CORPORATE LAW PRACTICE: POST-INCORPORATION MATTERS

What a day in LAGOS, we were incorporated fully into the whims and caprices of CAMA by our own OGA KENNETH….And OGA was like you have not seen nothing yet…..chaii!!!

We refused to be moved by fiercely looking CAMA, so we just want to encourage ourselves and say to CAMA bring it on…………..DON’T GIVE UP!!!

POST- INCORPORATION MATTERS

We started with the two basic things provided by CAMA to do after incorporation before commencing business;

1.      PUBLICATION OF NAME

This can be found under S.548 of CAMA and it provides for 3 ways to publish names by companies before commencing business

i.        Publication of Name in the Name Plate. RC NO must be affixed

ii.      Publication of Name in the Common Seal.

iii.    Publication of Name in official documentation

REASON:

i.        To identify the true operators of the business

ii.      To aid search of the company

iii.    Actions must be instituted in full corporate names of the company so as to  vest it with legal personality. Failure to do so invalidates the action

PENALTY:

i.        The company shall be liable to a fine of ₦100 for everyday it carries on business during which its name is not so published in its name plate. Section 548 (2) CAMA;

ii.      Every director of that company who knowingly and willfully authorizes or permits default shall be liable to like penalty;

iii.    The company shall be guilty of an offence and liable to a fine of ₦500 for not publishing its name in the common seal, official documentation and Bills of exchange. Section 548 (3) CAMA;

iv.    Failure to comply with publishing its name in the common seal, official documentation, the veil of incorporation will be lifted and such erring officers of the company will be guilty of an offence and on conviction, liable to a fine of ₦500, and shall further be personally liable to the holder of any such Bill of exchange for the amount thereof UNLESS it is duly paid by the company. S.548(4)(a-c)

2.      STATUTORY BOOKS TO BE KEPT

1.      REGISTER OF MEMBERS. SEE S.83& 84 CAMA

APPLICABLE: For all companies

CONTENT: See S.83.

USES: To list out the names and particulars of members. This shall be done WITHIN 28 DAYS of incorporation for subscribers or 28 DAYS of becoming or ceasing to be a member.

PENALTY: See S. 83(4)

LOCATION:

i.        Registered office or other arranged accessible place within Nigeria.

ii.      If kept outside the Registered Office, CAC must be notified.

2.      INDEX OF MEMBERS S.85 CAMA

APPLICABLE: kept once the MEMBERS EXCEED 50 members (PUBLIC COMPANY)

CONTENT: S.85

PENALTY: S.85(4)

LOCATION: To be kept at the same place as the register of members

3.      REGISTER OF SUBSTANTIAL INTEREST IN SHARES OF THE COMPANY. S.97 CAMA

APPLICABLE: Public Companies

USES: for recording acquisition of 10% unrestricted voting right in AGM of PLC singly or combination of nominees after the company must have been notified which in turn notifies CAC within 14 days

LOCATION: Registered Office or another arranged place with Notice to CAC

4.       
REGISTER OF DIRECTORS AND SECRETARIES. S. 292; 292(4)(4) CAMA

APPLICABLE: ALL companies.

USES; It used to record the Names and Particulars of current and past Directors and Secretaries of the company.

LOCATION Registered office

5.      REGISTER OF DIRECTORS SHAREHOLDING-S. 275 CAMA

APPLICABLE: All companies

USES: to record shares or debentures in which Directors are interested in the company.

N.B:  

                    i.            It is open for inspection to CAC always.

                  ii.            It is also open for inspection by members and debenture holders 14 DAYS BEFORE and 3 DAYS AFTER AGM.

LOCATION: Registered office

6.      REGISTER OF CHARGES S. 191, 192 CAMA

APPLICABLE: Private and Public Limited Companies

USES: records charges – fixed and floating, created by the company on its assets

LOCATION: REGISTERED OFFICE

7.    
REGISTER OF DEBENTURES HOLDERS S. 193(1)

APPLICATION: all companies that have issued debentures

USES: It records the names and particulars of Debenture holders and the details of the term of issue, WITHIN 30 DAYS OF CREATION AND 30 DAYS OF CEASING.

LOCATION: REGISTERED OFFICE

8.      ACCOUNTING RECORDS. S. 331 and 332 CAMA

APPLICABLE: ALL COMPANIES

USES: This reflects the Financial Records of the company sufficient to show and explain the transactions of the company.

LOCATION : REGISTERED OFFICE

9.      REGISTER OF INSTRUMENTS S.190 CAMA

APPLICATION: ALL COMPANIES

LOCATION: REGISTERED OFFICE

10.  MINUTES BOOKS. S. 241, 242 CAMA

APPLICABLE: ALL COMPANIES

USES: It records proceedings of meetings, signed by Chairman and Secretary as prima, facie evidence and copies.

N.B: The Minutes Books is available for inspection by members WITHIN 6 HOURS PER BUSINESS DAY without charge, but fee is to be paid for making a copy to be certified by the Company Secretary.

LOCATION: REGISTERED OFFICE, kept in bound book or leaflets or electronic storage device easily retrievable.

KEY POINTS ON CONVERSION AND RE-REGISTRATION OF COMPANIES

FOR THE PURPOSE OF BAR PART 2 PLEASE STUDY THIS VERY WELL. WE NOT GOING TO REPRODUCE THE CONTENT OF CAMA, SO JUST GOING TO GIVE KEY POINTS.

 UNDER CAMA, THE CONVERSION OF COMPANIES IS PERMISSIBLE UNDER THE FOLLOWING;

1)      A Private Company limited by shares may be converted to a Public Company by following the procedure laid down in SECTION 50 CAMA.

2)      A Company Limited by shares may be converted to an Unlimited Company by following the procedure in SECTION 51 OF CAMA.

3)      An Unlimited company may also be re-registered as a Company limited by shares by complying with SECTION 52 OF CAMA.

4)      A Public Company may be converted to a Private company under SECTION 53 OF CAMA

GENERALLY WHAT HAPPEN TO ALL OF THEM AFTER CONVERSION

 The CAC will grant the New Company a new certificate of Incorporation showing the new status of the company and the Certificate is prima facie evidence that;

1)      That the requirement of the Act in respect of re-registration and of matters precedent and incidental have been complied with

2)      The company has acquired new status

LEGAL IMPLICATION:  The fact that the company changes its staus does not mean it has changed it legal personality or that its rights and liabilities under the former status has now extinguished.

            The legal personality, rights and liabilities of the old company continues in the new company. Therefore any debt, obligation incurred, contract entered into or legal proceeding by or against the company will continue.

ALTERATION OF CONDITIONS OF THE MEMORANDUM

THE ALMIGHTY RULE: 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 that a company cannot go outside the express provision of CAMA to alter the conditions in its memorandum of association. SEE S.44(1) CAMA

THE RULES IN SECTION 45

RULE 1:  To alter the name of the company, Section 31 of CAMA must be complied with. SEE S.45(1)

RULE 2: As regards the business or object clause of the company, its alteration must be in accordance of SECTION 46 of CAMA. SEE S.45(2)

RULE 3: with respect of the alteration of any restriction on the powers of the company, you have to comply with SECTION 46 of CAMA. SEE S.45(3)

RULE 4: For the alteration of Capital, SECTION 100-111 of CAMA must be complied with. These Section deal with alteration of share capital by;

a)      CONSOLIDATION

b)      CONVERSION

c)      SUB-DIVISION OF SHARES

d)      CANCELLATION AND

e)      REDUCTION OF SHARES ETC

SEE SECTION 45(4)

                             TO BE CONTINUED!!!!!!!!! BUT I BEG YOU IN THE NAME OF CAMA PLEASE READ YOUR CAMA FOR CAMA SAKE AND CALL SAKE……….

READ HARD

EAT HARD

REST HARD

PRAY HARD………..ONLY THE LIVING WILL BE CALLED TO BAR!!!!!