Companies and Allied Matters Act

7/24/2019 Companies and Allied Matters Act

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CONTENTS

PART A

Part I Corporate Affairs CommissionPart II Incorporation of Companies and incidental mattersPart 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 Meetins and Proceedins of CompaniesPart I! Directors and Secretaries of the CompaniesPart ! Protection of minorities aainst illeal and oppressi"e conductPart !I #inancial Statement of AuditPart !II Annual $eturnsPart !III Di"idends and ProfitsPart !IV $ecei"ers and ManaersPart !V %indin&up of CompaniesPart !VI Arranements and CompromisePart !VII Dealins in Companies SecuritiesSections 541 623 have been repealed by section 263 (1)(d) of the Investments and Securities ecree!o 45 of 1"""Part !VIII Miscellaneous and supplementalPart B'usiness NamesPart CIncorporated TrusteesPart DShort TitleSchedules


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Companies and Allied Matters ActChapter 59

Laws of the Federal Republic of i!eria "99#

(nd)anuary *++,

An Act to establish the Corporate Affairs Commission- pro"ide for the incorporation ofcompanies and incidental matters- reistration of business names and the incorporation oftrustees of certain communities- bodies and associations.Part A

Companies

Part ICorporate Affairs commission

*. /*0 There is hereby established under this Decree- a body to be 1no2n as the CorporateAffairs Commission /in this Decree referred to as 3the Commission30./(0 The Commission shall be&/a0 a body corporate 2ith perpetual succession and a common seal4

/b0 capable of suin and bein sued in its corporate name4 and/c0 capable of ac5uirin- holdin or disposin of any property- mo"able or immo"able- forthe purpose of carryin out its functions./60 The head5uarters of the Commission shall be situated in the #ederal Capital Territory-Abu7a- and there shall be established an office of the Commission in each State of the#ederation.(. The Commission shall consist of the follo2in members- that is&/a0 a chairman 2ho shall be appointed by the President- Commander&in Chief of the Armed

#orces on the recommendation of the Minister- bein a person 2ho by reason of his ability-e8perience or specialised 1no2lede of corporate- industrial- commercial- financial oreconomic matters or of business or professional attainments 2ould in his opinion be capableof ma1in outstandin contributions to the 2or1 of the Commission4/b0 one representati"e of the business community- appointed by the Minister on therecommendation of the Nierian Association of Chambers of Commerce- Industries- Minesand Ariculture4/c0 one representati"e of the leal profession- appointed by the Minister on therecommendation of the Nierian 'ar Association4

/d0 one representati"e of the accountancy profession- appointed by the Minister on therecommendation of the Institute of Chartered Accountants of Nieria


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/e0 one representati"e of the Manufacturers Association of Nieria- appointed by theMinister on the recommendation of the Association4/f0 one representati"e of the Securities and E8chane Commission not belo2 the rade of aDirector or its e5ui"alent4/0 one representati"e of each of the follo2in #ederal Ministries- that is&/i0 Trade and Tourisms-/ii0 #inance and Economic De"elopment-/iii0 )ustice-/i"0 Industry and Technoloy4 and/h0 the $eistrar&9eneral of the Commission.6. /*0 Sub7ect to the pro"isions of subsection /(0 of this section- a person appointed as amember of the Commission /not bein an e8&officio member0 shall hold office for three yearsand shall be eliible for re&appointment for one further term of t2o years./(0 The minister may- 2ith the appro"al of the President- Commander&in Chief of theArmed #orces at any time remo"e any member of the Commission from office if the Ministeris of the opinion that it is not in the interest of the Commission for the member to continue inoffice and shall notify the member in 2ritin to that effect./60 The members of the Commission e8cept the $eistrar&9eneral shall be part&timemembers of the Commission./:0 Any member of the Commission shall cease to hold office if&/a0 he becomes of unsound mind or is incapable of carryin out his duties4/b0 he becomes ban1rupt or has made arranement 2ith his creditors4/c0 he is con"icted of felony or any offence in"ol"in dishonesty4/d0 he is uilty of serious misconduct relatin to his duties4 or/e0 in the case of a person possessed of professional 5ualifications- he is dis5ualified or

suspended /other than at his o2n re5uest0 from practisin his profession in any part ofNieria by the order of any competent authority made in respect of him personally.:. Members of the Commission appointed under section ( /a0- /b0- /c0- /d0- /e0- /f0- /0- and/h0 shall be paid such remuneration and allo2ances as the President- Commander&in&Chief ofthe Armed #orces may- from time to time- direct.;. /*0 Sub7ect to this section and section (< of the Interpretation Act *+


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/:0 The Commission may appoint any of its officers to act as Secretary at any of itsmeetins.


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*,. Not2ithstandin the pro"isions of any enactment to the contrary- a personappointed to the office or $eistrar&9eneral under section > of this Act or a person appointedunder section + of this Act 2ho is a leal practitioner shall- 2hile so appointed- be entitled torepresent the Commission as a leal practitioner for the purpose and in the course of hisemployment.**. Ser"ice in the Commission shall be appro"ed ser"ice for the purpose of the PensionsAct and accordinly- officers and other persons employed in the Commission shall in respectof their ser"ice in the Commission be entitled to pensions- ratuities and other retirementbenefits en7oyed by persons holdin e5ui"alent rades int he public ser"ice of the #ederation-so ho2e"er that nothin in this Act shall pre"ent the appointment of a person to any office onterms 2hich preclude the rant of a pension and ratuity in respect of that office.*(. The Commission shall establish a fund 2hich shall consist of such sums as may beallocated to it by the #ederal 9o"ernment and such other funds as may accrue to it in thedischare of its functions.*6. The Commission may- from time to time- apply the proceeds of the fund establishedin pursuance of section *( of this Act&/a0 to the cost of administration of the Commission4/b0 for re&imbursin members of the Commission or any committee set up by theCommission for such e8penses as may be authorised or appro"ed by the Commission- inaccordance 2ith the rate appro"ed in that behalf by the National Council of Ministers4/c0 to the payment of salaries- fees or other remuneration or allo2ances- pensions andratuities payable to the employees of the Commission4/d0 for the maintenance of any property ac5uired or "ested in the Commission4 and/e0 for- and in connection 2ith- all or any of the functions of the Commission underthis Act.*:. /*0 The Commission shall 1eep proper accounts and proper records in relationthereto and shall prepare in respect or each year a statement of accounts in such form as theNational Council of Ministers may direct./(0 The accounts of the Commission shall be audited not later than si8 months after the

end of the year by auditors appointed by the Commission from the list and in accordance2ith uidelines supplied by the Auditor&9eneral of the #ederation- and the fees of the

auditors and the e8penses of the audit enerally shall be paid from the funds of theCommission./60 The Commission shall cause to be prepared- not later than 6,th September in each

year- an estimate or the e8penditure and income or the Commission durin the ne8tsucceedin year and 2hen prepared they shall be submitted throuh the Minister forappro"al by the National Council of Ministers.*;. The Commission shall- not later than 6,th )une in each year- submit to the NationalCouncil of Ministers- a report on the acti"ities of the Commission durin the immediatelyprecedin year and shall include in such report- the audited accounts of the Commission.

*


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/a0 prescribin the forms and returns and other information re5uired under this Part-that is- Part A of this Act4/b0 re5uirin returns to be made 2ithin the period specified therein by any company orenterprise to 2hich this Part- that is- Part A of this Act applies4 and/d0 prescribin anyfees payableunder this Part- that is- Part A of this Act.*=. In this Part of this Act&3Chairman3 means the Chairman of the Commission4 and 3member3 means any member ofthe Commission- includin the Chairman.

Part IIIncorporation of companies and incidental matters

Chapter I#ormation of $ompany

*>. As from the commencement of this Act- any t2o or more persons may form andincorporate a company by complyin 2ith the re5uirements of this Act in respect ofreistration of such company.*+. /*0 No company- association- or partnership consistin of more than t2entypersons shall be formed for the purpose of carryin on any business for profit or ain by thecompany- association- or partnership- or by the indi"idual members thereof- unless it isreistered as a company under this Act- or is formed in pursuance of some other enactment inforce in Nieria./(0 Nothin in this section shall apply to&

/a0 any co&operati"e society reistered under the pro"isions of any enactment in forcein Nieria4 or/b0 any partnership for the purpose of carryin on practice&

/i0 as leal practitioners- by persons each of 2hom is a leal practitioner4 or/ii0 as accountants- by persons each of 2hom is entitled by la2 to practice as anaccountant./60 If at any time the number of members of a company- association or partnership

e8ceeds t2enty in contra"ention of this section and it carries on business for more thanfourteen days 2hile the contra"ention continues- e"ery person 2ho is a member of thecompany- association or partnership durin the time that is so carries on business after thosefourteen days shall be uilty of an offence and liable on con"iction to a fine of (; for e"eryday durin 2hich the default continues.

(,. /*0 Sub7ect to subsection /(0 of this section- an indi"idual shall not 7oin in theformation of a company under this Act if&
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/a0 he is less than eihteen years of ae4 or/b0 he is of unsound mind and has been so found by a court in Nieria or else2here4 or/c0 he is an undischared ban1rupt4 or/d0 he is dis5ualified under section (;: of this Act from bein a director of a company./(0 A person shall not be dis5ualified under pararaph /a0 of subsection /*0 of this

section- if t2o other persons not dis5ualified under that subsection ha"e subscribed to thememorandum./60 A body corporate in li5uidation shall not 7oin in the formation of a company under

this Act./:0 Sub7ect to the pro"isions of any enactment reulatin the rihts and capacity of

aliens to underta1e or participate in trade or business- an alien or a forein company may 7oinin formin a company.(*. /*0 An incorporated company may be either a company&/a0 ha"in the liability of its members limited by the memorandum to the amount- ifany- unpaid on the shares respecti"ely held by them /in this Act referred to as 3a companylimited by shares304 or/b0 ha"in the liability of its members limited by the memorandum to such amount asthe members may respecti"ely thereby underta1e to contribute to the assets of the companyin the e"ent of its bein 2ound up /in this Act referred to as 3a company limited byuarantee30 or/c0 not ha"in any limit on the liability of its members /in this Act referred to as 3anunlimited company30./(0 A company of any of the foreoin types may either be a pri"ate company or a

public company.((. /*0 A pri"ate company is one 2hich is stated in its memorandum to be a pri"atecompany./(0 E"ery pri"ate company shall by its articles restrict the transfer of its shares.

/60 The total number of members of a pri"ate company shall not e8ceed fifty- notincludin persons 2ho are bona fidein the employment of the company- or 2ere 2hile in thatemployment and ha"e continued after the determination of that employment to be- membersof the company./:0 %here t2o or more persons hold one or more shares in a company 7ointly- they shall

for the purpose of subsection /60 of this section- be treated as a sinle member./;0 A pri"ate company shall not- unless authorised by la2 in"ite the public to&

/a0 subscribe for any shares or debentures of the company4

/b0 deposit money for fi8ed periods or payable at call- 2hether or not bearin interest.


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(6. /*0 Sub7ect to subsection /(0 of this section- 2here default is made in complyin2ith any of the pro"isions of section (( of this Act in respect of a pri"ate company- thecompany shall cease to be entitled to the pri"ilees and e8emptions conferred on pri"atecompanies by or under this Act and this Act shall apply to the company as if it 2ere not apri"ate company./(0 If a court- on the application of the company or any other person interested- is

satisfied that the failure to comply 2ith the pro"isions of section (( of this Act 2as accidentalor due to inad"ertence or to some other sufficient cause- or that on other rounds it is 7ust ande5uitable to rant relief- the court may- on such terms and conditions as may seem to it to be7ust and e8pedient- order that the company be relie"ed from the conse5uences mentioned insubsection /*0 of this section.(:. Any company other than a pri"ate company shall be a public company and itsmemorandum shall state that it is a public company.(;. As from the commencement of this Act- an unlimited company shall be reistered2ith a share capital4 and 2here an e8istin unlimited company is not reistered 2ith a sharecapital- it shall- not later than the appointed day- alter its memorandum so that it becomes anunlimited company ha"in a share capital not belo2 the minimum share capital permittedunder section ++ of this Act.(


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/>0 Sub7ect to compliance 2ith subsection /;0 of this section- the articles of association of

a company limited by uarantee may pro"ide that members can retire or be e8cluded frommembership of the company./+0 If- in breach of subsection /;0 of this section- the total liability of the members of any

company limited by uarantee shall at any time be less than *,-,,,- e"ery director andmember of the company 2ho is conisant of the breach shall be uilty of an offence and liableon con"iction to a fine or ;, for e"ery day durin 2hich the default continues./*,0 If- upon the 2indin&up of a company limited by uarantee- there remains after thedischare of all its debts and liabilities any property of the company- the same shall not bedistributed amon the members but shall be transferred to some other company limited byuarantee ha"in ob7ects similar to the ob7ects of the company or applied to some charitableob7ect and such other company or charity shall be determined by the members prior to thedissolution of the company.

%emorandum of &ssociation

(=. /*0 The memorandum of e"ery company shall state&/a0 the name of the company4/b0 that the reistered office of the company shall be situated in Nieria4/c0 the nature of the business or businesses 2hich the company is authorised to carryon- or- if the company is not formed for the purpose of carryin on business- the nature of theob7ect or ob7ects for 2hich it is established4/d0 the restriction- if any- on the po2ers of the company4/e0 that the company is a pri"ate or public company- as the case may be4/f0 that the liability of its members is limited by shares or by uarantee or is unlimited-as the case may be./(0 If the company has a share capital&

/a0 the memorandum shall also state the amount of authorised share capital- not beinless than *,-,,, in the case of a pri"ate company and ;,,-,,, in the case of a public company-2ith 2hich the company proposes to be reistered- and the di"ision thereof into shares of afi8ed amount4/b0 the subscribers of the memorandum shall ta1e amon them a total number ofshares of a "alue of not less than t2enty&fi"e per centof the authorised share capital4 and/c0 each subscriber shall 2rite opposite to his name the number of shares he ta1es./60 A subscriber of the memorandum 2ho holds the 2hole 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./:0 The memorandum of a company limited by uarantee shall also state that&


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/a0 the income and property of the company shall be applied solely to2ards thepromotion of its ob7ects- and that no portion thereof shall be paid or transferred directly orindirectly to the members of the company e8cept as permitted by or under this Act4 and/b0 each member underta1es to contribute to the assets of the company in the e"ent ofits bein 2ound up 2hile he is a member or 2ithin one year after he ceases to be a member-for payment of the debts and liabilities of the company- and of the cost of 2indin up- suchamount as may be re5uired not e8ceedin a specified amount and the total of 2hich shall notbe less than *,-,,,./;0 The memorandum shall be sined by each subscriber in the presence of at least one

2itness 2ho shall attest the sinature./. Sub7ect to the pro"isions of section (= of this Act- the form of a memorandum ofassociation of&/a0 a company limited by shares4/b0 a company limited by uarantee4 and/c0 an unlimited company-shall be specified in Tables '- C and D respecti"ely- in the #irst Schedule to this Act- or asnear that form as circumstances admit.(+. The name of a pri"ate company limited by shares shall end 2ith the 2ord 3@imited3./(0 The name of a public company limited by shares shall end 2ith the 2ords 3Public

@imited Company3./60 The name of a company limited by uarantee shall end 2ith the 2ords 3/@imited by

9uarantee03 in brac1ets./:0 The name of an unlimited company shall end 2ith the 2ord 3nlimited3.

/;0 A company may use the abbre"iations 3@td3- 3P@C3 3/@tdB9te03 and 3ltd3 for the

2ords 3@imited3- 3Public @imited Company3- 3/@imited by 9uarantee03 and 3nlimited3respecti"ely- in the name of the company.

6,. /*0 No company shall be reistered under this Act by a name 2hich&/a0 is identical 2ith that by 2hich a company in e8istence is already reistered- or sonearly resembles that name as to be calculated to decei"e- e8cept 2here the company ine8istence is in the course of bein dissol"ed and sinifies its consent in such manner as theCommission re5uires4 or/b0 contains the 2ords 3Chamber of Commerce3 unless it is a company limited byuarantee4 or/c0 in the opinion of the Commission is capable of misleadin as to the nature or e8tent

or its acti"ities or is undesirable- offensi"e or other2ise contrary to public policy4 or


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/d0 in the opinion of the Commission 2ould "iolate any e8istin trade mar1 orbusiness name reistered in Nieria unless the consent of the o2ner of the trade mar1 orbusiness name has been obtained./(0 E8cept 2ith the consent of the Commission- no company shall be reistered by a

name 2hich&/a0 includes the 2ord 3#ederal3- 3National?- 3$eional3- 3State3- 39o"ernment3- or anyother 2ord 2hich in the opinion of the Commission suests or is calculated to suest that iten7oys the patronae or the 9o"ernment of the #ederation or the 9o"ernment of a State inNieria- as the case may be- or any Ministry or Department of 9o"ernment4 or/b0 contains the 2ord 3Municipal3 or 3Chartered3 or in the opinion of the Commissionsuests- or is calculated to suest- connection 2ith any municipality or other localauthority4 or/c0 contains the 2ord 3Co&operati"e3 or the 2ords 3'uildin Society34 or/d0 contains the 2ord 39roup3 or 3oldin3.6*. /*0 If a company- throuh inad"ertence or other2ise- on its first reistration or onits reistration by a ne2 name- is reistered under a name identical 2ith that by 2hich acompany in e8istence is pre"iously reistered- or so nearly resemblin it as to be li1ely todecei"e- the first&mentioned company may- 2ith the appro"al of the Commission- chane itsname- and if the Commission so directs 2ithin si8 months of its bein reistered under thatname- the company concerned shall chane its name 2ithin a period of si8 2ee1s from thedate of the direction or such loner period as the Commission may allo2.

/(0 If a company ma1es default in complyin 2ith a direction under subsection /*0 ofthis section- it shall be uilty of an offence and liable on con"iction to a fine of N (; for e"eryday durin the default continues./60 Any company may- by special resolution and 2ith the appro"al of the Commission

sinified in 2ritin- chane its namePro"ide that no such appro"al shall be re5uired 2here the only chane in the name of acompany is the substitution of the 2ords 3Public @imited Company3 for the 2ord 3@imited?or "ice "ersa on the con"ersion of a pri"ate company into a public company or a publiccompany into a pri"ate company in accordance 2ith the pro"isions of this Act.

/:0 Nothin in this Act shall preclude the Commission from re5uirin a company tochane its name if it is disco"ered that such a name conflicts 2ith an e8istin trade mar1 orbusiness name reistered in Nieria prior to the reistration of the company and the consentof the o2ner of the trade mar1 or business name 2as not obtained./;0 %here a company chanes its name- the Commission shall enter the ne2 name on

the reister in place of the former name- and issue a certificate of incorporation altered tomeet the circumstances of the case./


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/=0 Any alteration made in the name under this section shall be published by theCommission in the 'aette/>0 A certificate or publication in the 'aetteunder this section shall be e"idence of the

alteration to 2hich it relates.6(. /*0 The Commission may- on 2ritten application and on payment of the prescribedfee- reser"e a name pendin reistration of a company or a chane of name by a company./(0 Such reser"ation as is mentioned in subsection /*0 of this section shall be for such

period as the Commission shall thin1 fit not e8ceedin si8ty days and durin the period ofreser"ation no other company shall be reistered under the reser"ed name or under any othername 2hich in the opinion of the Commission bears too close a resemblance to the reser"edname.

&rticle of &ssociation

66. There shall be reistered 2ith the memorandum of association articles ofassociation sined by the subscribers to the memorandum of association- and prescribinreulations for the company.6:. /*0 The form and contents of the articles of association of a public company ha"ina share capital- a pri"ate company ha"in a share capital- a company limited by uaranteeand an unlimited company shall be as in Parts I- II- III- and IV respecti"ely- of Table A in the#irst Schedule to this Act 2ith such additions- omissions or alterations as may be re5uired inthe circumstances. /(0 In the case of a company limited by uarantee- the articles ofassociation shall state the number of members 2ith 2hich the company proposes to bereistered for the purpose of enablin the Commission to determine the fees payable onreistration./60 The articles of association shall&

/a0 be printed4/b0 be di"ided into pararaph numbered consecuti"ely4 and/c0 be sined by each subscriber of the memorandum of association in the presence ofat least one 2itness 2ho shall attest the sinature./:0 The articles shall bear the same stamp duty as if they 2ere contained in a deed.

*e+istration of $ompanies

6;. /*0 As from the commencement of this Act- a company shall be formed in themanner set out in this section./(0 There shall be deli"ered to the Commission&

/a0 the memorandum of association and articles of association complyin 2ith thepro"isions of this Part of this Act4


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/b0 the notice of the address of the reistered office of the company and the head officeif different from the reistered office4/c0 a statement in the prescribed form containin the list and particulars toether 2iththe consent of the persons 2ho are to be the first directors of the company4/d0 a statement of the authorised share capital sined by at least one director4 and/e0 any other document re5uired by the Commission to satisfy the re5uirements of anyla2 relatin to the formation of a company./60 A statutory declaration in the prescribed form by a leal practitioner that those

re5uirements of this Act for the reistration of a company ha"e been compiled 2ith shall beproduced to the Commission- and it may accept such a declaration as sufficient e"idence ofcompliancePro"ided that there 2here the Commission refuses a declaration- it shall 2ithin thirty days ofthe date of receipt of the declaration send to the declarant a notice of its refusal i"in therounds of such refusal.6


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/b0 in the case of a limited company- that the liability of the members is limited byshares or by uarantee4 or/c0 in the case of an unlimited company- that the liability of the members is unlimited4and/d0 that the company is a pri"ate or public company- as the case may be./. /*0 E8cept to the e8tent that the company?s memorandum or any enactmentother2ise pro"ides- e"ery company shall- for the furtherance of its authorised business orob7ects- ha"e all the po2ers of a natural person of full capacity./(0 A company shall not ha"e or e8ercise po2er either directly or indirectly to ma1e a

donation or ift of any of its property or funds to a political party or political association- orfor any political purpose4 and if any companyin breach of this subsection ma1es anydonations or ift of its property to a political party or association- or for any political purpose-the officers in default and any member 2ho "oted for the breach shall be 7ointly and se"erallyliable to refund to the company the sum or "alue of the donation or ift and in addition- thecompany and e"ery such officer or member shall be uilty of an offence and liable to a finee5ual to the amount or "alue of the donation or ift.6+. /*0 A company shall not carry on any business not authorised by its memorandumand shall not e8ceed the po2ers conferred upon it by its memorandum or this Decree.

/(0 A breach of subsection /*0 of this section- may be asserted in any proceedins undersections 6,, to 6*6 of this Decree or under subsection /:0 of this section. /60 Not2ithstandinthe pro"isions of subsection /*0 of this section- no act of a company and no con"eyance ortransfer of property to or by a company shall be in"alid by reason of the fact that such act-con"eyance or transfer 2as not done or made for the furtherance of any of the authorisedbusiness of the company or that the company 2as other2ise e8ceedin its ob7ects or po2ers./:0 On the application of&

/a0 any member of the company4 or

/b0 the holder of any debenture secured by a floatin chare o"er all or any of thecompanyFs property or by the trustee of the holders of any such debentures-


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the court may prohibit by in7unction- the doin of any act or the con"eyance or transfer of anyproperty in breach of subsection /*0 of this section./;0 If the transactions souht to be prohibited in any proceedin under subsection /:0 of

this section are bein- or are to be performed or made pursuant to any contract to 2hich thecompany is a party- the court may- if it deems the same t be e5uitable and if all the parties tothe contract are parties to the proceedins- set aside and prohibit the performance of suchcontract- and may allo2 to the company or to the other parties to the contract compensationfor any loss or damae sustained by them by reason of the settin aside or prohibition of theperformance of such contract but no compensation shall be allo2ed for loss of anticipatedprofits to be deri"ed from the performance of such contract.:,. /*0 %here there is pro"ision in the memorandum of association of a companyrestrictin the po2ers and capacity of the company to carry on its authorised business orob7ect- the restriction may be relied on and ha"e effect only for the purpose of&/a0 proceedins aainst the company by a director or member of the company- or2here the company has issued debentures secured by a floatin chare o"er all or any of thecompanyFs property- by the holder of any of the debentures or the trustee for the holders ofthe debentures4 or/b0 proceedins by the company or a member of the company aainst the present offormer officers or the company for failure to obser"e any such restriction4 or/c0 proceedins by the Commission or a member of the company to 2ind up thecompany4 or/d0 proceedins for the purpose of restrainin the company or other person fromactin in breach of the memorandum or directin the company or such person to comply2ith the same./(0 A person may not in proceedins referred to in subsection /*0 /a0 /b0 or /c0- of this

section- rely on a restriction of the po2er or capacity of the company contained in thememorandum in any case 2here he "oted in fa"our of- or other2ise e8pressly or by conductareed to the doin of an act by the company or the con"eyance by or to the company ofproperty 2hich- it is alleed in the proceedins- 2as or 2ould be contrary to such arestriction.

-ffect of memorandum and articles

:*. /*0 Sub7ect to the pro"isions of this Decree- the memorandum and articles- 2henreistered- shall ha"e the effect of a contract under seal bet2een the company and itsmembers and officers and bet2een the members and officers themsel"es 2hereby they areeto obser"e and perform the pro"isions of the memorandum and articles- as altered from timeto time in so far as they relate to the company- members- or officers as such./(0 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 specialitydebt.

/60 %here the memorandum or articles empo2er any person to appoint or remo"e anydirector or other officer of the company- such po2er shall be enforceable by that personnot2ithstandin that he is not a member or officer of the company.


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/:0 In any action by any member or officer to enforce any obliation o2ed under the

memorandum or articles to him and any other member or officer- such member or officermay- if any other member or officer is affected- by the alleed breach of such obliation 2ithhis consent- sue in a representati"e capacity on behalf of himself and all other members orofficers 2ho may be affected other than any 2ho are defendants and the pro"isions of Part !Iof this Decree shall apply.

%ember.s ri+ht to copy of memorandum and articles

:(. /*0 A company shall- on bein so re5uired by any member- send to him a copy ofthe memorandum and of the articles- if any- and a copy of any enactment 2hich alters thememorandum- sub7ect to payment- in the case of a copy of the memorandum and of thearticles- of N(, or such less sum as the company may prescribe and in the case of a copy of anenactment of such sum not e8ceedin the published price thereof as the company mayre5uire./(0 If a company ma1es default in complyin 2ith this section- the company and e"ery

officer of the company 2ho is in default shall be liable for each offence to a fine not e8ceedinN(;.:6. /*0 %here an alteration is made in the memorandum of a company e"ery copy ofthe memorandum issued after the date of the alteration shall be in accordance 2ith thealteration./(0 If- 2here any such alteration has been made- the company at any time after the date

of the alteration issues any copies of the memorandum 2hich are not in accordance 2ith thealteration- it shall be liable to a fine not e8ceedin N(; for each copy so issued- and e"eryofficer of the company 2ho is in default shall be liable to the li1e penalty.

&lteration of memorandum and articles

::. /*0 A company may not alter the conditions contained in its memorandum e8ceptin the cases and in the manner and to the e8tent for 2hich e8press pro"ision is made in thisDecree./(0 Only those pro"isions 2hich are re5uired by section (= of this Decree or by any

other specific pro"ision contained in this Decree- to be stated in the memorandum of thecompany concerned shall be deemed to be conditions contained in its memorandum.:;. /*0 The name of the company shall not be altered e8cept 2ith the consent of theCommission in accordance 2ith section 6* of this Decree./(0 The business 2hich the company is authorised to carry on or- if the company is not

formed for the purpose of carryin on business- the ob7ects or 2hich it is established may bealtered or added to in accordance 2ith the pro"isions of section :< or of Part !V of thisDecree.

/60 Any restriction on the po2ers of the company may be altered in the same 2ay asthe business or ob7ect of the company.


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/:0 The share capital of the company may be altered in accordance 2ith the pro"isions

of section *,, to *** of this Decree but not other2ise./;0 Sub7ect to section :+ of this Decree- any other pro"ision of the memorandum may be

altered in accordance 2ith section :< of this Decree- or as other2ise pro"ided in this Decree.:


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/i0 a certified true copy of the order in the case of refusal to confirm the resolution4 and/ii0 a certified true copy of the order in the case of confirmation of the resolutiontoether 2ith a printed copy of the memorandum as thereby altered4/b0 no application is made 2ith respect thereto to a court under this section- thecompany shall 2ithin fifteen days from the end of the period for ta1in such an applicationdeli"er to the Commission a copy of the resolution as passed4 and if the Commission&/i0 is satisfied- a printed copy of the memorandum as altered by the resolution shallforth2ith thereafter be deli"ered to it4/ii0 is not satisfied- it shall i"e notice in 2ritin to the company of its decision and anappeal from its decision shall thereafter lie to the court at the suit of any person arie"ed- ifmade 2ithin (* days from the date of the receipt by the company of the notice of there7ection- or 2ithin such e8tended time as the court may allo2./>0 The court may at any time e8tend the time for the deli"ery of documents to the

Commission under pararaph /a0 of subsection /=0 of this section for such period as the courtmay thin1 proper./+0 If a company ma1es default in i"in notice or deli"erin any document to the

Commission as re5uired by subsection /0 and /+0 of section :< of this Act /2hich relate to mode

of alteration of business or ob7ects0 e8cept pararaph /b0 of subsection /(0 thereof shall applyin relation to any alteration and to any application made under this section as they apply inrelation to alterations and to applications made under that section.

/:0 This section shall apply to a company?s memorandum 2hether reistered before orafter the commencement of this Decree.


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:>. /*0 Sub7ect to the pro"isions of this Decree and to the conditions or other pro"isionscontained in its memorandum- a company may by special resolution alter or add to itsarticles./(0 Any alteration or addition so made in the articles shall- sub7ect to the pro"isions of

this Decree- be as "alid as if oriinally contained therein and be sub7ect- in li1e manner- toalteration by special resolution.:+. Sa"e to the e8tent to 2hich a member of a company arees in 2ritin at any time tobe bound thereby- and anythin to the contrary in the memorandum or articlesnot2ithstandin- the member shall not be bound by any alteration made in the memoradnumor articles of the company re5uirin him on or after the date of the alteration to&/a0 ta1e or subscribe for more shares than he held at the date on 2hich he became amember4 or/b0 increase his liability to contribute to the share capital of the company4 or/c0 pay money by any other means to the company.

Chapter ($onversion and *e/re+istration of $ompanies

;,. /*0 Sub7ect to this section- a pri"ate company ha"in a share capital may be re&reistered as a public company if&/a0 a special resolution that it should be so re&reistered is passed4 and/b0 an application for re&reistration is deli"ered to the Commission toether 2ith thedocuments prescribed in subsection /60 of this section./(0 The special resolution shall&

/a0 alter the company?s memorandum so that it states that the company is to be apublic company4 and/b0 ma1e such other alterations in the memorandum as are necessary to brin it into

conformity 2ith the re5uirements of this Decree 2ith respect to the memorandum of a publiccompany in accordance 2ith section (= of this Decree4 and/c0 ma1e such alterations in the company?s articles as are re5uisite in the circumstances/60 The application shall be made to the Commission in the prescribed form and be

sined by at least one director and the secretary of the company4 and the documents to bedeli"ered 2ith it are the follo2in&/a0 a printed copy of the memorandum and articles as altered in pursuance of theresolution4 and

/b0 a copy of a 2ritten statement by the directors and the secretary certified on oath bythem- and sho2in that the paid up capital of the company as at the date of the application isnot less than (; per cent of the authorised share capital as at that date4 and


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/c0 a copy of the balance sheet of the company as at the date of the resolution or theprecedin < months- 2hiche"er is later4 and/d0 a statutory declaration in the prescribed form by a director and the secretary of thecompany&

/i0 that the special resolution re5uired under this section has been passed4 and/ii0 that the company?s net assets are not less than the areate of the paid up sharecapital and undistributable reser"es4 and/e0 a copy of any prospectus or statement in lieu of prospectus deli"ered 2ithin theprecedin *( months to the Securities and E8chane Commission established under theSecurities and E8chane Commission Decree *+>>./:0 If the Commission is satisfied that a company has complied 2ith the pro"isions of

this section and may be re&reistered as a public company- it shall&/a0 retain the application and other documents deli"ered to it under this section4/b0 reister the application and other documents4 and/c0 issue the company a certificate of incorporation- statin that the company is apublic company./;0 pon the issue to a company of the certificate of incorporation under this section&

/a0 the company shall by "irtue of this issue of that certificate become a publiccompany4 and/b0 any alterations in the memorandum and articles set out in the resolution shall ta1eeffect accordinly./


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/:0 An application under this section shall be in the prescribed form and sined by adirector and the secretary of the company- and be loded 2ith the Commission toether 2iththe documents specified in subsection /


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/(0 A company shall not under this section be re&reistered as a public company orcompany limited by uarantee4 and a company shall be precluded from reisterin under it ifit is unlimited by "irtue of re&reistration under section ;* of this Decree./60 The special resolution shall state the proposed authorised share capital and pro"ide

for the ma1in of such alterations in the memorandum as are necessary to brin it intoconformity 2ith the re5uirements of this Decree 2ith respect to the memorandum of acompany so limited- and such alterations in the articles as are re5uisite in the circumstances./:0 An application in the prescribed form for the company to be re&reistered as limited

sined by a director and the secretary of the company shall be loded 2ith the Commissiontoether 2ith the necessary documents not earlier than the day on 2hich the resolution 2asfiled under section (6= of this Decree./;0 The documents to be loded 2ith the Commission shall be a printed copy of the&

/a0 memorandum as altered in pursuance of the resolution4 and/b0 articles as so altered./0 The certificate shall beprima faciee"idence that the re5uirements of this section in

respect of re&reistration and of matters precedent and incidental to it ha"e been complied2ith- and that the company 2as authorised to be re&reistered in pursuance of this sectionand 2as duly so re&reistered./+0 The re&reistration of an unlimited company as a limited company shall not affect

the rihts and liabilities of the company in respect of any debt or obliation incurred- or any

contract entered into- by- to- 2ith- or on behalf of the company before the re&reistration- andthose rihts or liabilities may be enforced in the manner pro"ided by Part III of this Decree asin the case of a company reistered pursuant to Part II of this Decree.;6. /*0 A public company may be re&reistered as a pri"ate company if&/a0 a special resolution complyin 2ith subsection /(0 of this section that it should beso re&reistered is passed and has not been cancelled by the court under this section4

/b0 an application for the purpose in the prescribed form and sined by a director andthe secretary of the company is deli"ered to the Commission toether 2ith a printed copy of

the memorandum and articles of the company as altered by the resolution4 and/c0 either&


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/i0 the period durin 2hich an application for the cancellation of the resolution underthis section may be made has e8pired 2ithout any such application ha"in been made4 and

/ii0 2here such an application has been made- the application has been 2ithdra2n oran order has been made confirmin the resolution and a copy of that order has beendeli"ered to the Commission./(0 The special resolution shall alter the company?s memorandum so that it states that

the company is a pri"ate company and shall ma1e such other alterations in the company?smemorandum and articles as are re5uisite in the circumstances./60 %here 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&/a0 the holders of not less in the areate than ; per cent in the nominal "alue of thecompany?s issued share capital- or any class thereof4 or/b0 not less than ; per cent of the company?s members4 but not by a person 2ho hasconsented to or "oted in fa"our of the resolution./:0 The application shall be made 2ithin (> days after the passin of the resolution andthe applicant shall forth2ith i"e notice of the application in the prescribed form to theCommission and to the company.

/;0 On the hearin of the application- the court shall ma1e an order either cancellin orconfirmin the resolution and may ma1e all such orders or i"e such directions as it maythin1 e8pedient under the circumstances./


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/a0 the re5uirements of this section in respect of re&reistration and of mattersprecedent and incidental to it ha"e been complied 2ith4 and/b0 the company is a pri"ate company.

Chapter 6#orei+n $ompanies

;:. /*0 Sub7ect to sections ;< to ;+ of this Decree e"ery forein company 2hich beforeor after the commencement of this Decree 2as incorporated outside Nieria- and ha"in theintention of carryin on business in Nieria shall ta1e all steps necessary to obtainincorporation as a separate entity in Nieria for that purpose- but until so incorporated- theforein company shall not carry on business in Nieria or e8ercise any of the po2ers of areistered company and shall not ha"e a place of business or an address for ser"ice ofdocuments or processes in Nieria for any purpose other than the receipt of notices and otherdocuments- as matters preliminary to incorporation under this Decree./(0 Any act of the company in contra"ention of subsection /*0 of this section shall be

"oid./60 Nothin in this section shall affect the status of&

/a0 any forein company 2hich before the commencement of this Decree 2as rantede8emption from compliance 2ith Part ! of the Companies Act *+4/b0 any forein companies e8empted under any treaty to 2hich Nieria is a party.;;. If any forein company fails to comply 2ith the re5uirements of section ;: of thisDecree in so far as they may apply to the company- the company shall be uilty of an offenceand liable on con"iction to a fine of not less than N(-;,,4 and e"ery officer or aent of thecompany 2ho 1no2inly and 2ilfully authorises or permits the default or failure to complyshall- 2hether or not the company is also con"icted of any offence- be liable on con"iction to afine of not less than N(;, and 2here the offence is a continuin one to a further fine of N(;for e"ery day durin 2hich the default continues.;


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/(0 An application for e8emption under this section shall be in 2ritin addressed to the

Secretary to the #ederal Military 9o"ernment and shall set out&/a0 the name and place of business of the forein company outside Nieria4/b0 the name and place of business or the proposed name and place of business of theforein company in Nieria4/c0 the name and address of each director- partner or other principal officer of theforein company4/d0 a certified copy of the charter- statutes- or memorandum and articles of associationof the company- or other instrument constitutin or definin the constitution of the companyand if the instrument is not 2ritten in the Enlish lanuae- a certified translation thereof4/e0 the names and addresses of some one or more persons resident in Nieriaauthorised to accept on behalf of the forein company ser"ices of process and any noticesre5uired to be ser"ed on the company4/f0 the business or proposed business in Nieria of the forein company and theduration of such business4/0 particulars of any pro7ect pre"iously carried out by the company as an e8emptedforein company4 and/h0 such other particulars as may be re5uired by the Secretary to the #ederal Military9o"ernment./60 %here the National Council of Ministers upon the receipt of an application for

e8emption is of the opinion- that the circumstances are such as to render it e8pedient thatsuch an e8emption should be ranted- the National Council of Ministers may- sub7ect to suchconditions as it may prescribe- e8empt the forein company from the obliations imposed byor under this Decree./:0 E"ery e8emption ranted in pursuance of this section shall specify the period or- as

the case may be- the pro7ect or series of pro7ects- for 2hich it is ranted and shall lapse at theend of such period or upon the completion of such pro7ect or series of pro7ects./;0 The National Council of Ministers may at any time re"o1e any e8emption ranted to

any company- if it is of the opinion that the company has contra"ened any pro"ision of this

Decree or has failed to fulfil any condition contained in the e8emption order or for any otherood or sufficient reason./


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;>. Sub7ect to this Decree and sa"e as may be stated in the instrument of e8emption- aforein company e8empted pursuant to this Decree shall ha"e the status of an unreisteredcompany and accordinly- the pro"isions of this Decree applicable to an unreisteredcompany shall apply in relation to such an e8empted company as they apply in relation to anunreistered company under this Decree.;+. /*0 Any person 2ho for the purpose of obtainin an e8emption or of complyin2ith any of the pro"isions of section ;< of this Decree- ma1es any statement or presents anyinstrument 2hich is false in a material particular shall be uilty of an offence unless he pro"esthat he has ta1en all reasonable steps to ascertain the truth of the statement made orcontained in the instrument so presented./(0 Any person 2ho is uilty of an offence under this section shall be liable on

con"iction to a fine of N;-,,, or imprisonment for a term of three years.


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/c0 by the company at a eneral meetin at 2hich neither the promoter nor the holdersof any shares of any in 2hich he is beneficially interested shall "ote on the resolution to enterinto or ratify that transaction./:0 No period of limitation shall apply to any proceedins brouht by the company to

enforce any of its rihts under this section but in any such proceedins the court may relie"ea promoter in 2hole or in part and on such terms as it thin1s fit from liability hereunder if inall the circumstances- includin lapse of time- the court thin1s it e5uitable to do so.

Part IIIActs by or on behalf of the Company-ercise of $ompany.s 0o,ers


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/a0 e8ercise their po2ers throuh committees consistin of such members of the bodyas they thin1 fit4 or/b0 from time to time- appoint one or more of their body to the office of manaindirector and may deleate all or any of their po2ers to such manain director.

iability for acts of the company


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other2ise attach to him in respect of any nelience- default- or breach of trust of 2hich hemay be uilty in relation to the company- shall be "oid./(0 Not2ithstandin the pro"isions of subsection /*0 of this section&

/a0 a person shall not be depri"ed of any e8emption or riht to be indemnified inrespect of anythin done or omitted to be done by him 2hile any such pro"ision asmentioned in that subsection 2as in force4 and/b0 a company may- in pursuance of any such pro"ision as mentioned in subsection /*0of this section- indemnify any such officer or auditor aainst any liability incurred by him indefendin any proceedins- 2hether ci"il or criminal in 2hich 7udement is i"en in hisfa"our or in 2hich he is ac5uitted or in connection 2ith any application under section


30/218

/ii0 a person shall not be entitled to assume that any one or more of the directors of thecompany ha"e been appointed to act as a committee of the board of directors or that anofficer or aent of the company has the company?s authority merely because the company?sarticles pro"ided that authority to act in the matter may be deleated to a committee or to anofficer or aent.=,. %here- in accordance 2ith section


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/(0 The company and its successors shall be bound thereby if the company is inaccordance 2ith sections


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Part IVMembership of the company

=+. /*0 The subscribers of the memorandum of a company shall be deemed to ha"eareed to become members of the company- and on its reistration shall be entered asmembers in its reister of members./(0 E"ery other person 2ho arees in 2ritin to become a member of a company- and

2hose name is entered in its reister of members- shall be a member of the company./60 In the case of a company share capital- each member shall be a shareholder of thecompany of the company and shall hold at least one share.>,. /*0 As from the commencement of this Act- an indi"idual shall not be capable ofbecomin a member of a company if &/a0 he is of unsound mind and has been so found by a court in Nieria or else2here4 or/b0 he is an undischared ban1rupt./(0 A person under the ae of eihteen years shall not be counted for the purpose of

determinin the leal minimum number of members of a company./60 A corporate body in li5uidation shall not be capable of becomin a member of a

Company./:0 %here at the commencement of this Act- any person fallin 2ithin the pro"isions of

subsection /*0 of this section is a member of a Company by reason of bein a shareholder ofthe Company- his share shall "est in his committee or trustee- as the case may be./;0 %here after the commencement of this Act- any shareholder purports to transfer

any shares to a person fallin 2ithin the pro"isions of subsection /*0 of this section- thepurported transfer shall not "est the title in the shares in that person but the title shall remainin the purported transfer or his personal representati"e 2ho hold the shares in trust for thatperson durin the period of his incapacity.>*. E"ery member shall- not2ithstandin any pro"ision in the articles- ha"e a riht toattend any eneral meetin of the Company and to spea1 and "ote on any resolution beforethe meetin

Pro"ided that the articles may pro"ide that a member shall not be entitled to attend and "oteunless all calls or other sums payable by him in respect of shares in the Company ha"e beenpaid.>(. If any person falsely deceitfully personates any member of a Company and therebyobtains or endea"ours to obtain any benefit due to any such member- he shall be uilty of anoffence and be liable on con"iction to imprisonment for a term of not more than se"en yearsor a fine of not more than N(-;,,.


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*e+ister of %embers

>6. /*0 E"ery Company shall 1eep a reister of its members and enter in it thefollo2in particulars &/a0 the names and address of the members- and in the case of a Company ha"in ashare- if capital a statement of the shares and class of shares- if any- held by each member-distinuishin each share by its number so lon as the share has a number- and of the amountpaid or areed to be considered as paid on the share of each member./b0 the date on 2hich each person 2as reistered as a member4 and/c0 the date on 2hich any person ceased to be a memberPro"ided that- 2here the Company has con"erted any of its shares into stoc1 and i"ennotice of the Con"ersion to the Commission- the reister shall sho2 the amount of stoc1 heldby each member instead of the amount of shares and the particulars relatin to sharespecified in pararaph /a0 of this subsection./(0 The entry re5uired under pararaph /a0 or /b0 of subsection /*0 of this section- shall

be made 2ithin t2enty eiht days of the conclusion of the areement 2ith the Company tobecome a member or- in the case of a subscriber of the memorandum- 2ithin t2enty&eihtdays of the reistration of the Company./60 The entry re5uired under pararaph /c0 of subsection /*0 of this section shall be

made 2ithin t2enty&eiht days of the date on 2hich the person concerned ceased to be amember- or- if he ceased to be a member other2ise than as a result of action by the Company-2ithin t2enty&eiht days of production to the Company of e"idence satisfactory to theCompany of the occurrence of the e"ent 2hereby he ceased to be a member./:0 %here a company ma1es in default in complyin 2ith the pro"isions of this section-

the company and "ery officer of the company 2ho is in default shall be uilty of an offenceand liable on con"iction to a fine of N(; and a daily default fine of N;./;0 @iability incurred by a company from the ma1in or deletion of an entry in its

reister of members- or from a failure to ma1e or delete any such entry- shall not beenforceable after the e8piration of t2enty years from the date on 2hich the entry 2as madeor deleted or- in the case of any such failure- from the date on 2hich the failure first occurred.>:. /*0 The reister of members shall be 1ept at the reistered office of the company-

e8cept that if &/a0 the 2or1 of ma1in it up is done at another office of the company- it may be 1ept atthat other office4 and/b0 the company arranes 2ith some other person for the ma1in up of the reister tobe underta1en on behalf of the company by that person- it may 1ept at the office of that otherperson at 2hich the 2or1 is done4but the reister shall not be 1ept in the case of company reistered in Nieria- at a placeoutside Nieria.

/(0 E"ery company shall send notice of the Commission of the place 2here the reisteris 1ept and of any chane of that place.


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/60 A company shall not be bound to send notice under this subsection 2here thereister has- at all times since it came into e8istence or- in the case of a reister in e8istence atthe commencement of this Act- at all times since then- been 1ept at the reistered office of thecompany./:0 If a company ma1es default for t2enty&eiht days in complyin 2ith subsection /(0

of this section- the company and e"ery one of its officers 2ho is in default shall be uilty of anoffence and liable on con"iction to a fine of N*, and- for continued contra"ention- to a dailydefault fine of N;.>;. /*0 E"ery company ha"in more than fifty members shall- unless the reister ofmembers is in such a form as to constitute in itself an inde8- of the names of the members ofthe company and shall- 2ithin fourteen days after the date on 2hich any alteration is made inthe reister of members- ma1e any necessary alteration in the inde8/(0 The inde8 shall in respect of the each member contain a sufficient indication to

enable the account of that member in the reister to be readily found./:0 If default is made in complyin 2ith the pro"isions of this section- the company and

e"ery officer of the company 2ho is in default be liable to a fine of N;,.>=. /*0 E8cept 2hen the reister of members is closed under the pro"isions of this Act-the reister and the inde8 of members? names shall be open durin business hours /sub7ect tosuch reasonable restrictions as the company in eneral meetin may impose- so ho2e"er- thatno less than t2o hours in each day shall be allo2ed for inspection0 to the inspection of anymember of the company 2ithout chare- and 2ith the permission of the company to anyother person on payment of N* or any less sum as the company may prescribe for eachinspection./(0 Any member or- 2ith the permission of the company any other person may re5uire

a copy of the reister- or of any part thereof- on payment of ;, 1obo- or such less sum as thecompany may prescribe- for e"ery *,, 2ords or fractional part thereof re5uired to be copied4and the company shall cause any copy so re5uired by any person to be sent to that person2ithin a period of ten days commencin on the day ne8t after the day on 2hich there5uirement is recei"ed by the company./60 In the case of a member- if any inspection re5uired under this section is refused or if

any copy re5uired under this section is not sent 2ithin the prescribed period- the company

and e"ery officer of the company 2ho is in default shall be liable in respect of each offence toa fine of N*,./:0 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 reister- and inde8 or direct that the copiesre5uired shall be sent to the persons re5uirin them.>>. %hereby "irtue of pararaph /b0 of subsection /*0 of section >: of this Act- thereister of members is 1ept at the office of some person other than the company- and byreason of any default of his- the company fails to comply 2ith subsection /*0 or /(0 of section>: of this Act- or 2ith any re5uirements of this Act as to the production of the reister- thatother person shall be liable to the same penalties as if he 2ere an officer of the company 2ho

2as in default- and the po2er to the court under subsection /:0 of section >= of this Act shalle8tend to the ma1in of orders aainst that other person and his officers and ser"ants.


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>+. A company may- on i"in notice be ad"ertisement in a daily ne2spaperscirculatin in the district in 2hich the reistered office of the company is situated- close thereister of members or any part of it for any time or times and e8ceedin on the 2hole thirtydays in each year.+,. /*0 If &/a0 the name of any person is- 2ithout sufficient cause- entered in or omitted from thereister of members of a company4 or/b0 default is made or unnecessary delay ta1es place in enterin on the reister the factof any person ha"in ceased to be a member-the person arie"ed- or any member of the company- or the company- may apply to thecourt for rectification of the reister./(0 The court may refuse the application- or order rectification of the reister and

payment by the company of any damaes sustained by the party arie"ed./60 On an application under this section- the court may decide any 5uestion relatin to

the title of any person 2ho is a party to the application to ha"e his name entered in oromitted from the reister- 2hether the 5uestion arises bet2een members or alleed membersor bet2een members and alleed members on the one hand and the company on the otherhand- and enerally may decide any 5uestion necessary or e8pedient to be decided forrectification of the reister./:0 In the case of a company re5uired by this Act to send a list of its members to the

Commission- the court- 2hen ma1in an order for rectification of the reister shall- by itsorder- direct notice of the rectification to be i"en to the Commission.+*. The reister of members shall be prima facie e"idence of matters 2hich are by thisAct directed or authorised to be inserted in it.

iability of members

+(. /*0 Prior to the 2indin&up of a company- a member of the company 2ith sharesshall be liable to contribute the balance- if any- of the amount payable in respect of the sharesheld by him in accordance 2ith the terms of the areement under 2hich the shares 2ere

issued or in accordance 2ith a call "alidly made by the company pursuant to its articles./(0 %here any contribution has become due and payable by reason of a call "alidly

made by the company pursuant to the articles or 2here- under the terms of any areement2ith the company- a member has underta1en personal liability to ma1e future payments inrespect of shares issued to him- the liability of the members shall continue not2ithstandinthat the shares held by him are subse5uent transferred or forfeited under a pro"ision to thateffect in the articles- but his liability shall cease if and 2hen the company shall ha"e recei"edpayment in full of all such moneys in respect of the shares./60 Sub7ect to subsections /*0 and /(0 of this section- no member or past member shall be

liable to contribute to the assets of the company- e8cept in the e"ent of its bein 2ound up.

/:0 In the e"ent of a company bein 2ound up- e"ery present or past member shall beliable to contribute to the assets of the company to an amount sufficient for payment of its


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debts and liabilities and for the costs- chares and e8penses of the 2indin&up and for thead7ustment of the rihts of the members and past members amon themsel"es but sub7ect tothe follo2in 5ualifications &/a0 a past member shall not be liable to contribute if he has ceased to be a member forperiod of one year or up2ards before the commencement of the 2indin&up4/b0 as past member shall not be liable to contribute unless it appears to the court thatthe e8istin members are unable to satisfy the contributions re5uired to be made by them inpursuance of this section4/c0 in the case of a company limited by shares- no contribution shall be re5uired fromany member or past member e8ceedin the amount- if any unpaid on the shares in respect of2hich he is liable as a present or past member4/d0 in the case of a company limited by uarantee- no contribution shall be re5uiredfrom any member or past member e8ceedin the amount underta1en to be contributed byhim to the assets of the company in the e"ent of its bein 2ound up4 and/e0 any sum due from the company to a member or past member- in his capacity asmember- by 2ay of di"idends or other2ise shall not be set&off aainst the amount of 2hichhe is liable to contribute in accordance 2ith this section but any such sum shall be ta1en intoaccount for the purposes of final ad7ustment of the rihts of the members and past membersamonst themsel"es./;0 #or the purposes of this section- the e8pression 3past member3 includes the estate of

a deceased member and 2here any person dies after becomin liable as a member or pastmember such liability shall be enforceable aainst his estate./


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any shares in the company- the company may- by notice in 2ritin- re5uire that other person2ithin such reasonable time as is specified in the notice &/a0 to indicate in 2ritin the capacity in 2hich he holds that interest4 and/b0 if he holds it other2ise than as beneficial o2ner- to indicate in 2ritin- so far as itlies 2ithin his 1no2lede- the persons 2ho ha"e any interests in them /either by name andaddress or by other particulars sufficient to enable them to be identified0 and the nature oftheir interests./60 %hene"er a company recei"es information from a person in pursuance of a

re5uirement imposed on him under this section 2ith respects to shares held by a member ofthe company- it shall be under an obliation to inscribe aainst the name of the member in thereister of members &/a0 the fact that the re5uirement 2as imposed4 and/b0 the information recei"ed in pursuance of the re5uirement./:0 Sub7ect to subsection /;0 of this section- any person 2ho &

/a0 fails to comply 2ith a notice under this section4 or/b0 in purported compliance 2ith such a notice- ma1es any statement 2hich he 1no2sto be false in a material particular or rec1lessly ma1es any statement 2hich is false in materialparticular-shall be uilty of an offence and liable on con"iction to imprisonment for si8 months or to afine of N(; for e"ery day durin 2hich the default continues./;0 A person shall not uilty of an offence under subsection /:0/a0 of this section- if he

pro"es that the information ion 5uestion 2as already in the possession of the company or thatthe re5uirement to i"e it 2as for any other reason fri"olous or "e8atious.+;. /*0 A person 2ho is a substantial shareholder in a public company shall i"e noticein 2ritin to the company statin his name and address and i"in full particulars of theshares held by him or his nominees /namin the nominee0 by "irtue of 2hich he is asubstantial shareholder./(0 A person is a substantial shareholder in a public company if he holds himself or by

his nominee- shares in the company 2hich entitle him to e8ercise at least ten per cent of the

unrestricted "otin rihts at any eneral meetin of the company./60 A person re5uired to i"e a notice under subsection /*0 of this section- shall do so

2ithin fourteen days after that person becomes a2are that he is a substantial shareholder./:0 The notice shall be so i"en not2ithstandin that the person has ceased to be a

substantial shareholder before the e8piration of the period referred to in subsection /60 of thissection./;0 A person 2ho fails to comply 2ith the pro"isions of this section shall be liable to a

fine of N;, for e"ery day durin 2hich the default continues.

+


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substantial shareholder and i"in full particulars of the circumstances by reason of 2hich heceased to be a substantial shareholder./(0 A person re5uired to i"e notice under subsection /*0 of this section shall do so

2ithin fourteen days after he becomes a2are that he has ceased to be a substantialshareholder.+=. /*0 A public company shall 1eep a reister in 2hich it shall enter &/a0 in a alphabetical order- the names of persons from 2hom it has recei"ed a noticeunder section +; of this Act4 and/b0 aainst each name so entered- the information i"en in the notice and 2here itrecei"es a notice under section +; of this Act- the information i"en in that notice./(0 The reister shall be 1ept at the place 2here the reister of members re5uired to be

1ept under section >: of this Act is 1ept and shall be sub7ect to the same riht to inspectionthe reister of members./60 The Commission may- at any time in 2ritin- re5uire the company to furnish it 2ith

a copy of the reister or any part of the reister and the company shall furnish the copy2ithin fourteen days after the day on 2hich the re5uirement is recei"ed by the company./:0 If the company ceases to be public company- it shall continue to 1eep the reisteruntil the end of the period of si8 years beinnin 2ith the day ne8t follo2in that on 2hich itceases to be such a company./;0 A company shall not- by reason of anythin done for the purposes of this section- beaffected 2ith notice of- or put on en5uiry as to- a riht of a person to or in relation to a sharein the company./. The matter relatin to beneficial interests in shares re5uired by section +: of this Actshall entered in a different part of the reister of interests 2hich shall be so made up that theentries inscribed in it appear in chronoloical order.

Part VShare Capital%inimum share capital

++. /*0 %here- after the commencement of this Act- a memorandum deli"ered to theCommission under this section 6; of this Act states that the association to be reistered is tobe reistered 2ith shares- the amount of the share capital stated in the memorandum to bereistered shall not be less than the authorised minimum share capital and not less thant2enty&fi"e per cent of the capital shall be ta1en by the subscribers of the memorandum./(0 No company ha"in a share capital shall- after the commencement of this Act- be

reistered 2ith an authorised share capital less than the authorised minimum share capital.


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/60 %here at the commencement of this Act- the authorised share capital of an e8istincompany is less than the authoriGed minimum share capital- the company shall- not later thanthirty days after the appointed day- increase the share capital to an amount not less than theauthorised minimum share capital of 2hich not less than t2enty&fi"e per cent shall be issued./:0 Sub7ect to subsection /60 of this section and to section *,6 of this Act- 2here a

company is reistered 2ith shares- its issued capital shall not at any time be less than t2enty&fi"e per cent of the authorised share capital./;0 %here a company to 2hich subsection /60 or /:0 of this section applies fails to

comply 2ith the applicable subsection- it shall be uilty of an offence and liable on con"ictionto a fine of N(-;,,- and e"ery officer 2ho is in default shall be liable to a fine of N;, for e"eryday durin 2hich the default continues.

&lteration of share capital

*,,. /*0 A company ha"in a share capital may in eneral meetin and not other2isealter the conditions of its memorandum to the follo2in e8tent- that is to say- it may &/a0 consolidate and di"ide all or any part of its share capital into shares of lareramount than its e8istin shares4/b0 con"ert all or any of its paid&up shares into stoc1- and re&con"ert that stoc1 intopaid&up shares of any denomination4/c0 subdi"ide its shares or any of them- into shares of smaller amount than is fi8ed bythe memorandum- so ho2e"er that in the subdi"ision the proportion bet2een the amountpaid and the amount- if any- unpaid on each reduced share be the seem as it 2as in the caseof the share from 2hich the reduced share is deri"ed./d0 cancel shares 2hich- at the date of the passin of the resolution in that behalf- ha"enot been ta1en or areed to be ta1en by any person- and diminish the amount of its sharecapital by the amount of the shares so cancelled./(0 Cancellation of shares made in pursuance of this section shall not be deemed to be a

reduction of share capital 2ithin the meanin of this Act.*,*. /*0 If a company ha"in share capital has&

/a0 consolidated and di"ided its share capital into shares of laer amount than itse8istin shares4 or/b0 con"erted any shares into stoc14 or/c0 re&con"erted stoc1 into shares4 or/d0 subdi"ided its shares or any of them4 or/e0 cancelled any shares- other2ise than in connection 2ith a reduction of share capitalunder section *,; of this Act-

it shall 2ithin one month after so doin i"e notice of it to the Commission specifyin as thecase may be- the shares consolidated- subdi"ided- con"erted- cancelled- or the stoc1 re&con"erted.


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/(0 If default is made in complyin 2ith this season- the company and e"ery officer of

the company 2ho is in default shall be liable to a fine of N;, for e"ery day durin 2hich thedefault continues.*,(. /*0 A company ha"in a share capital 2hether or not the shares ha"e beencon"erted into stoc1 may- in eneral meetin and not other2ise- increase its share capital byne2 shares of such amount as it thin1s e8pedient./(0 %here a company has increased its shares capital it shall- 2ithin fifteen days after

the passin of the resolution authorisin the increase- i"e to the Commission- notice of theincrease and the Commission shall record the increase./60 %here in connection 2ith the increase of shares any appro"al is re5uired to be

obtained under any enactment other than this Act- the Commission may on application by acompany e8tend the time 2ithin 2hich to i"e notice of the increase to the Commission./:0 The notice to be i"en under this section shall include any particulars prescribed

2ith respect to the classes of shares affected and the condition sub7ect to 2hich the ne2shares ha"e been or are to be issued and the notice shall be accompanied by a printed copy ofthe resolution authorisin the increase./;0 If default is made in complyin 2ith the pro"isions of this section- the company in

default shall be uilty of an offence and liable on con"iction to a fine of N;, for e"ery daydurin 2hich the default continues.*,6. %here a company passes a resolution increasin its authorised share capital- theincrease shall not ta1e effect unless &/a0 2ithin si8 months of i"in notice of the increase to the Commission- not less thant2enty fi"e per cent of the share capital includin the increase has been issued4 and/b0 the directors ha"e deli"ered to the Commission a statutory declaration "erifyinthat fact.*,:. If an unlimited company resol"es to be reistered as a limited company under thisAct- it may &/a0 increase the nominal amount of its share capital by increasin the nominal amountof each of its shares- but sub7ect to the condition that no part of the increased capital shall becapable of bein called up e8cept in the e"ent and for the purposes of the company bein

2ould up- or/b0 pro"ide that a specified portion of its uncalled share capital shall not be capable ofbein called up e8cept in the e"ent and for the purposes of the company bein 2ound up.

*eduction of share capital

*,;. /*0 E8cept as authorised by this Decree- a company ha"in a share capital shall notreduce its issued share capital.


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/(0 #or the purposes of this and other sections relatin to reduction of share capital- anyissued of share capital shall include the share premium account and any capital redemptionreser"e account of a company- and 3issued share capital3 shall be construed accordinly.*,


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/a0 the company admits the full amount of the debt or claim or- thouh not admittinit- is 2illin to pro"ide for it- then the full amount of the debt or claim4/b0 the company does not admit- and is not 2illin to pro"ide for- the full amount ofthe debt or claim- or if the amount is continent or not ascertained- then an amount fi8ed bythe court after the li1e en5uiry and ad7udication as if the company 2ere bein 2ound up bythe court./


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/60 A notice of the reistration shall be published in such manner as the Court maydirect./:0 The Commission shall certify the reistration of the order and minutes4 and the

certificate&/a0 may be either sined by the $eistrar&9eneral or authenticated by its official seal4/b0 shall beprima faciee"idence that all the re5uirements of this Decree 2ith respect tothe reduction of share capital ha"e been complied 2ith- and that the company?s share capitalis as stated in the minutes./;0 The minutes 2hen reistered shall be deemed to be substituted for the

correspondin part of the company?s memorandum- and "alid and alterable as if it had beenoriinally contained in it./


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/c0 aids- abets or is pri"y to any such concealment or misrepresentation as is mentionedabo"e-he shall be uilty of an offence and liable on con"iction to a fine of N;,,.

%iscellaneous matters relatin+ to capital

**(. /*0 %here the net assets of a public company are half or less of its called up sharecapital- the directors shall- not later than 6, days from the earliest day on 2hich that fact is1no2n to a director of the company- duly con"ene an e8traordinary eneral meetin of thecompany- duly later than


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/e0 the rate of interest shall not e8ceed the current ban1 rate4/f0 the payment of the interest shall not operate as a reduction of the amount paid upon the shares in respect of 2hich it is paid.

Part VIShares!ature of shares

**:. Sub7ects to the pro"isions of this Decree- the rihts and liabilities attachin to theshares of a company shall&

/a0 be dependent on the terms of issue and of the company?s articles4 and/b0 not2ithstandin anythin to the contrary in the terms or the articles- include theriht to attend any eneral meetin of the company and "ote at such a meetin.**;. The shares or other interests of a member in a company shall be propertytransferable in the manner pro"ided in articles of association of the company.**


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/(0 If a company contra"enes any of the pro"isions of this section- the company and anyofficer in default shall be liable to a daily default fine of N;, and any resolution passed incontra"ention of this section shall be "oid./60 Nothin in this section shall affect any riht attached to a preference share under

section *:6 of this Decree.

Issue of shares

**=. Sub7ect to any limitation in the articles of a company 2ith respect to the number ofshares 2hich may be issued- and any pre&empti"e rihts prescribed in the articles in relationto the shares- a company shall ha"e the po2er- at such times and for such consideration as itshall determine- to issue shares up to the total number authorised in the memorandum.**>. /*0 A company may- 2here so authorised by its articles issue classes of shares./(0 Shares shall not be treated as bein of the same class unless they ran1 e5ually for all

purposes.**+. %ithout pre7udice to any special rihts pre"iously conferred on the holders of anye8istin shares or class shares- any share in a company may be issued 2ith such preferred-deferred or other special rihts or such restrictions- 2hether 2ith reard to di"idend- returnof capital or other2ise- as the company may- from time to time- determine by ordinaryresolution.*(,. /*0 Shares of a company may be issued at a premium./(0 %here a company issues at a premium- 2hether for cash or other2ise- a sum e5ual

to the areate amount or "alue of the premium on those shares shall be transferred to anaccount- to be called 3the share premium account3- and the pro"isions of this Decree relatinto the reduction of the share capital of a company shall- e8cept as pro"ided in this section-apply as if the share premium account 2ere paid up share capital of the company./60 Not2ithstandin- anythin to the contrary in subsection /(0 of this section- the share

premium account may be applied by the company in payin up unissued shares of thecompany to be issued to members of the company as fully paid bonus shares- in 2ritin off&/a0 the preliminary e8penses of the company4 or

/b0 the e8penses of- or the commission paid or discount allo2ed on- any issue of sharesof the company4 or in pro"idin for the premium payable on redemption of any redeemableshare of the company./:0 %here a company has before the commencement of this Decree issued any shares at

a premium- this section shall apply as if the shares had been issued after the commencementof this DecreePro"ided that any part of the premium 2hich has been so applied that it does not at thecommencement of this Decree form an identifiable part of the company?s reser"es 2ithin themeanin of Schedule ( to this Decree shall be disrearded in determinin the sum to be

included in the share premium account.


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*(*. /*0 Sub7ect to the pro"isions of this section- it shall be la2ful for a company to issueat a discount shares in the company of a class of shares already issuedPro"ided that&/a0 the issue of the shares at a discount is authorised by resolution passed in eneralmeetin of the company- and thereafter is sanctioned by the court4/b0 the resolution specifies the ma8imum rate of discount at 2hich the shares are to beissued4 and/c0 the shares to be issued at a discount are issued 2ithin the month after the date on2hich the issue is sanctioned by the court or 2ithin such e8tended time as the court mayallo2./(0 %here a company has passed a resolution authorisin the issue of shares at a

discount- it may apply to the court for an order sanctionin the issue- and on any suchapplication the court- ha"in reard to all the circumstances of the case- amy if it thin1s fit soto do on such terms and conditions as it may impose- may ma1e an order sanctionin theissue./60 E"ery prospectus relatin to the issue of the sharesshall contain particulars of the

discount allo2ed on the issue of the shares or of so much of that discount as has not been2ritten off at the date of the issue of the prospectus./:0 If default is made in complyin 2ith subsection /60 of this section- the company and

e"ery officer of the company 2ho is in default shall be liable to a fine of N;, for e"erydaydurin 2hich the default continues.*((. Sub7ect to the pro"isions of section *;> of this Decree- a company limited by sharesmay- if so authorised by its articles- issue preference shares 2hich shall- or at the option of thecompany be liable- to be redeemed.*(6. /*0 %here a company has purported to issue or allot shares and the creation- issueor allotment of those shares 2as in"alid by reason of any pro"ision of this Decree or anyother enactment or of the articles of the company or other2ise- or the terms of issue orallotment 2ere inconsistent 2ith or unauthorised by any such pro"ision- the court may uponapplication made by the company or by a holder or mortaee of those shares or by a creditorof the company- and upon bein satisfied that in all the circumstances it is 7ust and e5uitableto do so- "alidate the issue or allotment of those shares or confirm the terms of the issue andallotment- as the case may be.

/(0 In e"ery case 2here the court "alidates an issue or allotment of shares or confirmsthe terms of an issue or allotment in accordance 2ith subsection /*0 of this section- it shallma1e- upon payment of the prescribed fees and order 2hich shall be proof of the "alidationor confirmation and upon the issue of the order- those shares shall be deemed to ha"e beenissued or allotted upon the rele"ant terms of issue or allotment.

&llotment of Shares

*(:. Sub7ect to the pro"isions of the Securities and E8chane Commission Decree *+>>-

the po2er to allot shares shall be "ested in the company 2hich may deleate it to thedirectors sub7ect to any conditions or directions that may be imposed in the articles or fromtime to time by the company in eneral meetin.


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*(;. %ithout pre7udice to the pro"isions of section ; of this Decree- a company may in itsarticles- ma1e pro"ision 2ith respect to payments on allotment of its shares.*(>. /*0 An allotment made by a company before the holdin of the statutory meetinto an applicant in contra"ention of the pro"isions of this Decree- shall be "oidable at theinstance of the applicant 2ithin one month after the holdin of the statutory meetin of thecompany and not later- or 2here the allotment is made after the holdin of the statutorymeetin- 2ithin one month after the date of the allotment- and not later- and the allotmentshall be so "oidable not2ithstandin that the company is in the course of bein 2ound up./(0 If any director of a company 1no2inly contra"enes or permits or authorises the

contra"ention of any of the pro"isions of this Decree 2ith respect to allotment- he shall beliable to compensate the company and the allottee respecti"ely for any loss- damaes or costs2hich the company or the allottee may ha"e sustained or incurred thereby

Pro"ided that proceedins to reco"er any such loss- damaes- or costs shall not becommenced after the e8piration of t2o years from the date of the allotment.*(+. /*0 %hene"er a company limited by shares ma1es any allotment of its shares- thecompany shall 2ithin one months thereafter deli"er to the Commission for reistration&/a0 a return of the allotments statin the number and nominal amount of the sharescomprised in the allotment- the names- addresses and description of the allottees- and theamount- if any- paid or due and payable on each share4 and/b0 in the case of shares allotted as fully or partly paid up other2ise than in cash&


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/i0 a contract in 2ritin constitutin the title of the allottee to the allotment toether2ith any contract of sale- or for ser"ices or other consideration in respect of 2hich thatallotment 2as made- such contracts bein duly stamped4/ii0 a return statin the number and nominal amount of shares so allotted- the e8tent to2hich they are to be treated as paid up- and the consideration for 2hich they ha"e beenallotted4 and/iii0 particulars of the "aluation of the consideration in accordance 2ith section *6= ofthis Decree- if any./(0 If default is made in complyin 2ith this section- e"ery officer of the company 2ho

is in default shall be liable to a fine of N;, for e"ery day durin 2hich the default continuesPro"ided that- in case of default in deli"erin to the Commission 2ithin one month after theallotment any document re5uired to be deli"ered by this section- the company or any officerliable for the default- may apply to the court for relief- and the court- if satisfied that theomission to deli"er the document 2as accidental or due to inad"ertence or that is 7ust ande5uitable to rant relief- may ma1e an order e8tendin the time for the deli"ery of thedocument for such period as the court may thin1 proper.

$ommission and discounts

*6,. /*0 E8cept as pro"ided in section *6* of this Decree- no company shall apply any ofits shares or capital money either directly or indirectly in payment of any commission-discount or allo2ance to any person in consideration of his subscribin or areein tosubscribe- 2hether absolutely or conditionally- for any shares in the company- or procurinor areein to procure subscriptions- 2hether absolute or conditional

Companies and Allied Matters Act

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Transcript of Companies and Allied Matters Act