CORPORATE LAW PRACTICE
NOVEMBER, 2015.
TOPIC- CHOICE OF BUSINESS ORGANISATIONS &
FORMATION-(COMPANIES)
QUESTION 1
Alhaja Kudirat trading under the name and style of Kudi
stores in Balogun Market has been
importing Aso- Oke from China due to the inability of local weavers to meet the
market demands. Yaya Musa, Eneobong Moses have approached Alhaja Kudirat with the
intention of setting up a weaving factory in Nigeria using Chinese technology
and also manufacturing digital weaving equipment. They plan to collaborate with Kudirat’s
suppliers in China-; Chum Yum Industries Ltd.
Some
of the details of the proposed company obtained by the legal Practitioner
engaged to incorporate the company are
as follows-:
Name- China weaving manufacturing company
Limited or Digital weaving manufacturing
company Limited.( The 2nd name was approved by the CAC)s.
Subscribers-Alhaja Kudirat Balogun, Yaya
Musa, Eneobong Moses, Chum Kong, Yum Yang.
a.
What other details do you think
the legal Practitioner will require in order to incorporate the company.
b.
Suggest reasons why you
think China Weaving Manufacturing Company Limited was not
approved by the CAC
c.
Explain the major steps to be
taken in order to incorporate the company.
d.
Explain the Role of the National Office for Technology
Acquisition & Promotion in the
establishment of the Weaving Factory.
e.
Suppose the
company is not able to go into
manufacturing of digital weaving
equipment after 3 years of incorporation. Advise on the legal implication.
QUESTION 2
John Otto is the owner of a bakery valued
at N400,000. He wants to form a company to take over the business with N400,
000 as the authorised capital divided into 400,000 ordinary shares of N1 each.
(a)
List the different types of companies
available under CAMA
(b)
hOutline the differences
between a company limited by
guarantee and a private company limited by shares.
(c)
What kind of Company would you
advise John Otto to form. Give reasons
for preferring that company to other companies.
(d)
Mention the documents you would present to the
Commissioner for Stamp duties in respect of John Otto’s company.
(e)
State the reasons why the CAC
may refuse to register a company.
QUESTION
3
Alhaji
Aminu Wada (a 71 year old man) carries on the business of importation and sale
of sugar in Kano under the name of Wadata and Sons. Due to expansion of the business, he has
decided to establish a Sugar factory in Wadata, a village in Kano State. His son, Bala who holds an MBA from Harvard
has prevailed on his father to incorporate a company to take over the business
carried on by Wadata and Sons at Ilasa Street, Wadata, Kano State. Alhaji Aminu Wada’s only concern is that he
must retain the name as to do otherwise is to lose his identity. He is
proposing that the name of the company would be Wadata & Sons Limited.
The
new company is to begin with a share capital of N5 billion divided into
5 billion ordinary shares of N1.00 each.
The business of Wadata and Sons is to be acquired by the new company.
Bala
Wada and his 17 year old sister, Mariam Wada would take 450m and 50m shares
respectively. The remainder of the
shares would be subscribed to by Alhaji Aminu Wada.
Alhaji
Aminu Wada, Bala Wada and Mariam Wada are proposed be the First Directors of
the Company
(1)
What other issues would you have to ask for
clarification in order to register the new company
(2)
Comment on the availability of the name Wadata
& Sons Limited at the CAC.
(3)
Alhaji
Aminu Wada is not sure of the type of company to form, explain to him, five (5)
advantages of Private Companies over Public Companies
(4)
What are the necessary incorporation
documents? Would you include the Form of
return of allotment? State the reason
for your answer.
(5)
What clauses will you insert in the Articles of
Association to give Alhaji Aminu Wada some control in the Company?
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