COMPANY LAW 1

Discuss the Rationale for the regulation of prospectus

Foremost, Section 315, ISA (Investment & Security Act) defines prospectus as any written or
electronic information, notice, advertisement or other forms of invitation offering the public for
subscription or purchase of any shares, debentures or other approved and recognized securities of
a company and other issues or scheme, the concept of prospectus is seen as an invitation to treat
and deemed to be addressed to only those who subscribe to shares in response to the prospectus.

A prospectus can only be issued to the public if only within six months before its issuance, such
prospectus has been delivered to the Security and Exchange Commissions (SEC) and has been
subsequently registered as provided in S.78, ISA and SEC regulations 55 provides that the date
of registration must be written on the prospectus upon distribution to the public. It is required
that the full information of a company’s financial and capital status must be stated in a
prospectus.
Further, it is unlawful to issue any form of application for securities in a public company unless
the form is issued in a prospectus.
The prospectus shall have endorsed it or attached to it
a. The consent of every expert whose statement is contained in the prospectus
b. In the case of prospectus issued generally, a copy of any applicable contract; written
statement by an expert in respect of adjustment made in any report.
c. State that a copy has been delivered for registration and
d. Specify or refer to statements included in the prospectus which specify, any
documents required to be endorsed on or attached to the copy so delivered.
It should be noted that a prospectus can be abridged prospectus as in a summarized version of
the prospectus containing the key requirements of a prospectus, - this is usually in use because
full prospectus contains many documents and bulky.
Prospectus can also be deemed prospectus. This is any document, though not titled prospectus,
for all intents and purposes, contains, the basic requirement of a prospectus, used in offer for sale
of companies securities.
 2. Discuss the following (a) Partnership (b) Incorporated Trustees (c ) Sole Proprietorship
(d) Statutory corporations ( e ) incorporated organisations

a. Partnership
Partnership is the relationship which exists between persons who have agreed to carry on
business in common with a view to profit. Section 4, partnership law, Kaduna state, Section 3
Partnership law of Lagos state and section 1 partnership Act (UK) of 1890. Mere agreement to
carry on business is not enough, for a partnership to exist, the parties must have started business.
The business must be for profit. This carrying on business for the benefit of the members without
intention to share profit may not amount to a partnership. Thus, partnership cannot exist for
charitable purposes. Interpretation Section of CAMA defines business to mean any trade,
industry, profession and any occupation carried on for profit. For a business to amount to a
partnership therefore, it must be carrying on business for profit. The said business must be a
continuous one not a once and for all venture, although under the common law a partnership
could exist for a single venture only. In Mann v. D’Arcy, the parties entered into a single
venture for the purchase and resale of a quantity of potatoes. It was held that this transaction was
a business carried on in common for profit and so qualified as a partnership. There is therefore a
departure by the partnership laws in Nigeria from the U.K. position on this issue. In Nigeria, a
once and for all business venture does not qualify as a partnership.

The business of the partnership must be carried on “in common” i.e. all the partners must be in
the business together as to incur liability on behalf of each other. Intention to carry on business is
not enough and does not thereby create a partnership.
In Keith Spicer Ltd v. Mansell M. and B agreed to go into business together and to form a
limited company later which would carry on business in M’s restaurant. B ordered certain goods
from Keith intending to use them for the business of the proposed company when formed. B.
became bankrupt. Keith sued M. to recover the price of the goods contending that M & B were
partners in business and therefore liable for each other’s debts under the partnership. It was held
that M & B were not partners as they were never carrying business in common.

According to S.1 (1), partnership Act, 1890 and as established in Shunubi v. Onafiku ( is the
relationship which subsists between persons carrying on business with a view to making profit.
The composition of Partnership is the minimum of two persons and he maximum of 20 persons,
any business unit beyond twenty persons must cease to be a partnership but must be incorporated
as a company as seen in Section 19 (1), CAMA 2020 and any such partnership operating
without incorporation becomes an illegal association as in Akinloshe v. AIT co. A partnership
lacks a legal capacity and the liabilities of the partners are unlimited except in a limited
partnership. The formation and terms of the partnership is contained in a partnership article
which may be under seal or by mere agreement whether oral or written as held in Ojente v.
Okoafuda . The basis of the existence of a partnership is agreement made by the parties of
which there is equality in their composition except as otherwise agreed. The partners can engage
in any kind of legitimate business and not restrained by the doctrine of ultra vires

b. Incorporated Trustees

These are registered under Part C of CAMA, it is not accompany but an organization which
is non-profit oriented like religious organizations or social clubs, they are basically formed
for the purpose of acquiring corporate personality by persons bound by customs, religion,
kinship, sociology or nationality, literary, developmental, scientific, educational etc. these
forms of organization can operate without incorporation but will not have a corporate
personality.

CAMA 2020 gives the possession of a common seal by an incorporated trustee optional rather
than compulsory (section 822(1(b)). Furthermore, the Bill gives the commission the power to
treat two or more associations having the same trustees as a single association (section 823(b).
Section 841 also allows for the merger of two or more associations with similar aims and objects
as may be prescribed by the Commission.

c. Sole Proprietorship

This is the oldest and commonest form of business organization whereby an individual engages
in commercial activities with a view to making profit. Any person can form a business of sole
proprietorship and where the business requires professional qualification, such person must have
the requisite qualification, the sole proprietor is solely responsible for whatever loss or profit
from the business as the liability is unlimited, he does the business in his name and can be sued
personally as his entity (business) is not separated from the operator of the business as against
the rule in Salomon v. Salomon. The disadvantage of running a sole proprietorship is that there
is no assurance of continuity upon the death of the owner and it cannot attract capital for the
development of the business.

d. Statutory corporations

These are public enterprises brought into existence by a special Act of the National
Assembly. This is a body corporate created by the legislature with defined powers and
functions and is financially independent with a clear control over a specified area of a
particular business.

e. incorporated organizations
this is a group of people coming together to form a business with an identified and registered
name. this registration, entitles the organization to stand out as a separate and corporate entity
thereby allowing it to acquire property, borrow, sue and be sued.

Section 42 of CAMA 2020 states that

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

3. FACTS
Madarikan started a body cream selling business in September 2006 supplying creams to local
beauticians and chemists. In 2010, he registered the business as a company with CAC, and made
his wife and 3 children shareholders but he retained controlling shareholding and obtained loans
from different creditors using the company’s asset as collateral. The company was subsequently
unable to pay its debts. The creditors are claiming that since Madarikan holds majority
shareholding, it signifies that although he has other shareholders, he runs the company as if it
were a one man entity and as such he should be personally liable for the loan. Advise the parties.
ISSUES
Whether or not Mr Madarikan can run the company as if it were a one man entity and can obtain
loan with the company’s assets
Whether or not Mr Madarikan can be personally liable for the payment of the loan
RULING
The principle of law governing the above legal issues revolve around the incorporation of the
company (corporate personality) and the doctrine of lifting the veil.
Incorporation is the process of conferring the company with legal personality. It means among
other things that a company is a legal person and has a separate character or existence from its
members.
Section 37 of CAMA provides that “As from the date of incorporation mentioned in the
certificate of incorporation, the subscribers of the memorandum together with such other persons
as may from time to time become members of the company shall be a body corporate by the
name mentioned in the memorandum…”

A company upon incorporation becomes a legal person of its own. The law regards the company
as a person whose identity is different from that of the persons who finance or work for it. Those
who finance the company are therefore not its owners. They only own the money they
contribute to the company by way of buying a share in the company’s share capital. The
shareholders of the company collectively are therefore its owners only in a technical sense i.e.
they collectively own the company’s share capital with which it finances its operations.

In the case of Salomon v. Salomon, the court held that the company upon incorporation
becomes a distinct person from its member. Thus, the incorporation vests the following features
on the company.

i. Right to acquire property

ii. The capacity to sue and be sued
iii. Perpetual succession
iv. Transfer of shares
v. Borrowing

For the purpose of the above issues, the power of the company to borrow shall be discussed.
The company has the capacity to borrow money in its own name and for its purposes. In the case
of Soyinka v. Inaolaji, the court decided that a clear distinction exists between the company and
its directors and shareholders and as such, upon incorporation, a director cannot be held liable for
the loan granted in favor of the company unless he is a guarantor or surety for the loan granted. It
therefore also follows that, a director cannot be permitted to borrow or obtain loan for his
personal use in the name of its company as it would amount to fraud.

Doctrine of lifting the veil

Despite the doctrine of corporate entity of the company, there are cases where the liability
incurred will be visited on the members of the company, this process is known as Lifting the veil
of incorporation and it is done in the interest of justice to prevent the statute from being used as
an instrument of fraud as held in FDB Financial services ltd V. Adeshola per Aderemi , JCA.
The cases where the veil will be lifted include:

i. Where the membership of the company is below legal minimum. S.9provides that
where the membership of the company is less than two and it keeps carrying on
business for more than six months, every director who knows of such facts shall be
liable jointly for debts incurred by the company during that period.
ii. Where the number of directors is below legal minimum. That is, where a member or
director of a company knows that the company carries on business for more than sixty
days, such director or member shall be liable for all expenses incurred at that period.
iii. Where a company receives money by way of loan for specific purpose or receives
money for the advancement of a contract and with the intent to defraud, fails to apply
the property for that purpose, every director or officer in default will be personally
liable, the court in this case will lift the veil of incorporation and find out who is in
charge of the fraud as held in PFS ltd v. Jefia Where the company in the process of
winding up is found to have engaged in Fraudulent and reckless trading, any person
who was involved in the fraud will be personally liable as in Section 88 CAMA
iv. Where the company’s name and registration number is not properly written on
negotiable instruments issued by the company in line with the CAMA, the officer
making the omission will be personally liable to the holder of such company.
 v. Where the company is used as a sham or mask to avoid legal obligations, the court
will be ready to lift the veil of incorporation as in Gilford motor co. v. Horne
where the company was unveiled because it was used to avoid a covenant of trade
restraint.
vi. In Criminal cases, where the company is used as fraud, the veil will be lifted as in
Adeniji v. The state
vii. The veil of incorporation between a holding and subsidiary company will also be
lifted where the subsidiary is used to evade tax obligations.

In the case of NDIc v. Vibelko Nig Ltd, the court affirmed that it is in the interest of justice that
the court or tribunal will lift the veil of a company. Particularly where the company is being used
as a mask or sham by the directors to avoid recognition in the eyes of equity.

In the case of Re William Leitch Bros. the court held that, upon the application of any receiver
or creditor of the company, a company’s veil may be lifted where it is found that business of the
company is being carried out recklessly and in a fraudulent manner, and as such the debts or
other liabilities shall accrue to the persons behind the veil who knowingly operates the company
in such manner.

APPLICATION

In applying the above principles of law to the first issue, it can be deduced that the Mr
Madarikan is running the company as a one man asset and it is against the provision of the law
relating to corporate governance. Also, he is obtaining personal loan in the name of the name of
the company as against the doctrine of incorporation.

CONCLUSION

Conclusively, the parties can bring an action to lift the veil of incorporations of the company and
this will in turn render Mr Madarikan personally liable for the loans obtained.

4. FACTS

Mr Buhari, the president of Nigeria needs to incorporate a company that he would use in
exporting halal meat upon completion of his tenure as president. However, he wants the
company to be his legacy to his great grandchildren. As such, he is considering making his 51
great grandchildren whose ages range from 1 month to 216 months the only shareholders of the
company. He previously fail in with the name of another livestock producing company called
Zartech so he is considering Zarteth Nigeria ltd as a name. He wants his friend who was
dismissed on grounds of financial improprieties in the Civil service as the sole director of the
company. Also, he is of the view he wants the paid up share capital to be ₦5000.00 and intends
to restrict the transfer of the company’s shares. He has approached you as a lawyer seeking your
legal opinion on his intention. With the aid of statutory provisions and decided cases advise him
accordingly.

ISSUES
Issues for determination are as follows:

1. Whether or not Buhari’s 51 great grandchildren whose ages ranges from 1 month to 216
months are eligible subscribers of the company.
2. Whether or not Buhari can incorporate his company with the name Zartech Nigeria
Limited
3. Whether or not his friend who was dismissed from civil service as a result of financial
improprieties can be a director of a company
4. Whether or not his friend can singlehandedly operate as the director of the company.
5. Whether or not 5000 naira can be the share capital of a private company
6. Whether or not Buhari can restrict the transfer of the company’s share

RULING AND CONCLUSION

In answering the first issue, the law is clear that the minimum number of persons that can
incorporate a company are two and these two must have attained the age of 18 years as
encapsulated in Section 20 CAMA.

It is also trite law that the maximum total number of a private company shall not exceed 50
members as encapsulated in Section 22 (3) CAMA. However, joint holders of shares can be
treated as single members as in Section 22 (4).

Applying the above principle of law to this issue, it is evident that 216 month is 18 years old
and where it can be inferred that there at least two 216 months among the 51 great grand
children. Then, the requirement of law is fulfilled. However, where it is only one 216 month
among the great grand children, then the minimum number required by law has not be
complied with.

Also, the position of the law is clear that the total number of a private company shall not
exceed 50. therefore it can be said that where two members have attained the age of 18 years
(216 months out of the 51 great grandchildren), then one of the 51 great grandchildren should
be dropped or withdrawn so that the remaining 50 can form the maximum of 50 required by
the tenor of section 22 (3) CAMA.

In answering the second issue, it is express in section 31 of CAMA that certain names are
prohibited and some are restricted. These are:

i. Names identical to an existing name and is so calculated of capable to mislead the

public as in the case of Niger Chemist v. Nigeria Chemist Limited. Such name can
only be allowed where the existing company bearing it is about to be dissolved.
ii. Names violating existing trademarks.
iii. Name containing the word ‘chamber of commerce’

Where the commission discovers any of these, it has the power to reject it without applying
to the court. Therefore, on this issue, Buhari cannot be permitted to use the name “Zartech
Nigeria Ltd” since it is resemblance with an existing name called “Zartech”

In answering the third legal issue, going by the tenor of Sections 20 (c) 254 (1) (ii) and 257
(c) CAMA any person who is found to be been guilty of financial impropriety is prohibited
from being a director and this impropriety must be connected with the management of a
company. However, such prohibition will only last for ten years as in Section 281 and 283
CAMA. Suffice to say that such person will only be prohibited from being a director for a
period of 10 years.

Therefore, Buhari’s friend will be qualified to be a director except where it can be shown that
such impropriety is connected with the management of a company but where it occurs in a
civil service as in this case, it will not preclude him from being a director. In fact, if the
financial impropriety is committed in the course of managing a company, it will also abate
after 10 years of commission.
 In answering the fourth issue, the provision of the law is that a company must have a
minimum of two directors. Therefore, making his friend a sole director of the company will
be illegal and invalid as judicially noticed in Baffa v. Odili

In answering the fifth legal issue, Section 27 (2) (a) CAMA provides that the minimum
share capital of a private company is 10, 000 Naira. Therefore, 5000 share capital intended to
be used for incorporation has offended and a non-compliance with Section 27 (2) (a)
CAMA.

In answering the sixth issue, the position of the law is that a private company cannot unless
authorized by law invite the public to subscribe for any shares or debentures. That is every
private company must by its article of association restrict the transfer of its shares as
encapsulated in Section 22 (2) CAMA.

The most important thing of this restriction is that it prevents the securities of the private
company from being listed at the Stock Exchange. Therefore, the restriction by Buhari is in
order and it complies with Section 22 (2) CAMA.

5. FACTS
Messrs Jogor and Mensrea are estate consultants who have incorporated a company with its
objective as buying and selling of lands. However, CAC’s investigation reveals that the
company’s account is been used as conduit for the funding of terrorism activities. The federal
government is seeking to prosecute Messrs Jogor and Mensrea. Messrs Jogor and Mensrea
are arguing that CAC’s investigation is invalid because it lacks the power to investigate the
activities of their company and also that the federal government cannot prosecute them for
the activities of their company because of the corporate personality of the company. Advise
the parties.
ISSUES

Whether or not CAC lacks the power to investigate the activities of the company of Messyrs
Jogors and Mensrea

Whether or not the company can be used as a conduit for funding terrorism
RULING

On the first issue, the principle covering this is the power and duties of the Commission in
relation to the company.

Section 1 of the CAMA provides that there shall be a body to be known as corporate affairs
commission otherwise known as commission.

The commission shall be a body corporate with perpetual succession and a common seal, capable
of suing and being sued in its corporate name; and capable of acquiring, holding or disposing of
any property movable or immovable, for the purpose of carrying its functions.

Section 7(1) is explicit on the functions of the Commission while Section 8 CAMA provide for
the appointment of the Registrar-General who is central to the workings/operation of the
Commission.

Functions of the commission include the following :

i. Administer the Act, regulation, supervision of the formation, incorporation,

registration, management and winding up of companies.
ii. Establish a company’s registry and offices in all the states of the federation.
iii. Arrange and conduct investigation into the affairs of companies in d interests of
shareholders and the public.
iv. Undertake other activities that are necessary to give full effect to the Act.
v. Perform other functions as may be specified by any other Act or law.
Investigation by the CAC
The corporate Affairs Commission may on the petition of a member direct an investigation into
the Affairs of a company to determine whether the affairs of the company are being properly run.
Section 357
INVESTIGATION OF THE COMPANY BY CAC – S. 314 CAMA
i. The commission may appoint inspectors to investigate the affairs of the company.
ii. The appointment may be made:
iii. In the case of a company having a share capital, on the application of members
holding not less than ¼ of the class of shares issued;
 iv. In the case of a company not having a share capital, on the application of not less
than ¼ in number of the persons on the company’s register of members; and
v. In any other case, on the application of the company.
:The application(s) shall be supported by such evidence as the commission may
require for the purpose of showing that the applicant(s) have good reason for
requiring the investigation.
vi. By the commission pursuant to the order of the court that the affairs of the company
ought to be investigated –

vii. By Section 357 CAMA, the commission, if it appears to it that there are
circumstances suggesting that:
viii. the company’s affairs are being or have been conducted with intent to defraud its
creditors or the creditors of any other person, or in any manner which is unfairly
prejudicial to some part of its members; or
ix. any actual or proposed act or omission of the company (including an act or
x. omission on its behalf) is or would be so prejudicial, or that the company was formed
for any fraudulent or unlawful purpose; or

xi. persons concerned with the company’s formation or the management of its affairs
have in connection therewith been guilty of fraud, misfeasance, or other misconduct
towards it or towards its members; or
xii. the company’s members have not been given all the information with respect to its
affairs which they might reasonably expect.
It should be noted however that by Section 357 CAMA, shall be without prejudice to the
powers of the commission, and the power conferred by subsection 2 of this section shall be
exercisable with respect to a body corporate, notwithstanding that it is in the course of being
voluntarily wound up.

Therefore, it is safe to conclude on the strength of the above ruling that the CAC has the power
to investigate the activities of the company.

On the Second issue, the company cannot be used as a conduit for funding terrorism activities. It
is an equitable principle of our law that the law will not used as an agent or device to perpetrate
illegality or crime. In in Adeniji v. The State, the court unwaveringly affirmed that the law will
not allow a company to be incorporated with the aim of committing crime, fraud or illegality.
Therefore, in criminal cases, where the company is used as fraud, the veil will be lifted. In the
same vein, Smith and Keenan have opined in their book titled Company law that, the
company’s veil will be lifted where the circumstances of incorporation is as such to carry out
unlawful purposes.
CONCLUSION
Flowing from the afore mentioned provisions of law, it is safe to conclude that the Commission
has the power o conduct investigation on a company upon petition and also, the company cannot
be used as a conduit for funding terrorism as terrorism is a crime prohibited and penalized by
law.

6. FACTS

Makinde, Beko and Janet have agreed to form a company that would go into a joint venture with
Allied & Co Nigeria ltd for the refinery and distribution of petroleum products and liquefied
natural gas across Nigeria. To that extent, Beko is saddled with the incorporation and other pre-
incorporation contract of the yet to be incorporated company. As part of his acts on behalf of the
new company, he executed a Gas Transportation Agreement (GTA) with a third party company
in which he has significant interest in. Prior to ratification of the GTA, it was discovered that the
agreement was not bankable so the newly incorporated company failed to ratify it and that has
made performance of the contract impossible. It has also refused to remunerate Beko for his pre-
incorporation services to the company. Allied & Co is threatening to sue for breach of contract
but confused as to who to sue and Beko also wants to be remunerated for services rendered.
Advise the parties.

ISSUES
Whether or not the company can ratify the Gas Transportation Agreement (GTA) executed by
Bekko.
Whether or not Bekko is entitled to renumerations for his pre-incorporation services
Whether or not Allied & co can sue and also the appropriate person to sue.
RULING
In considering these issues, it is expedient to explain who a promoter is. There are both statutory
and judicial definitions of promoter, For instance, in Twycross v. Grant, Cockburn CJ defines a
promoter as a person who undertakes to form a company with reference to a given project and to
set it going and who takes necessary steps to accomplish that purpose. The supreme court in
Starcola Nig. Ltd v. Adeniji held that a promoter is a person who takes part in forming a
company or undertakes to raises capital for the company. S.61, CAMA summarizes these
definitions as any person who undertakes to take part in forming a company with reference to a
given project and set it going and who takes necessary steps to accomplish that purpose or who
with regard to a proposed or newly formed company, undertakes a part in raising capital for it.
Thus, in Okafor v. Ezenwa. Put it simple as the human agent whose activities often give birth to
a company as a legal entity, we can therefore say that any person who registers the company is a
promoter but any professional whose service is employed like the solicitor is not a promoter as
seen in the proviso to Section 85. In the absence of a contract, a promoter is not entitled to
recover renumerations. Also, the position of a promoter like that of agency relationship is a
fiduciary relationship as provided in Section 85 &86 CAMA and as such must act in utmost
good faith towards the company, he must also disclose any profit or information gotten from the
property of the company as required in S. 86 CAMA, he also has a duty to disclose any interest
he has in any transaction entered into by the company and disclose all material facts known to
him to the company directors independent of the promoters or all the members of the members of
the company or the company at a general meeting at which neither the promoter nor the
shareholders which he is beneficially interested shall vote on the resolution to ratify that
transaction.

Thus, in Erlanger v. Sombrero phosphate co, the court held that a promoter who fails to
disclose a sale of company’s property to the shareholders is invalid even though the company at
its general meeting later adopted the sale. Thus,

a. The promoter owes a duty to disclose to the board of directors even if he is a member and
his own knowledge of the fact alone is not sufficient to validate a transaction.
b. Where a promoter discloses a material fact at a general meeting which requires voting to
ratify the transaction, the promoter himself will not be eligible to vote on the matter
 likewise his nominees, this is aimed at preventing him from manipulating the company to
ratify his illegal acts and give room for an independent decision in the process of
ratification or otherwise.

It is also not sufficient to disclose the facts to the company, he must disclose all known facts
fully and partial disclosure will not avail him. Therefore, in Gluckstein v. Barnes, the court
invalidated the acts of the promoters on the ground that: (a) They accounted to only themselves
as directors, a process which could not be seen as independent (b) They only declare that they
made some profits without actually stating the amount of the profit.

Hence, where a promoter has breached his fiduciary duty to the company, the company has the
right to rescind the agreement where restitution integrum is possible as provided in CAMA.
Also, the company may recover the profit made by the promoter. The company may also sue the
promoter for breach of this duty likewise a subscriber may sue the promoter for misleading
statements willfully made by the promoter Jacobusmaner v. Maner, there is no lapse of time
upon which the company may bring an action against the promoter in this instance except where
the court see it as equitable to declare the action statue barred.

Another part of the promoter’s duty may arise in pre-incorporation contract i.e where a contract
is entered into by the promoter on behalf of the company before incorporation. The common law
position as stated in Urhobo V. Tarka is that a company will not be bound by such transaction
since an agent cannot exist for a non-existence principal. Thus, in Kelner v. Baxter, the
promoters of a company were held liable personally for contract entered into before
incorporation. However, by S. 86, CAMA, the company can now ratify such contract but where
the contract is not ratified, the promoter remains personally liable as seen in S. 86, CAMA.

APPLICATION AND CONCLUSION

From the above provisions, the company may ratify or not ratify the agreement executed by
Beko since it was it was discovered that the agreement was not bankable.

Also, on the issue of renumeration, since the company has refused to ratify, Beko is held
personally liable as seen in section 86 of CAMA above.
Also, on the third issue, Section 85 CAMA provides that the person acting on behalf of the
company is presumed to be liable for any transaction or liability of the pre-incorporation
contracts, in the absence of an express agreement to the contrary, flowing from this statutory
provisions, the company will not be liable to Allied & co. but Beko will be liable. Thus, Allied
& co is entitled to sue for breach of contract and the appropriate person to sue is Beko.

7. Discuss with the aid of decided cases and statutory provisions the different Liabilities of
companies.

In answering this question, it is expedient to state that the company exercises the capacity of a
corporate entity upon incorporation and as such it is possess legal capacity in that it can be liable
and (being sued) and can also sue. This was decided in the case of Foss v. Harbottle

Section 42 CAMA 2020 states that

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

It must be pointed here that upon incorporation, although the company acquires the personality
of aa corporate entity, its affairs are directed and coordinated by human persons. Therefore, the
company cannot reasonably exist and operate without persons running its affairs. This is why
the company is regarded as an artificial person, because it requires natural persons to perform its
corporate functions.

Section 89 CAMA 2020 provides for the liability of the company thus;

Any act of the members in general meeting, the board of directors, or a managing
director while carrying on in the usual way the business of the company, shall be
treated as the act of the company itself and the company is criminally and civilly
liable to the same extent as if it were a natural person:
Provided that -
a) the company shall not incur civil liability to any person if that person had actual
knowledge at the time of the transaction in question that the general meeting, board of
directors, or managing director, as the case may be, had no power to act in the matter or
had acted in an irregular manner or if, having regard to his position with or relationship to
the company, he ought to have known of the absence of such power or of their
irregularity; and
(b) if in fact a business is being carried on by the company, the company shall not escape
liability for acts undertaken in connection with that business merely because the business
in question was not among the business authorized by the company’s memorandum.
It follows that the acts of any officer or agent of a company shall not be deemed to be acts of the
company except he company, acting through its members in general meeting, board of directors,
or managing director, shall have expressly or impliedly authorised such officer or
agent to act in the matter; or the company itself have represented the officer or agent as having
its authority to act in the matter, in which event the company shall be civilly liable to any person
who has entered into the transaction in reliance on such representation unless such person had
actual knowledge that the officer or agent had no authority or unless having regard to his position
with or relationship to the company, he ought to have known of such absence of authority.

8. It is an established position of law that court would always seek to maintain the
sanctity of the corporate personality principle and would never seek to interrogate
the ownership of a company. With the aid of decided cases and statutory provisions,
critically analyse the accuracy of the statement.
It is important to first define what a company entails. A company can be defined as a business
association formed for the purpose of making profit by at least two persons whether private or
public as can be evident in S. 18, CAMA which requires that the legal requirement to form a
company is the existence of two or more persons. It however does not become a company until it
has been incorporated under the CAMA. Once incorporated, the company acquires a corporate
personality and becomes an artificial person.
This means that; the company is at law a different person from the subscribers once incorporated
in the same vein, the company is a person in law, although, a company is not a natural person or
human being in the real sense of it, the law clothes it with the status of an artificial person and
recognizes it at as a juristic person who can sue and be sued. Thus, the company has a corporate
personality. What then is corporate personality? It depicts according to the Blacks Law
Dictionary, the legal conception in which a human being or an artificial entity is regarded as a
person in law. Thus, Denning, L.J in Bolton (Engineering) co. v. Graham likened a company to
a human body which has brain and nerve centres that control what it does. Therefore, the court in
Union Bank v. Penny-Mart ltd explained that when a company is incorporated, it becomes a
separate entity from its members, this is seen in S. 42 CAMA 2020. the Section provides that

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

Consequently, the incorporation, bestows upon the company the following incidents/powers:

a. The power to hold property and hold same distinctly from the members of the company,
this was demonstrated in Macaura v. Nothern Assurance co. where it was held that a
member of the company has no insurable interest in the property of the company. Also, a
company’s account is distinct from the account of the operators of the company as held in
Habib Bank ltd. V. Ochette. In this case, the respondent had a personal account and his
company account with the bank, he paid a cheque into his personal account, the bank
then posted it into his company account in order to deduct the debt which the company
owed to the bank claiming that the company and the personal account were operated by
the same person, the company stated the rule of corporate personality that once the
company is incorporated, it assumes a separate and distinct personality from its members.
b. Limited Liability of the members i.e the company becomes liable for civil actions or
tortuous liability and criminal liability as held in Adeniji v. The State
 c. The power to sue and be sued in its own name, this was further stated in the rule in Foss
v. Harbottle where it was held that when the company has a claim, it is only the
company itself that can sue for same and not any of its members.
d. The company has a common seal
e. It has perpetual succession in the sense that it is capable of outliving its members unlike
in a partnership where the death of a partner affects the existence of the company,
provides that upon the death of a member, his personal representatives shall take over his
shares.

The principle was introduced in the case of Salomon v. Salomon and co. where Lord
Macnaughten held that a company cannot be treated as the same with the members regardless of
whether the profit was going to the same hands as the share and once incorporated, the business
does not belong to the subscribers and promoters but the company. In this case, a sole-proprietor
incorporated his business and nominated six of his family as shareholders, upon the winding up
of the company, the receiver appointed paid all the holders of the unsecured debenture of the
company but refused to pay Mr. Salomon whose debenture is secured on the ground that the
business is still that of Salomon, upon appeal, the house of lords held that the company is distinct
from Salomon and as such cannot be held liable for the expenses of the company. This was also
applied in Lee v. Lee where the executive director made himself a staff of the company and also
the major shareholder, upon his death, his defendants brought an action for compensation in
furtherance of him being a staff of the company, the company refused on the ground that the
company still belonged to Mr. Lee, the court treated the company and lee as separate persons and
so the defendants were entitled to the compensation. A company will therefore be treated as one
if it is able to produce the certificate of incorporation in evidence as a public document as held in
African Continental Bank v. Emostrade.

In certain situations, the legal personality of the company may be lifted and the directors behind
the operations of the company will be liable personally. This doctrine is called lifting the veil of
incorporation. The cases where the veil will be lifted include:

i. Where the membership of the company is below legal minimum. -as where the
membership of the company is less than two and it keeps carrying on business for
 more than six months, every director who knows of such facts shall be liable jointly
for debts incurred by the company during that period.
ii. Where the number of directors is below legal minimum that is where a member or
director of a company knows that the company carries on business for more than sixty
days, such director or member shall be liable for all expenses incurred at that period.
iii. Also, where a company receives money by way of loan for specific purpose or
receives money for the advancement of a contract and with the intent to defraud, fails
to apply the property for that purpose, every director or officer in default will be
personally liable, the court in this case will lift the veil of incorporation and find out
who is in charge of the fraud as held in PFS ltd v. Jefia
iv. Where the company in the process of winding up is found to have engaged in
Fraudulent and reckless trading, any person who was involved in the fraud will be
personally liable.
v. Where the company’s name and registration number is not properly written on
negotiable instruments issued by the company in line with the CAMA, the officer
making the omission will be personally liable to the holder of such company.
vi. Where the company is used as a sham or mask to avoid legal obligations, the court
will be ready to lift the veil of incorporation as held in Vilbeko (Nig.) ltd. V. N.D.I.C
NWLR Also, in Gilford motor co. v. Horne where the company was unveiled
because it was used to avoid a covenant of trade restraint.
vii. In Criminal cases, where the company is used as fraud, the veil will be lifted as in
Adeniji v. The state (supra).
viii. The veil of incorporation between a holding and subsidiary company will also be
lifted where the subsidiary is used to evade tax obligations.

9. The author of a prospectus has a responsibility to ensure that its content is not just
accurate but also not misleading. Discuss.
Usually, when an invitation is to be made to the public to acquire the company’s security, it must
be made with a prospectus which complies with the provisions of S.79 of Investment and
securities Act (ISA) except where a certificate of exemption is granted under S.71, ISA. Thus,
S.315, ISA defines prospectus as any written or electronic information, notice, advertisement or
other forms of invitation offering the public for subscription or purchase of any shares,
debentures or other approved and recognized securities of a company and other issues or scheme,
the concept of prospectus is seen as an invitation to treat and deemed to be addressed to only
those who subscribe to shares in response to the prospectus. A prospectus can only be issued to
the public if only within six months before its issuance, such prospectus has been delivered to the
Security and Exchange Commissions (SEC) and has been subsequently registered as provided in
S.78, ISA and SEC regulations 55 provides that the date of registration must be written on the
prospectus upon distribution to the public. It is required that the full information of a company’s
financial and capital status must be stated in a prospectus. The author of a prospectus also has a
responsibility to ensure that its content is not just accurate but also not misleading otherwise, it
will result into misrepresentation. Misrepresentation may be defined as an untrue statement of
fact made by one party another before or at the time of the contract with regards to some existing
facts or to some past events which has the effect of inducing the contract, Omission can also be
explained as the condition where a party fails to include all material facts which are part of the
contract such that the other party would not have entered into the agreement if he knew about
such facts. Such omission or misrepresentation may be fraudulent, negligent or innocent and
there are both civil liabilities and criminal liabilities for any director who issues such prospectus
or even an expert consenting to the claims in such prospectus. This liability is found out of the
duty imposed upon any person issuing a prospectus as stated by Kindersley VC in New
Brunswich & Canada Railway co. v. Muggeridge. “They are bound to state everything with
strict and scrupulous accuracy and they must not omit any material fact”.

At common law, a person issuing a prospectus which contains an untrue statement is liable o
damages for misrepresentation and the innocent party can rescind the contract and the liable
persons are the directors or the expert consenting to claims contained in the prospectus. Every
person who is injured by the misstatement can bring an action but a sub-buyer who buys from an
original buyer cannot bring an action under this category as held in Peek v. Gurney. Also, an
allottee of a share under this breach cannot bring an action if he is aware of the omission and still
purchase the shares as held in Watts v. Bucknall. Meanwhile, if the breach complained is only
an omission but not a misrepresentation the proper remedy is only damages but not rescission as
held in Cole v. White City Ltd.
Also, there are both civil and criminal liability which provides that the issuer of such prospectus
which has this breach shall be liable to compensation to the subscribers upon the
misrepresentation or omission. The liable parties are therefore:

a. A director of the company at the time of issuance of the prospectus.

b. A person who authorizes himself to be named as directors in the prospectus
c. Any person who is a promoter of the company and;
d. Any person who authorizes the issue of the prospectus.
b) Also, any officer who authorizes such a statement commits an offence and is liable on
conviction to a fine or imprisonment .
However, an expert who gives his consent to the issuance of the prospectus will not be
liable if:
(a) he withdrew his consent in writing before the prospectus is delivered to SEC for
registration or
(b) before allotment of shares, he withdrew the consent and gave a public notice in that
regard or
(c) that he was competent to consent to the statement and up to the allotment, he had a
reasonable ground to believe that the statement was true as provided in S. 85(6), ISA.

10. Fumen intends to incorporate a company although he is fascinated by the idea of a

company being unlimited he has no idea what the implication of an unlimited company
is. He has approached you for guidance on the options available to him if he wants to
incorporate his business.
For the purpose of this question, focus shall be made on the registration of a company,
particularly the process of incorporating an unlimited company.
An unlimited company shall be registered with a share capital not below the minimum issued
share capital permitted under Section 27 (2) (a) of the CAMA which states that
(a) the memorandum of association shall also state the amount of the minimum issued share
capital which shall not be less than Nl00,000.00 in the case of a private company and
N2,000,000.00, in the case of a public company, with which the company proposes to be
registered, and the division thereof into shares of a fixed amount.
The following are the checklist required by Funmen to register a business as an unlimited
company.
FORM CAC 1
Availability Check and Reservation of Name
FORM CAC 1.1 – now composite – embodies: Statement of Share Capital and Return of
Allotment of Shares (duly stamped at the Stamp Duties Office FIRS)
Notice of Registered Office Address
Declaration of compliance with the Requirement of CAMA (duly sworn to by Legal Practitioner
before a Commissioner for Oaths/Notary Public)
Particulars of Secretary of the Company
Particulars of First Directors
OTHER DOCUMENTS/ITEMS
Memorandum and Articles of Association (2printed and signed copies duly
stamped at stamp Duties –FIRS)
Original receipts of CAC Filing/Registration fees, stamp duties and compliance oath
Any other Document required by any other law /Regulation
The content of memorandum will be the same as for a company limited by shares with the
exemptions that
Name to end with the word “unlimited” and also, the liabilities of the members will be unlimited

11. (a) Memorandum of association and an article of association are both constitutions
of a company but for some fundamental differences. Discuss
The constitution of a company is formal document, drawn up by those applying to register the
company, which sets out the rules of running the company. The regulations of every company
are usually contained in two documents viz:
a. Memorandum of association which sets out the basic objects of the company. It
presents the company to outsiders.
b. Articles of Association which contain the domestic regulations of the company
and govern its internal management.
 Both documents must be registered with the Corporate Affairs Commission (CAC).
Once registered, they become a public documents for determining the nature,
business or objects, power etc of the company.
In the case of NIB Investment v. Omisore. The court held that the Memorandum and
Articles of Association constitute a contract not merely between the shareholders and
the company but between each individual shareholder and every other shareholders of
the company. This was also upheld in Obikoya v. Ezenwa
Both documents can be amended in accordance with the provision of the Act. See the
case of Orji & ors v. Orji & ors.
The memorandum differs from the article in that, while it regulates the external
affairs of the company, the Articles regulates the internal affairs of the company. The
court in the case of Guinness v. Local Corporation of Ireland states that the
Memorandum controls the Articles while the latter is used to explain the former in
respect of matters which are not required to be stated by the Act.
Essentially, the Memorandum is the document which regulates the company’s external activities
and must be drawn upon the formation of a registered or incorporated company, it determines the
objects of the company thereby setting boundaries for the acts of the company and defines the
company’s status and powers enabling shareholders and outsiders who deals the company to
know what business it is permitted to undertake and limit such business, what share capital the
company has and what its relation is with outsiders generally.
The Articles of association is basically concerned with the regulations of the internal affairs of
the company. They determine how the powers conferred on the company by the memorandum of
association shall be exercised.
The articles are subordinate to the memorandum of association in the sense that they cannot
confer wider powers than the memorandum of association. The court held in the case of
ReDuncan Glamour and Company Limited that where the articles and memorandum are
inconsistent, the memorandum of the association prevails.
On the other hand, the Articles must be read together with memorandum as far as may be
necessary to explain any ambiguity in its memorandum of association or to supplement it upon
any matter as to which it is silent.- Liquidator of Humboldt Redwood Co. LTD V. Coats.
Section 27 CAMA 2020 provides for the Memorandum of the Association. It states that:
l) The memorandum of association of every company shall state -
(a) the name of the company;
(b) that the registered office of the company shall be situated in Nigeria;
(c) the nature of the business or businesses which the company is authorized to carry on, or, if
the company is not formed for the purpose of carrying on business, the nature of the object or
objects for which it is established;
(d) the restriction, if any, on the powers of the company;
(e) that the company is a private or public company, as the
case may be; and
(f) that the liability of its members is limited by shares, by guarantee or unlimited, as the case
may be.
Section 34 CAMA 2020 provides for the Articles of the association and states that ‘a company
shall have articles of associations prescribing regulations for the company’
Section 46 CAMA 2020 further provides for the effect of Memorandum and Articles of
Association
‘the memorandum and articles of association shall have the effect of a deed between the
company and its members and shareholders upon registration’ tis has long been stated in the case
of Yalaju-Amaye v.AREC Ltd
It should however be noted that any such provision either in the Articles or Memorandum of the
company which is inconsistent with the provision of the Company and Allied Matters is invalid.

11b. Critically discuss the following Constructive notice; Presumption of regularity; Small
company.
Constructive notice
The ultra vires doctrine is essentially a restriction placed on a company to operate only within the
ambits of its object clause, any deviation from the object clause render such acts void ab initio
and cannot be ratified by members of the company and cannot be enforced by either side, the
doctrine therefore goes to the fact that no organ of the company has the power to do such acts on
behalf of the company since such act is not within the scope of the company. The basis of the
doctrine is to protect the creditors and investors of the company from putting their money in an
uncertain venture i.e a person should not put his money in accompany that sells furniture and
now finds itself selling laptop. At common law, the ultra vires doctrine strictly applies to the
letter and transactions outside the memorandum was void and incapable of ratification. Thus, in
Continental Chemist v. Ifeakandu, the court held that a company’s memorandum is its charter
and any act beyond the memorandum is void. The strict application of this doctrine under the
common law has worked to prejudice third parties who enter into an ultra vires act with the
company not minding the fact that such third party may not know about the object clause of the
company e.g if A who does not know that company B has no power to enter into debt
relationship with him, A enters such relationship, he would not be able to enforce his claim under
such contract as the object clause of Company B does not cover such contract. Thus, people
became frustrated and found it difficult to contract with companies, the basis of the third party’s
loss while involved in an ultra vires act with a company is seen in the doctrine of constructive
notice which provides that since a memorandum of association is a public document, the third
party is presumed to have knowledge of the object clause of the company he is dealing with, he
ought to conduct proper search. However, the doctrine of constructive notice was abrogated by
the decision in Royal British Bank ltd v. Tarquand where it was held that a party who is
contracting with a company can presume that there is regularity of the company’s internal
management, this is known as the internal management rule i.e there is a presumption that the
company is contracting within the ambit of its memorandum, and where the act turns out to be
ultra vires, the third party can still enforce the contract. This rule is meant to prevent the
company from evading liabilities on the ground that its officers has no authority to do an act. The
transaction will be only be unenforceable if the court can deduce that the third party is in a
position to know the object clause of the company. This principle has been enacted into Section
92 CAMA 2020 which abolishes the doctrine of Constructive notice. Section 92 CAMA 2020
states that

“Except as mentioned in section 223 of this Act, regarding particulars in the register of
particulars of charges, a person is not deemed to have knowledge of the contents of the
memorandum and articles of a company or of any other particulars, documents, or the
contents of documents merely because such particulars or documents are registered by
the Commission or referred to in the particulars or documents so registered, or are
available for inspection at an office of the company.”
Presumption of regularities

This is captured under the provision of Section 93 CAMA 2020 which states that

“A person dealing with a company or with someone deriving title under the company, is entitled
to make the following assumptions and the company and those deriving title under it shall be
estopped from denying their truth that

(a) the company’s memorandum and articles have been duly complied with;
(b) every person described in the particulars filed with the Commission pursuant to
sections 36 (4) (c), 319 and 337 of this Act as a director, managing director or
secretary of the company, or represented by the company, acting through its
members in general meeting, board of directors, or managing director, as an officer
or agent of the company, has been duly appointed and has authority to exercise the
powers and discharge the duties customarily exercised or performed by a director,
managing director, or secretary of a company carrying on business of the type
carried on by the company or customarily exercised or performed by an officer or
agent of the type concerned;
(c) the secretary of the company, and every officer or agent of the company having
authority to issue documents or certified copies of documents on behalf of the
company, has authority to warrant the genuineness of the documents or the
accuracy of the copies so issued;
(d) a document has been duly sealed by the company if it bears what purports to be
the seal of the company attested by what purports to be the signatures of two
persons who, in accordance with paragraph (b), can be assumed to be a director and
the secretary of the company: Provided that a person shall not be entitled to –
(i) make such assumptions, if he had actual knowledge to the contrary or if, having
regard to his position with or relationship to the company, he ought to have known
the contrary; and (ii) assume that any one or more of the directors of the company
have been appointed to act as a committee of the board of directors or that an
officer or agent of the company has the company’s authority merely because the
company’s articles provided that authority to act in the matter that may be delegated
to a committee, an officer or agent.
 From the foregoing, it follows that it is incumbent upon the subscriber to a memorandum of a
company to take reasonable steps to verify that the prospective company he is subscribing
into is acting in compliance with the provision of the CAMA as well as the regulations of the
Corporate Affairs Commission.

Small company.
Section 394 CAMA 2020 states the qualification of a small company as thus;

1) A company qualifies as small in relation to its first financial year if the qualifying
conditions are met in that year.
(2) A company qualifies as small in relation to a subsequent financial year if the
qualifying conditions -
(a) are met in that year and the preceding financial year;
(b) are met in that year and the company qualified as small in relation to the preceding
financial year; or
(c) were met in the preceding financial year and the
company qualified as small in relation to that year.
(3) The qualifying conditions are met by a company in a year in which it satisfies the
following requirements-
(a) it is a private company;
(b) its turnover is not more than #120,000,000 or such amount as maybe fixed by the
Commission from time to time;
(c) its net assets value is not more than #60,000,000 or such amount as may be fixed by
the Commission from time to time;
(d) none of its members is an alien;
(e) none of its members is a government, government corporation or agency or its
nominee; and
(f) in the case of a company having share capital, the directors between themselves hold
at least 51% of its equity share capital
 12. Discuss the requirements for
(a) reregistering a limited liability as an Unlimited company.
(b) Increasing the share capital of a company
(c) altering the memorandum and articles of association
(d) Reregistering a private company as a public company.

Reregistering a limited liability as an Unlimited company.

A company limited by shares may by the assent of all members be subsequently re-registered as
unlimited in line with Section71 CAMA 2020. However, a company cannot be re-registered as
unlimited in the following way: (a) in cases where it was previously unlimited and registered as
unlimited. (b) a public company cannot be re-registered as unlimited. A company which has
previously been re-registered as unlimited.
Section 71 CAMA 2020 provides that the unlimited company can be re-registered as unlimited
upon application lodged with the commission together with the following document as set out in
a) The application form
b) The prescribed form of assent showing the company’s application for re-registration
c) A statutory declaration made by the directors of the company stating that the persons
by whom the form of assent is subscribed constitute the whole membership of the
company and that the directors have taken reasonable steps to ensure that all members
subscribe to the form
d) A printed copy of the altered memorandum and article of association

Once satisfied that the company may be registered as unlimited, the commission shall
retain the application and issue the application and issue the company with a certificate of
incorporation stating that it is an unlimited company. The certificate is therefore a prima
facie evidence that the requirement of the act has been complied with and the company
was duly registered as held in Femi Johnson v. Director Insurance

These are the wordings of Section 71 CAMA 2020

(1) An unlimited company may be re-registered as a private limited company if.-

(a) a special resolution that it should be re-registered is passed,
(b) the condition specified under subsection (2) is met, and
 (c) an application for re-registration is delivered to the Commission in accordance with
section 72, together with-
(i) the other documents required by that section, and
(ii) a statement of compliance.
(2) The condition is that the company has not previously been re-registered as
unlimited.
(3) The special resolution shall state whether the company is to be limited by shares or
by guarantee.
(4) The company shall make such changes-
(a) in its name; and Issue of certificate of incorporation on reregistration as an unlimited
company.
Increasing the share capital of a company

A company having a share capital whether or not the shares have been converted into stock
may in a general meeting duly conveyed and held, increase its shares by creation of new
shares. This is provided in Section 127 CAMA 2020 it states:
(1) A company having a share capital, may in general meeting and not otherwise, increase its

issued share capital by the allotment of new shares of such amount as it considers expedient.
(2) Where a company increased its share capital, it shall, within 15 days after the passing of
the resolution authorizing the increase, give to the Commission notice of the increase and the

Commission shall record the increase.

The procedure for the increment according to the Section provided above are:
a) Board resolution
b) Passing of special resolution
c) Deliver to Corporate Affairs Commission within 15 days of passing the resolution the
following:
d) Printed copy of the Notice of increase;
e) Statement of Increase duly stamped;
f) A copy of the resolution; and
g) Evidence of payment of Annual Returns
h) Within 6 months of giving notice of the increase, ensure that not less than
 i) 25% of the share capital including the increase has been issued
j) Have the directors deliver to Corporate Affairs Commission statutory declaration
verifying the fact that 25% of the shares have been issued
k) Obtain certificate of increase from corporate Affairs Commission; and have a copy each
of the resolution and certificate of increase annexed to the memorandum

Altering the memorandum and articles of association

The procedure form carrying out the alteration of the memorandum and articles of association is
embedded in Section 50 CAMA 2020 which states that:
1) The name of the company shall not be altered except with the consent of the Commission in
accordance with section 30.
(2) The business which the company is authorized to carry on or, if the company is not formed
for the purpose of carrying on business, the objects for which it is established, may be altered or
added to in accordance with the provisions of section 51.
(3) Any restriction on the powers of the company may be altered in the same way as the
business or objects of the company.
(4) The share capital of the company may be altered in accordance with the provisions of
sections 128 - 130, but not otherwise.
(5) Subject to section 54, any other provision of the memorandum maybe altered in accordance
with section 51, or as otherwise provided in this Act

Reregistering a private company as a public company.

If a public company wishes to be re-registered as private, the provision is contained in
section 68 CAMA and the procedures include:
(i) The company must pass a special resolution showing that it should be registered as
private as provided in Section 68 CAMA. Meanwhile, the minority members dissenting
have the right to apply for its cancellation in court.
(ii) Upon making the resolution n, an application will be made under the prescribed form
which must be signed by a director and the secretary, the application is then delivered to
the CAC together with the altered memorandum and Article of Association.
(iii) Upon delivery of the application to the CAC, the commission will wait for the period
permitted by law upon which an application for cancellation can be brought, if such
cancellation is not done, the commission will consider the application and if satisfied
that the company has complied with legal requirements, it will register the company as
private and issue it with a certificate of incorporation to that effect.