Nigerian Law School (2017) Corporate Law Practice Summarized Note

WEEK 3.
TOPIC: AN OVERVIEW OF THE LEGAL FRAMEWORK AND
REGULATORY BODIES ON CORPORATE LAW PRACTICE IN NIGERIA.
HIGHLIGHTS OF THE CAMA 1990.
- Promulgated on 2nd January, 1990 and commenced on 31st December 1990.
- It incorporates various principles of law and equity, has detailed provisions on Directors,
Members, Secretaries, Accounts, Auditors, Meetings, Memo and Articles, e.t.c. It also
establishes the CAC as a body corporate with perpetual succession and a common seal
capable of suing and being sued1.
:: OSIC:
:: ACCREDITATION AND REGISTRATION: To ensure best practices, CAC and SEC
often require accreditation or registration (respectively) of professionals dealing with it.
:: ACCREDITATION WITH CAC: Legal Practitioners, Accountants and Chartered
Secretaries who are the only professionals that can deal with the CAC on matters of PART
A (companies), CAMA must be formally accredited with the CAC. This is by filling and
returning Accreditation Form A or B with –two passport photographs, Qualifying
Certificate (e.g. Call to Bar Certificate for Lawyers), Practicing Fee receipt for the year,
NYSC discharge or exemption Certificate, and Accreditation Fee of 2,500 or 5,000 for
individual or firms respectively. An Identity Card with unique serial number2 is then
issued. The lawyer is at an advantage because only him can fill CAC Form 4 statutory
Declaration of Compliance with the Requirement of CAMA for the registration of a
company” Section 35(3) CAMA.
:: REGISTRATION WITH SEC: though challenged in S.E.C v Professor A.B
Kasunmu, ISA 2007 now provides that professionals are to register with SEC. This is
done by filling SEC Form 2, evidence of payment of current practicing fee, payment of
application fee (1k individual, 20k firm), statement that ISA has been complied with.
Additionally, businesses are to forward CTC of business name/partnership deed, CV of
at least 2 officers, full postal and electronic address, evidence of minimum net worth
(2,000,000 firm, 500k individual). Then applicant participates in SEC Training School.
See Section 38 ISA, 178 SEC Rules.
1 The chief executive officer of the CAC is the Registrar-General who must be a legal practitioner
qualified for not less than 10 years with 8 years in Company Law Practice.
2 This number shall be used in CAC forms he uses.
Law Notes, Past Questions and Answers at www.isochukwu.com
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WEEK FOUR.
TOPIC: CHOICE OF BUSINESS ORGANIZATION AND FORMATION (1)-
COMPANIES.
Under CAMA, Organizations are broadly classified into business3 and non-business4.
CAC registers such except statutory corporations and cooperative societies.
:: STATE THE TYPES OF COMPANIES THAT CAN BE REGISTERED. The types
are largely 6.
A company may be a PRIVATE or PUBLIC company in which the liability of members
are; 1. Limited by Shares. OR 2. Limited to the amount in which each member
guarantees/undertakes to contribute in the event of the company’s winding up. OR 3.
Unlimited.
The type of the company is determined by the MEMO.
A Private Co should have authorised share capital of 10,000, restrict transfer of shares
(excluding authorized private banking business) and membership should generally be
within 2-50.
:: ADVISE ON SUITABILITY OF EACH. In doing so wo appraise the object, size of
members and company, sphere of operation, transferability of shares (Section 22 CAMA),
formalities, capital, whether the company would be issuing shares to the public (then
better go for public co), and cost of registration.
:: PREPARE A CHECKLIST OF DOCUMENTS REQUIRED FOR REGISTRATION
OF COMPANIES. They include:
First, have the requisite CAC form(s). 1. FORM CAC 1 – Availability check and
reservation of name. 2. FORM CAC 1.15
3. The Memorandum of Association (MEMO): Tables B, C, and D of Schedule 1 to the
Act could be adopted with necessary and permitted modifications. It should contain the
following clauses indicating (Section 27 CAMA) –the Name (which must end with Plc,
Ltd, Gte, Ultd, depending), - Registered Office, - Object (precisely stated6), - Restrictions
if any, - Status (public or private), liability (limited, unlimited, etc.). NRSL.