential level of import competition in the market;
2. the ease of entry into the market, including tariff and regulatory barriers;
3. the level and trends of concentration, and history of collusion in the market;
4. the degree of countervailing power in the market;
5. the dynamic characteristics of the market, including growth, innovation, and product
differentiation;
6. the nature and extent of vertical integration in the market;
7. whether the business or part of the business of a party to the merger or proposed
merger has failed or is likely to fail; and
8. whether the merger or proposed merger will result in the removal of an effective
competitor.
b) if it appears that the merger is likely to substantially prevent or lessen competition, then
determine -
i. whether or not the merger is likely to result in any technological efficiency or other
procompetitive gain which will be greater than, and off-set, or is likely to result from
the merger, and would not likely be obtained if the merger is prevented, and
ii. whether the merger can or cannot be justified on substantial public interest grounds
by assessing the above factors;
c) otherwise, determine whether the merger can or cannot be justified on substantial public
interest grounds by assessing the factors set out above.
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STAGES: Merging Companies are mandated to take the following steps:

1. Application for negative clearance Reg 10 MRR
2. Pre-notification consultations Reg 11 MRR
3. Notification to FCCPC Reg 12 MRR
4. Post-Merger notification of compliance/consequential filings with FCCPC, CAC, SEC
PROCEDURE FOR MERGERS
1. Separate BOD meetings of the companies to prepare the scheme of merger
2. Application to FHC for court ordered meeting
3. Notice stating all the relevant info of the scheme to the members to convene the meeting,
the notice must be published in two national dailies and a copy filed with FCCPC
inviting FCCPC to the meeting.
4. Meeting of the members wherein ¾ majority passes special resolution approving the
scheme of merger
5. Application for negative clearance (ANC) Reg 10 MRR
6. Pre-notification consultations (PNC) Reg 11 MRR
7. Notification to FCCPC for review (phase one and phase two) Reg 12 MRR
o PHASE ONE, REG 14: The purpose of the first detailed review shall be for the
FCCPC to determine whether or not the merger is likely to substantially prevent
or lessen competition.
o PHASE TWO, REG 18: At the second detailed review, FCCPC shall conduct a
review and investigation with respect to -
a. the existence and validity of any counterweighting effects of the merger
that are likely to result in any technological efficiency or other pro-
competitive benefit (otherwise referred to as the “efficiency test”);
b. the existence and substantiality of any public interest grounds (otherwise
referred to as “public interest considerations”); and
c. whether the effects of the efficiency test are greater than and offsets the
effects of the substantial competition concerns and provides consumers a
fair share of the resulting benefit.
8. FCCPC considers whether proposed scheme will cause substantial restraint of trade or
monopoly. If it approves the merger then;
9. Letter of consent by the merging companies under oath.
10. FCCPC’s approval-in-principle to proceed
11. The parties apply to court for a merger order.
12. Court order sanctioning the scheme.
13. Once court order is made, it becomes binding on the parties. The court order may provide
for any of the following:
i. The transfer of the whole or part of the undertaking and of the property or liabilities
between the transferee and any transferor company
ii. The allotment and appropriation of shares, debentures, policies or other like interests
under the scheme
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iii. The continuation by or against the transferee company of any legal proceedings
pending by or against any transferor company
iv. Provision for dissenters to the scheme
v. The dissolution, without winding up, of any transferor company
vi. Othe incidental or consequential matters necessary for the reconstruction or merger to
be fully carried out.
POST-APPROVAL REQUIREMENTS Amendment to the Rules on Merger, August, 2021
After the approval given by the Commission and the court-order sanctioning the scheme, the
following requirements shall be complied with by the applicant:
1. file a copy of the court-order sanctioning the scheme within seven (7) days of the court
making the order;
2. file a copy of the newspaper publication of the court-order;
3. file an application for the registration of the securities to be issued as consideration for
the scheme where applicable, accompanied by the following (where applicable);
a. evidence of payment of the processing fee
b. relevant SEC form for the registration of securities
c. evidence of increase in share capital of the resultant company to accommodate the
share exchange
d. amended copy of the memart of the resultant company
4. file summary reports of the scheme within three months in respect of the following:
a) Arrangement relating to employees of the acquired company;
b) Settlement of shareholders;
c) Utilization of monies injected into the company, if any.
d) Treatment of dissenting shareholders;
e) Submission of gazetted copy of the court sanction;
f) Evidence of allotment of shares;
g) Evidence of settlement of severance benefits of employees (where applicable).
h) Statement of the actual cost of the scheme
REGISTRATION AT CAC
• Resolution of the companies
• Merger scheme as approved by FCCPC
• Formal approval by SEC
• Court orders.
• Evidence of publication of Court order in Gazette and 1 newspaper.
• Original certificate of incorporation of companies dissolved in the merger for
cancellation.
• Updated Annual Return
SALIENT CLAUSES IN A MERGER AND ACQUISITION AGREEMENT
1. Introduction
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2. Parties and the date

3. Recitals
4. Basic terms of the acquisition
5. Representations and warranties
6. Corporate authority
7. Consents and authorisations
8. Financial statements
9. Title to properties of the various parties to the merger
10. Litigations (pending)
11. Employee matters (e.g., NITEL workers)
12. Licenses (e.g., NITEL)
13. Compensation plans for employees
14. Full and complete disclosures
15. Covenants and undertakings
16. Notification of default or any adverse developments
17. Indemnity and insurance
18. Conduct of seller’s business prior to closing
19. Conduct of purchaser’s business prior to closing
20. Conditions to closing
21. Amendments of the scheme
22. Termination and effect of termination
23. Extension
24. Miscellaneous
25. Definition
POWER OF FCCPC TO REVOKE MERGER S99 FCCPA
The Commission is empowered to revoke its decision on approved or conditionally approved
merger scheme if any of the following occurs:
a) Incorrect information for which a party to the merger is responsible;
b) Any approval obtained by deceit;
c) The parties fail to implement the merger within 12 months after the approval was
granted; or
d) Breach of an obligation attached to the merger by any of the merging parties.
POWER TO HEAR PERSONS IN MERGER PROCEEDINGS S101 FCCPA
• In making a determination in respect of a merger notification, FCCPC may hear any
person, other than parties to the merger, who, in the opinion of FCCPC, is able to assist in
making a determination or the merger notification.
• Before making a determination in relation to a merger or a proposed merger, FCCPC may
decide to hold a hearing publicly or in private and shall appoint a date, time and place for
holding the hearing and give notice of the date, time, and place so appointed and of the
matters to be considered at the hearing to the persons entitled to be present at the hearing
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APPEALS S103 FCCPA

• A person aggrieved by FCCPC's decision may file an application for review before the
Tribunal and where the decision relates to a decision of the Tribunal, to the CA.
ACQUISITION
• Acquisition means where a person or group of persons buys most (if not all) of a
company’s ownership stake in order to assume control of the target company R433 SEC
Rules.
• Acquisition is the takeover by one company of sufficient shares in another company as to
give the acquiring company control over the other company R421 SEC Rules.
• For an external corporate restructuring to qualify as an acquisition; the threshold of
acquisition must be below 30% R421 SEC Rules.
• Acquisition as a corporate restructuring strategy is peculiar to only private companies and
public unquoted companies.
• SEC as the apex regulatory body requires the acquirer to file an expression of
interest/letter of intent accompanied with documents stated in the SEC Rules, 2013.
• The filing shall be done by a registered capital market operator registered as an issuing
house/investment advisor.
FILLING REQUIREMENTS FOR ACQUISITION BY A CORPORATE
ENTITY/INDIVIDUAL R434 SEC Rules 2013
The acquirer shall file a letter of intent accompanied with the following documents; the filling
shall be done by a registered capital market operator registered to function as an issuing house:
1. Two (2) draft copies of Information Memorandum;
2. Extracts of board resolutions of the acquirer and the acquiree agreeing to the acquisition
signed by the company’s secretary and a director (where applicable);
3. A recent CAC certified true copy of the memart of the acquirer and the acquiree (where
applicable);
4. A certificate of incorporation of the acquirer and the acquiree (where applicable) certified
by the company secretary;
5. Extracts of shareholders resolution of the acquirer and the acquiree to be signed by a
director and company secretary (where applicable);
6. Summary of the claims and litigations of the company to acquired;
7. A copy of “No Objection” letter from the relevant regulatory body (where applicable);
8. Copies of letters appointing the financial advertiser(s);
9. CAC certified form showing particulars of directors and allotment of shares of the
acquirer and the acquiree (where applicable)
10. Notarized consent of directors of the acquirer and the acquiree (where applicable);
11. Financial services agreement between the acquirer and the acquiree and their respective
Financial Advisers (where applicable);
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12. Share purchase agreement and any other relevant agreement executed between the
acquirer and the acquiree (where applicable);
13. Payment of N50,000 being application fee;
14. Payment of processing fee based on the value to be acquired on the graduation fee.
15. Annual report and accounts of both companies for the proceeding period of five (5) years
or a shorter period of three (3) years for private companies and those that have been
operating for less than five (5) years;
16. Source of fund to finance the acquisition must be clearly disclosed and backed by
documentary evidence;
17. Report of valuation shares/assets (where applicable);
18. Publication of the acquisition in at least two national dailies after consummation.
POST ACQUISITION REQUIREMENTS BY SEC R437 SEC RULES
The following docs shall be forwarded:
a) Executed share/asset purchase agreement
b) Evidence of settlement of purchase agreement
c) Evidence of settlement of severance benefits of employees who may be affected by the
restructuring exercise.
POST- ACQUISITION INSPECTION R439 SEC RULES
• Post-acquisition inspection by SEC, three months after the approval and consummation
of the exercise.
EXTERNAL RESTRUCTURING R440 SEC RULES
• External restructuring includes restructuring of a group of companies and other related
party transactions.
Procedure for obtaining approval for External Restructuring R441 SEC RULES
Companies proposing for external restructuring shall:
1. File with CAC an application for external restructuring;
2. Upon clearance of the application, the companies shall file an application in the FHC
seeking an order to convene a court ordered meeting;
3. Following the resolution of the shareholders at the court ordered meeting approving the
scheme and sanctioning of the transaction by the court, the applicants shall file with CAC
a formal application for approval of the external restructuring.
Requirements for External Restructuring R442 SEC RULES
An application for external restructuring shall be filed by submitting the following documents:
1. Shareholders resolution of the companies approving the external restructuring;
2. A copy of certificate(s) of incorporation of the entities certified by the co secretary;
3. CAC CTCs of particulars of directors and allotment of shares of the affected companies;
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4. ‘No objection’ letter from relevant regulatory authorities (where applicable);

5. Scheme of external restructuring containing the following information:
a) Directors of the companies;
b) Profile/share capital history of the companies;
c) Shareholding structure of the companies;
d) Directors beneficial interest;
e) Status of the subsidiary(ies) after the external restructuring;
f) Status of the shares of the combined company; Percentage or level of involvement of
the combined companies (if they have similar products);
6. Any other information or document required by the Commission from time to time;
7. Additional requirements:
a) Consents of directors and other parties to the transaction;
b) Board resolutions;
c) 2 years financial statement of the entities;
d) Evidence of payment of processing fees.
Requirements for formal approval R443 SEC RULES
After the clearance of the documents and the court ordered meeting by the shareholders
approving the restructuring, the following documents should be submitted to the Commission:
1. Two copies of the Scheme of restructuring duly executed by the parties to the transaction;
2. Copies of duly executed shareholders resolution passed at the separate court order
meeting approving the scheme;
3. Scrutineer’s report showing the result of the voting;
4. Power of attorneys of Directors who were absent at the separate court order meeting;
5. Any other document which the Commission may require.
Post approval requirements R444 SEC RULES
After the final approval given by CAC and the court order sanctioning the scheme, the following
document requirement shall be complied with by the applicant:
1. Obtain the court order sanctioning the scheme;
2. File a copy of court order sanctioning the scheme within seven (7) days of the court
sanction;
3. File a copy of newspaper publication of court order;
4. File a statement of the actual cost of the scheme;
5. Report on the settlement of shareholders;
6. File a notification of completion or otherwise of the exercise within there (3) month.
TAKEOVER
a) A takeover is a situation where a person or group of persons acquire(s) or wish to acquire
a minimum of 30% shares in a public company with the intention of taking over the
control of that company S117 ISA and R445 SEC Rules.
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b) A takeover bid must be made by such a person or group of persons or through the
instrumentality of a market operator to the shareholders of the target company.
c) Where a takeover bid is made by a corporate body, there must be a resolution of the
board of directors approving the bid and also accompanying the bid.
d) The bid must be made to at least 20 shareholders representing 60% of the
membership of the target company or such other members as may be prescribed by SEC.
e) A bid must not be made where the shares to be acquired are shares of a private company.
TAKE OVER BID R445 SEC Rules
1. The takeover bid shall be made through the agents of the person/corporation to the target
company R445(1) SEC Rules.
2. The agent who dispatches the bid must be a registered CMO R445(1)(b) SEC Rules
3. The take-over bid must be made or dispatched to at least twenty (20) shareholders
representing sixty (60%) percent of the members of the target company or such other
number as SEC may provide from time-to-time R445(3)(a) SEC Rules. This can also be
to members holding aggregate of 51% of the paid-up shares S133(3)(a) ISA.
4. The bid must be to acquires shares of a pub company not a private company R445(3)(b)
SEC Rules, S133(4) ISA.
5. If the bid is by a corporate body, it must be accompanied by a resolution of the company,
signed by one director and the company secretary approving the bid R445(2) SEC Rules.
6. The bid must be advertised in at least two (2) national dailies R445(4) SEC Rules
7. The bid must be dispatched within three (3) months from the date the authority to
proceed with the bid was granted, or if a renewal is granted, then within the renewed
period.
8. The bid must contain the requisite contents of a take-over bid set out in R446 SEC Rules
and S136(1) ISA.
9. The bid must be registered with SEC in accordance with R448 SEC Rules and S135 ISA
CONTENTS OF A TAKEOVER BID R446 SEC Rules
A bid, being an invitation under a takeover bid must be in a document that states as follows:
1. The name and address of the offeror,
2. The maximum number and offer particulars of the shares the company proposed to be
acquired during the period specified in the invitation to bid.
3. The price and other terms on which those shares are proposed to be acquired.
4. The number and other particulars of the shares in the offeree company to which:
i. the offeror; and
ii. any company in the same group of companies as the offerors, is or are entitled
immediately before the date of the take-over bid
5. State whether it is going to acquire the shares of dissenting members at the fair market
value.
6. Such other matter as may be prescribed by regulation from time to time.
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DOCS TO BE FILED WITH A TOB R446 SEC Rules

1. Application letter
2. Copies of information memorandum
3. Letter of ‘no objection’ from regulatory body
4. Shareholders’ and BOD resolutions
5. Certificate of incorporation of offer or company
6. Memart of offer or company
7. Letter appointing financial adviser to the offer
Contents of an information memorandum shall include:
• Background Information
A. Section I
i. Background to the transaction;
ii. Parties to the takeover;
iii. Statement of intention/objective;
iv. Statement of financial capability of offeror;
B. Section II
i. Brief History of the offeror;
ii. Share capital, ownership structure and directors of the offeror (where applicable);
iii. The percentage market share of the offeror in the relevant industry;
iv. Current shareholding of the offeror in the target company;
v. Number of shares and percentage holding to be acquired;
vi. The post-takeover status of the target company;
vii. Likely effect of the take-over bid, if successful on:
a) The economy of Nigeria;
b) The staff of the target company.
AUTHORITY TO PROCEED WITH THE TAKEOVER BID R447 SEC RULES
• Authority to proceed must be granted by the Commission before a takeover bid could be
made.
• Authority to proceed remains in force for 3 months subject to renewal for another period
of 3 months but the request must be made within 14 days prior to the expiration of the
first 3 months.
• A takeover bid must be signed by the maker and also registered with the Commission
before the dispatch.
• The offer must be filed with SEC within 7 working days upon conclusion of the offer.
POST APPROVAL REQUIREMENTS
1. Obtain court order sanctioning the scheme and within seven days of the court sanction
file a copy with the SEC.
2. File a copy of newspaper publication of the court order.
3. File a statement of the actual cost of the scheme.
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4. Report on the settlement of shareholders.

5. File a notification of completion or otherwise of the exercise within 3 months.
PURCHASE AND ASSUMPTION
• Under this category of external restructuring, the focus is usually the rescue of some of
the investments in a moribund or failing company.
• The aim is to effect a reduction in losses occasioned by depreciating investments by
allowing another company/investor to purchase the liabilities of the failing company and
assume ownership of its assets.
• The assumed company undergoes dissolution through judicial sale of its assets and
liabilities.
• Acquisition of the assets and undertakings of a moribund co by a ‘Going Concern’ and
Assumption of its liabilities with a view to turning it around E.g., Trade Bank Plc by
UBA Plc; All States Trust Bank Plc by ECOBANK Plc.
• It is usually effected through a duly executed Deed of Purchase and Assumption executed
by the parties and the resolutions approving the transaction or government white papers
in the case of government corporation purchased and assumed by a regulatory agency
such as CBN, NDIC or AMCON.
• Application must be made to the FHC for the P&A to be sanctioned.
• All the liabilities of the failing company are taken which is a major difference between
P&A and Cherry picking.
• Role of CBN, NDIC in collation of assets and liabilities –Cherry –Picking by Purchasers.
• P & A involves:
o Legal Due Diligence
o Purchase of assets
o Assumption of liabilities
o Winding up and dissolution of P&A entities
o Settlement of investors, depositors and creditors
CHERRY PICKING
• The action or practice of choosing and taking only the most beneficial or profitable items,
opportunities, etc., from what is available.
• The investor here, picks what is beneficial from what is available, not like P&A where all
liabilities are also covered.
• This is an external restructuring option for a moribund or failing company, also aimed at
reducing the loss of investment.
• Unlike P&A, the company/investor is not taking up all the liabilities of the failing/failed
company, but is allowed to inspect the books, assets, business operations/activities of the
failing company with a view to choosing or picking out those aspects it could save by
integrating them into its own business activities.
• This is almost the opposite of purchase and assumption because under P&A all the
liabilities of the failing company are taken; but under cherry picking, not all is taken.
300
ETHICAL ISSUES
1. Duty to disclose the true state of the company in preparation for the scheme of merger.
2. Duty not to allow conflict of interest under R17 RPC 2007.
3. Duty to act with care and skill as required under R14 RPC 2007.
4. It is also the duty of the solicitors to the scheme of merger to devote their attention,
energy and expertise to the course of the newly merged company and minimize post-
merger conflict
SOME ETHICAL ISSUES INVOLVED IN MBO AND PURCHASE AND ASSUMPTION
1. Duty to disclose the true state of the company in preparation for the management Buyout
and Purchase and Assumption.
2. Duty not to allow conflict of interest and insider trading on the part of the managers in a
MBO under R17 RPC 2007.
3. Duty to act with care and skill as required under R14 RPC2007.
4. It is also the duty of the solicitors to the P&A transaction to devote their attention, energy
and expertise to the course of the financial institution assuming liabilities and minimise
post assumption conflicts and undisclosed liabilities.
301
COMPANY PROCEEDINGS AND INVESTMENT DISPUTES

RESOLUTION
COMPANY PROCEEDINGS
APPLICABLE LAWS/RULES
1. Companies and Allied Matters Act 2020
2. Companies Proceedings Rules 1992
3. Investment and Securities Act 2007
4. Company Winding up Rules 2001
5. Constitution of the Federal Republic of Nigeria 1999 (CFRN as amended)
6. Federal High Court of Nigeria Act
7. Arbitration &Conciliation Act (ACA)
8. Federal High Court Civil Procedure Rules 2019
9. Investment & Securities Tribunal Procedure Rules
10. Securities and Exchange Commission Rules 2013
JURISDICTION
Federal High Court (Exclusive) for civil matters.
• S251(1)(e) CFRN provides; notwithstanding anything to the contrary, the FHC shall
have and exercise jurisdiction to the exclusion of any other court in civil causes and
matters arising from the operation of the CAMA or any other enactment replacing the Act
or regulating the operation of companies incorporated under the CAMA;
• Albeit by subsection (3) the jurisdiction on criminal matters is not exclusive.
• Rules 21 and 19 Companies Proceedings Rules
• Nahtex International Ltd v Habib (Nig) Bank ltd
• Inland Bank (Nigeria) Plc v Ruhanti (Nigeria) Enterprises Ltd &ors
MODES OF APPLICATION/COMMENCING ACTIONS RR 2(1) AND 19 CPR
• Originating summons
• Originating motion
• Petition
• Writ of summons
COMPANIES PROCEEDING RULES 1992
• This is used for all proceedings under part B of CAMA 2020, R21(1) CPR.
• Where there is no provision in the CPR, the FHCCPR 2019 will apply Rule 19.
• Criminal offences arising from corporate infractions are to be tried by courts of
competent jurisdiction in the place where the offence is alleged to have been committed;
not necessarily the FHC S734(1) CAMA, S251(3) CFRN.
302
TITLING OF COMPANY PROCEEDINGS R1(1) CPR

• Every originating summons, notice of originating motion and petition by which any such
proceedings are begun and all affidavit notices and other documents in those proceedings
shall be entitled:
“IN THE MATTER OF THE COMPANY CONCERNED AND
IN THE MATTER OF THE COMPANIES AND ALLIED
MATTERS ACT”
E.g., “IN THE MATTER OF EDUPAL NIGERIA LIMITED
AND IN THE MATTER OF THE COMPANIES AND
ALLIED MATTERS ACT”
• NB: The same rule applies to commencement of winding up petition under the
Companies Winding Up Rules, 2001.
MODES OF MAKING APPLICATIONS
ORIGINATING SUMMONS R2 CPR
• All applications under CAMA are made by originating summons except where the rules
require the applications to be made by another means R2(1) CPR, Unipetrol (Nig.) Plc.
v Agip Nig. Plc.
• It is as contained in Form 1 of the Schedule to the Companies Proceedings Rules R2(3)
CPR
• It can be exparte or on notice R2(2) CPR
ORIGINATING MOTION R3 CPR
1. Application for default in complying with conditions constituting a private company
under S23(2) CAMA.
2. Application for extension of time to deliver documents to CAC under SS51(9), 154(3)
and 355(5) CAMA.
3. Application for the rectification of the registers of members under S115(1) CAMA.
4. Application for an order declaring that the affairs of a company ought to be investigated
by an inspector appointed by the CAC under S358 CAMA.
5. Application for contempt proceedings against the person who refuses to appear before the
inspector under S362(3) & (4) CAMA.
6. Application for an order directing that any shares or debentures of a company shall cease
to be subject to restrictions imposed by CAC under S372 CAMA
7. Application for an order declaring dissolution of a company which has not been wound
up to have been void under S691(1) CAMA
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APPLICATION TO BE MADE BY PETITION R4 CPR

1. Application to cancel the alteration of a company’s Business objects under S51(1) & (2)
CAMA.
2. Application to cancel the alteration of a condition contained in a company’s
memorandum under S52(1) CAMA.
3. Application to cancel a special resolution for re-register PLC as LTD under S64(1)
CAMA.
4. Application to confirm a reduction of the share premium account of a company under
S131(1) CAMA.
5. Application to cancel any variation or abrogation of rights attached to any class of shares
in a company under S167(1) CAMA.
6. Application to confirm a reduction of the capital redemption reserve fund of a company
under S182 CAMA.
7. Application for relief on the ground that the affairs of the company are being conducted
in an illegal or oppressive manner under S354(1) CAMA.
8. Application for an order deferring the date at which the dissolution of the company is to
take effect under S641(4) CAMA.
9. Application for an order restoring the name of a company to the register where the
application is made with an application for the winding up of the company under S692(6)
CAMA.
10. Application for relief from liability of an officer of a company or a person employed by a
company as auditor under S738 CAMA.
INVESTMENT DISPUTES
REGULATORY FRAMEWORK
1. Amicable settlement or reconciliation.
2. ADR & Arbitration/hybrid processes
3. Settlement by self-regulatory organisation for its members.
4. Administrative Proceedings Committee of SEC
5. Investment and Securities Tribunal
6. Federal High Court.
ADMINISTRATIVE PROCEEDINGS COMMITTEE OF SEC S310 ISA, R599 SEC
RULES, SCHEDULE VIII SEC RULES
ESTABLISHMENT R599(1) SEC RULES
• Pursuant to sections 310 of the Act, there is hereby established an administrative body to
be known as Administrative Proceedings Committee (the Committee) for the purpose of
hearing capital market operators and institutions in the market who are perceived to have
violated or have actually violated or threatened to violate the provisions of the Act and
the rules and regulations made thereunder and such operators or persons against whom
complaints/allegations have been made to the Commission.
304
PARTIES
The parties to the proceedings before the Committee shall be:
a) In a matter initiated by the Commission:
i. the Head of Department responsible for investigation in the Commission;
ii. the person or institution against whom an allegation of violation of the Act or Rules
has been made;
iii. any other person required by the Committee to be joined or joined by leave of the
Committee.
b) In any other case:
i. the Complainant;
ii. the Respondent;
iii. any person considered by the Committee to have an interest in the proceedings or
joined by leave of the Committee.
POWERS OF THE COMMITTEE
The Committee shall have jurisdiction in respect of:
1. disputes between investors and Capital Market Operators;
2. disputes between Capital Market Operators;
3. disputes between Securities Exchanges, Capital Trade Points and other Self-Regulatory
Organizations (SROs);
4. disputes arising from public offers by companies;
5. disputes between Investors and Issuers of securities;
6. disputes between Investors;
7. disputes between SROs;
8. violations or probable or threatened violation of the provisions of the Investments and
Securities Act, the Rules and Regulations made there under and the Code of Conduct for
Capital Market Operators and their Employees;
9. violation of the Code of Corporate Governance for public companies;
10. activities and dealings of public companies and their employees;
11. issues relating to the registration of Market Operators and SROs;
12. public sale or trading in unregistered securities;
13. dealing in securities or sale of securities to the public;
14. unethical and unprofessional practice, manipulations and use of deceptive devices or
contrivances in securities transactions;
15. denial of registration;
16. non-compliance with orders, guidelines and directives of the Commission;
17. any other matter which the Commission may direct it to hear
INVESTMENT AND SECURITIES TRIBUNAL
• Established under S274 ISA
305
• The Tribunal was established to provide an efficient dispute settlement mechanism with
fairness, flexibility and transparency for the capital market investors, public companies,
capital market operators, self-regulatory organisations and other market participants IST
Procedural Rules 2&3(1) 2003.
COMPOSITION OF THE TRIBUNAL S275 ISA
• The Tribunal shall consist of ten (10) persons to be appointed by the Minister as follows:
o a full time Chairman who shall be a legal practitioner of not less than 15 years
with cognate experience in capital market matters;
o four other full time Members, three of whom shall be Legal Practitioners of not
less than 10 years’ experience and one person who shall be knowledgeable in
Capital Market matters who shall devote themselves to issues relating to
adjudication and shall not exercise any administrative function;
o five other part time members who shall be persons of proven ability and
expertise in corporate and capital market matters.
• The Chairman shall be the Chief Executive and Accounting Officer and shall be
responsible for the overall control, supervision and administration of the Tribunal.
CONSTITUTION OF THE TRIBUNAL S276 ISA
• The Tribunal shall be duly constituted if it consists of not less than 3 members of the
Tribunal
• The Chairman of the Tribunal may constitute a panel of three (3) from its membership
whenever he deems it necessary for the purpose of exercising the jurisdiction vested in
the Tribunal by this Act or any other Act provided that:
o a member presiding as chairman of any panel shall be a legal practitioner; and
o the sitting of any of such panel shall be deemed a sitting of the Tribunal.
JURISDICTION OF THE TRIBUNAL S284 ISA
The Tribunal shall, to the exclusion of any other court of law or body in Nigeria, exercise
jurisdiction to hear and determine any question of law or dispute involving-
1. a decision or determination of the Commission in the operation and application of this
Act, and in particular, relating to any dispute-
i. between capital market operators;
ii. between capital market operators and their clients;
iii. between an investor and a securities exchange or capital trade point or
clearing and settlement agency;
iv. between capital market operators and self regulatory organisation;
2. the Commission and self regulatory organisation;
3. a capital market operator and the Commission;
4. an investor and the Commission;
5. an issuer of securities and the Commission; and
306
6. disputes arising from the administration, management and operation of collective

investment schemes.
THE JURISDICTION OF THE TRIBUNAL S289 ISA
• The Tribunal has original as well as appellate jurisdictions.
• The person aggrieved by the decision of the SEC may institute an action in the Tribunal
thereby activating the original jurisdiction of the Tribunal or appeal against such a
decision from the Administrative Proceedings Committee of SEC.
• The Commission must be notified by the aggrieved person and the length of the notice is
14 days.
• In the case of an appeal, the appeal must be filed within 30 days of the receipt of the
copy of the order sought to be appealed against.
POWERS AND PROCEDURES OF THE TRIBUNAL S290 ISA
1. The Tribunal may make rules regulating its procedures.
2. The Tribunal shall have, for the purposes of discharging its functions, power to-
i. summon and enforce the attendance of any person and examine him on oath;
ii. require the discovery and production of documents;
iii. receive evidence on affidavits;
iv. call for the examination of witness or documents;
v. review its decisions;
vi. dismiss an application for default or deciding matters ex-parte;
vii. set aside any order or dismissal of any application for default or any order made by it
ex-parte; and
viii. do anything which in the opinion of the Tribunal is incidental or ancillary to its
functions.
3. Any proceeding before the Tribunal shall be deemed to be a judicial proceeding and the
Tribunal shall be deemed to be a civil court for all purposes.
4. Proceedings of the Tribunal may be held in camera as and when deemed appropriate
in the interest of the public. QUERY: how does this juxtapose with S36(1) & (3)
CFRN?
JUDGEMENT AND APPEALS
• The judgment of the Tribunal must be in writing and would be enforced as if it were a
judgment of the FHC S293(3) ISA.
• Further Appeal will lie to the CA and subsequently to the SC.
• The Tribunal must adjudicate and decide a case within ninety days of the
commencement of the proceedings (this only appears in the handbook @pg 174 not the
ISA, probably, the authority is S294(1) CFRN) vis-à-vis S6(5)(J) CFRN.
ADMINISTRATIVE PROCEEDINGS COMMITTEE (CAC) S851 CAMA
COMPOSITION OF THE ADMINISTRATIVE PROCEEDINGS COMMITTEE
307
• The Commission shall establish an Administrative Proceedings Committee comprising:

a. the Registrar-General who shall be the Chairman of the Committee;
b. five representatives from the operational departments of the Commission, not
below the grade level of a director, one of whom shall be from the Compliance
Department of the Commission; and
c. a representative of the Federal Ministry of Industry, Trade and Investment not
below the grade level of a director.
PERSONS THAT THE COMMITTEE MAY CO-OPT AT ITS MEETINGS
• The Committee may co-opt persons, at any of its meetings, as observers, representatives
of relevant associations, including associations of shareholders, registrars or trustees,
as are considered necessary, and members so co-opted shall not count towards a quorum
or have the right to vote in respect of any decision taken by the Administrative
Committee.
SECRETARY OF THE COMMITTEE
• The Commission shall designate an officer of the Commission with at least 10 years
post-call experience in the legal profession who shall be the secretary of the
Administrative Committee.
FUNCTIONS OF THE ADMINISTRATIVE S851(4) CAMA
i. Provide opportunities for persons alleged to have breached the provisions of CAMA or
its regulations to be heard;
ii. Resolve disputes or grievances arising from the operations of CAMA or its regulations;
and
iii. Impose administrative penalties for breach of the provisions of CAMA or its regulations
in the settlement of matters before it.
PROCEEDINGS OF THE MEETING OF THE ADMINISTRATIVE PROCEEDINGS
COMMITTEE S851 (5) & (6)
i. The chairman presides over the meetings of the Committee and at any meeting the
chairman is absent, the members present will appoint one of their members to preside
over the meeting.
ii. The quorum at the sitting of the Committee is four members present.
iii. Issues are determined by the Committee by simple majority of the members present and
where there is a tie, the chairman or the member presiding is entitled to a casting vote
(second vote).
iv. The Committee regulates its proceedings subject to the provisions CAMA.
JUSISDICTION OF THE ADMINISTRATIVE PROCEEDINGS COMMITTEE REG 38
COMPANIES REG 2021
The jurisdiction of the Administrative Proceedings Committee is in respect of non-criminal
disputes arising from the operations of the Act as they relate to:
308
i. Names of companies, limited liability partnership, limited partnership, business names

and incorporated trustees;
ii. Shares in private companies; and
iii. Appointment or removal of directors, partners or trustees.
PROCEDURE OF SETTLEMENT OF DISPUTES BEFORE THE ADMINISTRATIVE
PROCEEDINGS COMMITTEE REGS 39 – 45 OF COMPANIES REGULATIONS, 2021
• Any party with complaint for adjudication by the Committee shall send it to the
Registrar-General of the Commission.
• If the Registrar-General on receipt of the complaint is of the opinion that the provisions
of the Act in respect of which the Committee has jurisdiction to adjudicate have been or
is about to be violated, he shall refer the complaint to the Committee for adjudication.
• The Secretary of the Committee upon receipt of the complaint shall within two working
days schedule the complaint for hearing on a date that may be determined by the
Chairman of the Committee.
• The Secretary shall within five working days of receipt of the complaint send to the
parties the notice of hearing.
• The notice shall contain the names of the parties, particulars of claim, details of the
alleged violations, date, place and time of hearing.
• The notice may be served on the parties personally or by registered post to their physical
or electronic addresses and where it cannot be served on a party for whatever reason, the
Chairman may direct that the notice be served by substituted means.
• The hearing of the complaint shall not be scheduled for a day less than 21 days from
the date of receipt of the complaint together with the report of the investigation.
• Not later than 10 working days from service of hearing notice, the parties shall file their
briefs with the Committee and serve each other notice of same.
• Parties may file and serve each other further documents not later than five working days
from filing and service of the initial pleadings on each other.
• The periods prescribed for filing and service of documents maybe extended by the leave
of the Committee.
• At the expiration of the time prescribed for further pleadings, the Secretary shall set down
the matter for hearing.
• Parties shall attend the sittings of the Committee either in person or be represented by a
legal practitioner.
• Proceedings of the Committee shall be recorded on audio or visual tape or such other
electronic device.
• The Committee many grant not more than two adjournments in a matter which may only
be granted if it considers that refusing to grant adjournment may lead to miscarriage of
justice and on condition of payment of administrative fees.
• Issues are determined by the Committee by simple majority of the members present and
where there is a tie, the chairman or the member presiding is entitled to a casting vote
(second vote).
309
• Decisions of the Committee are subject to confirmation by the governing board of the
Corporate Affairs Commission.
• Parties dissatisfied with the decision of the Committee may appeal to FHC.
Note:
i. The venue of the sittings of the Committee unless otherwise indicated is the head office
of CAC.
ii. The chairman presides over the meetings of the Committee and at any meeting the
chairman is absent, the members present will appoint one of their members to preside
over the meeting.
iii. The quorum at the sitting of the Committee is four members present.
iv. The Committee regulates its proceedings subject to the provisions of S851 of CAMA.
v. The proceedings of the Committee shall be guided by the provisions of the Evidence Act
SANCTIONS THAT THE ADMINISTRATIVE PROCEEDINGS COMMITTEE MAY
IMPOSE
i. Imposition of administrative penalties;
ii. Suspension or revocation of registration; or
iii. Recommendation for criminal prosecution if matters brought before it reveals any
criminal act or conduct S851(10) CAMA.
DRAFTING OF COURT PROCESS

HOLDEN AT LAGOS
AND
BETWEEN
JOHN WEST
SMART STEVE
(Administrators/Personal representative of the Estate of Edwin John-Deceased) ---------------------
--------------------------------------------------------------------------------------------------APPLICANTS
AND
PETER PAN (DIRECTOR)-------------------------------------------------------------RESPONDENTS
ORIGINATING MOTION
310
BROUGHT PURSUANT TO SECTION 115 OF THE COMPANIES AND ALLIED-

MATTERS ACT, 2020, ORDER 3 OF THE COMPANIES PROCEEDINGS RULES 1992 (AS
AMENDED) AND UNDER THE INHERENT JURISDICTION OF THIS HONOURABLE
COURT
TAKE NOTICE that this honourable court shall be moved on the 15th day of August, 2022 at the
hour of 9 O’clock or so soon thereafter as Counsel to the Applicant may be heard praying the
court for the following reliefs:
1. AN ORDER mandating the Respondent to rectify the Register of members to include
both the names of the Applicants as owners of the shares owned by Edwin John now
deceased.
2. AND FOR SUCH FURTHER OTHER ORDERS as the honourable court may deem fit
to make in the circumstances.
____________________________
Chris Ozo Agbata.
C. O. Agbata LP
Abuja.
[email protected]
07035406532
FOR SERVICE ON:

Theo Uguru Esq
56 Madison Close,
Abuja.

HOLDEN AT LAGOS
AND
311
BETWEEN
JOHN WEST -----------------------------------------------------------------PLAINTIFF/APPLICANT
AND
PETER PAN (DIRECTOR)-----------------------------------------DEFENDANTS/RESPONDENTS
ORIGINATING SUMMONS
BROUGHT PURSUANT TO RULE 2(2) COMPANIES PROCEEDING RULES 1992 AND
UNDER THE INHERENT JURISDICTION OF THE COURT
Let Edupal Nigeria Plc whose registered address is at 15 Edupal Drive, Ikoyi, Lagos within
jurisdiction to within 7 days on or after service of this summons on it inclusive of the day of such
service cause an appearance to be entered for it to this summons, which is JOHN WEST
(Plaintiff) whose registered address is situate at 12 Yahaya Street, Lagos, and who will seek for
the determination of the following questions:
QUESTIONS FOR DETERMINATION
1. Whether or not the takeover of the plaintiff by the defendant is legal?
RELIEFS:
AND after the determination of the issues, the Plaintiff/Applicant prays as follows:
1. AN ORDER declaring its take-over by the defendant as fraudulent, illegal and void
2. AND FOR SUCH FURTHER ORDER OR ORDERS as the court may deem fit in the
circumstances.
____________________________
Chris Ozo Agbata.
C. O. Agbata LP
Abuja.
[email protected]
07035406532
FOR SERVICE ON:

Theo Uguru Esq
56 Madison Close,
Abuja.
312
NB: these processes are supported by affidavits drafted in the general format; thus, they
apply mutatis mutandis with those in Civil Litigation.

HOLDEN AT LAGOS
IN THE MATTER OF BAD NIGERIA LIMITED
AND
BETWEEN
CHRIS OZO AGBATA-------------------------------------------------------PLAINTIFF/APPLICANT
AND
BAD NIGERIA LIMITED--------------------------------------DEFENDANTS/RESPONDENTS
PETITION FOR WINDING UP OF BAD NIGERIA LIMITED
The humble petition of Mr. Chris Ozo Agbata (Petitioner) of 15, Kaba Street, Lagos is presented
for filing based on the following facts:
1. The Petitioner is a Legal Practitioner with his office at 15 Edupal Drive, Ikoyi, Lagos.
2. The Respondent is a company incorporated in Nigeria in accordance with the provisions
of the Companies and Allied Matters Act, 2020, with registered office at 14, Imam Street.
3. The Respondent agreed to pay 2 million dollars as professional fees to the petitioner.
4. The Petitioner has demanded for payment of his professional fee and the respondent has
failed pay for over six months.
THE PETITIONER PRAYS AS FOLLOWS:
1. AN ORDER for the compulsory winding up of the company by this Honourable Court
2. That a Liquidator be appointed by the court to effect the winding up and settlement of the
sum owed the petitioner.
Dated the 15th day of August, 2022.
____________________________
Chris Ozo Agbata.
C. O. Agbata LP
12, Johnson Street, Asokoro, Abuja.
[email protected]
07035406532
FOR SERVICE ON:
313
Theo Uguru Esq
56 Madison Close,
Abuja.
ADR OPTIONS
• Negotiation
• Mediation
• Conciliation
• Arbitration
• NB: the Disadvantages of litigation and advantages of ADR
ADR PROCESS UNDER S26 NIPC ACT
• S26 NIPC Act applies where:
o The dispute involves any level of government in Nigeria (Federal, state or local)
or its agency
o The dispute involves the business enterprise
o The dispute involves a local or foreign investor
ADR Process:
Step 1: Mutual discussion via Negotiation or mediation
Step 2: where step 1 fails, the parties will resort to arbitration.
• The applicable arbitration rule will depend on if the investor is a local or foreigner
• Where the investor is a local (national), recourse will be had to the provisions of the
Arbitration and Conciliation Act.
• Where the investor is a foreigner, recourse will be had to any bilateral or multilateral
treaty to which the Federal Government and the country of which the investor is a
national are parties
• In the absence of any such bilateral or multilateral treaty, recourse will be had to any
other national or international machinery for the settlement of investment dispute agreed
to by the parties.
• Where they fail to agree, the parties must adopt the International Center for Settlement
of Investment Disputes (ICSID) Rules.
IST – ADR CENTRE
• It is an ADR centre of the IST
• Provides sessions for the various ADR options
• Such as mediation, negotiation, arbitration and other hybrid processes
314
• R34(1) IST Procedure Rules issues directive for effective management and resolution
of disputes
• More so, IST is empowered to promote reconciliation among parties to an action and
encourage and facilitate amicable settlement of disputes
GUIDES IN DRAFTING AN ADR CLAUSE
Sample
“If at any time disagreement or dispute or question shall arise between
the parties in connection with this agreement or its validity, construction;
or performance, then the same shall be referred to an Arbitrator
nominated by Settlement House upon request on the request of any of
any party and the decision of the Arbitrator shall be binding on all the
parties.”
ETHICAL ISSUES INVOLVED IN COMPANY PROCEEDINGS
1. Duty not to forge documents in relation to the proceedings involving companies in
consonance with R1 RPC 2007.
2. Duty to ensure that the right originating process is applied to client’s action R16 RPC
3. Duty of confidentiality
4. Duty to appear in litigation on behalf of client corporate or individual.
5. Duty not to aid unauthorized practice of law.
315
CORPORATE INSOLVENCY, COMPANY VOLUNTARY

ARRANGEMENT, ADMINISRATION AND RECEIVERSHIP
KEY TERMS (S868 CAMA):
• Insolvent person: means any person in Nigeria who, in respect of any judgment, Act or
court order against him, is unable to satisfy execution or other process issued in favour of
a creditor, and the execution or other process remains unsatisfied for not less than six
weeks.
• Insolvency practitioner means a legal practitioner within the meaning of the Legal
Practitioners Act or a member of the Institute of Chartered Accountants of Nigeria or
such other professional bodies of accountants as are established by an Act of the National
Assembly.
• Arrangement means any change in the rights or liabilities of members, debenture
holders or creditors of a company or any class of them or in the regulation of a company,
other than a change effected under any other provision of this Act or by the unanimous
agreement of all parties affected S710 CAMA.
• Official receiver means the officer by whatever name called or known charged with
control of affairs in bankruptcy and if the appointment is vacant for any reason
whatsoever, means the sheriff.
• Receiver includes a manager.
CORPORATE INSOLVENCY
• Corporate insolvency is inability of a company to pay its debts.
• The principal law on corporate insolvency in Nigeria is CAMA 2020.
• Insolvency Practitioner plays a major role in corporate insolvency
OPTIONS UNDER CAMA
These do not include winding up, liquidation or dissolution but rescuing the company;
i. Company Voluntary Arrangement (CVA)
ii. Administration of Companies
iii. Receivership (Receiver and Managers)
INSOLVENCY PRACTITIONER
ACTING AS INSOLVENCY PRACTITIONER S704
A person acts as an insolvency practitioner in relation to a company by acting as its:
i. liquidator,
ii. provisional liquidator or
iii. official receiver;
iv. administrator or
v. administrative receiver; or
vi. receiver and manager, or
316
vii. nominee or supervisor of a company’s voluntary arrangement.

QUALIFICATION OF INSOLVENCY PRACTITIONER S705
A person is only qualified to act as an insolvency practitioner where he:
i. has obtained a degree in law, accountancy or such other relevant discipline from any
recognised University or Polytechnic;
ii. has a minimum of five years post qualification experience in matters relating to
insolvency;
iii. is authorised to so act by virtue of a certificate of membership issued by Business
Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN), or his
membership of any other professional body recognised by CAC, being permitted to act
by or under the rules of that body; and
iv. holds an authorisation granted by the CAC.
• CAC may prescribe in its regulations such other additional qualifications as may be
considered necessary.
ACCREDITATION OF INSOLVENCY PRACTITIONERS BY CAC REG 24
COMPANIES REGULATIONS (CR) 2021
Members of the following professional bodies may apply to CAC for accreditation as insolvency
practitioners;
1. Business Rescue and Insolvency Practitioners Association of Nigeria (BRIPAN)
2. Nigerian Bar Association (NBA)
3. Institute of Chartered Accountants of Nigeria (ICAN)
4. Association of National Accountants of Nigeria (ANAN)
5. Institute of Chartered Secretaries and Administrators of Nigeria
REQUIREMENTS FOR ACCREDITATION REG 24 CR
Requirements for accreditation shall include the following;
1. Duly completed Form CAC-MISC 02
2. Payment of prescribed application fee;
3. Evidence of membership of relevant professional body;
4. Evidence of practice as insolvency practitioner for not less than five years immediately
preceding the date of application;
5. Evidence of eligibility to practice for the current year; and
6. Evidence of completion of accredited course of continuous learning administered by the
relevant professional body in the preceding year (in the case of renewal accreditation).
• Accreditation by CAC shall be renewable every two years and at no cost.
• Accreditation may be withdrawn by CAC where the holder of the accreditation is
disqualified from practice by professional body or in any other case if it appears to CAC
not fit to act as an insolvency practitioner.
317
COMMISSION TO NOTIFY THE PARTY OF THE REFUSAL OR WITHDRAWAL OF

AUTHORISATION S708 CAMA
1. CAC may, on an application duly made and after being furnished with all such
information as it may require, grant or refuse the application.
2. CAC shall grant the application if it appears to it that the applicant;
i. is a fit and proper person to act as an insolvency practitioner, and
ii. meets the prescribed requirements with respect to education and practical training and
experience.
3. An authorisation granted shall take effect from the date of grant.
4. Authorisation may be withdrawn by CAC if it appears to it that the holder of the
authorisation is no longer a fit and proper person to act as an insolvency practitioner.
5. An authorisation may be withdrawn by CAC at the request or with the consent of the
holder of the authorisation.
COMPANY VOLUNTARY ARRANGEMENTS (CVA) CAP 17 CAMA
Company Voluntary Arrangement (CVA) is an insolvency procedure. It is usually employed
when a company is unable to pay its debts which is normally characterized as insolvency.
THOSE WHO MAY PROPOSE CVA S434
• The directors may make a proposal to its creditors for a composition in satisfaction of its
debts or a scheme of arrangement of its affairs S434(1).
• A proposal is one which provides for some person (“the nominee”) to act in relation to
the CVA either as trustee or otherwise for the purpose of supervising its implementation,
• The nominee shall be a person who is qualified to act as an insolvency practitioner in
relation to the company S434(2).
• The administrator makes the proposal if the co is in administration S434(3).
• The liquidator makes the proposal if the co is being wound-up S434(3).
APPOINTMENT OF SUPERVISOR IN CVA REG 22 CR
1. Only a person qualified to practice as an insolvency practitioner under the Act shall be
appointed supervisor in a CVA.
2. Notice of his appointment as Supervisor shall be filed with CAC within 14 days of his
appointment.
3. The notice shall be in the format prescribed in Form CAC 11
NOMINEE’S REPORT S435
Where the nominee is neither the administrator nor the liquidator of the co:
1. The nominee shall, within 28 days (or such longer period as the Court may allow) after he
is given notice of the proposal for a VA, submit a report to the Court stating;
a. whether, in his opinion, meetings of the company and of its creditors should be
summoned to consider the proposal; and
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b. if, in his opinion, such meetings should be summoned, the date, time and place
that he proposes for the meetings.
2. For the purposes of enabling the nominee to prepare his report, the person intending to
make the proposal shall submit to the nominee;
a. a document setting out the terms of the proposed VA; and
b. a statement of the company’s affairs containing;
i. particulars of its creditors, its debts and other liabilities and of its assets as
may be prescribed, and
ii. other information as may be prescribed.
3. The Court may, on an application made by the person intending to make the proposal, in a
case where the nominee failed to submit the report, direct that the nominee be replaced as
such by another person qualified to act as an insolvency practitioner in relation to the co.
SUMMONING OF MEETINGS S436
A proposal may also be made where the nominee is;
a. not the liquidator or administrator, and it has been reported to the Court that such
meetings should be summoned, the person making the report shall (unless the Court
otherwise directs) summon those meetings for the time, date and place proposed in the
report; and
b. the liquidator or administrator, he shall summon meetings of the company and of its
creditors to consider the proposal for such a time, date and place as he thinks fit.
c. The persons to be summoned to a creditors’ meeting under this section are every creditor
of the company of whose claim and address the person summoning the meeting is aware.
DECISIONS OF MEETINGS S437
• The meetings summoned shall decide whether to approve the proposed voluntary
arrangement with or without modifications.
• However, it shall not make modifications:
i. by virtue of which the proposal ceases to be a proposal such as is mentioned in
section 434.
ii. which affects the right of a secured creditor of the company to enforce his security,
except with the concurrence of the creditor concerned.
iii. any preferential debt of the company is to be paid otherwise than in priority to such of
its debts as are not preferential debts
iv. a preferential creditor of the company is to be paid an amount in respect of a
preferential debt that bears to that debt a smaller proportion than is borne to another
preferential debt by the amount that is to be paid in respect of that other debt provided
that the meeting may approve such a proposal or modification with the concurrence
of the preferential creditor concerned.
• After the conclusion of either meeting, the chairman of the meeting shall report the result
of the meeting to the Court, and, immediately after reporting to the Court, shall give
notice of the result of the meeting to such persons as may be prescribed.
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APPROVAL OF CVA S438

• The decision has effect if, in accordance with the rules:
i. it has been taken by both meetings summoned under section 436; or
ii. subject to any order made under subsection (4) it has been taken by the creditors’
meeting summoned under that section.
• If the decision taken by the creditors’ meeting differs from that taken by the company
meeting, a member of the company may apply to the Court within 28 days from the day
on which the decision was taken by the creditors’ meeting; or where the decision of the
company meeting was taken on a later day, that day.
• On an application under subsection (3), the Court may;
i. order the decision of the company meeting to have effect instead of the decision of
the creditors’ meeting; or
ii. make such other order as it deems fit.
EFFECT OF APPROVAL S439
(2) The order of the Court that the decision of the company meeting should have effect instead of
the decision of the creditors’ meeting;
a. takes effect as if made by the company at the creditors’ meeting; and
b. binds every person who, in accordance with the rules;
i. was entitled to vote at that meeting (whether or not he was present or represented), or
ii. would have been so entitled if he had had notice of it, as if he were a party to the VA.
(3) Where the arrangement;
a. ceases to have effect, any amount payable, under the arrangement to a person bound by
virtue of subsection (2) (b) (ii) has not been paid, and
b. did not come to an end prematurely, the company shall at that time become liable to pay
to that person the amount payable under the arrangement.
(4) Where the company is being wound up or is in administration, the Court may:
a. by order, stay all proceedings in the winding-up or provide for the appointment of the
administrator to cease to have effect; or
b. give such directions with respect to the conduct of the winding-up or the administration
as it considers appropriate for facilitating the implementation of the order of the Court
that the decision of the company meeting should have effect instead of the decision of the
creditors’ meeting on the VA.
(5) The Court shall not make an order to stay all proceedings in the winding-up or provide for the
appointment of the administrator to cease to have effect
a. at any time before the end of 28 days beginning with the first day on which the
nominee’s report has been made to the Court; or
b. at any time when an application where the nominee fails to make the report was made,
pending or supposed to be made to the court.
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CHALLENGE OF DECISIONS, S440

Grounds for Challenge S440(1)
a. a VA unfairly prejudices the interests of a creditor, member or contributory of the
company; or
b. there has been some material irregularity at or in relation to either of the meetings.
Who may Challenge? S440(2)
a. persons entitled, in accordance with the rules, to vote at either of the meetings;
b. persons who would have been entitled, in accordance with the rules, to vote at the
creditors’ meeting if they had had notice of it;
c. the nominees or persons who replaced them
d. if the company is being wound up or is in administration, the liquidator or administrator.
Time to challenge S440(3)
a. after the end of 28 days beginning with the first day on which each of the nominee’s
reports have been made.
b. on which each of the reports has been made to the Court but (subject to that), an
application made by a person on the ground that the VA prejudices his interests may be
made after the arrangement has ceased to have effect, unless it came to an end
prematurely.
Orders Court may Make S440(4)
a. revoke or suspend any decision approving the VA or, in a case where there has been
some material irregularity at or in relation to either of the meetings, any decision taken by
the meeting; or
b. give a direction to any person for the summoning of further meetings to consider any
revised proposal, the person who made the original proposal may make or, in the case
where there has been some material irregularity at or in relation to either of the meetings,
a further company or creditors’ meeting to reconsider the original proposal.
A FALSE REPRESENTATION S441
• If, for the purpose of obtaining the approval of the members or creditors of a company to
a proposal for a voluntary arrangement, a person who is an officer of the company—
a. makes any false representation, or
b. fraudulently does, or omits to do anything, he commits an offence.
• Such a person is liable on conviction to imprisonment for a term of one year or a fine as
the Court deems fit or both.
IMPLEMENTATION OF PROPOSAL S442
• It is implemented by the nominee or who files report in place of him known as the
supervisor
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• If any of the company’s creditors or any other person is dissatisfied by any act, omission
or decision of the supervisor, he may apply to the Court, and, on the application, the
Court may;
a. confirm, reverse or modify any act or decision of the supervisor;
b. give him directions; or
c. make such other order as it deems fit.
• The supervisor may apply to the Court for directions in relation to any particular matter
arising under the voluntary arrangement, and is included among the persons who may
apply to the Court for the winding-up of the company or for an administration order to be
made in relation to it.
• The Court may, whenever it is;
a. expedient to appoint a person to perform the functions of the supervisor, and
b. it is inexpedient, difficult or impracticable for an appointment to be made without the
assistance of the Court,
make an order appointing a person who is qualified to act as an insolvency practitioner in
relation to the company, either in substitution for the existing supervisor or to fill a vacancy.
ADMINISTRATION OF COMPANIES
• Administration is a statutory insolvency procedure introduced by the CAMA, 2020 with
the primary purpose of rescuing instead of liquidating an insolvent company.
• It is an alternative regime to receivership in which the receiver is primarily concerned
with the interest of the creditor who appointed him as against the collective interest of all
creditors.
• Administration unlike CVA affords a moratorium on other legal process in that no step
can be taken to enforce security or repossess goods in the company’s possession under a
hire purchase agreement without the consent of the administrator or presentation of court.
APPOINTMENT OF ADMINISTRATOR S443
• By S443(1), a person may be appointed as administrator of a company by:
i. an administration order of the Court under s.449
ii. the holder of a floating charge under s. 452
iii. the company under s.459, or
iv. its directors under s. 459
• Where an administrator is appointed out of Court, if it is an administration that has a
cross-border element, an application shall be made ex parte to the Court for approval
S443(2).
PURPOSE OF ADMINISTRATION S444
The administrator may perform his functions with the objective of:
a. rescuing the co, the whole or any part of its undertaking, as a going concern;
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b. achieving a better result for the co’s creditors as a whole than would be likely if the co
were wound up, without first being in administration;
c. realising property in order to make a distribution to one or more secured or preferential
creditors.
• According to subsections 4 and 5, the functions rank in the order of importance, B is
performed when A is impracticable, and C is performed when neither A nor B is
practicable.
• Notwithstanding (b) - (c) above, the rescue of the co is the primary objective of the
administrator in the performance of his functions, except
o where he is of the opinion that it is not reasonably practicable or
o a better result can be achieved for the co’s creditors by pursuing some other
course in order of priority i.e., secured or preferential creditors.
• The administrator shall, within 60 days of his appointment prepare a detailed schedule of
assets and submit a copy to the person by whom he was appointed.
STATUS AND STANDARD OF PERFORMANCE EXPECTED OF ADMINISTRATOR
S445
• He shall perform his functions as quickly and efficiently as is reasonably practicable.
STATUS OF ADMINISTRATOR S446
• He is an officer of the Court, whether or not he is appointed by the Court.
GENERAL RESTRICTIONS ON APPOINTMENT OF ADMINISTRATOR S447
1. A person may be appointed as administrator only if he is qualified to act as an insolvency
practitioner in relation to the company.
2. A person shall only be appointed as administrator of a company which is in
administration, subject to the provisions of sections 525-534 and 537-541 about
replacement and additional administrators.
3. A person shall not be appointed as administrator of a company which is in liquidation by
virtue of;
a. a resolution for voluntary winding-up, subject to section 475 (2) (b) of this Act; or
b. a winding-up order, subject to sections 474 and 475 of this Act.
4. A person shall not be appointed as administrator of a company which;
a. has as a liability in respect of a deposit which it accepted in accordance with
relevant banking laws; and
b. is not an authorised deposit taker within the meaning of banking laws and
regulations.
5. A person shall not be appointed as administrator of a company which effects or carries out
contracts of insurance except with the leave of the insurance regulator.
APPOINTMENT: WHO CAN APPOINT?
• court S448
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• a floating charge holder S452

• company out of court S459(1)
• directors out of court S459(2)
(APPOINTMENT BY COURT) ADMINISTRATION ORDER S448
• An administration order is an order appointing a person as the administrator of a
company.
CONDITIONS FOR MAKING ORDER S449
• A Court may make an administration order, where it is satisfied that the:
a. company is or is likely to become unable to pay its debts; and
b. administration order is likely to achieve the purpose of administration.
APPLICATION TO COURT FOR ADMINISTRATION ORDER S450
• An application may be made by:
a. the company;
b. the directors of the company;
c. one or more creditors of the company;
d. the designated officer of the FHC appointed to act as a receiver; or
e. a combination of the persons listed in paragraphs (a)-(d).
• As soon as is reasonably practicable after the making of an administration application, the
applicant shall notify;
a. any Court that has appointed a receiver and any person who has appointed a
receiver of the company;
b. a person who has, who is or who may be entitled to appoint a receiver of the
company;
c. a person who is or may be entitled to appoint an administrator of the company
under section 452 of this Act; and
d. such other persons as may be prescribed.
• An administration application shall not be withdrawn without the permission of the
Court.
• “Creditor” includes a contingent creditor and a prospective creditor.
ORDERS COURT MAY MAKE S451
• Subject to section 573 on hearing an administration application, the Court may:
a. make the administration order sought;
b. dismiss the application;
c. adjourn the hearing conditionally or unconditionally;
d. make an interim order;
e. treat the application as a winding-up petition and make any order which the Court
could make under section 574; or
f. make any other order which the Court deems appropriate.
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• An appointment of an administrator by an administration order takes effect:

a. at a time appointed by the order; or
b. where no time is appointed by the order, when the order is made.
POWER TO APPOINT BY HOLDER OF FLOATING CHARGE S452
1. Subject to section 450, the holder of a floating charge in respect of a co’s property may
appoint an administrator.
2. A floating charge qualifies if it is created by an instrument which;
a. states that this section applies to the floating charge;
b. purports to empower the holder of the floating charge to appoint an administrator of
the company; or
c. purports to empower the holder of the floating charge to appoint a receiver within the
meaning of this Part or where this Part is not applicable, the relevant provisions of
CAMA.
3. A person is the holder of a floating charge in respect of a co’s property if he holds one or
more debentures of the co secured by:
a. a floating charge which relates to the whole or substantially the whole of the
company’s property;
b. a number of floating charges which together relate to the whole or substantially the
whole of the company’s property; or
c. charges and other forms of security which together relate to the whole or substantially
the whole of the company’s property and at least one of which is a floating charge.
RESTRICTIONS ON POWER TO APPOINT S453
A person shall not appoint an administrator as holder of a floating charge unless:
a. he has given at least two working days’ written notice to the holder of any prior
floating charge (either created first or with an agreement to have priority).
b. the holder of any prior floating charge which was either created first or with an
agreement to have priority, has consented in writing to the making of the appointment.
WHEN NOT TO APPOINT ADMINISTRATOR S454
An administrator shall not be appointed by a holder of a floating charge if;
a. a floating charge on which the appointment relies is not enforceable, a holder of the
unenforceable charge may apply or join as a mere creditor in an administration;
b. a provisional liquidator of the company has been appointed; or
c. prior to the commencement of this Act and the coming into effect of this Chapter, a
receiver or manager of the company is in office.
FILING NOTICE OF APPOINTMENT WITH CAC S455
1. A person who appoints an administrator of a company as holder of a floating charge shall
file with CAC:
a. a notice of appointment; and
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b. such other documents as may be prescribed.

2. The notice of appointment shall include a statutory declaration by or on behalf of the
person who makes the appointment that:
a. the person is the holder of a floating charge in respect of the company’s property;
b. each floating charge relied on in making the appointment is or was enforceable on
the date of the appointment; and
c. the appointment is in accordance with this Chapter and generally with this Act.
3. The notice of appointment shall identify the administrator and be accompanied by a
statement by the administrator:
a. that he consents to the appointment;
b. that in his opinion, the purpose of administration is likely to be achieved; and
c. giving such other information and opinions as may be prescribed.
4. The administrator may at his discretion elect to apply for further discretion or relief.
5. For the purpose of a statement under subsection (3), an administrator may rely on
information supplied by directors of the co, unless he has reason to doubt its accuracy.
6. The notice of appointment and any document accompanying it shall be in the prescribed
form.
7. A statutory declaration under subsection (2) shall be made during the prescribed period.
8. A person commits an offence, if in a statutory declaration under subsection (2), he makes
a statement which:
a. is false; and
b. he does not reasonably believe to be true.
APPOINTMENT OF ADMINISTRATOR BY COMPANY OR DIRECTORS OUT OF
COURT S.459
• A company may appoint an administrator out of Court.
• The directors of a company may also appoint an administrator out of Court.
WHEN THE APPOINTMENT CANNOT BE MADE (12 MONTHS MORAORIUM) SS
460, 461, 462.
• This appointment shall not be made within 12 months from the date when the
administration ordered by court or appointed by directors or company out of court ends.
• It shall also not be made within 12 months after an arrangement ends
• It shall also not be made while petition for winding up or application for administration is
pending or a receiver is in office.
FILING OF NOTICE OF INTENTION TO APPOINT S464
1. A person who gives notice of intention to appoint under section 458 shall file with the
Commission as soon as is reasonably practicable a copy of:
a. the notice; and
b. any document accompanying it.
2. The copy filed under subsection (1) shall be accompanied by a statutory declaration made
by or on behalf of the person who proposes to make the appointment:
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a. that the company is or is likely to become unable to pay its debts;

b. that the company is not in liquidation;
c. that so far as the person making the statement is able to ascertain, the appointment is
not prevented by sections 453 and 454 of this Act; and
d. to such additional effect, and giving such information, as may be prescribed.
3. A statutory declaration under subsection (2) shall be:
a. in the prescribed form; and
b. made during the prescribed period.
4. A person commits an offence if, in a statutory declaration under subsection (2), he makes
a statement which:
a. is false; and
b. he does not reasonably believe to be true.
FILING OF NOTICE OF APPOINTMENT S466
1. A person who appoints an administrator of a company under section 459 shall file with the
Court:
a. a notice of appointment; and
b. such other documents as may be prescribed.
2. The notice of appointment shall include a statutory declaration by or on behalf of the
person who makes the appointment that:
a. the person is entitled to make an appointment under section 459 of this Act
b. the appointment is in accordance with this Part; and
c. so far as the person making the statement is able to ascertain, the statements made and
information given in the statutory declaration filed with the notice of intention to
appoint remain accurate.
3. The notice of appointment shall identify the administrator and be accompanied by a
statement by the administrator:
a. that he consents to the appointment;
b. that in his opinion the purpose of administration is likely to be achieved; and
c. giving such other information and opinions as may be prescribed.
COMMENCEMENT OF APPOINTMENT S469
• The appointment of an administrator under section 459 takes effect when the
requirements of section 464 of this Act are satisfied
NOTIFICATION OF ADMINISTRATOR OF HIS APPOINTMENT S470
• A person who appoints an administrator under section 459:
a. shall notify the administrator and such other persons as may be prescribed as soon as
is reasonably practicable after the requirements of section 464 are satisfied; and
b. commits an offence if he fails, without reasonable excuse, to do so.
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EFFECT OF ADMINISTRATION ORDER ON APPOINTMENT S471

Where, before the requirements of section 464 are satisfied, the company enters administration
by virtue of an administration order or an appointment under section 450:
a. the appointment under section 459 shall not take effect; and
b. section 467 shall not apply.
EFFECT OF ADMINISTRATION ORDER
1. Dismissal of winding up order S477
2. Vacation of office by receiver S478
3. No resolution may be passed or order made for winding up
4. No steps may be taken to enforce security
5. No repossession of goods under hire purchase agreement
6. No right of forfeiture by re-entry of landlord
7. No legal process
8. Disclosure of administration and administrator
PROCESS OF ADMINISTRATION
Announcement of Administrator’s Appointment S483
1. This section applies where a person becomes the administrator of a company.
2. The administrator shall not later than 14 days;
a. send a notice of his appointment to the company;
b. publish a notice of his appointment in the prescribed manner;
c. obtain a list of the company’s creditors; and
d. send a notice of his appointment to each creditor whose claim and address he is aware
of.
3. The administrator shall send a notice of his appointment to CAC, publicising the notice
before the end of 14 working days beginning with the date specified in subsection (5).
4. The administrator shall send a notice of his appointment to such persons as may be
prescribed before the end of the prescribed period beginning with the date specified in
subsection (5).
5. The date, for the purpose of subsections (3) and (4) is, in the case of an administrator
appointed—
a. by administration order, the date of the order
b. by holder of floating charge, the date on which he receives notice from holder of a
prior floating charge and notice of appointment is filed with CAC; and
c. under section 458 of this Act (appointment by company or directors’ out of court,
S459, seems to be a typo in the Act), the date on which he receives notice under
section 463 (notice of intention to appoint) and 465 of this Act.
6. The Court may direct that subsection (2) (d) or (4)—
a. shall not apply; or
b. shall apply with the substitution of a different period.
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7. A notice under this section shall—

a. contain the prescribed information; and
b. be in the prescribed form.
Request for Statement of Affairs of the Company S484
1. As soon as is reasonably practicable after appointment, the administrator of a company
shall, by notice in the prescribed form, require one or more relevant persons to provide the
administrator with a statement of the affairs of the company.
2. The statement shall;
a. be verified by a statement on oath;
b. be in the prescribed form;
c. give particulars of the company’s property, debts and liabilities;
d. give the names and addresses of the company’s creditors;
e. specify the security held by each creditor;
f. give the date on which each security was granted; and
g. contain such other information as may be prescribed.
3. Relevant person means a person; during the period of one year ending with the date on
which the company enters administration;
a. who is or has been an officer of the company;
b. who took part in the formation of the company;
c. employed by the company during that period; and
d. who is or has, been an officer or employee of a company.
4. Employment means a contract of employment or a contract for services.
When to Submit Statement of Affairs S485
1. A person required to submit a statement of affairs shall do so before the end of 11
working days beginning with the day on which he receives notice of the requirement.
2. The administrator may;
a. revoke a requirement under section 484(2); or
b. extend the period specified in subsection (1), before or after expiration of the period.
3. If the administrator refuses a request to act under subsection (2) (b)—
a. the person whose request is refused may apply to the Court; and
b. the Court may take action as specified in subsection (2).
Administrator’s Statement of Proposals S486
1. The administrator shall make a statement setting out proposals for achieving the purpose.
2. The statement shall, in particular—
a. deal with such matters as may be prescribed; and
b. where applicable, explain why the administrator thinks that the objective of the
administration cannot be achieved.
3. Proposals under this section may include—
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a. a proposal for a voluntary arrangement under Chapter 17, but this section is without
prejudice to section 435 (procedure where nominee is not the liquidator or
administrator) and
b. a proposal for a scheme of arrangement and compromise or reconstruction.
4. The administrator shall send a copy of the statement of his proposals to—
a. CAC;
b. every creditor of the company of whose claim and address he is aware; and
c. every member of the company of whose address he is aware.
5. The administrator shall send the proposals before the end of 30 days beginning with the
day on which the company enters administration.
6. The administrator is deemed to send proposals if he publishes in the prescribed manner, a
notice undertaking to provide a copy of the statement of proposals free of charge to any
member of the company who applies in writing to a specified address.
Creditors’ meeting (ICM) S487
1. The administrator shall summon a meeting of the creditors to be known as “creditors’
meeting”;
a. in the prescribed manner; and
b. giving the prescribed period of notice to every creditor of the company of whose
claim and address he is aware.
2. The period of notice may be varied in accordance with consent of the creditors.
3. A creditors’ meeting shall be conducted in accordance with the prescribed rules.
Requirement for initial creditors’ meeting (ICM) S488
1. Each copy of an administrator’s statement of proposals sent to a creditor shall be
accompanied by an invitation to creditors’ meeting (an “initial creditors’ meeting”).
2. The date set for an initial creditors’ meeting is 42 days beginning with the date on
which the company enters administration.
3. An administrator shall present a copy of his statement of proposals to an initial creditors’
meeting.
4. A period specified in this section may be varied with the consent of the creditors.
5. An administrator commits an offence if he fails, without reasonable excuse, to comply.
Restrictions on summoning of ICM S489
1. No need to summon ICM where the statement of proposals states that the administrator
thinks that—
a. the company has sufficient property to enable each creditor to be paid in full;
b. the company has insufficient property to enable a distribution to be made to unsecured
creditors other than by virtue of the provisions of CAMA; or
c. neither of the objectives specified in section 444 (1) (a) and (b) of this Act shall be
achieved.
2. The Administrator shall summon an ICM if it is requested—
a. by creditors whose debts amount to at least 10% of the total debts of the company;
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b. in the prescribed manner; and

c. within the prescribed period.
3. The meeting requested, shall be summoned for a date within the prescribed period.
4. The period prescribed, may be varied with the consent of the creditors
Business and result of initial creditors’ meeting S490
1. An ICM to which an administrator’s proposals are presented shall consider them and may
approve them—
a. without modification; or
b. with modification to which the administrator consents.
2. After the conclusion of ICM the administrator shall, as soon as is reasonably practicable,
report any decision taken to—
a. the Court;
b. the CAC; and
c. such other persons as may be prescribed by the Minister.
3. An administrator commits an offence if he fails, without reasonable excuse, to comply.
Request for a revision of proposal by the administrator after approval S491
1. This section applies where—
a. an administrator’s proposals have been approved with or without modification at
ICM;
b. the administrator proposes a revision to the proposals; and
c. the administrator thinks that the proposed revision is substantial.
2. The administrator shall—
a. summon a creditors’ meeting;
b. send a statement in the prescribed form of the proposed revision with the notice of the
meeting sent to each creditor;
c. send a copy of the statement, within the prescribed period, to each member of the
company of whose address he is aware; and
d. present a copy of the statement to the meeting.
3. The administrator is deemed to have complied with subsection (2) (c) if he publishes a
notice undertaking to provide a copy of the statement free of charge to any member of the
company who applies in writing to a specified address.
4. A notice under subsection (3) shall be published—
a. in the prescribed manner; and
b. within the prescribed period.
5. A creditors’ meeting to which a proposed revision is presented shall consider it and may
approve it—
a. without modification; or
b. with modification to which the administrator consents.
6. After the conclusion of a creditors’ meeting, the administrator shall, as soon as is
reasonably practicable, report any decision taken to—
a. the Court;
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b. the CAC; and

c. such other persons as may be prescribed by the Minister.
7. An administrator commits an offence if he fails, without reasonable excuse, to comply
with subsection (6).
Failure to secure approval to administrator’s proposal S492
1. This section applies where an administrator reports to the Court that—
a. an ICM has failed to approve the administrator’s proposals presented to it; or
b. a creditors’ meeting has failed to approve a revision of the administrator’s proposals
presented to it.
2. The Court may—
a. provide that the appointment of an administrator shall cease to have effect from a
specified time;
b. adjourn the hearing conditionally or unconditionally;
c. make an interim order;
d. make an order on a petition for winding-up suspended by virtue of section 462 (b) of
this Act; or
e. make any other order, including an order making consequential provision, that the
Court deems appropriate.
FURTHER CREDITORS’ MEETING (FCM)
• The administrator must summon FCM if it is requested in the prescribed manner by
creditors of the company whose debts amount to at least 10% of the total debts of the
company or he is directed by the Court to summon a creditors’ meeting S493(1).
POWERS OF ADMINISTRATOR SS496 & 497, Tenth Schedule
NB: the Act used “Eleventh Schedule” but could have been a typo, the proper schedule is
Tenth albeit the contents are ipsissima verba.
General powers S496
• The administrator of a company may do anything necessary or expedient for the
management of the affairs, business and property of the company.
Under the Tenth Schedule, he has the specific powers to:
1. take possession of, collect and get in the property of the company and, for that purpose, to
take such proceedings as may seem to him expedient.
2. sell or otherwise dispose of the property of the co by public auction or private contract.
3. raise or borrow money and grant security therefor over the property of the company.
4. appoint a solicitor or accountant or other professionally qualified person to assist him in
the performance of his functions.
5. bring or defend any action or other legal proceedings in the name and on behalf of the co.
6. refer to arbitration any question affecting the company.
7. effect and maintain insurances in respect of the business and property of the company.
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8. use the company’s seal.

9. do all acts and to execute in the name and on behalf of the co any deed, receipt or other
document.
10. draw, accept, make and endorse any bill of exchange or promissory note in the name and
on behalf of the co.
11. appoint any agent to do any business which he is unable to do himself or which can more
conveniently be done by an agent and power to employ and dismiss employees.
12. do all such things (including the carrying out of works) as may be necessary for the
realisation of the property of the co.
13. make any payment which is necessary or incidental to the performance of his functions.
14. carry on the business of the company.
15. establish subsidiaries of the company.
16. transfer to subsidiaries, the whole or any part of the business and property of the co.
17. grant or accept a surrender of a lease or tenancy of any of the property of the co, and to
take a lease or tenancy of any property required or convenient for the business of the co.
18. make any arrangement or compromises on behalf of the company.
19. call up any uncalled capital of the company.
20. rank and claim in the bankruptcy, insolvency, sequestration or liquidation of any person
indebted to the co and to receive dividends, and to accede to trust deeds for the creditors
of any such person.
21. present or defend a petition for the winding-up of the company.
22. change the situation of the company’s registered office.
23. do all other things incidental to the exercise of the foregoing powers.
OTHER POWERS
• The administrator of a company may remove or appoint a director of the company,
whether or not the appointment is to fill a vacancy S498.
• The administrator of a company may call a meeting of members or creditors of the
company S499.
• The administrator of a company may apply to the Court for directions in connection with
his functions S500.
• A company in administration or an officer of a company in administration shall not
exercise a management power without the consent of the administrator S501.
• The administrator of a company may make a distribution to a creditor of the co S502.
• The administrator may make a payment other than in accordance with section 497 or
paragraph 13 of the Eleventh Schedule to this Act if he thinks it likely to assist
achievement of the purpose of administration S503.
• The administrator of a company shall, on his appointment take custody or control of all
the property to which he thinks the company is entitled S504.
• The administrator of a company shall manage its affairs, business and property S505.
• The administrator of a company acts as its agent when managing the company S506.
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PRESUMPTION OF VALIDITY OF AN ACT OF ADMINISTRATOR S542

• An act of the administrator of a company is valid in spite of a defect in his appointment
or qualification S542.
CHALLENGE OF ADMINISTRATION S511(1)
Administration can be challenged by
i. Creditors
ii. Members
GROUNDS FOR CHALLENGE S511
i. That the administrator is acting or has acted so unfairly as to harm the interests of the
applicant (whether alone or in common with some or all other members or creditors).
ii. That the administrator proposes to act unfairly as to harm the interests of the applicant
(whether alone or in common with some or all other members or creditors).
iii. That the administrator is not performing his functions as quickly or as efficiently as is
reasonably practicable.
END OF ADMINISTRATION
1. Automatic cessation of administration: usually lasts for one year but may be extended by
court order for a max further period of six months S513
2. Cessation on application of administrator to the court S517
3. Cessation when the purpose of administration is achieved S518
4. Cessation upon application of creditor S519
5. Cessation upon a winding up order in the public interest S520
6. Cessation upon registration of notice of administrator by CAC SS521 to 524
i. Moving from administration to creditors’ voluntary liquidation S521
ii. Moving from administration to dissolution S522
iii. Discharge of administration order on cessation of administration S523
RESIGNATION, REMOVAL, VACATION OF OFFICE OF ADMINISTRATOR
• An administrator may resign in the prescribed circumstances stated in S525 and that is by
giving written notice to his appointor which may be the court, holder of a floating charge,
the company or the directors of the company.
• The court is also given power to remove an administrator under S526.
• An administrator must vacate office if he ceases to be qualified to act as an insolvency
practitioner but he must give written notice to the court, holder of a floating charge, the
company or the directors of the company, depending on his mode of appointment S527.
REPLACEMENT OF AN ADMINISTRATOR
• An administrator may die, resign, vacate office or be removed thereby creating the need
for replacement S528.
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• Where such is the case, he is replaced by the appointing authority pursuant to SS 529-535
RECEIVERSHIP
• Among the remedies of the debenture holder as provided under S233 is the appointment
of a receiver.
WHO MAY NOT BE A RECEIVER OR MANAGER? S550
• The following persons cannot be appointed a receiver or managers of any property or
undertaking of any company: -
i. An infant;
ii. Any person found by a competent court to be of unsound mind;
iii. A body corporate;
iv. An undischarged bankrupt, unless he shall have been given leave to act as a receiver
or manager of the property or undertaking of the company by the court by which he
was adjudged bankrupt;
v. A director or auditor of the company;
vi. Any person convicted of any offence involving fraud, dishonesty, official corruption
or moral turpitude and who is disqualified under section 280 of the Act.
APPOINTMENT OF RECEIVER AND MANAGER BY THE COURT S551
• Where an application is made to the Court to appoint a receiver on behalf of the
debenture holder or other creditors of a company which is being wound up by a court, an
official receiver may be appointed.
LEGAL STATUS OF A RECEIVER APPOINTED BY THE COURT S552(2)
• A receiver or manager of any property or undertaking of a company appointed by the
Court is deemed to be an officer of the Court and not of the company and shall act in
accordance with the directions and instructions of the Court.
RECEIVER AND MANAGERS APPOINTED OUT OF COURT S553
• A receiver or manager of any property or undertaking of a company appointed out of
Court under a power contained in any instrument is, subject to section 554 of this Act,
deemed to be an agent of the person or persons on whose behalf he is appointed and, if
appointed manager of the whole or any part of the undertaking of a company, he is
deemed to stand in a fiduciary relationship to the company and observe the utmost good
faith towards it in any transaction with it or on its behalf.
POWER OF A RECEIVER OR MANAGER APPOINTED OUT OF COURT TO APPLY
TO THE COURT FOR DIRECTIONS S554
• A receiver or manager of the property of a co appointed under a power contained in any
instrument, or the persons by whom or on whose behalf a receiver or manager has been
so appointed may apply to the Court for directions in relation to any particular matter
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arising in connection with the performance of his functions, and on any such application
the Court may give such directions or make such order declaring the rights of persons
before the Court or otherwise, as it deems just.
Notice and Statement of Affairs of the Company s.559
NOTIFICATION TO THE COMMISSION THAT A RECEIVER OR MANAGER HAS
BEEN APPOINTED S555
• Where a receiver or manager of the property of a co has been appointed, the receiver or
manager shall within 14 days give notice of his appointment to CAC indicating the
terms of and remuneration for the appointment, and every invoice, order for goods or
business letter issued by or on behalf of the company, receiver, manager or liquidator of
the company, being a document on or in which the company’s name appears, shall
contain a statement that a receiver or manager has been appointed.
DUTIES AND POWERS OF RECEIVERS AND MANAGERS S556
• A person appointed a receiver of any property of a company must, subject to prior
encumbrances, take possession of and protect the property, receive the rents and profits
and discharge all out-goings in respect of it, and realize the security for the benefit of
those on whose behalf he is appointed but unless appointed manager, he will not have
power to carry on any business or undertaking.
• A person appointed manager of the whole or any part of the undertaking of a company
must manage it with a view to the realization of the security of those on whose behalf he
is appointed (this is the major difference with administrator who acts in the interest
of all creditors albeit in priority).
• Without prejudice to subsection (1) or (2), where a receiver or manager is appointed for
the whole or substantially the whole of a company’s property, the powers conferred on
him by the debentures by virtue of which he was appointed are deemed to include (except
they are inconsistent with any of the provisions of those debentures) the powers specified
in the Eleventh Schedule to this Act (NB: they are ipsissima verba with the powers of
administrators stated above contained in the Tenth Schedule to CAMA).
• From the date of appointment of a receiver or manager, the powers of the directors or
liquidators in a members’ voluntary winding-up to deal with the property or undertaking
over which he is appointed, shall cease, unless the receiver or manager is discharged or
the security is realised.
• If, on the appointment of a receiver or manager, the company is being wound up under
the provision relating to creditors’ voluntary winding-up, or the property concerned is in
the hands of some other officer of the Court, the liquidator or officer shall not be bound
to relinquish control of such property to the receiver or manager except under the order of
the Court.
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LIABILITIES OF RECEIVERS AND MANAGERS ON CONTRACTS S557

1. A receiver or manager of any property or undertaking of a company is personally liable
on any contract entered into by him except in so far as the contract otherwise expressly
provides.
2. As regards contracts entered into by a receiver or manager in the proper performance of
his functions, such receiver or manager is, subject to the rights of any prior encumbrance,
entitled to an indemnity in respect of liability thereon out of the property over which he
has been appointed to act as a receiver or manager.
3. A receiver or manager appointed out of Court under a power contained in any instrument
is also entitled, as regards contracts entered into by him with the express or implied
authority of those appointing him, to an indemnity in respect of liability thereon from
those appointing him to the extent to which he is unable to recover in accordance with
subsection (2).
PROCEDURE AFTER APPOINTMENT
Information where receiver or manager appointed in respect of a floating charge S559
1. Where a receiver or manager of the whole or substantially the whole of the property of a
company (“the receiver”) has been appointed on behalf of the holders of any debentures
of the company secured by a floating charge;
a. the receiver shall immediately send notice to the co of his appointment and the terms;
b. there shall, within 14 days after receipt of the notice, or such longer period as may be
allowed by the Court or by the receiver, be made out and submitted to the receiver, a
statement of affairs of the company; and
c. the receiver shall, within two months after receipt of the statements, send to—
i. CAC or Court a copy of the statement and of any comments he sees fit to make
thereon and in the case of the CAC also a summary of the statement and of his
comments, if any,
ii. the company a copy of any comments or if he does not think fit to make any
comment, a notice to that effect, and
iii. any trustees for the debenture holders on whose behalf he has been appointed and,
so far as he is aware of their addresses, to all such debenture holders, a copy of
the said summary.
2. The receiver shall within two months, or such longer period as the Court may allow after
the expiration of the period of 12 months from the date of his appointment and of
every subsequent period of 12 months, and within two months, or such longer period as
the Court may allow after he ceases to act as receiver or manager of the property of the
co, send to CAC, any trustee for the debenture holders of the co on whose behalf he was
appointed, the co and (if he is aware of their addresses) all debenture holders (if he is
aware of their addresses), an abstract in the prescribed form showing his receipts and
payments during that period of 12 months, or, where he ceases to act, during the period
from the end of the period to which the last preceding abstract relates up to the date of his
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so ceasing, and the aggregate amounts of his receipts and payments during all preceding
periods since his appointment.
3. Where the receiver is appointed under the powers contained in any instrument, this
section has effect with the —
a. omission of the references to the Court in subsection (1); and
b. substitution for the references to the Court in subsection (2), of references to CAC
and in any other case references to the Court shall be taken as referring to the Court
by which the receiver was appointed.
4. Subsection (1) does not apply in relation to the appointment of a receiver or manager to
act with an existing receiver or manager or in place of a receiver or manager dying or
ceasing to act, except that, where that subsection applies to a receiver or manager who
dies or ceases to act before it has been fully complied with, the references in paragraphs
(b) and (c) to the receiver shall, subject to subsection (5), include references to his
successor and to any continuing receiver or manager and nothing in this subsection shall
be taken as limiting the meaning of the expression “the receiver” where used in, or in
relation to, subsection (2).
5. This section and section 560 of this Act, where the company is being wound up, apply
notwithstanding that the receiver or manager and the liquidator are the same person.
ETHICAL ISSUES
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WINDING UP AND DISSOLUTION OF COMPANIES

A. WINDING UP OF COMPANIES:
SOME RELEVANT LAWS
1. Companies and Allied Matters Act, 2020
2. Winding Up Rules, 2001
3. Federal High Court Act and Civil Procedure Rules, 2019
4. Investments and Securities Act, 2007
5. Securities and Exchange Commission Consolidated Rule, 2013
6. Banks and Other Financial Institutions Act
7. Nigerian Communication Commission Act
8. Companies Proceedings Rules, 1992
The following persons, play major roles in winding up proceedings, they are:
1. Liquidator;
2. Official receiver;
3. Provisional liquidator;
4. Receiver/Receiver Manager; and
5. Special Manager.
MEANING AND SGINIFICANCE
• “A winding up proceeding is signing of the death warrant of a company or a
pronouncement of the death of the company. It is a very serious matter” Tate Industries
Plc v Devcom M.B Ltd (2004).
• The above best captures the gravity of winding up. It is therefore a process by which a
company is liquidated and dissolved and its assets distributed in accordance with the
rules of priority for the benefit of its creditors, members and employees.
MODES OF WINDING UP S564
i. Compulsory winding up by the court;
ii. Voluntary; and
a. members voluntary winding up
b. creditors voluntary winding up
iii. Subject to the supervision of the court
• NB: If a co passes a resolution for voluntary winding up before the presentation of the
petition, the winding up would be deemed to have commenced at the time of the passing
of the resolution – S578(1).
LIABILITY AS CONTRIBUTORIES OF PRESENT AND PAST MEMBERS S565
• In the event of a company being wound up, every present and past member is liable to
contribute to the assets of the company as provided in section 117.
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• S117 provides that every member is liable as a contributory but not where;
i. he has ceased to be a member for a period of one year or upwards before the
commencement of the winding up;
ii. unless it appears to the Court that the existing members are unable to satisfy the
contributions required to be made by them in pursuance of this section;
iii. in the case of a company limited by shares, no contribution is required from any
member or past member exceeding the amount, if any, unpaid on the shares in respect
of which he is liable as a present or past member;
iv. in the case of a company limited by guarantee, no contribution is required from any
member or past member exceeding the amount undertaken to be contributed by him
to the assets of the company in the event of its being wound up; and
v. any sum due from the company to a member or past member, in his capacity as
member, by way of dividends or otherwise shall not be set-off against the amount for
which he is liable to contribute in accordance with this section but any such sum is to
be taken into account for the purposes of final adjustment of the rights of the
members and past members amongst themselves.
DEFINITION OF CONTRIBUTORY S566
• The term, “contributory” means every person liable to contribute to the assets of a
company in the event of its being wound up, and for the purposes of all proceedings prior
to the final determination of the persons who are to be deemed contributories, the
expression includes any person alleged to be a contributory.
COMPULSORY WINDING UP BY THE COURT
Jurisdiction as to Winding-up S570 CAMA & S251(1)(d) CFRN
1. The Court having jurisdiction to wind up a company is the FHC within whose area of
jurisdiction the registered office or head office of the company is situate.
2. Registered office or head office means the place which has longest been the principal
place of business of the company during the six months immediately preceding the
presentation of the petition for winding-up.
Circumstances in which companies may be wound up by Court S571
A company may be wound up by the court if:
a. the co has by special resolution resolved that the co be wound up by the Court;
b. default is made in delivering the statutory report to CAC or in holding the statutory
meeting;
c. the number of members is reduced below two in the case of companies with more than
one shareholder;
d. the company is unable to pay its debts;
e. the condition precedent to the operation of the company has ceased to exist; or
f. the Court is of opinion that it is just and equitable that the company should be wound up.
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DEFINITION OF INABILITY TO PAY DEBTS S572

A company is deemed to be unable to pay its debts if;
a. a creditor, by assignment or otherwise, to whom the co is indebted in a sum exceeding
N200,000, then due, has served on the co by leaving it at its registered office or head
office, a demand under his hand requiring the co to pay the sum due, and the co has for
three weeks thereafter neglected to pay the sum or to secure or compound for it to the
reasonable satisfaction of the creditor;
b. execution or other process issued on a judgment, act or order of any Court in favour of a
creditor of the co is returned unsatisfied in whole or in part; or
c. the Court, after taking into account any contingent or prospective liability of the co, is
satisfied that the co is unable to pay its debts.
For the court to wind up a company for being unable to pay its debts, four essential ingredients
must co-exist. They are as follows:
i. There must be a debt in existence;
ii. The debt must be due;
iii. There must have been a formal demand for the debt; and
iv. There must be inability on the part of the company to pay the debt.
When the amount owed becomes contentious, a petition for winding up will be refused Onoche
v Alan Dick & Co Ltd, Tate Industries Plc v Devcom M.B. Ltd. NB: in such cases, the matter
will be referred to the State High Court for a determination of the amount owed.
PERSONS ELIGIBLE TO BRING PETITION FOR COMPULSORY WINDING UP BY
THE COURT S573:
1. The company or a director;
2. A creditor, including a contingent or prospective creditor of the company;
3. The official receiver;
4. A contributory;
5. A trustee in bankruptcy to, or a personal representative of a creditor or contributory;
6. The CAC under section 323 of CAMA
7. A receiver if authorised by the instrument under which he was appointed.
8. By all or any of those parties, together or separately.
WHEN THESE PARTIES CAN SPECIFICALLY BRING PETITIONS S573(2)
• For default in holding statutory meeting or filing statutory report; only a shareholder
separately or together can bring a petition before the expiration of 14 days after the last
day on which the meeting should have been held.
• A contributory is only qualified to bring a petition when the number is below two in a
co that is not a one-man co or shares in respect of which he is contributory or some of
them, were originally allotted to him or have been held by him, and registered in his
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name, for at least six months during the 18 months before the commencement of the
winding-up, or have devolved on him through the death of a former holder.
• the Court shall not hear a winding-up petition presented by a contingent or prospective
creditor until sufficient security for costs has been given, and a prima facie case for
winding-up has been established to its satisfaction.
• A contributory is entitled to present a winding-up petition notwithstanding that there may
not be assets available on the winding-up for distribution to contributories.
WINDING UP ON JUST AND EQUITABLE GROUNDS S571(f)
Pursuant to this section, the following must exist:
a. The company is formed for fraudulent purposes;
b. The co is a “bubble” i.e., where a going concern does not have any business or assets;
c. Unfairly prejudicial or discriminating acts against the minority or other members;
d. If it is a small going concern, ground employable in the dissolution of partnership is
enough to dissolve the company.
The remedy was readily available in the context of small family cos or quasi partnerships. It’s
what happened in Ebrahimi v Westborn Galleries Ltd as it’s a co of father and son and the
applicant. The father and son ganged up and removed him as director from the co as director and
they followed the correct procedures of passing ordinary resolution and removed him legally.
Being hard done by the removal and very unhappy brought action to wind up the co on winding
up on just and equitable ground, lost at TC and CA but won at HL based on equitable grounds.
It is immaterial whether the act is in the interest of the co, provided it is inequitable per Lord
Wilberforce. This was given the initial understanding that all three of them would be directors,
the HL held it to suffice and because that was the only remedy available in the 1948 Act
(England), it was wound up. But now, there are more remedies like unfair prejudice so the court
wouldn’t grant that but likely adopt other remedies. It would amount to using a sledge hammer to
kill an ant. You cannot be closing up cos that create employment just like that.
If at all it would apply today, it would be in very small cos and there must be evidence that like
in Ebrahimi, that there was a pre-agreement between them and the would-be directors. The
phrase is legitimate expectation. This was expressed in O’Neil v Phillips where Lord Hoffman
referred to the phrase as an unruly horse that won’t be allowed to dent the smooth process of
corporate operations. So even the legitimate expectation based on the pre-agreement may not
now suffice in all circumstances.
The remedies now are numerous, so this winding up under just and equitable grounds, though
still in the statute books is highly unlikely to be granted.
In Fasakin v Fasakin, an application on the ground that there was reckless spending by the
director and treating the co as his personal property was refused with the CA overruling the TC
which had earlier granted it.
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COMMENCEMENT OF WINDING-UP BY THE COURT S578

Where, before the presentation of a petition for the windingup of a co by the Court, a resolution
has been passed by the co for voluntary winding-up, the winding-up of the co is deemed to have
commenced at the time of the passing of the resolution, and unless the Court, on proof of fraud
or mistake, deems it fit to direct otherwise, all proceedings taken in the voluntary winding-up are
deemed to have been validly taken.
In any other case, the winding-up of a co by the court is deemed to commence at the time of the
presentation of the petition for the winding-up.
EFFECT OF COMMENCEMENT OF WINDING UP
Upon commencement of winding up, there shall be no disposition of the property of the
company, including chooses in action and any transfer of shares, or alteration in the status of the
members of the co unless the court otherwise orders, its void S576.
CONSEQUENCES OF WINDING-UP ORDER
On the making of a winding-up order, a copy of the order shall immediately be forwarded by the
co, or otherwise as may be prescribed, to CAC, which shall make a minute thereof in its books
relating to the co S579.
If a winding-up order is made or a provisional liquidator is appointed, no action or proceeding
shall proceed with or commence against the co except by leave of the Court given on such terms
as the Court may impose S580.
An order for winding-up a co shall operate in favour of all the creditors and of all the
contributories of the co as if made on the joint petition of a creditor and of a contributory S581.
OFFICIAL RECEIVER
Official receiver means the Deputy Chief Registrar of the FHC or an officer designated for that
purpose by the CJ S582.
Where the Court has made a winding-up order or appointed a provisional liquidator there shall,
unless the court deems fit to order otherwise and so orders, be made out and submitted to the
official receiver a statement of affairs of the co in the prescribed form, verified by affidavit, and
showing the particulars of its assets, debts and liabilities, the names, residences and occupations
of its creditors, the securities held by them respectively, the dates when the securities were
respectively given, the list of members and the list of charges and such further or other
information as may be prescribed or as the official receiver may require S582.
Provisional liquidator is a temporary one to occupy the office until a liquidator is appointed. He
is usually the official receiver.
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LIQUIDATOR S585
The Court may appoint a liquidator or liquidators for the purpose of conducting the proceedings
in winding-up a company and performing such duties in reference to it as the court may impose
and where there is a vacancy, the official receiver shall by virtue of his office, act as liquidator
until such time as the vacancy is filled.
At any time after the presentation of a petition and before the making of a winding-up order, the
appointment shall be provisional and the Court making the appointment may limit and restrict
the powers of the liquidator by the order appointing him.
Powers of liquidator S588
1. The liquidator in a winding-up by the Court shall have power, with the sanction either of
the court or of the committee of inspection to—
a. bring or defend any action or other legal proceeding in the name and on behalf of the
co;
b. carry on the business of the co so far as may be necessary for its beneficial winding-
up;
c. appoint a legal practitioner or any other relevant professional to assist him in the
performance of his duties;
d. pay any classes of creditors in full;
e. make any compromise or arrangement with creditors or persons claiming to be
creditors, or having or alleging themselves to have any claim, present or future,
certain or contingent, ascertained or sounding only in damages against the co, or
whereby the co may be rendered liable; and
f. compromise all calls and liabilities to calls, debts and liabilities capable of resulting in
debts, and all claims, present or future, certain or contingent, ascertained or sounding
only in damages, subsisting or supposed to subsist between the co and a contributory
or alleged contributory or other debtor or person apprehending liability to the co, and
all questions in any way relating to or affecting the assets or the winding-up of the co,
on such terms as may be agreed, and take any security for the discharge of any such
call, debt, liability or claim and give a complete discharge in respect of it.
2. The liquidator in winding-up by the Court shall have power to;

a. sell the property of the co of whatever nature by public auction or private contract,
with power to transfer the whole thereof to any person or co or to sell the same in
parcels;
b. do all acts and to execute, in the name and on behalf of the co, all deeds, receipts and
other documents, and for that purpose to use, when necessary, the co’s seal (where
the co has a seal);
c. prove, rank and claim in the bankruptcy, insolvency or sequestration of any
contributory for any balance against his estate, and to receive dividends in the
bankruptcy, insolvency or sequestration in respect of that balance as a separate debt
due from the bankrupt or insolvent, and ratably with the other separate creditors;
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d. draw, accept, make and indorse any bill of exchange or promissory note in the name
and on behalf of the co with the same effect with respect to the liability of the co as if
the bill or note had been drawn, accepted, made or indorsed by or on behalf of the co
in the course of its business;
e. raise on the security of the assets of the co any money requisite;
f. take out in his official name, letters of administration to any deceased contributory,
and to do in his official name any other act necessary for obtaining payment of any
money due from a contributory or his estate which cannot be conveniently done in the
name of the co, and in all such cases the money due shall, for the purpose of enabling
the liquidator to take out the letters of administration or recover the money, be
deemed to be due to the liquidator himself;
g. appoint an agent to do any business which the liquidator is unable to do himself; and
h. do all other things as may be necessary for winding-up the affairs of the co and
distributing its assets.
PROCEDURAL STEPS IN COMPULSORY WINDING UP BY THE COURT
1. Filling of the petition with the affidavit verifying the petition;
2. Service of the petition (file affidavit/proof of service);
3. Obtain leave of court to advertise the petition;
4. Advertisement of the petition;
5. Filing of memorandum of compliance;
6. Filing notice of intention to appear, affidavit in opposition and affidavit in reply by the
respondent;
7. Appointment of provisional liquidator;
8. Filing and leaving of summons for costs;
9. Filing of list of persons appearing;
10. Hearing of the petition;
11. Making of the winding up order;
12. Service of winding up order;
13. Delivery of statement of affairs;
14. Official receiver’s preliminary report;
15. First meeting of creditors and contributories;
16. Appointment of liquidator;
17. Advertisement of appointment of liquidator;
18. Appointment of committee of inspection;
19. Winding up by the liquidator; and
20. Dissolution order.
A winding up proceeding, could be stayed after a winding up order has been made in the interest
of justice S601(1).
Reg 43 Companies Reg 2012 (not in the 2021 regulations but in the handbook, so this is
strictly for bar finals) sets out the requirements for winding up by the court. The steps are
as follows:
345
a. Special resolution for winding up by court, pursuant S571(a) (where applicable), to be

filed at CAC within 14 days of its passing.
b. CTC of court order for winding up
c. Publication of notice of appointment of liquidator in the gazette or two daily
newspapers.
d. Liquidator's notice of his appointment, to be filed within 14 days of his appointment
e. Liquidator's account of receipts and payments at least twice a year, which shall be in
duplicate and verified by statutory declaration.
f. CTC of court orders for dissolution of company
g. Updated annual returns
h. Updated filings
i. Original certificate of incorporation (or CTC) for cancellation
j. Payment of fees
VOLUNTARY WINDING UP
A company may be wound up voluntarily in the following circumstances:
a. when the period, if any fixed for the duration of the co by the articles expires, or the
event, if any, occurs, on occurrence of which the articles provided that the co is to be
dissolved and the co in general meeting has passed a resolution requiring the co to be
wound up voluntarily; and
b. If the co resolves by special resolution that the co be wound up voluntarily S620.
If a company passes a resolution for voluntary winding up it shall, within 14 days after the
passing of the resolution give notice of the resolution by advertisement in the Gazette or two
daily newspapers and to CAC, pursuant to S621.
A voluntary winding up shall be deemed to commence at the time of the passing of the resolution
for voluntary winding up S622.
A winding up in any case where a declaration has been made and delivered in accordance with
the provisions above is referred to as a members' voluntary winding up and a winding up in any
case where a declaration has not been made and delivered as aforesaid is referred to as a
creditors voluntary winding up S457.
DECLARATION OF SOLVENCY S625
Where it is proposed to wind up a co voluntarily, the directors of the co or, in the case of a co
having more than two directors, the majority of the directors, may at a meeting of the directors
make a statutory declaration, to the effect that they have made a full inquiry into the affairs of the
company and that, having so done, they have formed the opinion that the co will be able to pay
its debts in full within such period, not exceeding 12 months from the commencement of the
winding up, as is specified in the declaration.
Such declaration must be made within 5 weeks immediately preceding the date -of the
passing of the resolution for winding up the co and is delivered to CAC for registration within
346
15 days after passing the resolution and it should embody a statement of the co's assets and
liabilities as at the latest practicable date for the making of the declaration. Where this is not
done, the statement will have no effect.
Any director(s) who makes this statement carelessly and the co fails to fulfil the declaration
commits an offence and on conviction liable to punishment as the court may prescribe or 3
months imprisonment.
A winding-up in any case where this type of declaration has been made and delivered, shall be
referred to as “a members’ voluntary winding-up” and a winding-up in any case where a
declaration has not been made and delivered as aforesaid shall in this Act be referred to as “a
creditors’ voluntary winding-up”
NB: all costs, charges and expenses properly incurred in the winding up, including the
remuneration of the liquidator, shall be payable out of the assets of the co in priority to all other
claims.
SUMMARY OF PROCEDURE FOR MEMBERS VOLUNTARY WINDING
1. Statutory declaration of solvency duly signed by majority of the directors and embodying
statement of the company's asset and liabilities, to be filed at CAC within 5 weeks
preceding the date to pass winding up resolution and filed with CAC within 15 days
of passing the resolution.
2. A GM is convened to pass the winding up resolution.
3. Special resolution for voluntary winding up signed by a director and secretary or two
directors, to be passed within 5 weeks of making of the statutory declaration of
solvency, and filed with CAC within 14 days of its passage.
4. Publication of notice of appointment of a liquidator in the Gazette or two daily
newspapers.
5. The co ceases to carryon business except those that will benefit the winding up.
6. The co in GM shall appoint one or more liquidators for the purpose of winding-up the
affairs and distributing the assets of the co, and may fix the remuneration to be paid to
him or them.
7. If a liquidator is appointed, all the powers of the directors shall cease, except so far as the
co in GM or the liquidator sanctions the continuance thereof.
8. Resolution for appointment of liquidator.
9. Notice of appointment of liquidator to be filed with CAC within 14 days of the
appointment.
10. Liquidator's notice of his appointment.
11. Return of final meeting and account of liquidation as laid before and approved by the
meeting, to be filed with CAC within 7 days after date of the final meeting.
12. Original certificate of registration (or CTC where applicable) to be delivered to CAC for
cancellation. See also SS630 and 631 (2) CAMA
347
Requirements for Creditors’ Voluntary Winding Up

The requirements of creditors’ voluntary winding up include:
1. Publication of notice of creditors' meeting in the gazette and two daily newspapers
2. Resolution for the voluntary winding up, to be filed with CAC within 14 days of passing
3. Appointment of liquidator
4. Publication of notice of appointment of liquidator in the gazette or two daily newspapers
5. Notice of appointment of liquidator to be filed with CAC within 14 days of the
appointment
6. Liquidator's notice of his appointment
7. Publication of notice of final meeting in the gazette and at least two daily newspapers
circulating in the locality where the meeting is being called
8. Return of final meeting and account of liquidation as laid before and approved by the
meeting
9. Original certificate of registration (or CTC where applicable) for cancellation
10. Updated annual return
11. Updated S553 filing where applicable (this is a little confusing as S553 deals with
“receivers and managers appointed out of Court”, albeit S554 provides that such a
person may apply to court for directions, it is difficult to tell if that is what is meant
here as the section didn’t provide for any filing).
12. Payment of fees. See also SS635(1) – (4), 636 and 637 CAMA
POINTS ON CREDITORS’ VW
• The company shall cause a meeting of the creditors of the co to be summoned for the day,
or the day next following, on which there is to be held the meeting at which the resolution
for voluntary windingup is to be proposed, and shall cause the notices of the meeting of
creditors to be sent by post to the creditors simultaneously with the sending of the notices
of the meetings of the co S635 (1).
• The company shall cause notice of the meeting of the creditors to be published once in
the Federal Government Gazette and once at least in two daily newspapers printed in
Nigeria and circulating in the district where the registered office or principal place of
business of the company is situate S635(2).
• The company also holds its own GM to pass the winding up resolution S635(5).
• The creditors and the co at their respective meetings may nominate a person to be
liquidator for the purpose of winding-up the affairs and distributing the assets of the co,
and if the creditors and the co nominate different persons, the person nominated by the
creditors shall be liquidator, and if no person is nominated by the creditors the person if
any, nominated by the co, shall be liquidator except court otherwise orders S636.
• On the appointment of a liquidator, all the powers of the directors shall cease, except
there is a Committee of Inspection, or if there is no such committee, the creditors shall
sanction the continuance S636(2).
• Committee of inspection of five members is also appointed and the rule of appointment
of liquidator still applies S637.
348
WINDING UP SUBJECT TO SUPERVISION OF COURT CAP 23

• If a company passes a resolution for voluntary winding up, the court may on petition
order that the voluntary winding up shall continue but subject to such supervision of the
court, and with such liberty for creditors, contributories, or others to apply to the Court,
and generally on such terms and conditions, as the court deems fit S649.
• A petition for the continuance of a voluntary winding-up subject to the supervision of the
Court shall, for the purpose of giving jurisdiction to the Court over actions, be deemed to
be a petition for winding-up by the Court S650.
• A winding-up subject to the supervision of the court shall, for the purposes of sections
576 and 577 of this Act, be deemed to be a winding-up by the Court S651.
• Where an order is made for a winding up subject to supervision of the court, the court
may by the same order or any subsequent order appoint an additional liquidator S652(1).
• A liquidator appointed by the Court under this section shall have the same powers, be
subject to the same obligations, and in all respects stand in the same position, as if he had
been duly appointed in accordance with the provisions of this Act with respect to the
appointment of liquidators in a voluntary winding-up S652(1).
• The court may also remove any liquidator so appointed by the court or any liquidator
continued under the supervision order, and may fill any vacancy occasioned by the
removal, or by death or resignation S652(3).
• Where an order is made for a winding up subject to supervision of court, the liquidator
may, subject to any restriction imposed by the court, exercise all his powers without the
sanction or intervention of the court in the same manner as if the company were being
wound up voluntarily, provided that he cannot exercise his powers under S588 (1)
(d),(e)&(f) without the sanction of the court or the creditor or committee of inspection if
the winding up was initially commenced as a creditors' voluntary winding up S653(1).
• Order of supervision does not change the date of commencement of the winding up
which will still be the day the resolution was passed by the company.
THOSE FUNCTIONS IN S588(1) (d), (e) & (f) are:
(d) pay any classes of creditors in full;
(e) make any compromise or arrangement with creditors or persons claiming to be creditors, or
having or alleging themselves to have any claim, present or future, certain or contingent,
ascertained or sounding only in damages against the company, or whereby the company may be
rendered liable; and
(f) compromise all calls and liabilities to calls, debts and liabilities capable of resulting in debts,
and all claims, present or future, certain or contingent, ascertained or sounding only in damages,
subsisting or supposed to subsist between the company and a contributory or alleged
contributory or other debtor or person apprehending liability to the company, and all questions in
any way relating to or affecting the assets or the winding-up of the company, on such terms as
may be agreed, and take any security for the discharge of any such call, debt, liability or claim
and give a complete discharge in respect of it.
349

RC:151025
07035406532
([email protected])
Our Ref: 2304______________________________________ Your Ref: _______________
15th August, 2022
The Managing Director,
BAD Nigeria Limited,
Plot 256 Maitama,
Abuja.
Dear Sir,
STATUTORY NOTICE OF DEMAND TO REPAY N50, 000, 000. 00 LOAN PURSUANT TO
SECTION 572 OF THE COMPANIES AND ALLIED-MATTERS ACT, 2020
Edupal Nigeria Limited (our Company) seeks to bring the debt in the sum of N50,000,000.00
(Fifty Million Naira) only which BAD Nigeria Limited owes our company to the notice of BAD
Nigeria Limited.
The said sum is hereby demanded and BAD Nigeria Limited is given three weeks, from the date
of receipt of this letter, to pay the said sum mentioned above.
TAKE NOTICE that upon failure to pay the said sum after the expiration of three weeks from
the date of receipt of this letter, our company shall proceed to apply to the Federal High Court to
compulsorily wind-up BAD Nigeria Limited.
Thank you.
Yours faithfully,
________________
Company Secretary
350

RC:151025
07035406532
([email protected])
Our Ref: 2304______________________________________ Your Ref: _______________
15th August, 2022
The Managing Director,
BAD Nigeria Limited,
Plot 256 Maitama,
Abuja.
Dear Sir,
STATUTORY DECLARATION OF SOLVENCY EMBODYING A STATEMENT OF THE
ASSETS AND LAIBILITIES OF EDUPAL NIGERIA LIMITED PURSUANT TO SECTION
625 OF THE COMPANIES AND ALLIED-MATTERS ACT, 2020
We, ABC and XYZ, being the Directors of the above-named company, solemnly declare as
follows:
1. That we have made a full enquiry into the affairs of this company
2. That having done so, we have formed the opinion that the company will be able to pay its
debt in full within a period of twelve (12) months from the commencement of the
winding up, and we append a statement of the company’s assets and liabilities as at the
15th day of August, 2022 being the latest practicable date before making this declaration.
3. And we make this solemn declaration, conscientiously believing the same to be true by
virtue of the Oaths Act.
…………………
1. ABC
…………………
2. XYZ
Deponents
Sworn to at the Federal High Court Registry, Lagos
This 15th day of August. 2022
BEFORE ME
.......................................................................................................
COMMISSIONER OF OATHS
351
For the last two topics:

1. BUSINESS NAMES AND PARTNERSHIPS REGISTRATION OF BUSINESS
NAMES AND PARTNERSHIP and
2. NON-BUSINESS ORGANISATION: INCORPORATED TRUSTEES
Check the second topic at the beginning of the note, they have been discussed therein.
352

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Chris Ozo Agbata [email protected] chrisozoagbata@edupalinstitute.

AN OVERVIEW OF THE LEGAL FRAMEWORK & REGULATORY

1 Companies and Allied Matters Act Corporate Affairs Commission Registrar-General

A. CORPORATE AFFAIRS COMMISSION (CAMA 2020)

v. Payment receipt of the current year practicing fee

4. CAC 4 - Application for Re-Registration

B. SECURITIES AND EXCHANGE COMMISSION

c. A copy of the certificate of incorporation of the company certified by the company

D. NIGERIAN INVESTMENT PROMOTION COMMISSION

E. NATIONAL OFFICE FOR TECHNOLOGY ACQUISITION AND PROMOTION

F. ONE STOP INVESTMENT CENTRE (OSIC)

G. NIGERIAN STOCK EXCHANGE

H. ASSET MANAGEMENT CORPORATION

I. CENTRAL BANK OF NIGERIA

CHOICE OF BUSINESS ORGANIZATION AND FORMATION (I)

11 Appointment of No such restrictions or where a person who is above 70 years is to

COMPANY LIMITED BY SHARE S 21(1) (a)

DIFFERENCES BETWEEN CO LTD BY SHARES AND CO LTD BY GUARANTEE

UNLIMITED LIABILITY COMPANY S 21(1) (c)

6. Restrictions on Power of the Company

7. Registered Office Address

8. Control and Management

10. Type of company

12. Nature and objects of Business

4. Illegal or offensive to public policy

Explanation of the Contents

(d) contains the word “Group” or “Holding”.

Availability and Reservation of Name S31:

10 Jackson Cresent, Ikeja, Lagos

DATED the 29th day of June, 2021

BUSINESS NAME/PARTNERSHIP AND INCORPORATED TRUSTEE

v. If such a contract is not in writing, a person receiving by way of annuity or

5) A person ceases to be a DP if he ceases to be a partner.

iii. Minutes Book.

POWER OF INSPECTORS TO CARRY OUT INVESTIGATION INTO AFFAIRS OF

EXPENSES OF INVESTIGATION SS764 – 786

MODIFICATION OF GENERAL LAW IN CASE OF LP S806.

22. Limits of Authority

(b) the general nature of the business;

(e) where the registration to be effected is that of a firm;

(f) where the registration to be effected is that of an individual;

(g) where the registration to be effected is that of a company;

TIME FOR REGISTRATION

2. The applications must be accompanied by separate enclosures as follow S825:

Effect of registration and certificate.

Changes in contravention of certain provisions of this part of this Act

DIFFERENCES BETWEEN IT AND LTD/GTE

RELEVANT CAC FORMS UNDER PART F OF CAMA:

5. CAC/IT 05 – Bi-annual Statement of Incorporated Trustees

Answer the following questions:

PREPARATION OF DOCUMENTS FOR BUSINESS ORGANIZATION AND NON-

• More Responsibilities of Promoter

ii. Designating the Directors of the company

LEGAL STATUS OF PRE-INCORPORATION CONTRACTS

2. Recital (background facts)

6. Displaying of certificate of incorporation in conspicuous place

STATUTORY BOOKS (REGISTERS)

1. REGISTER OF MEMBERS S109

2. INDEX OF MEMBERS (PUBLIC COMPANIES ONLY) S111

3. REGISTER OF SUBSTANTIAL INTEREST IN SHARES (MUST FOR A PUBLIC