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Incorporated Trustees Correcttask Answers
Incorporated Trustees Correcttask Answers
Incorporated Trustees Correcttask Answers
QUESTION 1
Pastor Williams has engaged you for the Purpose of registration with the Corporate
Affairs
Commission, ‘Hope Ministries’ which he started 3 years ago. He would also like to
register Hope Nursery and Private School owned by the Ministry and Hope Bookshop
which has been selling religious and educational books to members of the ministry, pupils
of the school as well as members of the public. The Bookshop is owned by Pastor
Williams and his wife- Shade and its current worth is about N5,000,000.
Answer the following questions:
i. Advice Pastor Williams on the appropriate type of organisations recognised by Law, to
register the Ministry, the School and the Bookshop. Give Reasons for your answer.
ANSWER
The appropriate type of organization to register here for the Ministry is an Incorporated
Trustee. The ideal type of business organization for the school is This is because an
Incorporated Trustee is set up to promote religion, education, research and charity. Also,
they are for non-business and non-profit organisations.
ii. Suggest the Names you will fill in Form CAC 1 in respect of your Application for each
organisation.
ANSWER
A. For the Ministry, The Incorporated Trustees of Hope Ministries
B. For the school, Hope Nursery and Primary School Ltd
C. For the bookshop, Hope Bookshop Ltd.
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iii. Assuming one of the organisations you intend to register is an Incorporated Trustees
under Part F of CAMA, prepare a check list of the instructions you would take from
Pastor Williams .
ANSWER
The checklist may include
1. Name of the Incorporated Trustee.
2. Aims and objects
3. Names and addresses of Trustees’ appointment, powers, duties, tenure and
replacement
4. Common seal (if any)
5. Meeting clause
6. Governing body number, appointment, removal, and powers
7. Source of income
8. Disbursement of fund
9. Types of accounts
10. Keeping and Auditing of accounts
11. Constitution amendment clause is a mandatory provision in the Act (Sections 832,
833 and 835 of this Companies and Allied Matters Act 2020)
1. Register of trustees
2. Minite books
3. Books of accounts showng accounting activities for 6 years
iv. (a).Outline the documents and materials you need in order to incorporate the Trustees.(b).
Draft the Public Notice.
1. Application form (CAC/IT/1)
2. Trustee declaration form
3. Original receipt of fees
4. Two passport photos of each trustee
5. Two copies of the applicant’s Constitution
6. Newspaper publication (originals)
7. Form of approval for name
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8. Formal letter of application signed by the Chairman and Secretary or applicant’s
Solicitor.
9. Impression of the common seal of the body
10. Letter of authority authorizing the person effecting the registration of the applicant
body
11. Minutes of meeting where the trustees were elected and special clause adopted
v. List the Registers which Hope Ministries would be obliged to keep under the law when
incorporated.
i. 1. Register of Memrbers
ii. 2. Register of Trustees iii. 3. Minltes Book iv.
4. Books of Accolnt
vi. Advice Pastor Wiliams on the circumstances(if any) that may lead to the dissolution of an
Incorporated Trustees.
(1) That the aims and objects for which the association was established have been
fully realized and no useful purpose would be served by keeping the association alive.
(2) That the association was formed to exist for a specified period has expired and it is
not necessary for it to continue to exist.
(3) That all the aims and objects of the association have become illegal or otherwise
contrary to public policy.
(4) That it is just and equitable in all the circumstances that the corporate body be
dissolved (5) The certificate of registration of the association has been withdrawn,
cancelled or revoked by the commission see section 850(2) CAMA
QUESTION TWO
The focus on Climate Change issues appears to be divided among several
Nations,despite the historic Agreement signed by more than 140 countries- including
Nigeria, in Paris –France in December 2015.
While frantic efforts are being made by some countries to tackle the issue through tree
planting, the emission of greenhouse gases is on the rise in many other Nations. It has
been estimated that average temperature will increase by more than 20 degrees
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Centigrade by the end of the 21 st Century.It is also reported that the negative effects of
the global warming on the Ocean surrounding the African Continent is already being felt.
Concerned about the effect of Climate Change in Nigeria, a group of Young
Nigerians have come together to tackle the problem. They assert that, as the most
populous African country,
Nigeria needs to maintain leadership in Africa on climate change issues, by taking the Paris
Agreement more seriously. They have therefore resolved to establish- Climate Change
Palaver Initiative, as a platform to pursue their aims and objectives. They are however
confused about whether to incorporate a Company Limited by Guarantee or an
Incorporated Trustee.
ii. Outline the differences between a company Limited by Guarantee and Incorporated
Trustees.
ANSWER
1. Consent of Attorney General of the Federation is required for the registration of
Company
Limited by Guarantee whereas no such is needed for registration as incorporated trustee
5. A company limited by Guarantee may do business to make profits and plough back
same towards the attainment of its objectives whereas and Incorporated Trustee cannot
do business
iii. Assuming the Young Nigerians have decided to incorporate under Part F of
CAMA, and It has been suggested that Chief Kokoe a renowned
Environmentalist, who failed to click the gubernatorial seat in his political
party in 2011 as a result of the allegation that he forged his school certificate
result be appointed as one of the Trustees. Also, Chukwudi , a 16 year old
Secondary School student who won the Essay Competition on Climate Change
last year is being considered as Trustee. Comment.
ANSWER
A person cannot be appointed or act as a trustee if:(a)he is an infant;(b)he is a of a
unsound mind have been found by Court; (c)he is an undischatged bankruptcy (d)
he has been convicted of an offence involving fraud or dishonesty within five
years of his proposed appointments.826(1)CAMA.
Therefore, Chief Kokoe been only alleged and not convicted of dishonest conduct
and for the period of allegation been above 5 years (2011-2023) altogether does
not invalidate Chief Koko from being appointed a member of trustee, however
Chukwudi being a minor and less than the majority age of 18 is an infant and
therefore not qualified for appointment as a member of trustees.
iv. (a)List Five clauses that must be contained in the Constitution of the Initiative.
(b) Draft the Special Clause of the Constitution.
ANSWER
(a). The Five clauses are:
(i) Name Clause;
(ii) Registered Office Clauses;
(iii) Object Clauses;
(iv) Subscription Clause; (v) Special Clause.
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some other institutions having objects similar to the objects of the body or transferred to
same charitable objects.
ANSWER
s. 830(1) CAMA 2020 provides that from the date of registration, the trustees shall
become a body corporate by the name described in the certificate, and shall have—
(a) perpetual succession;
(b) a common seal if they so wish;
(c) power to sue and be sued in its corporate name as such trustees;
(d) They can merge with other associations
(e) subject to s. 836 of this Part, power to hold and acquire, and transfer, assign or dispose
of any property, or interests therein belonging to, or held for the benefit of such
association, in such manner and subject to such restrictions and provisions as the
trustees might without incorporation, hold or acquire, transfer, assign or otherwise
dispose of the same for the purposes of such community, body or association of
persons.
vi. Advise the Young Nigerians on the possibility of merging with other
Associations after incorporations. Give reasons for your answer.
ANSWER
The Young Nigerians can merge with other Associations after incorporation.
This is because section 849 of the Companies and Allied Matters Act 2020 provides for it.
Reason
Provided that two or more associations with similar aims and objects may merge under
terms and conditions as the Commission may prescribe by regulation.
viii. Assuming after incorporation, there are reports from the International
Organisations from whom the Initiative has been receiving donations and funding
that the Trustees have been using the grants received for the benefit of the Initiative
to enrich themselves, advice the CAC on the possibility of suspending the Trustees
and appointing Interim Managers.
The CAC is empowerd to regulate the conduct of the trustees of the association the CAC
is empowerd to suspend the trustees upon reports of mismanagement and by the petition
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of members of the association. See Registered Trustees of Christian Association of
Nigeria v.
CAC. (Religious association can be spared from the powers of the CAC with
reference to s. 839 CAMA 2020
QUESTION 3
At the 5th Extra- Ordinary general meeting of Ziu Minning (Nigeria) Limited, there was
a sharp disagreement amongst members regarding the proposal by management for the
company to incorporate an NGO as a platform to give back to the people of Ziu under the
company’s Corporate Social Responsibility(CSR) Initiative.
Shortly after the meeting commenced, some members, walked out of the meeting
following a serious disagreement with the management on the company’s CSR Budget .
Meanwhile, the remaining members passed a resolution to register with the Corporate
Affairs Commission, an organisation to be known as Ziu Football and Youth
Empowerment Foundation.
The reason for the walking out of the member (s) must be examined by the
chairman of the meeting and if the reason is found to be justifiable he can adjourn
but if it is insufficient he can continue.
By virtue of Section 256(3) which provides for what qualifies as quorum during
meetings provides that:
Where quorum was formed at the commencement of the meeting but it depeleted
as the meeting progressed, the chairman ought to direct the gate of the meeting.
The direction of the chairman would depend on whether the reason for withdrawal
is sufficient or insufficient. Where withdrawal is for sufficient reason, the meeting
shall be adjourned to the same place and time in a weeks time and if there's no
quorum still at the adjourned meeting,the members present shall be the quorum
and their decision shall bind all shareholders. If only one member is present at the
adjourned meeting, he may seek the direction of the court to take a decision.
But where the quorum was depeleted due to insufficient reason (malicious walking
out) for the purpose of reducing the quorum, the meeting can continue with the
number present and their decision shall bind all shareholders and where it remains
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only one member he may seek the direction of the court to take a decision. Section
256(4).
At the 5th Extra- Ordinary General Meeting of Ziu Minning (Nigeria) Limited held on the
30th of September 2023 by 1:00am at the multi purpose conference room of the
company, the following resolution was proposed and duly passed:
"That the company should incorporate ZIU FOOTBALL AND YOUTH
EMPOWERMENT
FOUNDATION in furtherance of it's corporate social responsibility drive, subject to the
consent of the Corporate Affairs Commission.
3. Advise the company on the Stipulations of CAMA with regards to Ziu Football and
Youth Empowerment Foundation, as follows (a) Bi Annual Statements; (b) Annual
Returns; (c ) Accounting Records; (d) Dormant Accounts;(e)Common Seal.
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i. Bi-Annual Statement: The trustees shall submit to the commission a bi-
annual statement of affairs of the association. Failure to do that, each of the
trustee shall be liable to a penalty for every day during which the default
continues.
ii. Annual returns: The trustee must submit to the commission not earlier than
30th June or later than 31st December each year a return. Which must show
the following:
iii. Accounting records: The trustees of the association are expected to keep
accounting records in respect of the association. The accounting records
must disclose the financial position of the association. It must contain the
following:
a. Entries showing day-to-day all sums of money received and expended by the
association
b. Matters in respect of which the receipt and expenditure took place.
c. A record of the assets and liabilities of the association. See Sec 846 CAMA.
Iv. Dormant account: where the trustee holds an account with a bank and there is l
no transaction on the said account and the account became dormant (as defined
under the relevant banking regulation). The bank is under obligation to notify the
commission. The commission may request the association to provide evidence of
it’s activities after receiving the notice, if the association fails within 15days of the
request, the commission may dissolve the association. Sec 842 CAMA
V. Common seal: They are not mandated to have a common seal. Sec 840 CAMA.
4. Assuming after incorporation, the Foundation wants to change its name to Ziu All
Sports &Youth Empowerment Foundation, advice on the steps that must be taken.
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As provided under section 822 (1) of the Companies and Allied Matters Act 2020,
Ziu Football and Youth Empowerment Foundation desirous of changing, altering
it's name to ziu All sports & Youth Empowerment shall:
After your call to Bar ceremony, Professor Ahmed Yaro, a renowned Medical
Practitioner; and a Professor of Pediatrics, consulted you for the Registration of The
Lafiya Centre for Medical Research and Innovation. The objective of the Research Centre
is to make available findings and medical inventions from the Centre to Teaching
Hospitals in Nigeria. The Research Centre is Professor Yaro’s modest contribution to
humanity.
1. Name the 2 options available for the Registration of the Lafiya Centre for Medical
Research and Innovation under the Companies and Allied Matters Act.
ANSWER
Incorporated Trustees and Company Limited By Guarantee
2. Outline the advantage(s) (if any), of each of the options in (1) above.
ANSWER
Advantages of Company Limited by Guarantee:
a) It enjoys tax exemption
b) It has no Share capital
c) If it winds up, it's properties will be transferred to another body with same or similar
objectives.
d) Members are required to contribute to the assets of the company in the event of it’s
winding up
e) All the members have legal personality
f) It may be allowed to do business.
g) It does not need to fulfill any advertisment requirement before it can be registered.
Section 828
CAMA.
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Advantages of Incorporated Trustees:
a) It enjoys tax exemption
(b) It has no Share capital
c) If it winds up, it's properties will be transferred to another body with same or similar
objectives
d) It is administered by the Corporate Affairs Commission
e) It becomes a CORPORATE PERSONALITY DISTINCTS FROM MEMBERS.
Section 830 CAMA
With reference to the two options in (1) above, Advise Professor Yaro on the legality or
otherwise of operating the Centre prior to Registration with the CAC.
(a) It is not a corporate body
3. List the documents to be submitted to the Corporate Affairs Commission for the
registration of the two options in (1) above.
4. In the event of winding up, advice on the principles to be applied for the
distribution of the properties of the Centre, with regards to the options in
(1) above.
ANSWER
In the event of a winding up of the Lafiya Centre for Medical Research and Innovation,
the debts and liabilities are first settled and whatever property that remains are not
distributed to the members but are given or transferred to some other institutions or
company limited by Guarantee having objects similar to the objects of the association as
determined by the members of the association.
Section 26(15) CAMA
Section 850(4-5) CAMA.
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