COMPANIES AND ALLIED MATTERS ACT 1990 (excerpts)

PART 11

INCORPORATION OF COMPANIES AND INCIDENTAL MATTERS

CHAPTER 1 – FORMATION OF COMPANY

Right to form a
company 18. As from the commencement of this Act, any two or more persons may form
and incorporate a company by complying with the requirements of this Act in
respect of registration of such company.

19. (1) No company, association or partners hip consisting of more than 20 persons
shall be formed for the purpose of carry ing on any business for profit or gain
by the company, association, or partne rship, or by the individual members
thereof, unless it is registered as a company under this Act, or is formed in
pursuance of some other enactment in force in Nigeria. Partnership, etc
of more than 20
members when
permitted

(2) Nothing in this section shall apply to –
(a) any cooperative society regi stered under the provision of any enactment in
force in Nigeria; or
(b) any partnership for the purpose of carrying on practice –
(i) as legal practitioners, by persons each of whom is a legal practitioner; or
(ii) as accountants by persons each of whom is entitled by law to practice as an
accountant.
(3) If any at time the number of members of a company, association or partnership
exceeds 20 in contravention of this sec tion and it carries on business for more
than 14 days while the contravention con tinues, every person who is a member
of the company, association or partnershi p during the time that it so carries on
business after those 14 days shall be liabl e to a fine of N25 for every day during
which the default continues.

20. (1) Subject to subjection (2) of this section, an individual shall join in the formation
of a company under this Act if –
Capacity of
individual to
form company
(a) he is less than 18 years of age; or
(b) he is of unsound mind and has been so found by a court in Nigeria or elsewhere;
or
(c) he is an un-discharged bankrupt; or
(d) he is disqualified under section 25 4 of this Act from being a director of a
company.
(2) A person shall no t be disqualified under paragraph (a) of subsection (1) of this
section, if two other persons not di squalified under that subsection have
subscribed to the memorandum.
(3) A corporate body in liquidation sh all not join in the formation of a company
under this Act.
(4) Subject to the provisions of any enactment regulating the rights and capacity of
aliens to undertake or participate in trade or business, an alien or foreign
company may join in forming a company.

Types of
companies 21. (1) An incorporated company may be either a company –
(a) having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them (in this Act termed “a
company limited by shares”); or

(b) having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets
of the company in the event of its being wound up (in this Act termed “a
company limited by guarantee”) or
(c) not having any limit on the liabilit y of its members (in this Act termed “an
unlimited company”).
2. A company of any of the foregoing types may either be a private company or a
public company.

22. (1) A private company is one which is stated in its memorandum to be a private company.
Private
company
(2) Every private company shall by its articles restrict the transfer of its shares.
(3) The total number of members of a private company shall not exceed 50, not
including persons who are bona fide in the employment of the company, or
were while in that employment and have continued after the determination of
that employment to be, members of the company.
(4) Where two or more persons hold one or more shares in a company jointly, they
shall for the purpose of subsection (3) of this section be treated as a single
member.
(5) A private company shall not unle ss authorized by law invite the public to –
(a) subscribe for any shares or debentures of the company; or
(b) deposit money for fixed periods or payable at call, whether or not bearing
interest.

23. (1) Subject to subsection (2 ) of this section, where default is made in complying
with any of the provisions of section 22 of this Act in respect of a private
company, the company shall cease to be entitled to the privileges and
exemptions conferred on private compan ies by or under this Act and this Act
shall apply to the company as if it were not a private company. Consequences of
default in
complying with
conditions
constituting a
private company
(2) If a court on the application of the co mpany or any other person interested, is
satisfied that the failure to comply with the provisions of section 22 of this Act
was accidental or due to inadvertence or to some other sufficient cause, or that
on other grounds it is just and equitable to grant relieve, the court may, on such
terms and conditions as may seem to it to be just and expedient, order that the
company be relieved from the consequen ces mentioned in subsection (1) of this
section.

24. Any company other than a private company shall be a public company and its memorandum shall state that it is a public company. Public com pany

25. As from the commencement of this Act, an unlimited company shall be
registered with a share capital; and wh ere an existing unlimited company is not
registered with a share capital, it shall, not later than the appointed day, alter its
memorandum so that it becomes an un limited company having a share capital
not below the minimum share capital pe rmitted under section 99 of this Act. Unlimited
company to have
share capital

26. (1) Where a company is to be formed for promoting commerce, art, science,
religion, sports, culture, education, res earch, charity or other similar objects,
and the income and property of the comp any are to be applied solely towards
the promotion of its objectives and no portion thereof is to be paid or
transferred directly or indirectly to the members of the company except as
permitted by this Act, the company shall not be registered as a company limited
by guarantee. Company
limited by
guarantee

(2) As from the commencement of this Act, a company limited by guarantee shall not be registered with a share capital; and every existing company limited by
guarantee and having a share capital sha ll, not later than the appointed day,
alter all its memorandum so that it becomes a company limited by guarantee
and not having a share capital.
(3) In the case of a company limited by guarantee, every provision in the memorandum or articles or in any resolution of the company purporting to give
any person a right to participate in the divisible profits of the company
otherwise than as a member or purpor ting to divide the company’s undertaking
into shares or interests shall be void.
(4) A company limited by guarantee sh all not be incorporated with object of
carrying on business for the purpose of making profits for distribution to
members.
(5) If any company limited by guarantee carries on business for the purpose of distributing profits, all e fforts and members thereof who are cognizant of the
fact that it is so carrying on business shall jointly and severally liable for the
payment and discharge of all debts and liabilities of the company incurred in
carrying on such business, and the company and every such officer and member
shall be liable to a fine not exceedi ng N100 for every day during which it
carries on such business.
(6) The total liability of the me mbers of a company limited by guarantee to
contribute to the assets of the company in the event of its being wound up shall
not at any time be less than N10,000.
(7) Subject to compliance with subs ection (5) of this section, the articles of
association of a company limited by guarantee may provide that members can
retire or be excluded from membership of the company.
(8) If in breach of subsection (5) of this section, the total liability of the members
of any company limited by guarantee sha ll at any time be less than N10,000,
every director and member of the compa ny who is cognizant of the breach shall
be liable to a fee of N50 for every da y during which the default continues.
(9) If, upon the winding up of a company limited by guarantee, there remains after
the discharge of all its debts and liab ilities any property of the company, the
same shall not be distributed among the members but shall be transferred to
some other company limited by guarantee having objects similar to the objects
of the company of applied to some charit able object and such other company or
charity shall be determined by memb ers prior to the dissolution of the
company.

REGISTRATION OF COMPANIES

35. (1) As from the commencement of this Act, a company shall be formed in the
manner set out in this section.
Documents of
Incorporation
(2) There shall be delivered to the Commission
(a) the memorandum of association an d articles of association complying with the
provisions of this Part of this Act;
(b) the notice of the address of th e registered office of the company and the head
office if different from the registered office: provided that a postal box address
or a private bag address shall not be accepted by the Commission as the
registered office;
(c) a statement in the prescribed fo rm containing the list and particulars together
with the consent of the persons who are to be the first directors of the company;
(d) a statement of the authorized share capital signed by at least one director; and
(e) any other document required by the Commission to satisfy the requirements of
any law relating to the formation of a company.
(3) A statutory declaration in the pres cribed form by a legal practitioner that those
requirements of this Act for the regist ration of a company have been compiled
with shall be produced to the Commissi on, and it may accept such a declaration
as sufficient evidence of compliance: Provided that where the Commission
refuses a declaration, it shall within 30 days of the date of receipt of the
declaration send to the declarant a noti ce of its refusal giving the grounds of
such refusal.

36. (1) The Commission shall register the memorandum a nd articles unless in its
opinion –
Re gistration
(a) they do not comply w ith the provisions of this Act; or
(b) the business which the company is to carry on; or the objects for which it is
formed, or any of them, are illegal; or
(c) any of the subscribers to the memorandum is incompetent or disqualified in accordance with section 20 of this Act; or
(d) there is non-compliance with the re quirement of any other law as to registration
and incorporation of a company; or
(e) the proposed name conflicts with or is likely to conflict with an existing trade
mark or business name registered in Nigeria.
(2) Any person aggrieved by the de cision of the Commission under subsection (1)
of this section, may give notice to the Commission requiring it to apply to the
court for directions and the Commission sh all within 21 days of the receipt of
such notice apply to the court for the directions.
(3) The Commission may in order to sa tisfy itself as provided in subsection (1) (c)
of this section, by instrument in writ ing require a person subscribing to the
memorandum to make and lodge with th e Commission, a statutory declaration
to the effect that he is not disqualified under section 20 of this Act f
rom joining
in forming a company.
(4) Steps to be taken under this Act to Incorporate a company shall not include any
invitation to subscribe for shares or otherwise howsoever on the basis of a
prospectus.
(5) Upon registration of the memora ndum and articles, the Commission shall
certify under its seal –
(a) that the company is incorporated;
(b) in the case of a limited company, that the liability of the members is limited by
shares or by guarantee; or
(c) in the case of an unlimited comp any, that the liability of the members is

unlimited; and
(d) that the company is a private or public company, as the case may be
(6) The certificate of incorporate shall be prima facie evidence that all the
requirements of this Act in respect of registration and of matters precedent and
incidental to it have been complied with and that the association is a company
authorized to be registered and duly registered under this Act.

37. As from the date of incorporation men tioned in the certificate of incorporation,
the subscriber of the me morandum together with su ch other persons as may,
from time to time, become members of the company, shall be a body corporate
by the name contained in the memorandum , capable forthwith of exercising all
the powers and functions of an incor porated company including the power to
hold land, and having perpetual successi on and a common seal, but with such
liability on the part of the members to c ontribute to the assets of the company in
the event of its being wound up as is mentioned in this Act.
Effect of
registration

PART C – INCORPORATED TRUSTEES

673.(1) Where one or more trustees are appointed by any community of persons bound together by custom, religion, kinship or nationality or by anybody or
association of persons established for any religious, educational, literary,
scientific, social, development, cultural , sporting or charitable purpose, he or
they may, if so authorized by the community, body or association (hereinafter
in this Act referred to as “the association”) apply to th e Commission in the
manner hereafter provided for registra tion under this Act as a corporate body.
Incorporation of
trustees of
certain
communities,
bodies and
associations
(2) Upon being so registered by the Commission, the trustee or trustees shall
become a corporate body in accordance wi th the provisions of section 679 of
this Part of this Act.

674. (1) Application under sectio n 673 of this Act shall be in the form prescribed by
the Commission and shall state –
Method of
application
(a) the name of the proposed corporate body which must contain the words
“Incorporated Trustees of _______________
(b) the aim and objects of the association which must be for the advancement of any religious, educational, literary, scientific, social, development, cultural,
sporting or charitable purpose, and must be lawful.
(i) the names, addresses and occupations of the secretary of the association if any.
(2) These shall be attached to the application –
(a) two printed copies of the constitution of the association;
(b) duly signed copies of the minut es of the meeting appointing the trustees and
authorizing the application, showing th e people present and the votes scored;
(c) the impression or drawing of the proposed common seal
(4) The commission may require such declaration or other evidence in verification
of the statements and particulars in the application and such other particulars,
information, and evidence, if any, as it may think fit.
(5) If any person knowingly ma kes any false statement or gives any false
information for the purpose of incorporating trustees under this Part of the A
ct,
he shall be guilty of an offence and liable on conviction to imprisonment for
one year or to fine of N100

Qualifications of
trustees 675. (1) A person shall not be qualified to be appointed as a trustee if –
(a) he is an infant; or
(b) he is a person of unsound mind having been so found by a court;
(c) he is an un-discharged bankrupt; or
(d) he has been convicted of an o ffence involving fraud or dishonesty within five
years of his proposed appointment.
(2) If a person disqualified under photograph (c ) or (d) of subsection
(1) of the section acts as a trustee, he shall be liab le to a fine of N50 for every day during
which he so acts.

676. The constitution of the association sh all in addition to any other matter – Constitution (a) state the name or title of the association which shall not conflict with that of a
company, or with a business name or trade mark registered in Nigeria;
(b) make provisions, in respect of the following –
(i) appointment, powers, duties, tenure of office and replacement of the trustees;
(ii) the use and custody of the common seal;
(iii) the meetings of the association;
(iv) the number of members of the govern ing body, if any, the procedure for
their appointment and removal, and their powers; and

(v) where subscriptions and other contributions are to be collected, the
procedure for disbursement of the funds of the association, the keeping of
accounts and the auditing of such accounts.

677(1) If the Commission is satisfied that the application has complied with the
provisions of section 674, 675 and 676 of th is Act it shall cause the application
to be published in a prescribed form in a daily newspaper circulating in the area
where the corporation is to be situated and at least one of the newspape
r shall be
a national newspaper.
(2) The advertisement shall invite object ions, if any, to the registration of the
body.
(3) The objection shall state the grounds on which it is made and shall be
forwarded to reach the Commission within 28 days of the date of the last of the
publications in the newspapers.
(4) If any objections are made, the Co mmission shall consider them and may
require the objectors and applicants to furnish further information or
explanation, and may uphold or reject the objections as it considers fit and
inform the applicant accordingly.

678 (1) If, after the advertisement, no obj ection is received within the period
specified in section 677 of this Act or, where any objection is received, the same
is rejected, the Commission, having regard to all the circumstances, may assent
to the application or withhold its assent. Registration and
certificate
(2) If the Commission assents to the applic ation, it shall register the trustees and
issue a certificate in the prescribed form.

679 (1) From the date of their registration, the trustee or trustees shall become a
body corporate by the name described in th e certificate, and shall have perpetual
succession and a common seal, and power to sue and be sued in its corporate
name and as such trustee or trustees and subject to section 12 of this Part of this
Act to hold and acquire, and transfer, assign or otherwise dispose of any
property or interests ther ein belonging to, or held for the benefit of such
association, in such manner and subject to such restrictions and provision as
trustees might without incorporation, hold or acquire, transfer, assign or
otherwise dispose of the same for th e purposes of such community, body or
association of persons. Effect of
registration and
certificate
(2) The certificate of incor poration shall vest in the body corporate all property
and interests of whatever nature or tenur e belonging to or held by any person in
trust for such community, body or association of persons.
(3) A certificate of incorporat ion when granted shall be prima facie evidence
that all the preliminary requisitions herein contained and required in respect of
such incorporation have been complied with, and the date of incorporation
mentioned in such certificate shall be deemed to be the date on which
incorporation has taken place.

Charges of
names or objects 680. (1) Where the association desirous of ch anging or altering its name or objects or
any of them, the trustees shall apply to the commission in the prescribed form
setting out the alterations desired a nd attaching a copy of the resolution
approving the change and dul y certified by the trustees.
(2) The Commission on receipt of the a pplication shall consider it and, if
satisfied that the change or alteration is prima facie lawful shall –
(a) cause the application to be published in 2 daily newspapers in the manner
specified in subsection (1) of the 677 of this Act; and

(b) direct the corporation to display for at least 28 days a notice of the proposed
change or alteration conspicuously mount ed at the corporation headquarters and
or any at branch offices, or any such places where as majority of the members
are likely to see it as the Commission may require.
(3) The publication and notices shal l call for objections which, if any, shall state
the grounds of objection and be forwarde d to reach the Commission not later
than 28 days after the last of th e publications in the newspapers.
(4) The provisions of section 676 and subsection (1) of section 677 of this Act
shall apply to this section as they ap ply to an application for registration.
(5) If the Commission assents to the application the alteration shall be made and
in the case of change of name, the Co mmission shall issue a new certificate in
the new name in place of the former certificate.

681. Subject to section 676 and 677 of this Ac t, an association whose trustees are
incorporated under this Act may alter its constitution by a resolution passed by a
simple majority of its members and approved by the Commission. Alteration of
provisions of the
constitution

682. (1) Where a body or association intends to replace some or all its trustees or to
appoint additional trustees, it may by reso lution at a general meeting do so and
apply in the prescribed form for the approval of the Commission.
Replacement
and
appointment of
additional
tru stees
(2) Upon such application the provisions of subsections (2) to (4) of section 679
of this Act, shall apply to this section as they apply to the change of name or
object.
(3) If the Commission assents to the application it shall signify its assent in writing to the corporation and the appoint ment shall become valid as from the
date of the resolution appointing the trustees.

Changes in
contravention of
certain provisions
of this part of this
Act
683. Any change or alterations purported to be made in contravention of section 680,
681 or 682 of this Act shall be void.

684. The association may appoint a council or governing body which shall include the trustees and may, subj ect to the provisions of this Act, assign to it such
administrative and management functions as it deems expedient.
Council, committee
or governing body

685. The powers vested in the tr ustees by or under this Act shall be exercised subject
to the directions of the associati on, or of the council or governing body
appointed under section 684 of this Act, as the case may be.
Exercise of powers
of trustee

686. (1) The income and property of a body or association whose trustees are
incorporated under this Act shall be app lied solely towards the promotion of the
objects of the body as set fort h in its constitution and no portion thereof shall be
paid or transferred directly or in directly, by way of dividend, bonus, or
otherwise by way of profit to any of the members of the association. Application of
income and
property
(2) Nothing in subsection (1) of this section shall prevent the payment in good
faith, of reasonable and proper remunerati on to an officer of servant of the body
in return for any service actually re ndered to the body or association;

Provided that –

(a) With the exception of ex-officio members of the governing council, no
member of a council of management or governing body shall be
appointed to any salaried office of the body, or any office of the body
paid by fees; and

(b) No remuneration or other benefit in money or money’s worth shall be
given by the body to any member of such council or governing body
except repayment of out-of-pocket e xpenses or reasonable and proper
rent for premises demised, or let to the body or reasonable fee for
services rendered.
(4) If any person knowingly acts or joins in acting in contravention of this section,
he shall be liable to refund such income or property so misapplied to the
association.

687. The common seal of the corporate body shall have such devices as may be
approved by the Commission; and any inst rument to which the common seal of
the corporate body has affixed in apparent compliance with the regulations for
the use of the common seal shall be binding on the corporate body, not
withstanding any defect or circumstance affecting the execution of such
instrument. Common seal

Contract of
corporate body 688. Subject to the provisions of this Act and of the constitution of the association,
the corporate body, may contract in the same form and manner as an individual.

689. (1) The Commission shall preserve all documents delivered to it under this Act. Documents and
inspection (2) Any person may on application to the Commission be permitted to inspect
the documents kept under subsection (1 ) of this section on payment of a
prescribed fee and may require a copy or extract of any such document to be
certified by the Commission on payment of a prescribed fee.

690. (1) The trustees of the corpor ation shall not earlier than 30 th June or later than
31 st of December each year (oth er than the year in which it is incorporated),
submit to the Commission a return show ing, among other things, the name of
the corporation, the names, addresses and occupations of the trustees, and
members of the council or governing body, particulars of any land held by the
corporate body during the year, and of any changes which have taken place in
the constitution of the association during the preceding year. Annual returns
(2) If the trustees fail to comply with subsection (1) of this section, they shall be
liable to a fine of N5 for each day during which the default continues.

691. (1) A corporate body formed under this Act may be dissolved by court on a petition brought for that purpose by – Dissolution of a
corporate body
formed under
this Act
(a) the governing body or council; or
(b) one or more trustees; or
(c) members of the association constitu ting not less than 50 per cent of the total
membership; or
(d) the Commission
(2) The grounds on which the corporate body may be dissolved are –
(a) that the aims and objects for whic h it was established have been fully
realised and no useful purpose would be served by keeping the corporation
alive;
(b) that the corporate body is formed to exist for a specified period has expired
and it is not necessary for it to continue to exist;
(c) that all the aims and objectives of the association have become illegal or
otherwise contrary to public policy; and
(d) that it is just and equitable in all the circumst ances that the corporate body
be dissolved.
(3) At the hearing of this petition, all persons whose interest or rights may, in

the opinion of the court, be affected by the dissolution shall be put on notice.
(4) If in the event of a winding up or dissolution of the corporate body there
remains after the satisfaction of all its debts and liabilities, any property
whatsoever, the same shall not be paid to or distributed among the members of
the association, but shall be given or transf erred to some other institutions to be
determined by the members of the association at or before the time of
dissolution.
(5) If effect cannot be gi ven to the provisions of subsection (4) of this section,
the remaining property shall be tran sferred to some charitable object.

692. The Minister may, with the approval of the National Council of Ministers,
make regulations generally for the purpose of this Act and, in particular,

without prejudice to the generality of the foregoing provisions, make
regulations – Regulations
(a) prescribing the forms and returns a nd other information required under this
Act;
(b) prescribing the procedure for obtaining any information required under this Act.
(c) requiring returns to be made within the period specified therein by any body
corporate to which this Act applies:
(d) Prescribing any fees payable under this Part of this Act.

693. In this part of this Act, unless the context otherwise requires – Interpretation of
words used in
this Part “Commission” means the Corporate A ffairs Commission established under
section 1 of this Act.
“Court” means the Federal High Court;
“Gazette” mans the Federal Government Official Gazette; and “Minister”
means the Minister charged with respons ibility for matters relating to trade.
Re peal of Ca p. 98 694. The Land (Perpetual Succession) Act is hereby repealed.

Validity of previous
registrations. Cap. 98 695. All trustees duly registered as corporate bodies under the Land (Perpetual
Succession) Act shall as from the date of coming into operation of this Act, be
deemed to be registered under and in accordance with this Act and the
provisions of this Act shall apply in respect of such trustees accordingly.

Citation 696 This Act may be cited as the Companies and Allied Matters Act 1990.

COMPANIES AND ALLIED MATTERS (AMENDMENT) ACT 1990 (excerpts)

The Companies and Allied Matters Act 1990 is hereby amended as follows:

section 26 thereof shall be amended as follows –
(i) immediately after subsection (4) thereof shall be inserted the
following provision, that is “(5) The memorandum of a company limited
by guarantee shall not be registered without the authority of the Attorney
General of the Federation.”