By Chigozie Ezekiel
+2348034997413
This can be found under section 548 of the Companies and Allied
Matters Act (CAMA) Cap. C20, LFN 2004.
Section
548 provides thus –
(1)
Every company, after incorporation shall –
(a)
paint or affix, and keep painted or affixed
its name and registration number on the outside of every office or place in
which its business is carried on, in a conspicuous position, in letters easily
legible;
(b)
have its name engraved in legible characters
on its seals; and
(c)
have its name and registration number
mentioned in legible characters in all business letters of the company and in
all notices, advertisements, and other official publications of the company,
and in all bills of exchange, promissory notes, endorsements, cheques, and
orders for money or goods purporting to be signed by or on behalf of the
company, and in all bills or parcels, invoices, receipts, and letters of credit
of the company.
What the above means is that the true names and nationality of all the
operators of the company as well as the registration number of the company or
business must be published in all trade catalogues, trade circulars and
business letters in legible letters.
NECESSITY
The necessity for publication of name is aimed at identifying the true
operators of the business.
CHECKLIST
OF STATUTORY BOOKS AND THEIR USES
The statutory books are:
1.
Register of Members – section 83 and 84 of CAMA
2.
Index of Members – section 85 of CAMA
3.
Register of Substantial Interest in
Shares –
section 97 of CAMA
4.
Register of Charges – section 191 of CAMA
5.
Register of Debenture Holders – section 193 of CAMA
6.
Minutes Book – section 241 of CAMA
7.
Register of Directors' Share Holdings –
section 275 of CAMA
8.
Register of Directors and Secretaries – section 292 of CAMA
9.
Accounting Records – section 331 of CAMA
1.
REGISTER OF MEMBERS – SECTIONS 83
AND 84 OF CAMA
This is provided under Sections
83 and 84 of CAMA. The register is
to contain the names, addresses, descriptions of all the members, and the
number of shares and class of shares held by each member. The amount paid on
the shares, how cash or other considerations are paid on the shares. The register must also contain the date, the
particular name of a shareholder and when he was registered as a member.
It should be noted that the name of
a member must be registered within 28 days of his acquiring the shares and in
the case of a subscriber within 28 days of incorporating the company.
USES: (1) It is used to keep the names of
all registered members in a company. (2) It is also used to keep the addresses
of all its registered members.
2. INDEX OF MEMBERS – SECTION 85 OF CAMA
The name can be found on the Register of Members. This is to contain a
sufficient indication to enable the account of that member in the register to
be readily found. Where the company arranged that the Register of Members also
include an index, there will be no need for a separate book as Index of
Members.
It should be noted that the index of
members is only required where the membership of the company is more than 50.
USES: This is to list out the names of
members.
3. THE REGISTER OF SUBSTANTIAL INTEREST IN SHARES OF THE COMPANY – SECTION 97
OF CAMA
This is required for public companies.
USES: It
is used to register those who have up to 10 per cent and above of the
total shares of the company.
4. REGISTER OF CHARGES – SECTION 191 OF CAMA
Securities or debentures charged on the properties of the company either
on land, machinery or unpaid shares of the company or book debt of the company
have to be included on the register.
USES: It is used to keep copies of charges
affecting property of the company.
5. REGISTER OF DEBENTURE HOLDERS – SECTION 193 OF CAMA
The register shall contain the names and addresses of the debenture
holders, the principal of the debenture and the debentures held by each of them.
USES: It is used to register
holders of debentures.
6. THE MINUTES BOOK – SECTIONS 241 OF CAMA
This
is also a must for all companies and it must contain the minutes of proceedings
of general meetings, Directors (Board) meetings and Minutes of its Managers’
Meeting. This Minutes Book shall prima
facie be evidence of the proceedings.
USES: It is used to keep minutes of the company.
7. REGISTER OF DIRECTORS’ SHAREHOLDING – SECTION 275 OF CAMA
This register is a must for all companies, whether private or public.
USES: It
is used to keep the amount, number and description of director’s shares.
8. REGISTER OF DIRECTORS AND SECRETARIES (SECTION 292 OF CAMA)
This is also for all companies. It must contain the names, usual
residential address, nationality, date of birth and particulars of other
directorship held by them.
USES: It
is used to keep the register of directors and secretaries as regards full
names, residential address, occupation, etc.
9. ACCOUNTING RECORDS – SECTIONS 331 OF CAMA
This is also a must for all companies and it shall show and explain the
transactions of the company, that is, the financial position of the company and
its assets and liabilities.
USES: It is used to keep accounting
records.
ALTERATION OF REGISTERED DOCUMENTS
ALTERATION OF CONDITIONS OF THE MEMORANDUM
Except in cases and in the manner
and to the extent expressly provided for in CAMA, a company may not alter the
conditions in its Memorandum of Association.
This means a company cannot go outside the express provisions of the Act
to alter the conditions in its Memorandum of Association – section 44(1) of CAMA.
Section 45 of CAMA makes provision
for how each condition can be changed.
With respect to the name of the company, Section 31 must be complied
with in its alteration. Section 31
provides that if a company is registered under a name identical with that by
which a company in existence is previously registered or so nearly resembling
it as to be likely to deceive, the first mentioned company may, with the
approval of the Commission, change its name and if the Commission so directs
within six months of its being registered under that name, the company
concerned shall change its name within a period of six weeks from the date of
the direction or such longer period as the Commission may allow.
As regards the business or object
clause of the company, its alteration must be in accordance with Section 46 of
the Act, which provides that Special Resolution must give notice to members – section 45(2) of CAMA.
With respect to the alteration of
any restrictions on the powers of the company, you have to comply with Section
46 of the Act – section 45(3) of CAMA.
For the alteration of capital,
Sections 100 to 111 of the Act must be complied with. These sections deal with alteration of share
capital by consolidation, conversion and subdivision of shares, cancellation
and reduction of shares etc – section 45(4) of CAMA.
ALTERATION OF THE BUSINESS OR OBJECT
CLAUSE IN THE MEMORANDUM
The business or object clause in a
company’s Memorandum may be altered by Special Resolution at a meeting by which
notice in writing was given to all members (whether or not otherwise entitled
thereto) – sections 46(1) and 45(2) of
CAMA.
Thus, a company may alter its
business or objects at any time and for any reason as long as the alteration is
carried out by special resolution and there is, no minority objection or if
there is, the court has affirmed the resolution – Re Parent Tyre Co. Ltd (1923) 2
Ch. 222; Re Government Stock Investment Co. (No. 2) (1907) 1 Ch. 579
PROCEDURE
1. By giving 21 days notice of meeting
and specifying in the notice the intention to pass a resolution as a Special
Resolution. The notice of meeting must be sent to all members of the company
and to all holders of debentures secured by floating charge of the company.
2. At the meeting, a Special Resolution
must be passed by ¾ of members voting in person or by proxy.
Holders of 15 per cent in nominal value of the company’s issued share capital or
holders of debentures shall make application for cancellation of Resolution to
the Federal High Court within 28 days of the passing of the Resolution not less
than 15 per cent of the company’s debentures secured by a floating
charge – section 46(2)(a) and (b), and
46(5) of CAMA.
It should be noted that any member
who voted in favour or consented to the resolution cannot apply for
cancellation. Also, it is not stated in the CAMA the ground for application for
cancellation. It follows from this that an applicant may apply for cancellation
on any ground at all as long as he can convince the court.
NOTIFICATION TO CAC
WHERE AN APPLICATION IS MADE TO COURT FOR CANCELLATION
The company must forthwith give
notice of making such application to the CAC. After the notice and within 15
days of making an order by the court and in the case of refusal to confirm the
resolution, a certified true copy of the order must be delivered to the CAC. In
the case of confirmation of the resolution, the company shall deliver a
certified true copy of the order with a printed copy of the Memorandum as
altered. A notice of the Special Resolution must also be delivered.
WHERE NO APPLICATION IS MADE TO THE COURT
Where no application is made to the
court within the specified 28 days, a copy of the Special Resolution must be
delivered to CAC within 15 days from the end of the 28 days waiting period. If
CAC is satisfied with the resolution then a printed copy of the memorandum as
altered will be delivered to it – section
46(8)(a) of CAMA.
But if, on the other hand, CAC is
not satisfied, it will notify the company in writing of its dissatisfaction and
the company has 21 days from the date of receipt of the notice to appeal
against the decision of the CAC. If, for any reason, the company fails to serve
the notice, it may apply to court for an extension of time to deliver the document
– section 46(8)(b) of CAMA.
The circumstance in which such
application can be made is when the company fails to notify CAC of the order of
the court made upon application for cancellation.
However, where the alteration has
not been properly made application may be made to the court within 21 days of
the passing of the resolution to have the alteration declared invalid. And any
member can apply to have the resolution declared invalid notwithstanding the
number of shares he has subscribed to.
ALTERATION OF THE CAPITAL CLAUSE
By virtue of section 100(1)(a) of CAMA dealing
with consolidation of shares provides that a company may consolidate and
sub-divide its shares into larger amount. For example, if a company has 10,000
shares of N1.00 each, it can consolidate the shares to 5,000 shares and
sub-divide it to N2.00 each.
Section 100(1)(b) of CAMA dealing with
conversion of shares into stock and conversion of stock into shares provides
that a company can convert paid-up shares into stock and to also reconvert
stock into paid-up shares. A company however, cannot issue stock directly but
can only convert paid up shares into stock, and any direct issue of stock is
ultra vires – Re Home and Foreign Investment and Agency Co. Ltd (1912) 1 Ch. 72.
Section 100(1)(c) of CAMA dealing with
subdivision of shares provides that a company can sub-divide its shares or any
of them into shares of smaller amount. For example, 5,000 shares of N2.00 each
can again be sub-divided into 10,000 shares of N1.00 each.
CANCELLATION OF UNISSUED SHARES
Section 100(1)(d) of CAMA provides for
cancellation of an unissued shares. The
company may cancel shares which have not been issued because so long as the
shares have not been issued to members, no member is committed to pay for them
and if the shares are cancelled, no member will be prejudiced by so doing.
It should be noted that where a
company takes any of the steps in section
100 of CAMA, it must give notice
to the CAC specifying, as the case may be, the shares consolidated, divided,
converted, sub-divided, cancelled or the stock re-converted within one month of
so doing.
However, for there to be an
agreement to take unissued shares there must be an offer and a valid acceptance
– Re
Swindon Town Foodbal Co. Ltd. (1990) B.C.L.C 467.
ALTERATION OF INCREASE OF SHARE
CAPITAL
This may be made by Ordinary
Resolution provided under section 102(1)
of CAMA.
A company limited by shares may in a
General Meeting and not otherwise increase its share capital by creating new
shares. This is done by Ordinary
Resolution except the Articles of Association provide otherwise.
PROCEDURE FOR INCREASE
1. There must be a Board resolution to
the effect that the capital of the company be increased and also authorising
its Secretary to take necessary steps to effect the increase.
2. Notice of meeting must be given to
members who are entitled to attend the General Meeting of the company. The
notice must specify the amount of the proposed increase – Mac Connell v. E. Prill & Co.
Ltd (1916) 2 Ch. 57.
3. A General Meeting will be convened
where an Ordinary Resolution to increase the capital of the company will be
passed.
4. After the resolution is passed and
within 15 days of the passing of the resolution permitting the increase, the
following documents must be delivered to the CAC.
a) A copy of the resolution
authorising the increase – section
102(4) of CAMA.
b) A notice of increase stating
the class or classes of shares involved and special rights attached to them, if
any – section 102(2) & (4) of CAMA.
c) A statement of increase duly
stamped (Form CAC 2). It should be
noted that two copies of statement of increase must be taken to the Federal
Commissioner of Stamp Duties. The stamp duty to be paid is calculated at the
same rate with the stamp duty paid on the authorised capital when incorporating
the company originally. The Commissioner
for Stamp Duty will retain a copy of the statement of increase (Form CAC 2) and return a stamped copy
to the person applying, which the applicant will include in the documents to be
filed with the CAC.
5. Within 6 months of giving the notice
of increase to the CAC, the applicant must ensure that not less than 25 per
cent of the share capital including the increase has been issued and unless
this is done, the increase cannot take effect – section 103 of CAMA.
6. The increase shall not take
effect unless the directors have
delivered to CAC a statutory declaration verifying that fact – section 103(b) of CAMA.
7. A certificate of increase must be
obtained from the CAC.
8. A copy each of the resolution and
certificate of increase must be annexed to the Memorandum of the company.
REDUCTION OF SHARE CAPITAL
Section 105 - 111 of CAMA provides for restriction on reduction of issued capital except in
accordance with the procedure laid down in CAMA.
Under section 106(1) of CAMA, a company limited by shares may reduce its
capital by Special Resolution if authorised by its Articles and subject to
confirmation by the court.
MODES OF REDUCTION OF SHARE CAPITAL
Section 106(2) of CAMA provides that a company may:
a) Extinguish or reduce the liability
on any of its shares in respect of share capital not paid up; or
b)
Either
with or without extinguishing or reducing liability on any of its shares,
cancel any paid-up share capital which is lost or unrepresented by available
assets; or
c)
Either
with or without extinguishing or reducing liability on any of its shares, pay
off any paid-up share capital which is in excess of the company’s wants, and
the company may, if and so far as is necessary, alter its memorandum by
reducing the amount of its share capital and of its shares accordingly.
In Re Saltdean Estate Co. Ltd (1968)
1 WLR, the court confirmed the reduction which involved repaying the
capital paid up on each of the company’s preference shares of 50p each plus a
premium of 25p per share.
MODE OF REDUCTION OF SHARE CAPITAL
This can be done in three ways:
1. The article must provide for it.
2. The company must pass a special resolution to
reduce share capital.
3. The court must confirm the reduction of share
capital.
PROCEDURE FOR REDUCTION OF CAPITAL
1. Directors must meet to resolve that the
share capital be reduced.
2. The scheme of reduction will be prepared.
3. The General Meeting has to be convened. The Notice of Meeting should be accompanied
by explanatory circular and the scheme of reduction.
4. At the meeting, a Special Resolution must be
passed reducing the capital and approving the scheme of reduction – Re
Moorgate Mercantile Holdings Ltd. (1980) 1 All E. R 40.
5.
Application must be made to the Court to confirm the reduction and also
approve the Scheme of Reduction. If the court is satisfied that the creditors
have duly consented or that adequate provisions have been made to discharge or
secure their debts or claims or that the debts as determined and the capital
does not by this reduction fall below the authorised minimum, it may by order
confirm the reduction – section 108(1) of
CAMA.
It should be noted that creditors who would be
entitled to make a claim on the company are entitled to object to the reduction
– section 107(2) and (3) of CAMA.
6. After the order of the court
confirming the reduction, a copy of the order and a copy of the minutes
approved by the courts showing particulars of the capital as altered must be
delivered to CAC.
a. A certificate of registration of the order
and Minutes will be obtained from the CAC.
b. The approved Minutes and order of reduction
shall be annexed to the Memo of the company.
Note that the Minutes are deemed to be substituted for the corresponding
part of the company’s memorandum as well as an alteration of the memo of the
company – section 109(5) and (6) of
CAMA.
ALTERATION OF THE REGISTERED OFFICE
CLAUSE
There is no specific provision in
the CAMA for the alteration of the Registered Office clause. However, complying with section 46 of CAMA,
unless there is a provision to the contrary, a company may alter any other
provisions in the Memorandum of Association of the company the alteration of
which is not specifically provided for in the Act – section 45(5) of CAMA.
It should be noted that if the
Memorandum states that the registered office will be situated in Nigeria, then
there is no need for it to be altered but if the Memorandum states that the
registered office should be situated in a particular place or state, for
example, Lagos or Abuja, the clause may need to be altered if such a place or
State is changed.
ALTERATION OF THE RESTRICTION OF THE
POWERS OF THE COMPANY CLAUSE.
The procedure to alter the
restriction of the powers of the company clause is the same as that of the
object clause – section 45(2) of CAMA.
ALTERATIONS OF PROVISIONS IN THE
MEMORANDUM IN CERTAIN CASES
This deals with cases like the
restriction on the powers of directors. This can be altered by Special
Resolution but if application is made to the court for the alteration to be
cancelled, it will not have effect except in so far as it has been confirmed by
the court – section 47(1) of CAMA.
PROCEDURE FOR ALTERATION OR
CANCELLATION
The procedure to be adopted for alteration
or cancellation is that under Section 46 earlier discussed with the exceptions
of the provisions under Section 46 of the Act relating to debenture holders,
that is, Section 46(2)(b), (5), (6) and (10).
However, the provision in Section 47
will not apply where the Memorandum provides or prohibits the alteration of
those provisions.
ALTERATION OF ARTICLES OF
ASSOCIATION
Section 48 of CAMA gives a company power to alter or add to its Articles by Special
Resolution but subject to the provisions of the Act and to the conditions or
other provisions contained in the Memorandum of the company. Any alteration so
made shall be as valid as if originally contained therein and be subject in
like manner to alteration by Special Resolution – section 48(1) and (2) of CAMA.
In Andrews v. Gas Meter Co. (1897) 1 Ch 361, the original Articles
contained no provision to issue preference shares but the company by Special
Resolution, altered its Articles so as to have power to issue preference shares
accordingly. The alteration was held to
be effective.
PROCEDURE FOR ALTERATION OF ARTICLES
1. There must be a Board meeting
whereby a resolution will be passed to alter the Articles.
2. A notice of 21 days must be given to
the Members accompanied with the proposed Special Resolution.
3. A general meeting will be convened
whereby a Special Resolution to alter the Articles will be passed.
4. The printed copies of the amended
Articles and printed copy of the Special Resolution must be delivered to the
CAC within 15 days of the passing of the resolution for registration – section 237(1) & (4)(a) of CAMA.
5. The resolution must be annexed to
every copy of the Articles issued after the passing of the resolution.
It should however be noted that the alteration must not go contrary to
the Act, particularly Section 49 which provides that a member of a company
shall not be bound by any alteration made in the Memorandum or Articles of the
company requiring him on or after the date of the alteration to -
(a) Take or subscribe for more shares than
he held at the date on which he became a member; or
(b) Increase his liability to contribute to
the share capital of the company; or
(c) Pay money by any other means to the
company.
However, the
question sometimes arises as to the right of a company to alter its articles in
breach of a contract with a third party, for example, a director. The rule is
that the company “cannot be precluded from altering its articles thereby giving
itself power to act upon the provisions of the altered articles, but so to act
may nevertheless be a breach of a contract if it is contrary to a stipulation
in a contract validly made before the alteration. It was, however held in Lapite
v. Nigeria Airways Ltd. (Suit No. CA/L/158/87 of 11th January 1988
(unreported) that “any decision taken by the company in breach of (or
not in compliance with) the articles of association is valid against the whole
world, save members who complain about it” and that since the articles do not
constitute a contract between the company and an outsider, even where aggrieved
third party proves a breach of the articles which is the basis of his claim, he
cannot succeed. He will have no locus
standi.
CONVERSION OF COMPANIES
This
has to do with a company changing its status without incorporating a new
company. But this does not imply that it has changed its legal personality or
that its former rights and liabilities are extinguished. Thus, all its former rights
and liabilities continue with it despite the conversion.
A
private company can be converted to a public company by following the procedure
laid down in section 50 of CAMA. A
company limited by shares may be converted to an unlimited company – section 51 of CAMA. An unlimited
company may be converted to a company limited by shares – section 52 of CAMA. A public company may be converted to a private
company – section 53 of CAMA.
BIJALO &
MIMZ NIGERIA LTD.
RESOLUTION FOR
CONVERSION OF PRIVATE COMPANY TO PUBLIC COMPANY
(Pursuant to section 50(2) of CAMA)
At the general meeting of Bijalo & Mimz Nigeria Ltd held on 14th
January, 2010 at the registered office of the company situated at No. 3 Bwari
Crescent, Abuja at 9:00am, the following resolution was proposed and duly
passed:
THAT the company be converted to a public company by the name of Bijalo
& Mimz Plc and that the following consequential alterations be made in the
Memorandum of Association and Articles of Association of the company;
1. That the Memorandum
of Association of the company be altered by:
(a)
Substituting Clause 1 with: “The name of the company
is Bijalo & Mimz Public Limited Company”
(b)
Substituting Clause 2 with: “The company is a Public
company”.
(c)
Substituting Clause 8 with: “The new share capital of
the company is One hundred thousand naira (N100,000) divided into 100,000
Ordinary Shares of N1 each.
2. That the
Articles of Association of the company be altered by:
(a) Deleting in Article
1 the word “restricted” and replacing it with the word “open”
(b)
Deleting in Article 5 the word “members” and replacing
it with the word “public”.
Dated this 14th
day of January, 2010
_________________ ________________
Director Secretary
BIJALO &
MIMZ NIGERIA LTD.
SPECIAL
RESOLUTION FOR CHANGE OF NAME
(Pursuant to section 31(3) of CAMA)
At the general meeting of Bijalo & Mimz Nigeria Ltd held on the 14th
day of January, 2010 at No. 3 Bwari Crescent, Abuja at 9:00am, the following
special resolution was proposed and duly passed:
THAT with the consent of CORPORATE AFFAIRS COMMISSION (C.A.C.), the name
of the company be changed to SOULBEEZ NIGERIA LTD.
Dated this 14th
day of January, 2010
_________________ ________________
Director Secretary
BIJALO &
MIMZ NIGERIA LTD.
RESOLUTION FOR
INCREASE OF SHARE CAPITAL
(Pursuant to sections 102 and 103 of CAMA)
At the general meeting of Bijalo & Mimz Nigeria Ltd held on the 14th
day of January, 2010 at No. 3 Bwari Crescent, Abuja at 9:00am, it was resolved:
THAT the share capital of the company be increased from 1,000,000,000 to
5,000,000,000 shares by the creation of additional 2,000,000,000 shares ranking
the same with the existing shares in the capital of the company.
Further that the Secretary of the company should and is hereby directed
to prepare and file every necessary documents for the registration and
obtaining of certificate of increase from C. A. C.
Dated this 14th
day of January, 2010
_________________ ________________
Director Secretary
BIJALO &
MIMZ NIGERIA LTD.
RESOLUTION FOR
REDUCTION OF SHARE CAPITAL
(Pursuant to section 106 of CAMA)
At the general meeting of Bijalo & Mimz Nigeria Ltd held on the 14th
day of January, 2010 at No. 3 Bwari Crescent, Abuja at 9:00am, the following
special resolution was proposed and resolved:
THAT, subject to the confirmation of the Federal High Court, the share
capital of the company be reduced from N1,000,000 divided into 1,000,000
Ordinary Shares of N1 each to N500,000 divided into 500,000 Ordinary Shares of
N1 each by refunding in proportion the amount already paid on those shares and
that the Board of Directors be and are hereby empowered to take necessary
action on this behalf.
Further that the Capital Clause of the Memorandum of Association of the
company be accordingly altered.
Dated this 14th
day of January, 2010
_________________ ________________
Director Secretary
