Nigerian Law School : Corporate Law Practice, Wednesday, August 11, 2010 - Part 4 (Answers from 4a - 4i)

QUESTION 4 (a):
Section 54, CAMA provides that every foreigner or foreign company desirous of doing business in Nigeria must register a company in Nigeria. But by virtue of section 56, CAMA, the foreigner or foreign company may, without formal registration in Nigeria, apply for and obtain EXEMPTION under section 56 CAMA, PROVIDED the company is qualified for such exemption. If exempted, it can come to Nigeria and do the business in respect of which it is exempted and for the duration contained in the instrument of exemption. Companied qualified to apply for exemption are :
A)    Foreign company invited to Nigeria by or with the approval of the FG to execute any project
B)    Foreign company in Nigeria to execute a project for a donor country or international organization (such as UNO, AU, EU, WHO, etc)
C)    Foreign government-owned companies engaged solely in export promotion activities
D)    Engineering consultants and technical experts in Nigeria to execute any project under contract with any person of organization provided such contract is approved by the Federal government (section 56(1).


QUESTION 4 (b):

XXlling GMBH Ltd
20, German Square
Berlin, Germany
Date: ………………….


The Executive President & Commander In Chief of the Armed forces
Federal Republic of Nigeria

Through:


The Secretary to the Government of the Federation
The Presidency, Aso Rock Villa,
Abuja, Nigeria,

Dear Sir,

APPLICATION FOR EXEMPTION FROM REGISTRATION UNDER SECTION 56, CAMA


We, the above-named Company, having been invited to Nigeria by the Federal Government of Nigeria to execute a project, hereby apply for exemption from formal incorporation as a Nigerian Company.

Please find attached the necessary documents as stipulated by section 56 (2), CAMA, Cap C20, LFN, 2004

Thanks.

Yours faithfully,


-----------------------
Company Secretary


QUESTION 4 (c):
(a)    Partnership (Joint Venture) Agreement, where necessary
(b)    Evidence of payment of application fees
(c)    Copy of Certificate of Incorporation of the applicant company
(d)    Copy of memo & Articles or other Constitution of the applicant company (where it is not in English, then, a certified translation thereof)
(e)    Evidence of payment of stamp duties
(f)    Feasibility report & project implementation program
(g)    Titles Deeds of Land, showing firm commitment to acquire requisite business premises in Nigeria for its operations
(h)    Training program for Nigerian staff or personnel policy of the Company or management Succession Schedule for qualified Nigerians
(i)    Particulars of Directors of the applicant company
(j)    Job title designation for expatriate staff
(k)    Information brochure

QUESTION 4 (d):
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.    Initial tax-free period of three years, renewable for another two years for engaging in gas utilization
b.    Importation of foreign currency/capital without limit into the country
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
f.    Repatriation of profit or the entire loan capital in the currency of the foreign loan
g.    Retention of export proceeds in foreign currency in its domiciliary account
h.    Interest accruing from the domiciliary account is not fixed
i.    Export incentives under the Export (Incentives & Miscellaneous Provisions) Act
a.    Relief from double Taxation under the relevant Double taxation treaties (ss.44 – 45, Companies Income tax Act), etc
(any two of the above)

QUESTION 4 (e):
Procedure for merger where the annual turnover of both companies is N2 billion:
 This is intermediate merger. Procedure is as follows:

Involves three major steps:
(1)    Pre-merger notification to SEC
(2)    Formal application for approval to SEC
(3)    Post –merger notification to SEC

Procedure for Merger:
i)    Separate BOD resolution of each merging company to authorize merger
ii)    Due diligence on merging companies
iii)    Prepare scheme of merger
iv)    Pre-merger notification to SEC and submit draft scheme of merger
v)    If SEC, approves scheme, then make a formal application to SEC for merger
vi)    Application by any of the merging companies for a court-ordered general meeting
vii)    Each merging company holds a court-ordered meeting to pass a special resolution to approve the merger
viii)    If SEC approves scheme of merger, make an application to court to sanction the scheme of merger
ix)    If court sanctions the scheme, register the order with CAC within 7 days
x)    Publish court order in at least one daily national newspaper and Federal gazette
xi)    Post –merger notification to SEC of completion of merger

QUESTION 4 (f):
(i)    Ordinary resolution
(ii)    Ordinary resolution maybe passed for voluntary winding in the following instances:
a.    When the period, if any, fixed for the duration of the company by the Articles has expired
b.    Where the company was formed and stated to be dissolved on the happening of a particular event, then when that event has happened
c.    When the company has accomplished its objects

QUESTION 4 (g):
Draft of Notice of Extra Ordinary general meeting
ANSWER:


XXLLING REFINERY SERVICES LIMITED
38, Buwa Road, Lagos, Nigeria


NOTICE OF EXTRAORDINARY GENERAL MEETING


NOTICE IS HEREBY GIVEN that an Extra Ordinary General Meeting of this Company will be held at (VENUE).......................... on ...(DATE0.............. at (TIME).. ...................... ., for the purpose of considering and, if thought fit, of passing the following Resolution as a Special Resolution:

"That the affairs of Xling Refinery Services Limited be merged with those of Entac Oil Services Limited"
 
Dated this ------------------ day of --------------------20 -----------------------------
 
Signed;
                                                                                   
--------------------------
Secretary
(By Order of the Board)
.

QUESTION 4 (h):
(i)    Meaning of Declaration of Solvency: It is a Statutory Declaration made by the directors or a majority of the directors stating that they have made full inquiry into the affairs of the company and that they are of the view that the Company will be able to pay its debts in full within a period of twelve months from the date of commencement of winding up of the company
(ii)     Conditions for validity of Declaration of solvency are
a.    The declaration must be made within the five (5) weeks immediately preceding the date of passing of the resolution for winding up
b.    The Declaration must be delivered to the CAC before the date of passing the resolution for winding up
c.    The Declaration must be accompanied by a statement of the company`s Assets & Liabilities as at the date of the declaration

QUESTION 4 (i):

XLING REFINERY SERVICES LIMITED
12, Law School Road, Victoria Island, Lagos
08123566789, amacoltd@yahoo.com


RESOLUTION TO WIND UP THE
COMPANY PURSUANT TO SECTION 401 CAMA


At the Extra-Ordinary General Meeting of the above-mentioned Company held on ---------------------the --------------- day  of ----------------- 20-------------- the following resolution was proposed and duly passed:

“That Xling Refinery services Limited be wound up voluntarily.”

 Dated the--------------------. day of------------------------ 20---------------------------

Signed:

-----------------------
Secretary/ Director


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