Nigerian Law School : Corporate Law Practice, Wednesday, August 11, 2010 - Part 3 (Answers from 1f - 3h)

QUESTION 1 (f)

FEDERAL REPUBLIC OF NIGERIA
COMPANIES & ALLIED MATTERS ACT, 1990
COMPANY LIMITED BY SHARES
MEMORANDUM OF ASSOCIATION
OF
TOSHZONIX NIGERIA PLC

1.    The name of the company is Toshonix Nigeria Plc
2.    The registered office of the company shall be situate in Nigeria
3.    The object for which the company is established is the manufacture, importation and exportation, distribution, supply and marketing of computer and computer accessories and matters incidental to these
4.    The Company is a public company
5.    The liability of the members is limited by shares
6.    The share capital of the company is N3 billion divided into 3 billion ordinary shares of N1.00 each.

QUESTION 1 (g)

The incentives available to the Company under Nigeria law for the following are:
(i)    Manufacture of “Pioneer products” ---- the company would be given the Pioneer status, under the NIPC Act & the Industrial Development Act
(ii)    Doing business in Nigeria with foreign loan --- If the loan is imported through an authorized dealer and the company obtains Certificate of capital Importation, the company would be entitled to the following incentives ---
a.    Relief under Double taxation treaties (ss.44 – 45, Companies Income tax Act)
b.    Importation of foreign currency/capital into the country without limit
c.    Allowance for servicing a foreign loan from Nigeria
d.    Procurement of foreign currency from the CBN at the official rate
e.    The loan will not be treated as income for the purpose of computation of company tax payable


QUESTION 2 (a)
Action should be commenced by Originating Motion. And the action would be filed at the Federal High Court

QUESTION 2 (b)
a)    Affidavit in support
b)    Written Address
c)    Copy of the Letters of Administration
d)    Copy of the Notice they gave to the company electing to become members of the company & evidence of rejection by the company -------- section 155 CAMA
e)    Evidence of payment of the prescribed processing fees
f)    Copy of share certificate



QUESTION 2 (c)
Service of originating processes is governed by Rules of Court, in this case, the Federal High Court Rules (s. 78 CAMA). The law is that they are served by court bailiffs or other authorized officers of the court in any of the following ways:
(1)    Service on a principal officer of the company
(2)    Delivery at the registered office of the company

QUESTION 2 (d)


  Ways of acquiring company shares (and of becoming a member of a company)
(1)    Subscription to the Memo of association – ss. 20 and 79 CAMA
(2)    Allotment – s. 125 CAMA
(3)    Transfer --- s. 151 CAMA
(4)    Transmission --- ss 148 and 155 CAMA


Note that even after acquiring shares in any of the following ways, the shareholder does not become a member of the Company unless and until his o0r her name is entered in the Register of Members --- See s. 79 (1) and (2), CAMA

QUESTION 2 (e)

(1)    Unit Trust Scheme
(2)    Open-Ended Investment Scheme
(3)    Real Estate Investment Scheme
(4)    Any Scheme designated as collective Investment Scheme by CAC and published in the Gazette as such.
See sections 152 and 154 ISA, 2007

QUESTION 3 (a):
Yes, the organization can operate without registration---- See s. 590 (1) CAMA

QUESTION 3 (b):
No, Mr. Udoh is not qualified to be a Trustee of a Body Registered under Part C, CAMA. This is because to be qualified for appointment as a Trustee under part C of CAMA, the person must be at least 18 years old --- s. 592 (1) (a) CAMA

QUESTION 3 (c):
Any number of Trustees. There is no maximum and there is no minimum ---- s. 590 CAMA
   
QUESTION 3 (d):
The following persons are cannot be appointed Trustees under part C, CAMA (s. 592 CAMA):
(1)    Infant (a person below 18 years)
(2)    Unsound mind (lunatic) who has been so pronounced by a court of law.
(3)    UN-discharged bankrupt
(4)    Person convicted of any offense involving fraud or dishonesty within the five years immediately preceding his appointment

QUESTION 3 (e):
(1)    Form of Approval & Reservation of Name (CAC 1)
(2)    Application letter, signed by the chairman and secretary of the association or by their solicitor
(3)    Prescribed application form for registration of Trustee – CAC/IT/1
(4)    Original copy of newspaper publication
(5)    Two copies of the applicant/association`s Constitution
(6)    Extracts of the Minutes of the meeting where the Trustees were appointed
(7)    Minutes of the meeting where the Special Clause was adopted
(8)    Sworn Affidavit by each trustee that, he/she is not disqualified under CAMA
(9)    Impression/drawing of the of the association`s common seal
(10)    2 passport photographs of each trustee
(11)    Evidence of land ownership or undertaking in lieu of this
(12)    Letter of authority from the association to the solicitor conducting registration on the association`s behalf
(13)    Evidence of payment of prescribed registration fees
(14)    Notice of Situation of the Address of the association or any changes therein
(15)    Evidence of payment of filing fees
See Regulation 65 of the Company Regulations, 2012

QUESTION 3 (f):
Matters to be included in the constitution of the association include:
(1)    Name of the association, which must start with, Incorporated trustees of ……....
(2)    Aims and objectives
(3)    Organs
(4)    Appointment and replacement of trustees
(5)    Meetings
(6)    Board of trustees
(7)    Contribution
(8)    Common seal
(9)    Audit
(10)    Accounts
(11)    Subscription
(12)    Special clause
(13)    Dissolution
(14)    Appointment/election and removal of other principal officers
See section 334 (2) CAMA

QUESTION 3 (g):
The Special Clause is usually inserted in the Constitution of the association to be registered under Part C. The Clause states/provides that in the event of dissolution of the association, the assets of the association shall not be shared among members but shall be given to another association with similar objects/objectives or to any charitable organization

QUESTION 3 (h):
Differences between Incorporated Trustees (Registered under part C) and Company Limited by Guarantee (registered under Part A, CAMA)

(1)    Incorporated Trustees (IT) are registered under part C of CAMA, whereas Company Ltd By Guarantee (CLG) is registered under part A, CAMA
(2)    Consent of the A.G, Federation is required to register a company Ltd By Guarantee (CLG) . Such consent is not necessary for Incorporated Trustees (IT)
(3)    Constitution not required for Incorporated Trustees, unlike Company Ltd By Guarantee
(4)    Memorandum & Articles of association not required for Incorporated Trustees, unlike Company Ltd by Guarantee
(5)     Payment of stamp duties not necessary for incorporated trustees, unlike Company Ltd By Guarantee
(6)    Company Ltd By Guarantee has Directors, unlike Incorporated trustee which have Trustee
(7)    Newspaper publication is required for Incorporated Trustees, unlike Company Ltd by Guarantee
(8)    CLG may do business while It may not

Note the similarities between the two.

(a)    Both attract tax exemption
(b)    Both are non-profit oriented
(c)    Both are governed by CAMA
(d)    In the event of dissolution, assets of both are not shared among members, but must be given out to another organization with similar objects


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