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Companies and Allied Matters Act

Chapter 59

Laws of the Federal Republic of Nigeria 1990

 

 

2nd January 1990

 

 

An Act to establish the Corporate Affairs Commission, provide for the incorporation of companies and incidental matters, registration of business names and the incorporation of trustees of certain communities, bodies and associations.

 

 

 

 

Part A

Companies

 

 

Part I

Corporate Affairs commission

 

 

1.    (1)      There is hereby established under this Decree, a body to be known as the Corporate Affairs Commission (in this Decree referred to as "the Commission").

 

(2)     The Commission shall be-

 

(a)     a body corporate with perpetual succession and a common seal;

 

(b)    capable of suing and being sued in its corporate name; and

 

(c)    capable of acquiring, holding or disposing of any property, movable or immovable, for the purpose of carrying out its functions.

 

(3)     The headquarters of the Commission shall be situated in the Federal Capital Territory, Abuja, and there shall be established an office of the Commission in each State of the Federation.

 

2.     The Commission shall consist of the following members, that is-

 

(a)     a chairman who shall be appointed by the President, Commander-in Chief of the Armed Forces on the recommendation of the Minister, being a person who by reason of his ability, experience or specialised knowledge of corporate, industrial, commercial, financial or economic matters or of business or professional attainments would in his opinion be capable of making outstanding contributions to the work of the Commission;

 

(b)     one representative of the business community, appointed by the Minister on the recommendation of the Nigerian Association of Chambers of Commerce, Industries, Mines and Agriculture;

 

(c)     one representative of the legal profession, appointed by the Minister on the recommendation of the Nigerian Bar Association;

 

(d)    one representative of the accountancy profession, appointed by the Minister on the recommendation of the Institute of Chartered Accountants of Nigeria

 

(e)    one representative of the Manufacturers Association of Nigeria, appointed by the Minister on the recommendation of the Association;

 

(f)     one representative of the Securities and Exchange Commission not below the grade of a Director or its equivalent;

 

(g)     one representative of each of the following Federal Ministries, that is-

 

(i)     Trade and Tourisms,

 

(ii)     Finance and Economic Development,

 

(iii)     Justice,

 

(iv)     Industry and Technology; and

 

(h)     the Registrar-General of the Commission.

 

3.    (1)     Subject to the provisions of subsection (2) of this section, a person appointed as a member of the Commission (not being an ex-officio member) shall hold office for three years and shall be eligible for re-appointment for one further term of two years.

 

(2)     The minister may, with the approval of the President, Commander-in Chief of the Armed Forces at any time remove any member of the Commission from office if the Minister is of the opinion that it is not in the interest of the Commission for the member to continue in office and shall notify the member in writing to that effect.

 

(3)     The members of the Commission except the Registrar-General shall be part-time members of the Commission.

 

(4)     Any member of the Commission shall cease to hold office if-

 

(a)     he becomes of unsound mind or is incapable of carrying out his duties;

 

(b)     he becomes bankrupt or has made arrangement with his creditors;

 

(c)     he is convicted of felony or any offence involving dishonesty;

 

(d)     he is guilty of serious misconduct relating to his duties; or

 

(e)     in the case of a person possessed of professional qualifications, he is disqualified or suspended (other than at his own request) from practising his profession in any part of Nigeria by the order of any competent authority made in respect of him personally.

 

4.      Members of the Commission appointed under section 2 (a), (b), (c), (d), (e), (f), (g), and (h) shall be paid such remuneration and allowances as the President, Commander-in-Chief of the Armed Forces may, from time to time, direct.

 

5.   (1)     Subject to this section and section 26 of the Interpretation Act 1964, the Commission may make standing orders regulating its proceedings.

 

(2)     The Chairman shall preside at every meeting of the Commission but, in his absence, the members present shall elect one of their number present to preside at the meeting.

 

(3)     The quorum for meetings of the Commission shall be five7

 

(4)     The Commission may appoint any of its officers to act as Secretary at any of its meetings.

 

6.    (1)     A member of the Commission who is directly interested in any company or enterprise, the affairs of which are being deliberated upon by the Commission, or is interested in any contract made or proposed to be made by the Commission shall, as soon as possible after the relevant facts have come to his knowledge, disclose the nature of his interest at a meeting of the Commission.

 

(2)     A disclosure, under subsection (1) of this section, shall be recorded in the minutes of the Commission, and the member shall-

 

(a)     not take part after such disclosure in any deliberation or decision of the Commission with regard to the subject matter in respect of which his interest is thus disclosed;

 

(b)     be excluded for the purpose of constituting a quorum of the Commission for any such deliberation or decision.

 

7.     (1)     The functions of the Commission shall be to-

 

(a)     subject to section 541 of this Act, administer this Act including the regulation and supervision of the formation, incorporation, registration, management, and winding-up of companies under or pursuant of this Act;

 

(b)     establish and maintain a companies registry and offices in all the States of the Federation suitably and adequately equipped to discharge its functions under this Act or any other law in respect of which it is charged with responsibility;

 

(c)     arrange or conduct an investigation into the affairs of any company where the interest of the shareholders and the public so demand;

 

(d)     perform such other functions as may be specified by any law or enactment; and

 

(e)     undertake such other activities as are necessary or expedient for giving full effect to the provisions of this Act.

 

(2)    Nothing in this section shall effect the powers, duties or jurisdiction of the Securities and Exchange Commission under the Securities and Exchange Commission Act.

 

8.     (1)     There shall be appointed by the Commission, a Registrar-General who shall be qualified to practice as a legal practitioner in Nigeria and has been so qualified for not less than 10 years and in addition, has had experience in company law practice or administration for not less than eight years.

 

(2)     The Registrar-General shall be the chief executive of the Commission and shall be subject to the directives of the Commission and shall hold office on such terms and conditions as may be specified in his letter of appointment and on such other terms and conditions as may be determined from time to time, by the Commission with the approval of the National Council of Ministers.

 

(3)     The Registrar-General shall be the accounting officer for the purpose of controlling and disbursing amounts from the fund established pursuant to section 12 of this Act.

 

9.     The Commission may appoint such other staff as it may deem necessary for the efficient performance of the functions of the Commissions under or pursuant to this Act.

 

10.           Notwithstanding the provisions of any enactment to the contrary, a person appointed to the office or Registrar-General under section 8 of this Act or a person appointed under section 9 of this Act who is a legal practitioner shall, while so appointed, be entitled to represent the Commission as a legal practitioner for the purpose and in the course of his employment.

 

11.           Service in the Commission shall be approved service for the purpose of the Pensions Act and accordingly, officers and other persons employed in the Commission shall in respect of their service in the Commission be entitled to pensions, gratuities and other retirement benefits enjoyed by persons holding equivalent grades int he public service of the Federation, so however that nothing in this Act shall prevent the appointment of a person to any office on terms which preclude the grant of a pension and gratuity in respect of that office.

 

12.           The Commission shall establish a fund which shall consist of such sums as may be allocated to it by the Federal Government and such other funds as may accrue to it in the discharge of its functions.

 

13.           The Commission may, from time to time, apply the proceeds of the fund established in pursuance of section 12 of this Act-

 

(a)             to the cost of administration of the Commission;

 

(b)             for re-imbursing members of the Commission or any committee set up by the Commission for such expenses as may be authorised or approved by the Commission, in accordance with the rate approved in that behalf by the National Council of Ministers;

 

(c)             to the payment of salaries, fees or other remuneration or allowances, pensions and gratuities payable to the employees of the Commission;

 

(d)             for the maintenance of any property acquired or vested in the Commission; and

 

(e)             for, and in connection with, all or any of the functions of the Commission under this Act.

 

14.     (1)         The Commission shall keep proper accounts and proper records in relation thereto and shall prepare in respect or each year a statement of accounts in such form as the National Council of Ministers may direct.

 

  (2)          The accounts of the Commission shall be audited not later than six months after the end of the year by auditors appointed by the Commission from the list and in accordance with guidelines supplied by the Auditor-General of the Federation, and the fees of the auditors and the expenses of the audit generally shall be paid from the funds of the Commission.

 

  (3)          The Commission shall cause to be prepared, not later than 30th September in each year, an estimate or the expenditure and income or the Commission during the next succeeding year and when prepared they shall be submitted through the Minister for approval by the National Council of Ministers.

 

15.           The Commission shall, not later than 30th June in each year, submit to the National Council of Ministers, a report on the activities of the Commission during the immediately preceding year and shall include in such report, the audited accounts of the Commission.

 

16.         The Minister may, with the approval or the National Council of Ministers, make regulations generally for the purpose of this Act and in particular, without prejudice to the generality of the foregoing provisions, make regulations-

 

(a)            prescribing the forms and returns and other information required under this Part, that is, Part A of this Act;

 

(b)            requiring returns to be made within the period specified therein by any company or enterprise to which this Part, that is, Part A of this Act applies; and

 

(d)            prescribing any fees payable under this Part, that is, Part A of this Act.

 

17.         In this Part of this Act-

 

"Chairman" means the Chairman of the Commission; and "member" means any member of the Commission, including the Chairman.

 

 

 

Part II

Incorporation of companies and incidental matters

 

 

Chapter I

Formation of Company

 

 

18.            As from the commencement of this Act, any two or more persons may form and incorporate a company by complying with the requirements of this Act in respect of registration of such company.

 

19.     (1)          No company, association, or partnership consisting of more than twenty persons shall be formed for the purpose of carrying on any business for profit or gain by the company, association, or partnership, or by the individual members thereof, unless it is registered as a company under this Act, or is formed in pursuance of some other enactment in force in Nigeria.

 

  (2)         Nothing in this section shall apply to-

 

(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 practice as an accountant.

 

  (3)          If at any time the number of members of a company, association or partnership exceeds twenty in contravention of this section and it carries on business for more than fourteen days while the contravention continues, every person who is a member of the company, association or partnership during the time that is so carries on business after those fourteen days shall be guilty of an offence and liable on conviction to a fine of 25 for every day during which the default continues.

 

20.     (1)         Subject to subsection (2) of this section, an individual shall not join in the formation of a company under this Act if-

 

(a)             he is less than eighteen years of age; or

 

(b)             he is of unsound mind and has been so found by a court in Nigeria or elsewhere; or

 

(c)             he is an undischarged bankrupt; or

 

(d)             he is disqualified under section 254 of this Act from being a director of a company.

 

  (2)          A person shall not be disqualified under paragraph (a) of subsection (1) of this section, if two other persons not disqualified under that subsection have subscribed to the memorandum.

 

  (3)          A body corporate in liquidation shall not join in the formation of a company under this Act.

 

  (4)          Subject to the provisions of any enactment regulating the rights and capacity of aliens to undertake or participate in trade or business, an alien or a foreign company may join in forming a company.

 

21.     (1)         An incorporated company may be either a company-

 

(a)             having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them (in this Act referred to as "a company limited by shares"); or

 

(b)             having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up (in this Act referred to as "a company limited by guarantee") or

 

(c)             not having any limit on the liability of its members (in this Act referred to as "an unlimited company").

 

  (2)          A company of any of the foregoing types may either be a private company or a public company.

 

22.     (1)         A private company is one which is stated in its memorandum to be a private company.

 

  (2)          Every private company shall by its articles restrict the transfer of its shares.

 

  (3)          The total number of members of a private company shall not exceed fifty, not including persons who are bona fide in the employment of the company, or were while in that employment and have continued after the determination of that employment to be, members of the company.

 

  (4)          Where two or more persons hold one or more shares in a company jointly, they shall for the purpose of subsection (3) of this section, be treated as a single member.

 

  (5)          A private company shall not, unless authorised by law invite the public to-

 

(a)             subscribe for any shares or debentures of the company;

 

(b)             deposit money for fixed periods or payable at call, whether or not bearing interest.

 

23.     (1)          Subject to subsection (2) of this section, where default is made in complying with any of the provisions of section 22 of this Act in respect of a private company, the company shall cease to be entitled to the privileges and exemptions conferred on private companies by or under this Act and this Act shall apply to the company as if it were not a private company.

 

  (2)          If a court, on the application of the company or any other person interested, is satisfied that the failure to comply with the provisions of section 22 of this Act was accidental or due to inadvertence or to some other sufficient cause, or that on other grounds it is just and equitable to grant relief, the court may, on such terms and conditions as may seem to it to be just and expedient, order that the company be relieved from the consequences mentioned in subsection (1) of this section.

 

24.           Any company other than a private company shall be a public company and its memorandum shall state that it is a public company.

 

25.           As from the commencement of this Act, an unlimited company shall be registered with a share capital; and where an existing unlimited company is not registered with a share capital, it shall, not later than the appointed day, alter its memorandum so that it becomes an unlimited company having a share capital not below the minimum share capital permitted under section 99 of this Act.

 

26.     (1)          Where a company is to be formed for promoting 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 on portion thereof is to be paid or transferred directly or indirectly to the members of the company except as permitted by this Act, the company shall not be registered as a company limited by shares, but may be registered as a company limited guarantee.

 

  (2)          As from the commencement of this Act, a company limited by guarantee shall not be registered with a share capital; and every existing company limited by guarantee and having share capital shall, not later than the appointed day, alter its memorandum so that it becomes a company limited by guarantee and not having a share capital.

 

  (3)          In the case of a company limited by guarantee, every provision in the memorandum or articles or in any resolution of the company purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member or purporting to divide the company's undertaking into shares or interests shall be void.

 

 

  (4)          A company limited by guarantee shall not be incorporated with the object of carrying on business for the purpose of making profits for distribution to members.

 

  (5)          The memorandum of a company limited by guarantee shall not be registered without the authority of the Attorney General of the Federation.

 

  (6)          If any company limited by guarantee carries on business for the purpose of distributing profits, all officers and members thereof who are cognisant of the fact that it is so carrying on business shall be jointly and severally liable for the payment and discharge of all the debts and liabilities or the company incurred in carrying on such business, and the company and every such officer and member shall be guilty of an offence and liable on conviction to a fine not exceeding 100 for every day during which it carries on such business.

 

  (7)          The total liability of the members of a company limited by guarantee to contribute to the assets of the company in the event of its being wound up shall not at any time be less than 10,000.

 

  (8)          Subject to compliance with subsection (5) of this section, the articles of association of a company limited by guarantee may provide that members can retire or be excluded from membership of the company.

 

  (9)          If, in breach of subsection (5) of this section, the total liability of the members of any company limited by guarantee shall at any time be less than 10,000, every director and member of the company who is cognisant of the breach shall be guilty of an offence and liable on conviction to a fine or 50 for every day during which the default continues.

 

 (10)          If, upon the winding-up of a company limited by guarantee, 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 charity shall be determined by the members prior to the dissolution of the company.

 

 

 

Memorandum of Association

 

 

27.     (1)         The memorandum of every company shall state-

 

(a)             the name of the company;

 

(b)             that the registered office of the company shall be situated in Nigeria;

 

(c)             the nature of the business or businesses which the company is authorised to carry on, or, if the company is not formed for the purpose of carrying on business, the nature of the object or objects for which it is established;

 

(d)             the restriction, if any, on the powers of the company;

 

(e)             that the company is a private or public company, as the case may be;

 

(f)             that the liability of its members is limited by shares or by guarantee or is unlimited, as the case may be.

 

  (2)          If the company has a share capital-

 

(a)             the memorandum shall also state the amount of authorised share capital, not being less than 10,000 in the case of a private company and 500,000 in the case of a public company, with which the company proposes to be registered, and the division thereof into shares of a fixed amount;

 

(b)             the subscribers of the memorandum shall take among them a total number of shares of a value of not less than twenty-five per cent of the authorised share capital; and

 

(c)             each subscriber shall write opposite to his name the number of shares he takes.

 

  (3)          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.

 

  (4)          The memorandum of a company limited by guarantee shall also state that-

 

(a)             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 or under this Act; and

 

(b)             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 the debts and liabilities of the company, and of the cost of winding up, such amount as may be required not exceeding a specified amount and the total of which shall not be less than 10,000.

 

  (5)          The memorandum shall be signed by each subscriber in the presence of at least one witness who shall attest the signature.

 

  (6)              The memorandum shall be stamped as a deed.

 

28.         Subject to the provisions of section 27 of this Act, the form of a memorandum of association of-

 

(a)             a company limited by shares;

 

(b)             a company limited by guarantee; and

 

(c)             an unlimited company,

 

shall be specified in Tables B, C and D respectively, in the First Schedule to this Act, or as near that form as circumstances admit.

 

29.         The name of a private company limited by shares shall end with the word "Limited".

 

  (2)          The name of a public company limited by shares shall end with the words "Public Limited Company".

 

  (3)          The name of a company limited by guarantee shall end with the words "(Limited by Guarantee)" in brackets.

 

  (4)          The name of an unlimited company shall end with the word "Unlimited".

 

  (5)          A company may use the abbreviations "Ltd", "PLC" "(Ltd/Gte)" and "Ultd" for the words "Limited", "Public Limited Company", "(Limited by Guarantee)" and "Unlimited" respectively, in the name of the company.

 

30.     (1)          No company shall be registered under this Act by a name which-

 

(a)             is identical with that by which a company in existence is already registered, or so nearly resembles that name as to be calculated to deceive, except where the company in existence is in the course of being dissolved and signifies its consent in such manner as the Commission requires; or

 

(b)             contains the words "Chamber of Commerce" unless it is a company limited by guarantee; or

 

(c)             in the opinion of the Commission is capable of misleading as to the nature or extent or its activities or is undesirable, offensive or otherwise contrary to public policy; or

 

(d)             in the opinion of the Commission would violate any existing trade mark or business name registered in Nigeria unless the consent of the owner of the trade mark or business name has been obtained.]

 

  (2)          Except with the consent of the Commission, no company shall be registered by a name which-

 

(a)             includes the word "Federal", "National', "Regional", "State", "Government", or any other word which in the opinion of the Commission suggests or is calculated to suggest that it enjoys the patronage or the Government of the Federation or the Government of a State in Nigeria, as the case may be, or any Ministry or Department of Government; or

 

(b)             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; or

 

(c)             contains the word "Co-operative" or the words "Building Society"; or

 

(d)             contains the word "Group" or "Holding".

 

31.      (1)         If a company, through inadvertence or otherwise, on its first registration or on its registration by a new name, is registered under a name identical with that by which a company in existence is previously registered, or so nearly resembling it as to be likely to deceive, the first-mentioned company may, with the approval of the Commission, change its name, and if the Commission so directs within six months of its being registered under that name, the company concerned shall change its name within a period of six weeks from the date of the direction or such longer period as the Commission may allow.

 

 

  (2)          If a company makes default in complying with a direction under subsection (1) of this section, it shall be guilty of an offence and liable on conviction to a fine of N 25 for every day during the default continues.

 

  (3)          Any company may, by special resolution and with the approval of the Commission signified in writing, change its name:

 

Provide that no such approval shall be required where the only change in the name of a company is the substitution of the words "Public Limited Company" for the word "Limited' or vice versa on the conversion of a private company into a public company or a public company into a private company in accordance with the provisions of this Act.

 

  (4)          Nothing in this Act shall preclude the Commission from requiring a company to change its name if it is discovered that such a name conflicts with an existing trade mark or business name registered in Nigeria prior to the registration of the company and the consent of the owner of the trade mark or business name was not obtained.

 

  (5)          Where a company changes its name, the Commission shall enter the new name on the register in place of the former name, and issue a certificate of incorporation altered to meet the circumstances of the case.

 

  (6)          The change of name shall not affect any rights or obligations of the company, or render defective any legal proceedings by or against the company, and any legal proceedings that could have been continued or commenced against it or by it in its former name may be continued or commenced against or by it in its new name.

 

  (7)          Any alteration made in the name under this section shall be published by the Commission in the Gazette.

 

  (8)          A certificate or publication in the Gazette under this section shall be evidence of the alteration to which it relates.

 

32.     (1)          The Commission may, on written application and on payment of the prescribed fee, reserve a name pending registration of a company or a change of name by a company.

 

  (2)          Such reservation as is mentioned in subsection (1) of this section shall be for such period as the Commission shall think fit not exceeding sixty days and during the period of reservation no other company shall be registered under the reserved name or under any other name which in the opinion of the Commission bears too close a resemblance to the reserved name.

 

 

 

Article of Association

 

 

33.            There shall be registered with the memorandum of association articles of association signed by the subscribers to the memorandum of association, and prescribing regulations for the company.

 

34.     (1)          The form and contents of the articles of association of a public company having a share capital, a private company having a share capital, a company limited by guarantee and an unlimited company shall be as in Parts I, II, III, and IV respectively, of Table A in the First Schedule to this Act with such additions, omissions or alterations as may be required in the circumstances. (2) In the case of a company limited by guarantee, the articles of association shall state the number of members with which the company proposes to be registered for the purpose of enabling the Commission to determine the fees payable on registration.

 

  (3)          The articles of association shall-

 

(a)             be printed;

 

(b)             be divided into paragraph numbered consecutively; and

 

(c)             be signed by each subscriber of the memorandum of association in the presence of at least one witness who shall attest the signature.

 

  (4)          The articles shall bear the same stamp duty as if they were contained in a deed.

 

 

 

Registration of Companies

 

 

35.     (1)         As from the commencement of this Act, a company shall be formed in the manner set out in this section.

 

  (2)          There shall be delivered to the Commission-

 

(a)             the memorandum of association and articles of association complying with the provisions of this Part of this Act;

 

(b)             the notice of the address of the registered office of the company and the head office if different from the registered office;

 

(c)             a statement in the prescribed form containing the list and particulars together with the consent of the persons who are to be the first directors of the company;

 

(d)             a statement of the authorised share capital signed by at least one director; and

 

(e)             any other document required by the Commission to satisfy the requirements of any law relating to the formation of a company.

 

  (3)          A statutory declaration in the prescribed form by a legal practitioner that those requirements of this Act for the registration of a company have been compiled with shall be produced to the Commission, and it may accept such a declaration as sufficient evidence of compliance:

 

Provided that there where the Commission refuses a declaration, it shall within thirty days of the date of receipt of the declaration send to the declarant a notice of its refusal giving the grounds of such refusal.

 

36.     (1)         The Commission shall register the memorandum and articles unless in its opinion-

 

(a)             they do not comply with the provisions of this Act; or

 

(b)             the business which the company is to carry on, or the objects for which it is formed, or any of them, are illegal; or

 

(c)             any of the subscribers to the memorandum is incompetent or disqualified in accordance with section 20 of this Act; or

 

(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 trade mark or business name registered in Nigeria.

 

  (2)          Any person aggrieved by the decision of the Commission under subsection (1) of this section, may give notice to the Commission requiring it to apply to the court for directions and the Commission shall within twenty-one days of the receipt of such notice apply to the court for the directions.

 

  (3)          The Commission may, in order to satisfy itself as provided in subsection (1) (c) of this section, by instrument in writing require a person subscribing to the memorandum to make and lodge with the Commission, a statutory declaration to the effect that he is not disqualified under section 20 of this Act from joining in forming a company.

 

  (4)          Steps to be taken under this Act to incorporate a company shall not include any invitation to subscribe for shares or otherwise howsoever on the basis of a prospectus.

 

  (5)          Upon registration of the memorandum and articles, the Commission shall certify under its seal-

 

(a)             that the company is incorporated;

 

(b)             in the case of a limited company, that the liability of the members is limited by shares or by guarantee; or

 

(c)             in the case of an unlimited company, that the liability of the members is unlimited; and

 

(d)             that the company is a private or public company, as the case may be.

 

  (6)          The certificate of incorporation shall be prima facie evidence that all the requirements of this Act in respect of registration and of matters precedent and incidental to it have been compiled with and that the association is a company authorised to be registered and duly registered under this Act.

 

37.           As from the date of incorporation, the subscriber of the memorandum together with such other persons as may, from time to time, become members of the company, shall be a body corporate by the name contained in the memorandum, capable forthwith of exercising all the powers and functions of an incorporated company including the power to hold land, and having perpetual succession and a common seal, but with such liability on the part of the members to contribute to the assets of the company in the event of its being wound up as is mentioned in this Act.

 

 

 

Capacity and powers of companies

 

 

38.     (1)         Except to the extent that the company's memorandum or any enactment otherwise provides, every company shall, for the furtherance of its authorised business or objects, have all the powers of a natural person of full capacity.

 

  (2)          A company shall not have or exercise power either directly or indirectly to make a donation or gift of any of its property or funds to a political party or political association, or for any political purpose; and if any company, in breach of this subsection makes any donations or gift of its property to a political party or association, or for any political purpose, the officers in default and any member who voted for the breach shall be jointly and severally liable to refund to the company the sum or value of the donation or gift and in addition, the company and every such officer or member shall be guilty of an offence and liable to a fine equal to the amount or value of the donation or gift.

 

39.    (1)          A company shall not carry on any business not authorised by its memorandum and shall not exceed the powers conferred upon it by its memorandum or this Decree.

 

  (2)          A breach of subsection (1) of this section, may be asserted in any proceedings under sections 300 to 313 of this Decree or under subsection (4) of this section. (3) Notwithstanding the provisions of subsection (1) of this section, no act of a company and no 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.

 

  (4)          On the application of-

 

(a)             any member of the company; or

 

(b)             the holder of any debenture secured by a floating charge over all or any of the company’s property or by the trustee of the holders of any such debentures,

 

the court may prohibit by injunction, the doing of any act or the conveyance or transfer of any property in breach of subsection (1) of this section.

 

  (5)          If the transactions sought to be prohibited in any proceeding under subsection (4) of this section are being, or are to be performed or made pursuant to any contract to which the company is a party, the court may, if it deems the same t be equitable and if all the parties to the contract are parties to the proceedings, set aside and prohibit the performance of such contract, and may allow to the company or to the other parties to the contract compensation for any loss or damage sustained by them by reason of the setting aside or prohibition of the performance of such contract but no compensation shall be allowed for loss of anticipated profits to be derived from the performance of such contract.

 

40.    (1)           Where there is provision in the memorandum of association of a company restricting the powers and capacity of the company to carry on its authorised business or object, the restriction may be relied on and have effect only for the purpose of-

 

(a)             proceedings against the company by a director or member of the company, or where the company has issued debentures secured by a floating charge over all or any of the company’s property, by the holder of any of the debentures or the trustee for the holders of the debentures; or

 

(b)             proceedings by the company or a member of the company against the present of former officers or the company for failure to observe any such restriction; or

 

(c)             proceedings by the Commission or a member of the company to wind up the company; or

 

(d)             proceedings for the purpose of restraining the company or other person from acting in breach of the memorandum or directing the company or such person to comply with the same.

 

  (2)          A person may not in proceedings referred to in subsection (1) (a) (b) or (c), of this section, rely on a restriction of the power or capacity of the company contained in the memorandum in any case where he voted in favour of, or otherwise expressly or by conduct agreed to the doing of an act by the company or the conveyance by or to the company of property which, it is alleged in the proceedings, was or would be contrary to such a restriction.

 

 

 

Effect of memorandum and articles

 

 

41.    (1)         Subject to the provisions of this Decree, the memorandum and articles, when registered, shall have the effect of a contract under seal between the company and its members and officers and between the members and officers themselves whereby they agree to observe and perform the provisions of the memorandum and articles, as altered from time to time in so far as they relate to the company, members, or officers as such.

 

  (2)          All money payable by any member to the company under the memorandum or articles shall be a debt due from him to the company and shall be of the nature of a speciality debt.

 

  (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.

 

  (4)          In any action by any member or officer to enforce any obligation owed under the memorandum or articles 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 are defendants and the provisions of Part XI of this Decree shall apply.

 

 

 

Member's right to copy of memorandum and articles

 

 

42.     (1)          A company shall, on being so required by any member, send to him a copy of the memorandum and of the articles, if any, and a copy of any enactment which alters the memorandum, subject to payment, in the case of a copy of the memorandum and of the articles, of N20 or such less sum as the company may prescribe and in the case of a copy of an enactment of such sum not exceeding the published price thereof as the company may require.

 

  (2)          If a company makes default in complying with this section, the company and every officer of the company who is in default shall be liable for each offence to a fine not exceeding N25.

 

43.    (1)         Where an alteration is made in the memorandum of a company every copy of the memorandum issued after the date of the alteration shall be in accordance with the alteration.

 

  (2)          If, where any such alteration has been made, the company at any time after the date of the alteration issues any copies of the memorandum which are not in accordance with the alteration, it shall be liable to a fine not exceeding N25 for each copy so issued, and every officer of the company who is in default shall be liable to the like penalty.

 

 

 

Alteration of memorandum and articles

 

 

44.    (1)           A company may not alter the conditions contained in its memorandum except in the cases and in the manner and to the extent for which express provision is made in this Decree.

 

  (2)          Only those provisions which are required by section 27 of this Decree or by any other specific provision contained in this Decree, to be stated in the memorandum of the company concerned shall be deemed to be conditions contained in its memorandum.

 

45.    (1)         The name of the company shall not be altered except with the consent of the Commission in accordance with section 31 of this Decree.

 

  (2)          The business which the company is authorised to carry on or, if the company is not formed for the purpose of carrying on business, the objects or which it is established may be altered or added to in accordance with the provisions of section 46 or of Part XV of this Decree.

 

  (3)          Any restriction on the powers of the company may be altered in the same way as the business or object of the company.

 

  (4)          The share capital of the company may be altered in accordance with the provisions of section 100 to 111 of this Decree but not otherwise.

 

  (5)          Subject to section 49 of this Decree, any other provision of the memorandum may be altered in accordance with section 46 of this Decree, or as otherwise provided in this Decree.

 

46.    (1)           A company may, at a meeting of which notice in writing has been duly given to all members (whether or not otherwise entitled thereto), 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-

 

 (a)             by the holders of not less in the aggregate than fifteen per cent 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 fifteen per cent of the company’s members; or

 

(b)             by the holders of not less than fifteen per cent 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 twenty-eight 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 their number as they may appoint in writing for the 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 thinks 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 dissentient members, and the court may give such directions and make such orders as it thinks expedient for facilitating or carrying into effect any such arrangement:

 

Provided that no part of the capital of the company shall be expended in any purchase.

 

  (5)          The debentures entitling the holders to object to alterations of a company’s business or objects shall be any debentures secured by a floating charge.

 

  (6)          The special resolution altering a company’s business or objects shall require the same notice to the holders of any such debentures as to members of the company; and in default of any provisions regulating the giving of notice to any such debenture holders, 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

 

(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 thereby altered;

 

(b)            no application is made with respect thereto to a court under this section, the company shall within fifteen days from the end of the period for taking such an application deliver to the Commission a copy of the resolution as passed; and if the Commission-

 

(i)             is satisfied, a printed copy of the memorandum as altered by the resolution shall forthwith thereafter be delivered to it;

 

(ii)            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, if made within 21 days from the date of the receipt by the company of the notice of the rejection, or within such extended time as the court may allow.

 

  (8)          The court may at any time extend the time for the delivery of documents to the Commission under paragraph (a) of subsection (7) of this section for such period as the court may think proper.

 

  (9)          If a company makes default in giving notice or delivering any document to the Commission as required by subsection (6) of this section, the company and every officer of the company who is in default shall be liable to a fine of N50.

 

 (10)          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) of this section except in proceedings taken for the purpose (whether under this section or otherwise) before the expiration of twenty-one days after the date of the resolution in that behalf; and where any such proceedings are taken otherwise than under this section, subsections (6), (7) and (8) of this section shall apply in relation thereto as if they had been taken under this section, and as if an order declaring the alteration invalid were an order cancelling it and as if any order dismissing the proceedings were an order confirming the alteration.

 

 (11)          In this section "member" includes any person financially interested in the company.

 

47.    (1)         Subject to the provisions of section 44 of this Act and of this section and of any Part of this Act which preserves the rights of minorities in certain cases) any provision in a company's memorandum which might lawfully have been in articles of association instead of in the memorandum may be altered by the company by special resolution; but if an application is made to the court for the alteration to be cancelled, the alteration shall not have effect except in so far as it is confirmed by the court.

 

  (2)          This section shall not apply where the memorandum itself provides for or prohibits the alteration of all or any of the said provisions, and shall not authorise any variation or abrogation of the special rights of any class of members.

 

  (3)          Subsections (2), (3), (4), (7), (8) and (9) of section 46 of this Act (which relate to mode of alteration of business or objects) except paragraph (b) of subsection (2) thereof shall apply in relation to any alteration and to any application made under this section as they apply in relation to alterations and to applications made under that section.

 

  (4)          This section shall apply to a company's memorandum whether registered before or after the commencement of this Decree.

 

48.    (1)         Subject to the provisions of this Decree and to the conditions or other provisions contained in its memorandum, a company may by special resolution alter or add to its articles.

 

  (2)          Any alteration or addition so made in the articles shall, subject to the provisions of this Decree, be as valid as if originally contained therein and be subject, in like manner, to alteration by special resolution.

 

49.           Save to the extent to which a member of a company agrees in writing at any time to be bound thereby, and anything to the contrary in the memorandum or articles notwithstanding, the member shall not be bound by any alteration made in the memoradnum or articles of the company requiring him on or after the date of the alteration to-

 

(a)             take or subscribe for more shares than he held at the date on which he became a member; or

 

(b)             increase his liability to contribute to the share capital of the company; or

 

(c)             pay money by any other means to the company.

 

 

 

 

Chapter 2

Conversion and Re-registration of Companies

 

 

50.    (1)         Subject to this section, a private company having a share capital may be re-registered as a public company if-

 

(a)             a special resolution that it should be so re-registered is passed; and

 

(b)            an application for re-registration is delivered to the Commission together with the documents prescribed in subsection (3) of this section.

 

  (2)          The special resolution shall-

 

(a)             alter the company's memorandum so that it states that the company is to be a public company; and

 

(b)             make such other alterations in the memorandum as are necessary to bring it into conformity with the requirements of this Decree with respect to the memorandum of a public company in accordance with section 27 of this Decree; and

 

(c)             make such alterations in the company's articles as are requisite in the circumstances

 

  (3)          The application shall be made to the Commission in the prescribed form and be signed by at least one director and the secretary of the company; and the documents to be delivered with it are the following-

 

(a)             a printed copy of the memorandum and articles as altered in pursuance of the resolution; and

 

(b)             a copy of a written statement by the directors and the secretary certified on oath by them, and showing that the paid up capital of the company as at the date of the application is not less than 25 per cent of the authorised share capital as at that date; and

 

(c)             a copy of the balance sheet of the company as at the date of the resolution or the preceding 6 months, whichever is later; and

 

(d)             a statutory declaration in the prescribed form by a director and the secretary of the company- 

 

(i)             that the special resolution required under this section has been passed; and

 

(ii)            that the company's net assets are not less than the aggregate of the paid up share capital and undistributable reserves; and

 

(e)             a copy of any prospectus or statement in lieu of prospectus delivered within the preceding 12 months to the Securities and Exchange Commission established under the Securities and Exchange Commission Decree 1988.

 

  (4)          If the Commission is satisfied that a company has complied with the provisions of this section and may be re-registered as a public company, it shall-

 

(a)             retain the application and other documents delivered to it under this section;

 

(b)             register the application and other documents; and

 

(c)             issue the company a certificate of incorporation, stating that the company is a public company.

 

  (5)          Upon the issue to a company of the certificate of incorporation under this section-

 

(a)             the company shall by virtue of this issue of that certificate become a public company; and

 

(b)             any alterations in the memorandum and articles set out in the resolution shall take effect accordingly.

 

  (6)          The certificate shall be prima facie evidence that-

 

(a)             the requirements of this Decree in respect of re-registration and of matters precedent and incidental thereto have been complied with; and

 

(b)             the company is a public company.

 

  (7)          A company shall not be re-registered under this section if it has previously been re-registered as an unlimited company.

 

51.    (1)          Subject as follows, a company which is registered as limited by shares may be re-registered as unlimited in pursuance of an application in that behalf complying with the requirements of this section.

 

  (2)          A company shall be precluded from re-registering under this section if it is limited by virtue of re-registration under section 52 of this Decree.

 

  (3)          A public company or a company which has previously been re-registered as unlimited company shall not be registered under this section.

 

  (4)          An application under this section shall be in the prescribed form and signed by a director and the secretary of the company, and be lodged with the Commission together with the documents specified in subsection (6) of this section.

 

  (5)          The application shall sect out such alterations in the company's memorandum and articles as are requisite to bring it into conformity with the requirements of this Decree with respect to the memorandum and articles of a company to be formed as an unlimited company.

 

  (6)          The documents to be lodged with the Commission are as follows-

 

(a)             the prescribed form of assent to the company being registered as unlimited, subscribed by or on behalf of all the members of the company;

 

(b)             a statutory declaration made by the directors of the company-

 

(i)             that the persons by whom or on whose behalf the form of assent is subscribed constitute the whole membership of the company; and

 

(ii)             if any of the members have not subscribed that form themselves, that the directors have taken all reasonable steps to satisfy themselves that each person who subscribed to it on behalf of a member was lawfully empowered to do so; and

 

(c)             a printed copy of the memorandum and the articles incorporating the alterations set out in the application.

 

  (7)          If the Commission is satisfied that the company be registered under this section as an unlimited company, it shall retain the application and other documents lodged with it under this section and-

 

(a)             register the application and other documents; and

 

(b)             issue to the company a certificate of incorporation appropriate to the status to be assumed by virtue of this section.

 

  (8)          On the issue of the certificate-

 

(a)             the status of the company, by virtue of the issue, shall be changed from limited to unlimited; and

 

(b)             the alterations in the memorandum set out in the application and any alteration in the articles so set out shall take effect as if duly made by resolution of the company; and

 

(c)             the provisions of this Decree shall apply accordingly to the memorandum and articles as altered.

 

  (9)          The certificate shall be prima facie evidence that the requirements of this section in respect of the re-registration and of matters precedent and incidental to it have been complied with, and that the company was authorised to be re-registered under this Decree in pursuance of this section and was duly so re-registered.

 

52.    (1)         Subject as follows, a company which is registered as unlimited may be re-registered as limited by shares if a special resolution that it should be so registered is passed, and the requirements of this section are complied with in respect of the resolution and otherwise.

 

  (2)          A company shall not under this section be re-registered as a public company or company limited by guarantee; and a company shall be precluded from registering under it if it is unlimited by virtue of re-registration under section 51 of this Decree.

 

  (3)          The special resolution shall state the proposed authorised share capital and provide for the making of such alterations in the memorandum as are necessary to bring it into conformity with the requirements of this Decree with respect to the memorandum of a company so limited, and such alterations in the articles as are requisite in the circumstances.

 

  (4)          An application in the prescribed form for the company to be re-registered as limited signed by a director and the secretary of the company shall be lodged with the Commission together with the necessary documents not earlier than the day on which the resolution was filed under section 237 of this Decree.

 

  (5)          The documents to be lodged with the Commission shall be a printed copy of the-

 

(a)             memorandum as altered in pursuance of the resolution; and

 

(b)             articles as so altered.

 

  (6)          If the Commission is satisfied that the company be re-registered under this section as a company limited by shares, it shall retain the application and other documents lodged with it under this section and register them, and it shall issue to the company a certificate of incorporation appropriate to the status to be assumed by the company by virtue of this section.

 

  (7)          On the issue of the certificate-

 

(a)             the status of the company shall, by virtue of the issue, change from unlimited to limited; and

 

(b)             the alterations in the memorandum specified in the resolution and the alterations in, and additions to, the articles so specified shall take effect accordingly.

 

  (8)          The certificate shall be prima facie evidence that the requirements of this section in respect of re-registration and of matters precedent and incidental to it have been complied with, and that the company was authorised to be re-registered in pursuance of this section and was duly so re-registered.

 

  (9)          The re-registration of an unlimited company as a limited company shall not affect the rights and liabilities of the company in respect of any debt or obligation incurred, or any contract entered into, by, to, with, or on behalf of the company before the re-registration, and those rights or liabilities may be enforced in the manner provided by Part III of this Decree as in the case of a company registered pursuant to Part II of this Decree.

 

53.     (1)             A public company may be re-registered as a private company if-

 

(a)             a special resolution complying with subsection (2) of this section that it should be so re-registered is passed and has not been cancelled by the court under this section;

 

 

(b)             an application for the purpose in the prescribed form and signed by a director and the secretary of the company is delivered to the Commission together with a printed copy of the memorandum and articles of the company as altered by the resolution; and

 

(c)             either-

 

(i)              the period during which an application for the cancellation of the resolution under this section may be made has expired without any such application having been made; and 

 

(ii)             where such an application has been made, the application has been withdrawn or an order has been made confirming the resolution and a copy of that order has been delivered to the Commission.

 

  (2)          The special resolution shall alter the company's memorandum so that it states that the company is a private company and shall make such other alterations in the company's memorandum and articles as are requisite in the circumstances.

 

  (3)          Where the special resolution is passed, an application may be made to the court for the cancellation of the resolution, and such application may be made by-

 

(a)             the holders of not less in the aggregate than 5 per cent in the nominal value of the company's issued share capital, or any class thereof; or

 

(b)             not less than 5 per cent of the company's members; but not by a person who has consented to or voted in favour of the resolution.

 

 (4)           The application shall be made within 28 days after the passing of the resolution and the applicant shall forthwith give notice of the application in the prescribed form to the Commission and to the company.

 

   (5)          On the hearing of the application, the court shall make an order either cancelling or confirming the resolution and may make all such orders or give such directions as it may think expedient under the circumstances.

 

 (6)           The company shall, within 15 days from the making of the court's order, or within such other period as the court may be by order direct, deliver to the Commission a certified true copy of the order.

 

  (7)          If a company fails to deliver to the Commission a certified true copy of the order as required in subsection (6) of this section, the company and any officer of it who is in default, shall be guilty of an offence and liable to a fine of N100 and for continued contravention, to a daily default fine of N25.

 

  (8)          If the Commission is satisfied that a company may be re-registered under this section, it shall-

 

(a)             retain the application and other documents delivered to it under this section;

 

(b)             register the application and other documents; and

 

(c)             issue the company with a certificate of incorporation as a private company.

 

  (9)          On the issue of the certificate-

 

(a)             the company shall become a private company; and

 

(b)             the alteration in the memorandum and articles set out in the resolution shall take effect accordingly.

 

 (10)          The certificate shall be prima facie evidence that-

 

(a)             the requirements of this section in respect of re-registration and of matters precedent and incidental to it have been complied with; and

 

(b)             the company is a private company.

 

 

 

Chapter 3

Foreign Companies

 

 

54.    (1)           Subject to sections 56 to 59 of this Decree every foreign company which before or after the commencement of this Decree was incorporated outside Nigeria, and having the intention of carrying on business in Nigeria shall take all steps necessary to obtain incorporation as a separate entity in Nigeria for that purpose, but until so incorporated, the foreign company 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 under this Decree.

 

  (2)          Any act of the company in contravention of subsection (1) of this section shall be void.

 

  (3)          Nothing in this section shall affect the status of-

 

(a)             any foreign company which before the commencement of this Decree was granted exemption from compliance with Part X of the Companies Act 1968;

 

(b)             any foreign companies exempted under any treaty to which Nigeria is a party.

 

55.            If any foreign company fails to comply with the requirements of section 54 of this Decree in so far as they may apply to the company, the company shall be guilty of an offence and liable on conviction to a fine of not less than N2,500; and every officer or agent of the company who knowingly and wilfully authorises or permits the default or failure to comply shall, whether or not the company is also convicted of any offence, be liable on conviction to a fine of not less than N250 and where the offence is a continuing one to a further fine of N25 for every day during which the default continues.

 

56.    (1)           A foreign company may apply to the National Council of Ministers for exemption from the provisions of section 54 of this Decree if that foreign company belongs to one of the following categories, that is-

 

(a)             foreign companies (other than those specified in paragraph (d) of this subsection) invited to Nigeria by or with the approval of the Federal Military Government to execute any specified individual project;

 

(b)             foreign companies which are in Nigeria for the execution of specific individual loan project 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 agencies or with any other body or person, where such contract has been approved by the Federal Military Government.

 

  (2)          An application for exemption under this section shall be in writing addressed to the Secretary to the Federal Military Government and shall set out-

 

(a)             the name and place of business of the foreign company outside Nigeria;

 

(b)             the name and place of business or the proposed name and place of business of the foreign company in Nigeria;

 

(c)               the name and address of each director, partner or other principal officer of the foreign company;

 

(d)             a certified copy of the charter, statutes, or memorandum and articles of association of the company, 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 some one or more persons resident in Nigeria authorised to accept on behalf of the foreign company services of process and any notices required to be served on the company;

 

(f)             the business or proposed business in Nigeria of the foreign company and the duration of such business;

 

(g)             particulars of any project previously carried out by the company as an exempted foreign company; and

 

(h)             such other particulars as may be required by the Secretary to the Federal Military Government.

 

  (3)          Where the National Council of Ministers upon the receipt of an application for exemption is of the opinion, that the circumstances are such as to render it expedient that such an exemption should be granted, the National Council of Ministers may, subject to such conditions as it may prescribe, exempt the foreign company from the obligations imposed by or under this Decree.

 

  (4)          Every exemption granted in pursuance of this section shall specify the period or, as the case may be, the project or series of projects, for which it is granted and shall lapse at the end of such period or upon the completion of such project or series of projects.

 

  (5)          The National Council of Ministers may at any time revoke any exemption granted to any company, if it is of the opinion that the company has contravened any provision of this Decree or has failed to fulfil any condition contained in the exemption order or for any other good or sufficient reason.

 

  (6)          The National Council of Ministers shall cause to be published in the Gazette the name of any company-

 

(a)             to which an exemption has been granted and the period or, as the case may be, the project or series of projects for which the exemption is granted;

 

(b)             whose exemption has been revoked and the effective date of such revocation.

 

57.            Every exempted foreign company shall deliver to the Commission, every calendar year a report in the form prescribed by the Commission.

 

58.           Subject to this Decree and save as may be stated in the instrument of exemption, a foreign company exempted pursuant to this Decree shall have the status of an unregistered company and accordingly, the provisions of this Decree applicable to an unregistered company shall apply in relation to such an exempted company as they apply in relation to an unregistered company under this Decree.

 

59.     (1)         Any person who for the purpose of obtaining an exemption or of complying with any of the provisions of section 56 of this Decree, makes any statement or presents any instrument which is false in a material particular shall be guilty of an offence unless he proves that he has taken all reasonable steps to ascertain the truth of the statement made or contained in the instrument so presented.

 

  (2)          Any person who is guilty of an offence under this section shall be liable on conviction to a fine of N5,000 or imprisonment for a term of three years.

 

60.         For the avoidance of doubt, it is hereby declared that-

 

(a)             save as provided in section 55, 56, 57 and 58 of this Decree, nothing in this Decree shall be construed as authorising the disregard by any exempted foreign company of any enactment or rule of law; and

 

(b)             nothing in this Chapter shall be construed as affecting the rights or liability of a foreign company to sue or be sued in its name or in the name of its agent.

 

 

 

Chapter 4

Promoters

 

 

61.            Any person who undertakes to take part in forming a company with reference to a given project and to 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, shall prima facie be 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 shall not thereby be deemed to be promoter.

 

62.     (1)          A promoter stands in a fiduciary relationship to the company and shall observe the utmost good faith towards the company in any transaction with it or on its behalf and shall company for any loss suffered by reason of his failure so to do.

 

  (2)          A promoter who acquired any property or information in circumstances in which it was his duty as a fiduciary to acquire it on behalf of the company shall account to the company for such property and for any profit which he may have made from the use of such property or information.

 

  (3)          Any transaction between a promoter and the company may be rescinded by the company unless, after full disclosure of all material facts known to the promoter, such transaction shall have been entered into or ratified on behalf of the company-

 

(a)             by the company's board of directors independent of the promoter; or

 

(b)             by all the members of the company; or

 

(c)             by the company at a general meeting at which neither the promoter nor the holders of any shares of any in which he is beneficially interested shall vote on the resolution to enter into or ratify that transaction.

 

  (4)          No period of limitation shall apply to any proceedings brought by the company to enforce any of its rights under this section but in any such proceedings the court may relieve a promoter in whole or in part and on such terms as it thinks fit from liability hereunder if in all the circumstances, including lapse of time, the court thinks it equitable to do so.

 

 

 

 

Part III

Acts by or on behalf of the Company

 

Exercise of Company's Powers

 

 

63.    (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.

 

  (2)          Subject to the provisions of this Decree, the respective powers of the members in general meeting and the board of directors shall be determined by the company's articles.

 

  (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 Decree or the articles required to be exercised by the members in general meeting.

 

  (4)          Unless the articles shall otherwise provide, the board of directors, when acting within the powers conferred upon them by this Decree or the articles, shall be 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) of this section, the members in general meeting may-

 

(a)             act in any matter if the members of the board of directors are disqualified or are unable to act because of a deadlock on the board or otherwise;

 

(b)             institute legal proceedings in the name and on behalf of the company, if the board of directors refuse or neglect to do so;

 

(c)             ratify or confirm any action taken by the board of directors; or

 

(d)             make recommendations to the board of directors regarding action to be taken by the board.

 

  (6)          No alteration of the articles shall invalidate any prior act of the board of directors which would have been valid if that alteration had not been made.

 

64.         Unless otherwise provided in this Decree or in the articles, the board of directors may-

 

(a)             exercise their powers through committees consisting of such members of the body as they think fit; or

 

(b)             from time to time, appoint one or more of their body to the office of managing director and may delegate all or any of their powers to such managing director.

 

 

 

Liability for acts of the company

 

 

65.          Any act of the members in general meeting, the board of directors, or of a managing director while carrying on in the usual way the business of the company shall be treated as the act of the company itself and the company shall be criminally and civilly liable therefor to the same extent as if it were a natural person:

 

Provided that-

 

(a)             the company shall not incur civil liability to any person if that person had actual knowledge at the time of the transaction in question that the general meeting, board of directors, or managing director, as the case may be had no power to act in the matter or had acted in an irregular manner or if, having regard to his position with or relationship to the company, he ought to have known of the absence of such power or of the irregularity;

 

(b)             if in fact a business is being carried on by the company, the company shall not escape liability for acts undertaken in connection with that business merely because the business in question was not among the business authorised by the company's memorandum.

 

66.    (1)           Except as provided in section 65 of this Decree, the acts of any officer or agent of a company shall not be deemed to be acts of the company, unless-

 

(a)             the company, acting through its members in general meeting, board of directors, or managing director, shall have expressly or implied authorised such officer or agent to act in the matter; or

 

(b)             the company, acting as mentioned in paragraph (a) of this subsection, shall have represented the officer or agent as having its authority to act in the matter, in which event the company shall be civilly liable to any person who has entered into the transaction in reliance on such representation unless such person had actual knowledge that the officer or agent had no authority or unless having regard to his position with or relationship to the company, he ought to have known of such absence of authority.

 

  (2)          The authority of an officer or agent of the company may be conferred prior to any action by him or by subsequent ratification, and knowledge of such action by the officer or agent and acquiescence therein by all the members of the company or by the directors for the time being or by the managing director for the time being by equivalent to ratification by the members in general meeting, board of directors, or managing director, as the case may be.

 

  (3)          Nothing in this section shall derogate from the vicarious liability of the company for the acts of its servants while acting within the scope of their employment.

 

67.    (1)           Any provision, whether contained in the articles of the company or in any contract with a company or otherwise, for exempting any officer of the company or any person (whether an officer of the company or not) employed by the company as auditor from, or indemnifying him against, any liability which by virtue of any rule of law, would otherwise attach to him in respect of any negligence, default, or breach of trust of which he may be guilty in relation to the company, shall be void.

 

  (2)          Notwithstanding the provisions of subsection (1) of this section-

 

(a)             a person shall not be deprived of any exemption or right to be indemnified in respect of anything done or omitted to be done by him while any such provision as mentioned in that subsection was in force; and

 

(b)             a company may, in pursuance of any such provision as mentioned in subsection (1) of this section, indemnify any such officer or auditor against any liability incurred by him in defending any proceedings, whether civil or criminal in which judgement is given in his favour or in which he is acquitted or in connection with any application under section 641 of this Decree in which relief is granted to him by the court.

 

 

 

Constructive notice of registered documents

 

 

68.           Except as mentioned in section 197 of this Decree, regarding particulars in the register of particulars of charges, a person shall not be deemed to have knowledge of the contents of the memorandum and articles of a company or of any other particulars, documents, or the contents of documents merely because such particulars or documents are registered by the Commission or referred to in any particulars or documents so registered, or are available for inspection at an office of the company.

 

69.           Any person having dealings with a company or with someone deriving title under the company shall be entitled to make the following assumptions and the company and those deriving title under it shall be stopped from denying their truth that-

 

(a)             the company's memorandum and articles have been duly complied with;

 

(b)             every person described in the particulars filed with the Commission pursuant to sections 35 and 292 of this Decree as a director, managing director secretary of the company, or represented by the company, acting through its members in general meeting, board of directors, or managing director, as an officer or agent of the company, has been duly appointed and has authority to exercise the powers and perform the duties customarily exercised or performed by a director, managing director, or secretary of a company carrying on business of the type carried on by the company or customarily exercised or performed by an officer or agent of the type concerned;

 

(c)             the secretary of the company, and every officer or agent of the company having authority to issue documents or certified copies of documents on behalf of the company has authority to warrant the genuiness of the documents or the accuracy of the copies so issued;

 

(d)             a document has been duly sealed by the company if it bears what purports to be the seal of the company attested by what purports to be the signatures of two persons who, in accordance with paragraph (b) of this section, can be assumed to be a director and the secretary of the company:

 

Provided that-

 

(i)             a person shall not be entitled to make such assumptions as aforesaid, if he had actual knowledge to the contrary or if, having regard to his position with or relationship to the company, he ought to have known the contrary;

 

(ii)             a person shall not be entitled to assume that any one or more of the directors of the company have been appointed to act as a committee of the board of directors or that an officer or agent of the company has the company's authority merely because the company's articles provided that authority to act in the matter may be delegated to a committee or to an officer or agent.

 

70.           Where, in accordance with section 65 to 69 of this Decree, a company would be liable to a third party for the acts of any officer or agent, the company shall, except where there is collusion between the officer or agent and the third party, be liable notwithstanding that the officer or agent has acted fraudulently or forged a document purporting to be sealed by or signed on behalf of the company.

 

 

 

Company's contracts

 

 

71.    (1)         Contracts on behalf of a company may be made, varied or discharged as follows-

 

(a)             any contract which if made between individuals would be by law required to be in writing under seal, or which would be varied, or discharged only by writing under seal, may be made, varied or discharged, as the case may be, in writing under the common seal of the company;

 

(b)             any contract which if made between individuals would be by law required to be in writing, signed by the parties to be charged therewith, or which could be varied or discharged only by writing or written evidence signed by the parties to be charged, may be made, varied or discharged as the case may be, in writing signed in the name or on behalf of the company; and

 

(c)             any contract which if made between individuals would be valid although made by parol only and not reduced into writing or which could be varied or discharged by parol, may be made, varied or discharged, as the case may be, by parol on behalf of the company.

 

  (2)          A contract made according to this section shall be effectual in law, and shall bind the company and its successors and all other parties thereto, their heirs, executors, or administrators, as the case may be; and may be varied or discharged in the same manner in which it is authorised by this section to be made.

 

72.    (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.

 

  (2)          Prior to ratification by the company, the person who purported to act in the name of 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.

 

73.    (1)           A bill of exchange or promissory note shall be deemed to have been made, accepted, or endorsed on behalf of a company if made, or expressed to be made, accepted, or endorsed in the name of the company, or if expressed to be made, accepted or endorsed on behalf or on account of the company by a person acting under its authority.

 

  (2)          The company and its successors shall be bound thereby if the company is in accordance with sections 65 to 67 of this Decree, liable for the acts of these who made, accepted or endorsed it in its name or on its behalf or account, and a signature by a director or the secretary on behalf of the company shall not be deemed to be a signature by procuration for the purposes of section 25 of the Bill of Exchange Act.

 

74.         A company shall have a common seal the use of which shall be regulated by the articles.

 

 

75.     (1)         A company whose objects require or comprise the transaction of business in foreign countries may, if authorised by its articles, have for use in any territory, district, or place outside Nigeria, an official seal, which shall be a facsimile of the common seal of the company, with the addition on its face of the name of every territory, district, or place where it is to be used.

 

  (2)          A company having such an official seal may, by writing under its common seal, authorise any person appointed for the purpose in any territory, district, or place outside Nigeria, to affix the same to any deed or other document to which the company is party in that territory, district, or place.

 

  (3)          The authority of any such agent shall, as between the company and any person dealing with the agent, continue during the period, if any, mentioned in the instrument conferring the authority, or if no period is there mentioned, then until notice of the revocation or determination of the agent's authority has been given to the person dealing with him.

 

  (4)          The person affixing any such official seal shall, by writing under his hand, on the deed or other document to which the seal is affixed, certify the date on which and place at which it is affixed.

 

  (5)          A deed or other document to which an official seal is duly affixed shall bind the company as if it has been sealed with the common seal of the company.

 

76.     (1)         A company may, by writing under seal, empower any person, either generally or in respect of any specified matter, as its attorney, to execute deeds on its behalf in any place within or outside Nigeria.

 

  (2)          A deed signed by a person empowered as provided in subsection (1) of this section shall bind the company and have the same effect as it would have if it were under the company's common seal.

 

 

 

Authentication and service of documents

 

 

77.            A document or proceeding requiring authentication by a company may be signed by a director, secretary, or other authorised officer of the company, and need not be under its common seal unless otherwise so required in this Part of this Decree.

 

78.            A court process shall be served on a company in the manner provided by the Rules of Court and any other document may be served on a company by leaving it at, or sending it by post to, the registered office or head office of the company.

 

 

 

Part IV

Membership of the company

 

 

79.     (1)         The subscribers of the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration shall be entered as members 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, shall be a member of the company.

  

 (3)               In the case of a company share capital, each member shall be a shareholder of the company of the company and shall hold at least one share.

 

80.     (1)         As from the commencement of this Act, an individual shall not be capable of becoming a member of a company if -

 

(a)             he is of unsound mind and has been so found by a court in Nigeria or elsewhere; or

 

(b)             he is an undischarged bankrupt.

 

  (2)          A person under the age of eighteen years shall not be counted for the purpose of determining the legal minimum number of members of a company.

 

  (3)          A corporate body in liquidation shall not be capable of becoming a member of a Company.

 

  (4)          Where at the commencement of this Act, any person falling within the provisions of subsection (1) of this section is a member of a Company by reason of being a shareholder of the Company, his share shall vest in his committee or trustee, as the case may be.

 

  (5)          Where after the commencement of this Act, any shareholder purports to transfer any shares to a person falling within the provisions of subsection (1) of this section, the purported transfer shall not vest the title in the shares in that person but the title shall remain in the purported transfer or his personal representative who hold the shares in trust for that person during the period of his incapacity.

 

81.            Every member shall, notwithstanding any provision in the articles, have a right to attend any general meeting of the Company and to speak and vote on any resolution before the meeting:

 

Provided that the articles may provide that a member shall not be entitled to attend and vote unless all calls or other sums payable by him in respect of shares in the Company have been paid.

 

82.           If any person falsely deceitfully personates any member of a Company and thereby obtains or endeavours to obtain any benefit due to any such member, he shall be guilty of an offence and be liable on conviction to imprisonment for a term of not more than seven years or a fine of not more than N2,500.

 

 

 

Register of Members

 

 

83.     (1)         Every Company shall keep a register of its members and enter in it the following particulars -

 

(a)             the names and address of the members, and in the case of a Company having a share, if capital a statement of the shares and class of shares, if any, held by each member, 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 share of each member.

 

(b)             the date on which each person was registered as a member; and

 

(c)             the date on which any person ceased to be a member:

 

Provided that, where the Company has converted any of its shares into stock and given notice of the Conversion to the Commission, the register shall show the amount of stock held by each member instead of the amount of shares and the particulars relating to share specified in paragraph (a) of this subsection.

 

  (2)          The entry required under paragraph (a) or (b) of subsection (1) of this section, shall be made within twenty eight 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 twenty-eight days of the registration of the Company.

 

  (3)          The entry required under paragraph (c) of subsection (1) of this section shall be made within twenty-eight days of the date on which the person concerned ceased to be a member, or, if he ceased to be a member otherwise than as a result of action by the Company, within twenty-eight days of production to the Company of evidence satisfactory to the Company of the occurrence of the event whereby he ceased to be a member.

 

  (4)          Where a company makes in default in complying with the provisions of this section, the company and very officer of the company who is in default shall be guilty of an offence and liable on conviction to a fine of N25 and a daily default fine of N5.

 

  (5)          Liability incurred by a company from the making or deletion of an entry in its register of members, or from a failure to make or delete any such entry, shall not be enforceable after the expiration of twenty years from the date on which the entry was made or deleted or, in the case of any such failure, from the date on which the failure first occurred.

 

84.     (1)         The register of members shall be kept at the registered office of the company, except that if -

 

(a)             the work of making it up is done at another office of the company, it may be kept at that other office; and

 

(b)             the company arranges with some other person for the making up of the register to be undertaken on behalf of the company by that person, it may kept at the office of that other person at which the work is done;

 

but the register shall not be kept in the case of company registered in Nigeria, at a place outside Nigeria.

 

  (2)          Every company shall send notice of the Commission of the place where the register is kept and of any change of that place.

 

  (3)          A company shall not be bound to send notice under this subsection where the register has, at all times since it came into existence or, in the case of a register in existence at the commencement of this Act, at all times since then, been kept at the registered office of the company.

 

  (4)          If a company makes default for twenty-eight days in complying with subsection (2) of this section, the company and every one of its officers who is in default shall be guilty of an offence and liable on conviction to a fine of N10 and, for continued contravention, to a daily default fine of N5.

 

85.     (1)           Every company having more than fifty members shall, unless the register of members is in such a form as to constitute in itself an index, of the names of the members of the company and shall, within fourteen days after the date on which any alteration is made in the register of members, make any necessary alteration in the index

 

  (2)          The index shall in respect of the each member contain a sufficient indication to enable the account of that member in the register to be readily found.

 

  (4)          If default is made in complying with the provisions of this section, the company and every officer of the company who is in default be liable to a fine of N50.

 

86.            No notice of any trust, express, implied or constructive shall be entered on the register of members or be receivable by the Commission.

 

87.     (1)         Except when the register of members is closed under the provisions of this Act, the register and the index of members' names shall be open during business hours (subject to such reasonable restrictions as the company in general meeting may impose, so however, that no less than two hours in each day shall be allowed for inspection) to the inspection of any member of the company without charge, and with the permission of the company to any other person on payment of N1 or any less sum as the company may prescribe for each inspection.

 

  (2)          Any member or, with the permission of the company any other person may require a copy of the register, or of any part thereof, on payment of 50 kobo, or such less sum as the company may prescribe, for every 100 words or fractional part thereof required to be copied; and the company shall cause any copy so required by any person to be sent to that person within a period of ten days commencing on the day next after the day on which the requirement is received by the company.

 

  (3)          In the case of a member, if any inspection required under this section is refused or if any copy required under this section is not sent within the prescribed period, the company and every officer of the company who is in default shall be liable in respect of each offence to a fine of N10.

 

  (4)          In the case of any such refusal or default in the case of a member, the court may by order compel an immediate inspection of the register, and index or direct that the copies required shall be sent to the persons requiring them.

 

88.           Where, by virtue of paragraph (b) of subsection (1) of section 84 of this Act, the register of members is kept at the office of some person other than the company, and by reason of any default of his, the company fails to comply with subsection (1) or (2) of section 84 of this Act, or with any requirements of this Act as to the production of the register, that other person shall be liable to the same penalties as if he were an officer of the company who was in default, and the power to the court under subsection (4) of section 87 of this Act shall extend to the making of orders against that other person and his officers and servants.

 

89.           A company may, on giving notice be advertisement in a daily newspapers circulating in the district in which the registered office of the company is situated, close the register of members or any part of it for any time or times and exceeding on the whole thirty days in each year.

 

90.     (1)         If -

 

(a)             the name of any person is, without sufficient cause, entered in or omitted from the register of members of a company; or

 

(b)             default is made or unnecessary delay takes place in entering on the register the fact of any person having ceased to be a member,

 

the person aggrieved, or any member of the company, or the company, may apply to the court for rectification of the register.

 

  (2)          The court may refuse the application, or order rectification of the register and payment by the company of any damages sustained by the party aggrieved.

 

  (3)          On an application under this section, the court may decide any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register, whether the question arises between members or alleged members or between members and alleged members on the one hand and the company on the other hand, and generally may decide any question necessary or expedient to be decided for rectification of the register.

 

  (4)          In the case of a company required by this Act to send a list of its members to the Commission, the court, when making an order for rectification of the register shall, by its order, direct notice of the rectification to be given to the Commission.

 

91.         The register of members shall be prima facie evidence of matters which are by this Act directed or authorised to be inserted in it.

 

 

 

Liability of members

 

 

92.     (1)         Prior to the winding-up of a company, a member of the company with shares shall be liable to contribute the balance, if any, of the amount payable in respect of the shares held by him in accordance with the terms of the agreement under which the shares were issued or in accordance with a call validly made by the company pursuant to its articles.

 

  (2)          Where any contribution has become due and payable by reason of a call validly made by the company pursuant to the articles or where, under the terms of any agreement with the company, a member has undertaken personal liability to make future payments in respect of shares issued to him, the liability of the members shall continue notwithstanding that the shares held by him are subsequent transferred or forfeited under a provision to that effect in the articles, but his liability shall cease if and when the company shall have received payment in full of all such moneys in respect of the shares.

 

  (3)          Subject to subsections (1) and (2) of this section, no member or past member shall be liable to contribute to the assets of the company, except in the event of its being wound up.

 

  (4)           In the event of a company being wound up, every present or past member shall be liable to contribute to the assets of the company to an amount sufficient for payment of its debts and liabilities and for the costs, charges and expenses of the winding-up and for the adjustment of the rights of the members and past members among themselves but subject to the following qualifications -

 

(a)             a past member shall not be liable to contribute if he has ceased to be a member for period of one year or upwards before the commencement of the winding-up;

 

(b)             as past member shall not be liable to contribute 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;

 

(c)             in the case of a company limited by shares, no contribution shall be 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;

 

(d)             in the case of a company limited by guarantee, no contribution shall be 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

 

(e)             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 of which he is liable to contribute in accordance with this section but any such sum shall be taken into account for the purposes of final adjustment of the rights of the members and past members amongst themselves.

 

  (5)          For the purposes of this section, the expression "past member" includes the estate of a deceased member and where any person dies after becoming liable as a member or past member such liability shall be enforceable against his estate.

 

  (6)          Except as contained in this section, a member or past member shall not be liable as a member or past member for any of the debts and liabilities of the company.

 

93.            If a company carries on business without having at least two members and does so for more than six months, every director or officer of the company during the time that it so carries on business after those six months who knows that it is carrying on business with only one or no member shall be liable jointly and severally with the company for the debts of the company contracted during that period.

 

 

Disclosure of beneficial interest in shares

 

 

94.     (1)          Notwithstanding the provision of section 95 of this Act, a public company may by notice in writing require any member of the company, within such reasonable time as is specified in the notice -

 

(a)             to indicate in writing the capacity in which he holds any shares in the company; and

 

(b)            if he holds them otherwise than as beneficial owner, to indicate in writing the particulars of the identity of persons interested in the shares in question and whether persons interested in the same shares are parties to any agreement or arrangement relating to the exercise of any rights conferred by the holding of the shares.

 

  (2)          Where a company is informed in pursuance of a notice given to any person under subsection (1) of this section, or under this subsection that any other person has an interest in any shares in the company, the company may, by notice in writing, require that other person within such reasonable time as is specified in the notice -

 

(a)             to indicate in writing the capacity in which he holds that interest; and

 

(b)             if he holds it otherwise than as beneficial owner, to indicate in writing, so far as it lies within his knowledge, the persons who have any interests in them (either by name and address or by other particulars sufficient to enable them to be identified) and the nature of their interests.

 

  (3)          Whenever a company receives information from a person in pursuance of a requirement imposed on him under this section with respects to shares held by a member of the company, it shall be under an obligation to inscribe against the name of the member in the register of members -

 

(a)             the fact that the requirement was imposed; and

 

(b)             the information received in pursuance of the requirement.

 

  (4)          Subject to subsection (5) of this section, any person who -

 

(a)             fails to comply with a notice under this section; or

 

(b)             in purported compliance with such a notice, makes any statement which he knows to be false in a material particular or recklessly makes any statement which is false in material particular,

 

shall be guilty of an offence and liable on conviction to imprisonment for six months or to a fine of N25 for every day during which the default continues.

 

  (5)          A person shall not guilty of an offence under subsection (4)(a) of this section, if he proves that the information ion question was already in the possession of the company or that the requirement to give it was for any other reason frivolous or vexatious.

 

95.     (1)         A person who is a substantial shareholder in a public company shall give notice in writing to the company stating his name and address and giving full particulars of the shares held by him or his nominees (naming the nominee) by virtue of which he is a substantial shareholder.

 

  (2)          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 ten per cent of the unrestricted voting rights at any general meeting of the company.

 

  (3)          A person required to give a notice under subsection (1) of this section, shall do so within fourteen days after that person becomes aware that he is a substantial shareholder.

 

  (4)          The notice shall be so given notwithstanding that the person has ceased to be a substantial shareholder before the expiration of the period referred to in subsection (3) of this section.

 

  (5)          A person who fails to comply with the provisions of this section shall be liable to a fine of N50 for every day during which the default continues.

 

96.     (1)          A person who ceases to be a substantial shareholder in a public company shall give notice in writing to the company stating his name and the date on which he ceases to be substantial shareholder and giving full particulars of the circumstances by reason of which he ceased to be a substantial shareholder.

 

  (2)          A person required to give notice under subsection (1) of this section shall do so within fourteen days after he becomes aware that he has ceased to be a substantial shareholder.

 

97.     (1)         A public company shall keep a register in which it shall enter -

 

(a)             in a alphabetical order, the names of persons from whom it has received a notice under section 95 of this Act; and

 

(b)             against each name so entered, the information given in the notice and where it receives a notice under section 95 of this Act, the information given in that notice.

 

  (2)          The register shall be kept at the place where the register of members required to be kept under section 84 of this Act is kept and shall be subject to the same right to inspection the register of members.

 

  (3)          The Commission may, at any time in writing, require the company to furnish it with a copy of the register or any part of the register and the company shall furnish the copy within fourteen days after the day on which the requirement is received by the company.

 

 (4)           If the company ceases to be public company, it shall continue to keep the register until the end of the period of six years beginning with the day next following that on which it ceases to be such a company.

 

 (5)          A company shall not, by reason of anything done for the purposes of this section, be affected with notice of, or put on enquiry as to, a right of a person to or in relation to a share in the company.

 

  (6)          If default is made in complying with this section, the company and every officer of the company who is in default shall be guilty of an offence and liable on conviction to a fine of N25 and a daily fine of N5.

 

98.           The matter relating to beneficial interests in shares required by section 94 of this Act shall entered in a different part of the register of interests which shall be so made up that the entries inscribed in it appear in chronological order.

 

 

 

Part V

Share Capital

Minimum share capital

 

 

99.     (1)         Where, after the commencement of this Act, a memorandum delivered to the Commission under this section 35 of this Act states that the association to be registered is to be registered with shares, the amount of the share capital stated in the memorandum to be registered shall not be less than the authorised minimum share capital and not less than twenty-five per cent of the capital shall be taken by the subscribers of the memorandum.

 

  (2)          No company having a share capital shall, after the commencement of this Act, be registered with an authorised share capital less than the authorised minimum share capital.

 

  (3)          Where at the commencement of this Act, the authorised share capital of an existing company is less than the authorized minimum share capital, the company shall, not later than thirty days after the appointed day, increase the share capital to an amount not less than the authorised minimum share capital of which not less than twenty-five per cent shall be issued.

 

  (4)          Subject to subsection (3) of this section and to section 103 of this Act, where a company is registered with shares, its issued capital shall not at any time be less than twenty-five per cent of the authorised share capital.

 

  (5)          Where a company to which subsection (3) or (4) of this section applies fails to comply with the applicable subsection, it shall be guilty of an offence and liable on conviction to a fine of N2,500, and every officer who is in default shall be liable to a fine of N50 for every day during which the default continues.

 

 

Alteration of share capital 

 

 

100.     (1)         A company having a share capital may in general meeting and not otherwise alter the conditions of its memorandum to the following extent, that is to say, it may -

 

(a)             consolidate and divide all or any part of its share capital into shares of larger amount than its existing shares;

 

(b)             convert all or any of its paid-up shares into stock, and re-convert that stock into paid-up shares of any denomination;

 

(c)             subdivide its shares or any of them, into shares of smaller amount than is fixed by the memorandum, so however that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share be the seem as it was in the case of the share from which the reduced share is derived.

 

(d)             cancel shares which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled.

 

  (2)          Cancellation of shares made in pursuance of this section shall not be deemed to be a reduction of share capital within the meaning of this Act.

 

101.     (1)         If a company having share capital has-

 

(a)             consolidated and divided its share capital into shares of lager amount than its existing shares; or

 

(b)             converted any shares into stock; or

 

(c)             re-converted stock into shares; or

 

(d)             subdivided its shares or any of them; or

 

(e)             cancelled any shares, otherwise than in connection with a reduction of share capital under section 105 of this Act,

 

 it shall within one month after so doing give notice of it to the Commission specifying as the case may be, the shares consolidated, subdivided, converted, cancelled, or the stock re-converted.

 

  (2)          If default is made in complying with this season, the company and every officer of the company who is in default shall be liable to a fine of N50 for every day during which the default continues.

 

102.    (1)         A company having a share capital whether or not the shares have been converted into stock may, in general meeting and not otherwise, increase its share capital by new shares of such amount as it thinks expedient.

 

  (2)          Where a company has increased its shares capital it shall, within fifteen 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 Commission may on application by a company extend the time within which to give notice of the increase to the Commission.

 

  (4)          The notice to be given under this section shall include any 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.

 

  (5)          If default is made in complying with the provisions of this section, the company in default shall be guilty of an offence and liable on conviction to a fine of N50 for every day during which the default continues.

 

103.         Where a company passes a resolution increasing its authorised share capital, the increase shall not take effect unless -

 

(a)             within six months of giving notice of the increase to the Commission, not less than twenty five per cent of the share capital including the increase has been issued; and

 

(b)             the directors have delivered to the Commission a statutory declaration verifying that fact.

 

104.         If an unlimited company resolves to be registered as a limited company under this Act, it may -

 

(a)             increase the nominal amount of its share capital by increasing the nominal amount of each of its shares, but subject to the condition that no part of the increased capital shall be capable of being called up except in the event and for the purposes of the company being would up, or

 

(b)             provide that a specified portion of its uncalled share capital shall not be capable of being called up except in the event and for the purposes of the company being wound up.

 

 

 

Reduction of share capital

 

 

105.    (1)         Except as authorised by this Decree, a company having a share capital shall not reduce its issued share capital.

 

  (2)          For the purposes of this and other sections relating to reduction of share capital, any issued 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.

 

106.   (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.

 

  (2)          In particular, and without prejudice to subsection (1) of this section, the company may-

 

(a)             extinguish or reduce the liability on any of its shares in respect of share capital not paid up; or

 

(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

 

(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,

 

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 Decree be referred to as "a resolution for reducing share capital".

 

107.    (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) of this section, 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) of this section shall have effect.

 

  (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 shall be 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;

 

(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 thinks 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-

 

(a)             the company admits the full amount of the debt or claim or, though not admitting it, is willing to provide for it, then the full amount of the debt or claim;

 

(b)             the company 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 circumstances of the case it thinks proper to do so, direct that subsections (3) to (5) of this section shall not apply as regards any class or any classes of creditors.

 

108.    (1)         The court, if satisfied-

 

(a)             with respect to every creditor of the company who under section 107 of this Decree 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 has determined, or has been secured; and

 

(b)             that the share capital does not by this reduction on such terms and conditions as it thinks fit.

  

(2)          Where the Court so orders, it may also-

 

(a)             if for any special reason it thinks 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";

 

(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 thinks expedient with a view to giving proper information to the public and (if the court thinks fit) the causes which led to the reduction.

 

109.    (1)         The Commission on production to it of the order of the court confirming of a company's share capital, and the delivery to it of a copy of the order and of minutes of the meeting of the company (approved by the court) showing, with respect to the company's share capital as altered by the order-

 

(a)             the amount of the share capital;

 

(b)             the number of shares into which it is to be divided, and the amount of each share; and

 

(c)             the amount (if any) at the date of the registration deemed to be paid up on each shares,

 

shall register the order and minutes.

 

  (2)          On the registration of the order and minutes, and not before, the resolution for reducing share capital as confirmed by the order so registered shall take effect.

 

  (3)          A notice of the registration shall be published in such manner as the Court may direct.

 

  (4)          The Commission shall certify the registration of the order and minutes; and the certificate-

 

(a)             may be either signed by the Registrar-General or authenticated by its official seal;

 

(b)             shall be prima facie evidence that all the requirements of this Decree with respect to the reduction of share capital have been complied with, and that the company's share capital is as stated in the minutes.

 

  (5)          The minutes when registered shall be deemed to be substituted for the corresponding part of the company's memorandum, and valid and alterable as if it had been originally contained in it.

 

  (6)          The substitution of such minutes for part of the company's memorandum shall be deemed an alteration of the memorandum.

 

110.    (1)         Where a company's share capital is reduced, a member of the company (past or present) shall not be liable in respect of any share to any call or contribution exceeding in amount the difference (if any) between the amount of the shares as fixed by the minute and the amount paid on the share or the reduced amount (if any), which is deemed to have been paid on it, as the case may be.

 

  (2)          Subsections (3) and (4) of this section shall apply if-

 

(a)             a creditor, entitled in respect of a debt or claim to object to the reduction of share capital, by reason of his ignorance of the proceedings for reduction of share capital, or of their nature and effect with respect to his claim, is not entered on the list of creditors; and

 

(b)             after the reduction of capital, the company is unable (within the meaning of section 409 of this Decree) to pay the amount of his debt or claim.

 

  (3)        Every person who was a member of the company at the date of the registration of the order for reduction and minutes shall be liable to contribute for the payment of the debt or claim in question an amount not exceeding that which he would have been liable to contribute if the company had commenced to be wound up on the day before that date.

 

  (4)          If the company is wound up, the Court, on application of the creditor in question and proof of ignorance referred to in subsection (2) (a), of this section, may (if it thinks fit), settle accordingly a list of persons so liable to contribute, and make and enforce calls and orders on the contributories settled on the list, as if they were ordinary contributories in a winding up.

 

  (5)          Nothing in this section shall affect the rights of the contributories among themselves.

 

 

111.         If an officer of the company-

 

(a)             wilfully conceals the name of a creditor entitled to object to the reduction of capital; or

 

(b)             wilfully misrepresents the nature or amount of the debt or claim of any creditor; or

 

(c)             aids, abets or is privy to any such concealment or misrepresentation as is mentioned above,

 

he shall be guilty of an offence and liable on conviction to a fine of N500.

 

 

 

Miscellaneous matters relating to capital

 

 

112.    (1)         Where the net assets of a public company are half or less of its called up share capital, the directors shall, not later than 30 days from the earliest day on which that fact is known to a director of the company, duly convene an extraordinary general meeting of the company, duly later than 60 days from that day for the purpose of considering whether any, and if so, what steps should be taken to deal with the situation.

 

  (2)          If there is a failure to convene an extraordinary general meeting as required by subsection (1) of this section, each of the directors of the company who-

 

(a)             knowingly and wilfully authorised or permits the failure; or

 

(b)             after the expiry of the period during which that meeting should have been convened, knowingly and wilfully authorises or permits the failure to continue,

 

shall be liable to a fine of N500.

 

  (3)          Nothing in this section shall authorise the consideration, at a meeting convened in pursuance of subsection (1) of this section, of any matter which could have been considered at that meeting apart from this section.

 

 

 

113.         Where any shares of a company are issued for the purposes of raising money to defray the expenses of the construction of any works or buildings or the provision of any plant which cannot be made profitable for a long period, the company may pay interest on so much of that share capital as if for the time being paid up for the period and subject to the conditions and restrictions mentioned in this section, and may charge the same to capital as part of the cost of construction of the work or building or the provision of plant:

 

Provided that-

 

(a)             no such payment shall be made unless it is authorised by the articles or by special resolution;

 

(b)             no such payment, whether authorised by the articles or by special resolution, shall be made without the previous sanction of the Commission;

 

(c)             before sanctioning any such payment the Commission may, at the expense of the company, appoint a person to inquire and report to it as to the circumstances of the case, and may, before making the appointment, require the company to give security for the payment of the costs of the inquiry;

 

(d)             the payment shall be made only for such period as may be determined by the Commission which shall in no case extend beyond the close of six months after the half year during which the works or buildings have been actually completed or the plant provided;

 

(e)             the rate of interest shall not exceed the current bank rate;

 

(f)             the payment of the interest shall not operate as a reduction of the amount paid up on the shares in respect of which it is paid.

 

 

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