Companies an Matters Act d Allied - IMOLIN

[Pages:192]Companies and Allied Matters Act

Chapter 59 Laws of the Federal Republic of Nigeria 1990

Contents

Part A

Companies

Part I

Corporate Affairs Commission

Part II

Incorporation of Companies and incidental matters

Part III

Acts by or on behalf of Company

Part IV

Membership of the Company

Part V

Share Capital

Part VI

Shares

Part VII

Debentures

Part VIII

Meetings and Proceedings of Companies

Part IX

Directors and Secretaries of the Companies

Part X

Protection of minorities against illegal and oppressive conduct

Part XI

Financial Statement of Audit

Part XII

Annual Returns

Part XIII

Dividends and Profits

Part XIV

Receivers and Managers

Part XV

Winding-up of Companies

Part XVI

Arrangements and Compromise

Part XVII

Dealings in Companies Securities

The entire part (Section 541 ? 623) has been repealed by section 263 (1)(d) of the Investments and Securities Decree No 45 of 1999

Part XVIII Miscellaneous and supplemental

Part B

Business Names

Part C

Incorporated Trustees

Part D

Short Title

Schedules

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.

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